Paris Court of Appeal, No. 09/17405 | Rory Wheeler, avocat (Paris) & solicitor (England)

Paris Court of Appeal, Pole 1 - Chamber 1, 4 November 2010, No. 09/17405

DYNCORP AEROSPACE TECHNOLOGY

vs.

INTERNATIONAL TRADING AND INDUSTRIAL INVESTMENT COMPANY

The company DYNCORP AEROSPACE TECHNOLOGY (DYNCORP) is an American law firm specialising in the provision of logistical support and security to which the US armed forces based in the State of Qatar have decided to appeal.

The company INTERNATIONAL TRADING AND INDUSTRIAL INVESTMENT COMPANY (INTERNATIONAL TRADING) is a Qatari law company specialised in the provision of services.

To set up in Qatar DYNCORP concluded on 20 July 1998 a partnership contract with INTERNATIONAL TRADING comply with the requirements of Qatari law, which imposes on any foreign company setting up in Qatar to have use of a Qatari agent.

This contract, entitled ‘Contract for the establishment of a branch in Doha, for the State of Qatar and the territorial waters of the State of Qatar’, subject to Qatari law, was drawn up in Arabic and English, the Arabic version prevailing in case of difficulty. It included an arbitration clause under which all disputes arising out of or in relation to the contract shall be settled under the Arbitration Rules of the International Chamber of Commerce (ICC) by one or more arbitrators appointed in accordance with those Rules.

A dispute has arisen regarding the early termination of the contract by DYNCORP. After unsuccessful proceedings before the Qatari courts, INTERNATIONAL TRADING referred the matter to the ICC International Court of Arbitration.

By award in Paris on 24 May 2006, the sole arbitrator, B C, ordered DYNCORP to pay INTERNATIONAL TRADING USD 1,107,764.95 with interest of 5% per annum from the date of the award. It also stated that each party shall bear its own legal fees. Moreover, it ordered DYNCORP to bear the arbitration costs set at USD 80,000 and to reimburse INTERNATIONAL TRADING its advance of USD 40,000 and dismissed the other claims.

DYNCORP first appealed before the Qatari courts. On 28 January 2008, the Qatar Court of Appeal upheld the award, with the exception of interest. On 17 June 2008, the Supreme Court of Qatar overturned this decision and the arbitral award. On April 30, 2009, INTERNATIONAL TRADING filed an application with the United States District Court for the District of Columbia to enforce the award.

DYNCORP then brought the present action for annulment. It raises three grounds for annulment: that the arbitrator ruled on a null agreement (Article 1502-1 of the Code of Civil Procedure), that the arbitrator ruled without complying with his the mission (Article 1502-3 of the Code of Civil Procedure) and the recognition and enforcement is contrary to international public order (Article 1502-5 of the Code of Civil Procedure).

In its submissions of 23 September 2010, DYNCORP requests the annulment of the award, the rejection of the applications of INTERNATIONAL TRADING and the condemnation of INTERNATIONAL TRADING to pay it $10,000 under Article 700 of the Code of Civil Procedure.

In its submissions of 28 September 2010, INTERNATIONAL TRADING requests the court to declare that the arbitration clause does not contain a right of appeal and that it is valid, that the arbitral tribunal ruled as a last resort, that the claims are belated and tend to a review on the merits, to declare DYNCORP’s claims inadmissible, to dismiss it, to confirm the award and to order DYNCORP to pay him $50,000 in damages for abusive proceedings and € 10,000 pursuant to Article 700 of the Code of Civil Procedure.

UPON WHICH :

Considering that the action for annulment based on the provisions of Articles 1502 and 1504 of the Code of Civil Procedure is admissible, the end of non-receipt or inadmissibility otherwise invoked by INTERNATIONAL TRADING concerning the grounds of annulment themselves;

On the first ground: the arbitrator ruled on an agreement which is null and void (Article 1502-1 of the Code of Civil Procedure):

DYNCORP argues that the arbitration clause is null and void insofar as it would provide in its Arabic language version for an appeal on the merits.

But considering that in order to be admissible the ground must be raised before the arbitrator whenever possible, which DYNCORP did not do;

That it is therefore inadmissible to uphold this ground for complaint before the court. It was observed that if the interpretation of the arbitration clause on which the parties differed could lead to the conclusion that it provided for an appeal on the merits, only that clause would be null and void, since the international arbitration agreement was not null and void;

That the first ground is inadmissible;

On the second and third grounds: the fact that the arbitrator ruled without complying with his mission and that the recognition and enforcement of the award are contrary to international public order (Articles 1502-3 and 1502-5 of the Code of Civil Procedure):

DYNCORP asserts that the arbitrator required to rule according to the law of Qatar did not identify the rules of law he applied, thus contravening his mission. Moreover, DYNCORP asserts that the arbitrator limited himself to ruling as an amiable compositeur contrary to the will of the parties and in disregard of the principle of international public policy of respect for the autonomy of the will of the parties.

But whereas the arbitrator, whose mission was essentially to interpret a contract regarding its termination, the liabilities incurred and the accounts to be drawn up, carried out a detailed analysis of Article 9.1 of the contract concerning its duration, the obligations of each party and the remuneration still due; whereas it has not been established that he did not reason on principles under Qatari law or that he ruled as an amiable compositeur;

That the second and third ground which are in fact missing are dismissed, as is the appeal;

On INTERNATIONAL TRADING’s claim for damages for abusive proceedings:

Considering that INTERNATIONAL TRADING does not establish that DYNCORP abused his right to take legal action, its claim is dismissed;

On claims according to Article 700 of the Code of Civil Procedure:

Considering that DYNCORP, who is unsuccessful and whose claim is rejected, pays INTERNATIONAL TRADING $10,000;

FOR THESE REASONS:

States that the action for annulment is admissible;

REJECTS it;

ORDERS DYNCORP AEROSPACE TECHNOLOGY to pay INTERNATIONAL TRADING AND INDUSTRIAL INVESTMENT COMPANY € 10,000 under Article 700 of the Code of Civil Procedure;

REJECTS all other requests;

ORDERS DYNCORP AEROSPACE TECHNOLOGY to pay the costs and admits the SCP Bolling- Durand-Lallement, avowed, for the benefit of article 699 of the code of civil procedure.