Court of Cassation, No. 09-17.346 | Rory Wheeler, avocat (Paris) & solicitor (England)

Court of Cassation, First Civil Chamber, 29 June 2011, 09-17.346

Papillon group corporation

vs.

Arab Advertising Organization

General Establishment for Foreign Trade

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

Whereas, for the organization of the Mediterranean games, the President of the Arab Republic of Syria instituted an organizing committee; that this committee, lacking of legal personality, formed a publicity committee placed under the presidency of the director of the Arab Publicity Organization (Golan); that, following a call for tenders, Golan signed, on 22 March 1986, with the Panamanian Papillon group corporation (PGC) a framework contract including an arbitration agreement, followed by several other contracts; following the first dispute, an arbitral tribunal jointly and severally ordered Golan and the Syrian Arab Republic to pay damages to PGC; that PGC once again filed a claim before an arbitral tribunal, in particular against Golan and the Syrian Arab Republic; that, by an award of 11 October 2007, one of the arbitrators having written a dissenting opinion, the arbitral tribunal declared itself, in particular, without jurisdiction with respect to the Syrian Arab Republic and declared part of the claim to be time-barred; that PGC filed an appeal for annulment of this award;

On the first plea:

Whereas the company PGC complains that the judgment under appeal (Paris, 26 March 2009) rejected its appeal for annulment, whereas, according to the plea, the principle of collegiality implies that each arbitrator should be able to discuss any decision with his colleagues; that tPGC argued that one of the arbitrators, Mr. X… had been excluded from the deliberation leading to the final award, which had been held solely between the two other arbitrators, so that by merely noting that the excluded arbitrator had had the opportunity to express his opinion by way of a dissenting opinion and that a meeting had been held during the course of the arbitral proceedings, the Court of Appeal deprived its decision of a legal basis pursuant to articles 1504, 1502-3 and 1502-5 of the Civil Procedure Code;

But whereas, after recalling that the principle of collegiality implies that each arbitrator had the possibility of discussing the decision with the others, the judgment notes that a collegial meeting took place and that one of the arbitrators, Mr. X…, was able to express his objection by a dissenting opinion; that, since there is a presumption that the award was deliberated and that it is up to the person claiming that there was no deliberation to prove it, the court of appeal was able to deduce from these elements that the principle of collegiality had not been violated; that the plea is unfounded;

On the second plea:

Whereas the same grievance is still made at the judgment, then, on the plea:

1°/ that it results from the judgment that the company under Panamanian law was acting through its establishment located in the United States in the state of Ohio; that the articles published by the President of the arbitral tribunal vilified both the United States and Israel, so that by merely stating that PGC is in no way concerned by the Israeli-Palestinian conflict about which Mr. M. Y … wrote press articles, the Court of Appeal did not give a legal basis for its decision pursuant to article 1502-2 of the Civil Procedure Code;

2°/ that by merely affirming that the articles in question concerned the geopolitical situation of the region without the author proving to be a zealot to the Syrian cause, without having analyzed the said articles and, in particular, the passages quoted in the pleadings of PGC, the Court of Appeal did not satisfy the requirements of article 455 of the Civil Procedure Code;

But given that the judgment notes that PGC, a Panamanian company involved in a litigation over a marketing contract, is in no way concerned by the Israeli-Palestinian conflict over which Mr. Y.. wrote two press articles concerning the geopolitical situation in the region without revealing to be a zealot of the Syrian cause; that the court of appeal was able to deduce, without having to analyze the content of the press articles, that neither the partiality nor the dependence of Mr. Y… towards one party was demonstrated; that the plea, new and mixed in fact in its first branch and unfounded in the second, cannot be accepted;

On the third plea:

Whereas the same grievance is still made at the judgment, then, according to the plea:

1°/ that in holding that the Syrian Arab Republic was foreign to the agreement containing the arbitration clause after having noted that Golan had contracted with PGC as a representative of the organizing committee, which does not have a legal entity distinct from the Syrian Arab Republic, the Court of Appeal did not draw the legal consequences of its decision pursuant to article 1502-3 of the Civil Procedure Code;

2°/ that the Court of Appeal, which found that the organizing committee does not have a legal entity distinct from the Syrian Arab Republic, did not draw the legal consequences of this finding based on article 1502-3 of the Civil Procedure Code;

But whereas the judgment notes, first, that the initial framework agreement, containing an arbitration clause, was signed only between PGC and Golan, then, that Golan, endowed with legal personality unlike the organizing committee, committed itself personally, its director having signed all the contracts except one, then, that the framework agreement only stipulates obligations to be assumed by PGC and Golan, again, that the arbitral tribunal set aside an agreement of 25 November 1987 for reasons based on the administration of evidence; that from these elements, which were sovereignly assessed, the court of appeal was able to deduce that, even if Golan was mandated by the organizing committee and the organizing committee was responsible, in the same way as Golan, for the delays relating to the export of the goods, the intention of the Syrian Arab Republic to be engaged by the arbitration agreement was not demonstrated; that the plea is unfounded;

FOR THESE REASONS:

REJECTS the appeal;

Condemns the company Papillon group corporation to pay the costs;

Based on article 700 of the Civil Procedure Code, condemns Papillon group corporation to pay to the Arab Republic of Syria, Advertising Organization and the General Establishment of Foreign Trade a global sum of 3 000 euros; rejects its request.

Thus done and judged by the Court of Cassation, first civil chamber, and pronounced by the president in his public hearing of June twenty-nine two thousand and eleven.