Court of Cassation, No. 07-20.345

Court of Cassation, Civil Chamber 1, 6 May 2009, No. 07-20.345

THE POLISH COMPANY CIECH

vs.

BRAZILIAN COMPANY - COMEXPORT

THE COURT OF CASSATION, FIRST CIVIL COUNCIL CHAMBER, delivered the following judgment:

Whereas, by an agreement of 1 January 1993, the Polish company CIECH, acting for itself and for the companies KZPSS and KZCSS, entered into a contract for the sale of sulphur with the Brazilian company Comexport Companhia de Comercio Exterior (Comexport); whereas that agreement contained an arbitration clause entrusting the organisation of the arbitration to the International Chamber of Commerce (ICC); that a dispute had arisen between the parties and, on 7 October 1998, Comexport referred the matter to the Court of Arbitration of the Polish Chamber of Commerce, whose jurisdiction was contested by the defendant companies; that on 16 September 2003 it referred the matter to the ICC; that, by an award of 30 August 2005, an arbitrator ordered the defendant companies to pay damages; that the contested judgment (Paris, 14 June 2007) dismissed the action for annulment brought against this award;

On the two grounds together, taken in their first branch, hereafter annexed:

Whereas the ground does not allow for the appeal to be admitted;

On the two grounds together, taken in their second part:

Whereas the company CIECH objects to the decision of the Court of Appeal, then, according to the grounds in law:

1°/ that since arbitral awards are not subject to any revision on the merits of the case, since they are only subject to an action for annulment, the annulment judge is prohibited from interfering in any question relating to the merits of the reasons for the award, their relevance or their logical articulation; by application of the principle of equality of arms, a rule which applies both to the grounds of annulment invoked by the author of the appeal and to the defences relied on by his opponent when requesting that the appeal should be rejected; that in this respect, it is excluded that the annulment judge can neutralise a violation of the principle of adversarial proceedings by considering that the reason for the award, which is the seat of this violation, must be treated as overabundant; that by deciding otherwise, the court of appeal violated Articles 1502 and 1504 of the Code of Civil Procedure ;

2°/ that considering that the motive given by the arbitrator and based on the position of Polish case law on prescription was an overabundant ground which merely explained the arbitrator’s reasoning, while it is clear from the award that this ground was an essential part of the arbitrator’s argument in concluding that the limitation period had been interrupted by the referral to the Court of Arbitration of the Polish Chamber of Commerce, the Court of Appeal distorted the arbitral award of 30 August 2005 and thus violated Article 1134 of the Civil Code;

However whereas, having noted that the statement on Polish case law and doctrine on limitation periods used by CIECH to denounce the violation of due process (in French Principe du contradictoire) is only an overabundant statement in the grounds for the arbitrator’s decision on the question of the interruption of the limitation period due to the referral to the Polish Chamber of Commerce, a decision based entirely and solely on elements, none of which escaped the parties' discussion, which specifically pleaded on the interruption of the limitation period in Polish law, the Court of Appeal was able to deduce, without distorting the terms of the award and within the limits of its powers as a judge of annulment, that the ground criticised was overabundant; that the pleas could not be accepted;

FOR THESE REASONS:

REJECTS the appeal;

Orders CIECH to pay the costs;

In terms of Article 700 of the Code of Civil Procedure, rejects the application of the company CIECH and orders it to pay the company Comexport Companhia de Comercio Exterior the sum of 2,500 euros;

Thus done and judged by the Court of Cassation, First Civil Chamber, and pronounced by the President in his public hearing of the sixth of May two thousand and nine.