Paris Court of Appeal, No. 08/06824 | Rory Wheeler, avocat (Paris) & solicitor (England)

Paris Court of Appeal, First Chamber, 14 May 2009, No.08/06824

TABET GROUP S.A.L SA

vs.

THE REPUBLIC OF THE CONGO

On 27 April 1992, the Republic of Congo and the Tabet Group (GAT) entered into a financial agreement (agreement 560) for the financing of public works, followed on 9 March 1993 by a financing agreement by opening a credit facility (agreement 569).

A dispute arose and the Republic of Congo filed a request for arbitration with the ICC in accordance with the arbitration clause provided by each of the contracts.

In a first award of 30 March 2000, the arbitral tribunal ruled on its jurisdiction.

In a second award rendered in Paris on 4 June 2002, which is the subject of the present action, the arbitral tribunal composed of Mr. Y, Mr. F and Mr. B stated in particular (point 5) “that interest should be debited, at a rate of 10% per year, within the framework of Convention 569, on the basis of and in accordance with the principles established in paragraphs 196 to 204 of the present award, which are held here as reproduced. The arbitral tribunal reserved the right to rule on this ground of claim. Moreover, it invites the parties to jointly establish the calculation of the said interest within forty-five days following the notification of the present Award by the Secretariat of the Court. The matter may be brought back before the Arbitral Tribunal at the request of the most diligent party for a decision on this count of the counterclaim in the course of the proceedings. The arbitral tribunal ordered (point 9) “to the Republic of Congo to give to Elf Congo, within forty-five days following notification of this Award by the Secretariat of the Court, all instructions necessary to ensure that the guarantees irrevocably given by Elf Congo to GAT, as a guarantee of the obligations arising for the Republic of Congo from Conventions 560 and 569, will once again take full and complete effect up to a total of (1) €15. 598. 232.17 (2) the amounts for which the Republic of Congo would be recognised as due in respect of interest on the principal sums owed, pursuant to an agreement or an arbitral award to be pronounced at a later date, and (3) the amounts of war damages attributable to Convention 569 for which the Republic of Congo would be recognised as accountable under the terms of an arbitral award to be pronounced at a later date. There is no reason, as it stands, to order the Republic of Congo to pay the penalty payments requested by Zet (point 14) who ordered the Republic of Congo to pay GAT a provisional sum of €16. 007.146,81.”

It shall be pointed out that a third award of 8 December 2003 concerns provisional and conservatory measures, that the action for annulment brought against this decision was dismissed and that a fourth award of 27 February 2008 declared that the request for withdrawal of the second award made by GAT to be unfounded and that it is the subject of an appeal which will be examined later.

GAT, in support of its appeal against the second award limited to the Annulment Of Point 5 Mentioned Above, Claims That The Arbitral Tribunal Did Not Comply With Its Mission (Article 1502-3 Of The Code of Civil Procedure). Moreover GAT claims that the award did not comply with due process (in French Principe de contradiction) (Article 1502-4 of the Code of Civil Procedure) and violated international public order (Article 1502-5 of the Code of Civil Procedure).

In its submissions dated 31 March 2009, it requested the Court to declare the Republic of the Congo inadmissible for invoking compliance with point 5 of the operative part of the partial award, to declare its appeal admissible, and, with reference to Article 1502 (3), (4) and (5) of the New Code of Civil Procedure by reference to Article 1504 of the same Code, to set aside point 5 of the operative part and paragraphs 196 to 204 of the said award, which by the reference made in point 5 of the operative part are held to be replicated by the arbitrators in the operative part of their award, and to condemn the Republic of Congo to pay him 100. 000€ pursuant to article 700 of the “New Code of Civil Procedure”.

By submissions of 23 March 2009, the Republic of Congo requests the Court to declare the action for annulment inadmissible, to dismiss it and to order GAT to pay it €100,000 under Article 700 of the Code of Civil Procedure.

UPON WHICH:

On the admissibility of the appeal:

The Republic of Congo states that the GAT acquiesced to the award by requesting its enforcement without reservation and by invoking it in other proceedings and in the subsequent arbitration proceedings. It considers that this action is brought in breach of the principle of loyalty.

GAT responds that the Republic of Congo has never previously raised this argument and that, on the contrary, it concluded that it could appeal in its submissions dated 13 July 2007 to oppose the request for amendment of the award rejected by the fourth arbitral decision Therefore, by virtue of the rule of estoppel, the ground of inadmissibility of the appeal must be rejected. GAT indicates that it has never acquiesced to point 5 and that, moreover, pursuant to Article 410 of the Code of Civil Procedure, that acquiescence can only be understood as the enforcement of the award and not the request for enforcement, especially since the provisional order of the Republic of Congo whose execution has been requested is enforceable de jure and that point 5 of the award is independent of the other parts of the operative part.

Whereas:

— by letter of 12 June 2002, GAT’s counsel, whose mandate is undisputed, gave formal notice to the Republic of Congo, in the person of its counsel, to pay him 33,034. 423.72€ in virtue of enforcement of the arbitral award and states: “You also noted that the arbitral tribunal gave the parties a period of 45 days from the notification of this letter, i.e. until 21 July 2002, to calculate the amount of interest due under Convention 569 in accordance with the principles laid down by the arbitrators in paragraphs 196 to 204 and to reach an agreement on this item. I would be grateful if you could confirm in writing by 17 June 2002 that you are mandated to discuss this matter with the undersigned. If this is the case, I propose that each party should establish or have establish its own statement of interest and that these statements should be communicated to each other by 28 June 2002 for examination”,

— by letter of 2 July 2002, the same counsel responding to a letter from counsel for the Republic of the Congo still requests the Republic to enforce the award “Consequently, the Republic of the Congo is, once again and for the last time, given formal notice to enforce, without conditions, the operative part of the partial award of 4 June 2002, as explained by the arbitral tribunal”. IT is appropriate to specify that counsels wrote to the arbitral tribunal requesting clarification on points 9 and 14,

In its statement of case dated 17 January 2003 filed with the arbitral tribunal, GAT, referring to paragraphs 190 to 204 of the award, which are expressly mentioned (pages 6 to 8), concludes (page 92) that the Republic of Congo should pay the interest due to it, but (point 6) “that the arbitral tribunal should take note of the fact that GAT continues to pursue all of its claims as set out in its previous submissions, insofar as they have not already been decided by the partial award of 4 June 2002 and have not been modified by the present submissions”;

It follows, on the one hand, from the terms of the two aforementioned letters that GAT has indeed requested the enforcement of the entire operative part of the award of 4 June 2002. It is emphasised that at no time is any reservation made concerning point 5. On the other hand, in point 6 of its submissions of 17 January 2003, it effectively acquiesces in this operative part since it expressly limits the scope of its previous submissions, the benefit of which it requests, to what has not been “already decided by the partial award of 4 June 2002”, the final nature of which it does not contest in the absence of any reservation;

Whereas GAT vainly invokes the rule of estoppel in that, in the context of its request for withdrawal of the second award, the Republic of Congo argued that this request was inadmissible because the decision did not have the force of res judicata; that in fact the Republic of Congo limited itself on this occasion to pointing out that the arbitral award was not subject to enforcement and that the possibility of an appeal remained open; the question of a possible acquiescence was not raised and the GAT limited itself to pointing out that the award was served on the parties in June 2002 in accordance with the ICC Rules of Arbitration (fourth award, page 17, para. 55), which in any case implied that it considered the award to be final, especially since it favoured the withdrawal procedure;

The GAT maintains, equally unsuccessfully, that the application for enforcement of the parts of the operative part in its favour does not constitute acceptance within the meaning of Article 410 of the Civil Code, of which its application to arbitral awards is not disputed, since, according to the GAT, only the enforcement and not the application for enforcement constitutes acceptance; that it is in fact common ground that an application for enforcement of a judgment constitutes acceptance as much as its spontaneous enforcement;

GAT is still wrong to argue that it has in fact limited its request for enforcement to the provisional condemnation of the Republic of the Congo, which is enforceable by law. Moreover, supposing its acceptance, this would concern only this point, even though it indeed requested payment of all the sums ordered (points 9 and 14) and not just the amount of the provisional condemnation (point 14), which itself depends on what has been judged on the interest. The arbitral tribunal especially stated that (para. 205) “This amount [€16,007,146.81] has been determined in such a way that the payment of the balance of the interest account due under Convention 569 should not reasonably give place to a repayment by GAT to the Republic”;

Whereas it follows that GAT acquiesced to the operative part of the partial award of 4 June 2002 and that, consequently, the present action is inadmissible pursuant to Article 409 of the Code of Civil Procedure applicable to arbitral awards;

On Article 700 of the Code of Civil Procedure:

Whereas GAT which succumbs and whose claim in this respect is rejected is ordered to pay to the Republic of Congo 100,000€;

FOR THESE REASONS:

HOLDS inadmissible the action for annulment brought by the G H Group against the partial arbitral award rendered in Paris on 4 June 2002 by Messrs. Y, F and B;

ORDERS Group G H to pay the Republic of Congo €100,000 pursuant to Article 700 of the Code of Civil Procedure;

DISMISSES all other requests ;

ORDERS the G H Group to pay the costs and admits the SCP Bernabé Chardin Cheviller, avowed, for the benefit of article 699 of the Code of Civil Procedure.

THE CLERK, THE PRESIDENT