Paris Court of Appeal, No. 12-02.299 | Rory Wheeler, avocat (Paris) & solicitor (England)

Paris Court of Appeal, 2 April 2013, No. 12-02.299

MR. D B

S.A.R.L. DE GESTION PIERRE CARDIN

(DBC)

Vs.

SOCIETE RATTI S.P.A. (RATTI)

By an agreement dated 19 December 2005, Mr. D B and SOCIETE DE GESTION PIERRE CARDIN (DBC) granted the Italian company ESSE SRL, whose rights are transferred to SOCIETE RATTI S.P.A. (RATTI), an exclusive license for the production and marketing of ‘D B’ ties, scarves and underwear in the Middle East and in the United States.

DBC having sold its trademark to a third party in June 2007 for seventeen Middle Eastern countries, RATTI filed a request for arbitration on the basis of the arbitration clause stipulated in the license agreement in order to obtain the reimbursement of the royalties unduly received after June 2007, as well as to order for DBC to compensate it for the loss of margin it had suffered in 2009 and for the loss resulting from the damage to its image and reputation.

In an award issued in Paris on 13 December 2011 under the aegis of the International Chamber of Commerce, Mr. A, the sole arbitrator, ordered DBC to pay the sum of EUR 472,547 in compensation for the prejudice resulting from the loss of margin suffered by RATTI.

On 7 February 2012, DBC filed an annulment appeal against the award.

By an order of 8 March 2012, now final, the Pre-trial judge rejected RATTI’s plea of inadmissibility to this appeal, as well as DBC’s application for provisional enforcement.

By submissions of 20 July 2012, DBC requested the annulment of the award and, consequently, requested the annulment of the exequatur order, to allocate it the sum of EUR10,000 pursuant to Article 700 of the Code of Civil Procedure, and finally to dismiss RATTI’s claims. DBC claims, on the one hand, the violation of international public order/policy, due to the arbitrator’s admission of altered documents produced by RATTI. DBC claims on the other hand, the failure to observe due process, resulting from the arbitrator’s refusal to order the production of the documents necessary for the examination of the prejudice/damages allegedly suffered by RATTI.

By submissions of 25 June 2012, RATTI demands to the court to dismiss DBC’s claims and to order it to pay it the sum of EUR100,000 in damages for abusive proceedings, in addition to EUR80,000 pursuant to Article 700 of the Code of Civil Procedure.

UPON WHICH:

On the ground alleging infringement of international public order (Article 1520-5 of the Code of Civil Procedure):

DBC claims that during the arbitration proceedings RATTI introduced purchase orders as well as an e-mail exchanged with a supplier, the dates of which had been erased in order to conceal the fact that its opponent had been late in drawing the consequences of the change in ownership of the trade mark D B. The claimant argues that the production of altered documents -which RATTI also falsely declared to the arbitrator that they did not contain any changes- constitutes fraud which is a ‘flagrant, effective and serious breach’ of international public order.

Whereas RATTI, having submitted several undated documents - especially purchase orders - in support of its claims for compensation, it has provided these documents in their original form at the arbitrator’s behest,

Whereas the recognition or performance of the award is not contrary to international public order merely because such documents were produced in the arbitral proceedings, since the amendments in question were disclosed during the proceedings and since the disputed documents were restored in their entirety, such that the arbitrator’s decision was not affected thereby;

Whereas the ground must therefore be dismissed;

On the ground alleging failure to observe the principle of due process (in french Principe de la contradiction) (Article 1520-4 of the Code of Civil Procedure):

B states that RATTI ’s claim concerned a loss of margin for the year 2009 and that the sum claimed in this respect was based on the contract concluded between RATTI and its distributor, Y. DBC claims that, given the contradictions in RATTI’s statements, this claim could not be examined solely in the light of the contract, but required the production of all e-mails, letters and messages exchanged between RATTI and Y. DBC claims, moreover, that the arbitrator, by refusing, without giving reasons, to order the production of these documents, even though it was essential to the resolution of the dispute, and by relying solely on the documents that RATTI had chosen to submit to the proceedings, had failed to observe the due process principle.

Whereas due process requires only that the parties have been able to make known their claims in fact and in law and to discuss those of their opposite party in a way that none of what served as a basis for the arbitrators' decision escaped their adversarial debate;

Whereas it is for the arbitral tribunal alone to decide whether it is sufficiently informed by the documents submitted by the parties to the proceedings and debated in an adversarial manner, and to refuse, accordingly, to order the production of additional documents; that the ground which invites the court to substitute its assessment on this point for that of the arbitrator, tends, under the guise of an alleged disregard of the contradiction process, to a revision of the award on the merits which is prohibited to the court of appeal;

That the ground can only be dismissed;

Whereas it follows from the foregoing that the appeal must be rejected;

Whereas it has not been established that the exercise of the appeal has degenerated into abuse; that RATTI’s claim for damages will be dismissed;

Whereas DBC, who is unsuccessful, cannot benefit from the provisions of Article 700 of the Code of Civil Procedure and will be ordered on this basis to pay 50. 000 euros to RATTI;

FOR THESE REASONS:

Rejects the claimant’s appeal against the award issued between the parties on 13 December 2011.

Dismisses RATTI SPA’s claim for damages.

Orders in solidum Mr. D B and SOCIETE DE GESTION PIERRE CARDIN to pay the costs.

Dismisses Mr. D B and SOCIETE DE GESTION PIERRE CARDIN’s claim based on Article 700 of the Code of Civil Procedure.

Orders Mr. D B and SOCIETE DE GESTION PIERRE CARDIN to pay in solidum the company RATTI SPA the sum of EUR 50,000 pursuant to Article 700 of the Code of Civil Procedure.