Court of Cassation, No. 09-14.280

Court of Cassation, First Civil Chamber, 8 July 2010, No. 09-14.280

Challenged decision: Paris Court of Appeal, 9 October 2008, No. 07/14539

LA MAROCAINE DES LOISIRS (MDL)

vs.

FRANCE QUICK

THE COURT OF CASSATION, FIRST CHAMBER, rendered the following judgment:

Whereas, by an agreement of 27 March 2001 containing an arbitration clause, the company France Quick granted to the company Marocaine de Loisirs (MDL), to which Mr. Y… is the chairman of the board of directors, the exclusive Quicks franchise on Moroccan territory; that two contracts pertaining to the creation of restaurants have been signed; that, France Quick terminated the contracts, and MDL has implemented the arbitration procedure; that, by a final award of 9 July 2007, an arbitral tribunal ruled that the contracts were rightfully terminated by France Quick and pronounced various condemnations against the company MDL;

On the sole ground of appeal, taken in its first part:

Whereas MDL objects to the judgment under appeal (Paris, 9 October 2008) which rejected the action for annulment filed against this award, whereas, according to the ground, the award may be set aside when its recognition or enforcement violates, in a manner that is flagrant, effective international public policy; that the enforcement of an award is incompatible with international procedural public policy when it has pronounced the termination of a contract without enabling one of the contracting parties, a party to the arbitration agreement, to be duly summoned to the proceedings in order to assert its rights; that by ruling as it did, without investigating, as it was nevertheless invited to do, whether Mr Y… was not personally a party to the memorandum of understanding of 27 March 2001 containing the arbitration clause, as well as to the franchise agreements of 20 November 2002 and 17 February 2005, the termination of which was pronounced by the arbitration award without his being summoned to the arbitration proceedings and, consequently, whether the enforcement of this award was not incompatible with international procedural public policy, the Court of Appeal did not legally justify its decision in the light of Articles 1502-5 and 1504 of the Code of Civil Procedure

But whereas the MDL company, claimant in the arbitration through Mr. Y…, its chairman of the board of directors, who did not consider it useful to intervene in the proceedings in a personal capacity, cannot, without contradicting itself to the detriment of the defendant company and thus violating the principle of fairness of the proceedings, maintain, before the annulment judge, that the recognition and enforcement of the award are contrary to international public policy due to the absence of Mr. Y… as a party to the proceedings; that the ground is inadmissible ;

On the sole ground of appeal, taken in its second part, hereinafter annexed:

Whereas this ground of appeal is not such as to permit the admission of the appeal;

FOR THESE REASONS:

Rejects the appeal;

Orders the Moroccan leisure company La Marocaine des Loisirs to the costs;

Pursuant to article 700 of the code of civil procedure, orders the Moroccan leisure company La Marocaine des Loisirs to pay to the company France Quick the sum of 2 500 euros;

Rejects the other requests;

Thus made and judged by the Court of Cassation, first civil chamber, and pronounced by the president in the public hearing of 8 July 2010.