Court of Cassation, No. 10-21.375

Court of Cassation, First Civil Chamber, 20 June 2012, No. 10-21.375

CHAUDRONNERIE MECANIQUE ARIEGEOISE (CMA)

Vs.

ADJOR SOFAL NEMONEH PARS (ASNP)

SCP CAVIGLIOLI

BARON AND FOURQUIÉ

MR. JULIEN BRENAC

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

On the sole ground in law:

Given that, according to the judgment under appeal (Paris, 3 June 2010), that on 24 November 2000, the company under French law Chaudronnerie Mecanique Ariégeoise (CMA) concluded with the Iranian company Adjor Sofal Nemoneh Pars (ASNP) a contract on the study, design, manufacture, installation, operation and the assembly of machines for the equipping of a production plant in Iran for the production of bricks and tiles according to a so-called SBF process; that an arbitration clause was stipulated in this contract intrusting the International Chamber of Commerce to arrange an arbitration; that a dispute has arisen over the implementation of the production chain, on 5 March 2008 and the ASNP referred the matter to the Court of international arbitration; that, by an award rendered in France on 14 August 2009, the sole arbitrator held the termination of the contract at the exclusive fault of CMA company and ordered it to pay to ASPN company the amount of several sums ;

Given that CMA objects to the judgment with rejecting its annulment appeal against this award, whereas, according to the grounds :

1°/ when he rules on a dispute, the arbitrator must comply with his mission, which it results from the Terms of Reference and the claims of the parties; the Terms of Reference of the arbitrator dated 15 October 2008 does not, in any way, refer, in its part devoted to the “points in dispute to be resolved by the Arbitral Tribunal” (points 8. 1 to 8.4), the SBF manufacturing process. Thus, the arbitrator could not rule on the conformity of this process for which CMA made no commitment. In ruling as they did, the court of Appeal violated Article 1502-3 of the Code of Civil Procedure ;

2°/ that the arbitrator is bound to respect the principle of contradiction, which implies the possibility for a party to reply to the writings of the opposing party as long as the investigation remains open. The court of appeal found that the arbitrator refused to take into account the statement filed on 21 April 2009 by CMA in reply to ASNP’s final statement, whereas the only justification for excluding the written submissions of one party was the closure of the proceedings on 13 May 2009. The Court of Appeal had necessarily to infer from this that there was a violation of due process (in French Principe de la contradiction), without being necessary to question the existence of the parties' consent to the arbitrator’s choice; that in ruling as it did, the Court of Appeal violated Article 1502-4 of the Code of Civil Procedure;

But whereas, on the one hand, the mission of the arbitrator, as defined by the arbitration agreement, is delimited mainly by the subject matter of the dispute, as determined by the parties' claims, without there being any need to focus solely on the statement of the issues in dispute in the Terms of Reference. The Court of Appeal noted, first of all, that it was not disputed that it was incumbent on the arbitrator to determine whether CMA fulfilled its obligations by delivering machines capable of producing the required quantity and quality of tiles and bricks. Then, the Court of Appeal noted that the arbitrator found that the company guaranteed the SBF process and undertook to deliver a brick plant operating according to this process, which the president and general manager of the company did not dispute. Thus, the Court of Appeal rightly held that the arbitrator did not misunderstand the scope of his mission when he concluded that CMA failed to fulfil its contractual obligations under which it guaranteed the reliability of the process;

Whereas, on the other hand, the Court of Appeal noted that the parties agreed to file only one entry and that no reply to the final statements was provided for in the provisional timetable, which was widely discussed and amended at the request of the parties. Furthermore, the Court of Appeal found that no agreement was reached between the parties on such a reply. The Court of Appeal concluded exactly from this that the arbitrator, who had to control the proceedings, did not disregard due process (in French Principe de la contradiction) by closing the debates, which he considered complete;

Hence it follows that the ground is not founded in any of its parts;

FOR THESE REASONS:

REJECTS the appeal;

Orders the company Chaudronnerie Mecanique Ariègeoise to pay the costs;

With regards to Article 700 of the Code of Civil Procedure, dismisses the application;

Thus done and judged by the Court of Cassation, first instance, the Civil Chamber, and delivered by the President in presence of the public hearing of twenty June two thousand and twelve.