Court of Cassation, No. 11-13.269

Court of Cassation, First Civil Chamber, 19 December 2012, No. 11-13.269

Botas Petroleum Pipeline Corporation

Vs.

Tepe Insaat Sanayii AS

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

Whereas, according to the decision under appeal (Paris, 2 December 2010), the construction of the Baku-Tbilisi-Ceyhan oil pipeline was carried out by a consortium of companies called “Participants in the Main Export Pipeline” (PEP) and that the construction of the section of the pipeline located on Turkish territory was entrusted by PEP to the semi-public Turkish company Botas Petroleum Pipeline Corporation (Botas) by a contract dated 19 October 2000; that the latter concluded, on 20 September 2002, with the Turkish company Tepe Insaat Sanayii AS (Tepe), a contract for the engineering, supply and construction of four pumping stations and an intermediate pigging station, with the completion of the work being scheduled for 10 May 2005; that disputes have arisen between the companies Botas and Tepe regarding the scope of the respective services of the parties, the financing of the work and compliance with deadlines, on 22 March 2005, Tepe sent a request for additional financing to its co-contractor, who, by letter written on the following 29 March, terminated the contract with immediate effect; that Tepe implemented the arbitration clause included in the contract, an arbitral tribunal issued a partial award in Paris on 5 June 2009, under the terms of which it rejected certain applications by the company Tepe and declared that the contractual termination by the company Botas was irregular, reserving the remainder of the applications; that Botas filed an action for annulment against this partial arbitral award;

On the first ground, taken in its first branch, hereafter annexed:

Whereas this ground is not such as to allow the appeal to be admitted;

On the first ground, taken in its second branch, and the second ground, taken in its various branches, hereafter annexed:

Whereas the company Botas complains that the decision rejects its action for annulment of the partial arbitral award;

Whereas it is clear from the wording of the decision that the arbitral tribunal found that the termination of the contract was unlawful, because the notice period owed to Tepe and the breaches invoked by Botas, including the threat to terminate the contract, were not respected, which cannot be qualified as a serious breach of the said contract;

Whereas, first of all, by finding that Botas criticized the arbitrators only for having disregarded the principle of execution of agreements in good faith, the Court of Appeal, which carried out the allegedly omitted investigation, deduced exactly from this that, failing to show how the solution adopted by the arbitral tribunal was contrary to international public policy, the ground for annulment tended towards a revision of the merits of the partial award, which the annulment judge was prohibited from doing;

Whereas, secondly, in noting that Botas had argued that the failure to comply with the rule of estoppel constituted a violation of international public policy, the Court of Appeal, without altering the subject-matter of the dispute and without distorting the facts, rightly found that this violation, supposing it had been demonstrated, did not characterize, in the absence of any procedural fraud, one of the cases of annulment opened by Article 1502 of the Code of Civil Procedure, so the recognition and enforcement of the partial award were not contrary to international public policy; that the claims are unfounded ;

ON THESE GROUNDS:

DISMISSES the appeal;

ORDERS Botas Petroleum Pipeline Corporation to pay the costs;

In view of Article 700 of the Code of Civil Procedure, rejects the application of Botas Petroleum Pipeline Corporation and orders it to pay the company Tepe Insaat Sanayii the sum of EUR 3,000;

Thus done and judged by the Court of Cassation, First Civil Chamber, and pronounced by the President in its public hearing of the nineteenth of December two thousand and twelve.