Paris Court of Appeal, No. 12-16.225 | Rory Wheeler, avocat (Paris) & solicitor (England)

Paris Court of Appeal, 18 March 2014, No. 12-16.225

S.A. GROUPE ANTOINE TABET

Vs.

THE REPUBLIC OF CONGO

The ANTOINE TABET GROUP (TABET) is a company under Lebanese law which works in the field of public and private works and the financing of such works. It concluded on 27th April 1992 with the REPUBLIC OF CONGO (the CONGO) an agreement for the financing of the rehabilitation of the Mayama road up to 100 million FF (agreement 560). On 9 March 1993, the parties concluded a financing contract by credit opening (convention 569) which provides for the setting up of financing contracts to be concluded between CONGO and the Lebanese company Afrique Entreprises Tabet SAL up to FF 500 million. Each agreement included an arbitration clause providing for arbitration under the aegis of the International Chamber of Commerce and the application of French substantive law.

Disputes having arisen between the parties in the execution of these agreements, CONGO filed a request for arbitration in application of these stipulations.

In an intermediate award issued in Paris on 4 June 2002, the arbitral tribunal composed of Messrs. Leurent and Salès, arbitrators, and Mr. Faurès, chairman, ordered CONGO to pay TABET a provisional sum of EUR 16,007,146.81.

TABET had previously brought a claim for payment before the Swiss courts against Total Fina Elf E & P Congo (TEP Congo), which guaranteed the payment of the price of the works from the oil royalty due to CONGO. In a judgement of 20 September 2001, the Geneva Court of First Instance ordered TEP Congo to pay TABET various sums for a total principal amount of CFH 73 million. When TEP Congo appealed, the Geneva Court of Justice ordered it to pay TABET 49,271,538 euros in principal. CONGO’s appeal against this decision was rejected on 13 September 2002 by the Geneva Court of Justice. The appeal for reform lodged by the CONGO before the Swiss Federal Court was also rejected on 13 September 2002.

Assuming that TABET had contravened the provisions of the award of 4 June 2002 by instituting proceedings in Switzerland without waiting for the arbitral proceedings to be completed, CONGO applied to the arbitral tribunal for interim and conservatory measures.

By a partial award issued in Paris on 8 December 2003, the arbitral tribunal essentially ordered TABET to give TEP Congo, within fifteen days of notification of the award, written and irrevocable instructions to pay into an escrow account to be opened with the President of the Bar of the Paris Court of Appeal any sum exceeding EUR 16,007,146.81 that TEP Congo might be required to pay in execution of a Swiss court decision, with interest attached to the principal sum.

By procedural order no. 10 of 11 December 2003, the president of the arbitral tribunal ordered the parties to sign the annexed escrow agreement, and provided that if TEP were to transfer to TABET a sum exceeding the amount of the advance before the escrow agreement was concluded, TABET would have to deposit the difference in the hands of the President of the Bar of the Paris Court of Appeal’s Bar Association under the conditions provided for in this annex.

On 4 September 2012, TABET filed a statement of claim for annulment of the award of 8 December 2003 and the procedural order of 11 December 2003.

According to the conclusions notified on 4 February 2014, he seeks the annulment of the award on the basis of Article 1520-3 of the Code of Civil Procedure, arguing that the arbitrators, firstly, disregarded the provisions of the Rules of Arbitration which provide for a prior review of the award by the International Court of Arbitration of the International Chamber of Commerce, and secondly, ruled ultra petita. In the alternative, he asks the court to rule that the order of 11 December 2003 is devoid of enforceability. He estimates his unrepeatable procedural costs at EUR50,000.

Following the submissions notified on 5 February 2014, CONGO asks the court to dismiss the appeal, to dismiss TABET’s application for a ruling that the order of 11 December 2003 is not an enforceable title and to order him to pay the sum of EUR 80,000 pursuant to Article 700 of the Code of Civil Procedure. He submits that TABET’s action for annulment is inadmissible in that it is not brought against an arbitral award and is not res judicata and that the application for a declaration that the order of 11 December 2003 is not enforceable is also inadmissible before the annulment court.

UPON WHICH

On the ground for annulment based on the arbitrators' lack of knowledge of their mission (Article 1502-3 of the Code of Civil Procedure):

TABET claims that the arbitral tribunal violated Article 27 of the International Chamber of Commerce Arbitration Rules by not submitting the draft order to the International Court of Arbitration before it was signed, and ruled ultra petita by ordering it to deposit certain sums received from TEP Congo, even before the escrow account was set up, even though such a measure was not requested.

TABET claims that his action cannot be dismissed on the basis of res judicata, nor on the basis that the order of 11 December 2003 is not an award, since the subject of the present action relates to the entirety of this order and the award of 8 December 2003.

Whereas by an interim award rendered in Paris on 4 June 2002, the arbitral tribunal ordered CONGO to pay TABET a provision of EUR16,007,146.81;

Whereas, in parallel with the arbitration proceedings, TABET obtained, by a decision dated 13 September 2002 of the Court of Justice of Geneva, an order from TEP Congo to pay, by virtue of the delegation of payment granted by CONGO on the oil royalties owed to it by TEP Congo, the sum of EUR49,271,538 in principal, as well as interest;

Whereas, seized by CONGO with a request for interim and conservatory measures, the arbitral tribunal considered that, by instituting this action before the Swiss courts without waiting for the outcome of the arbitration proceedings, TABET had breached the provisions of the award of 4 June 2002; that, consequently, the arbitrators, by a partial award issued in Paris on 8 December 2003:

rejected CONGO’s main request in that it sought an injunction against TABET to refrain from executing the 13 September 2002 ruling of the Geneva Court of Justice and to call upon TEP Congo’s guarantee for the deadlines to be met until 2004 pending the final award;
declared admissible the alternative request from CONGO and ordered TABET to give [-within 15 calendar days of the notification of the partial award to TEP Congo-] irrevocable written instructions to pay, [-into the escrow account that is to be opened by the parties with the President of the Bar Association of the Court of Appeal of Paris-, -in accordance with the provisions of the procedural order to be issued shortly by the arbitral tribunal-], any sum exceeding the amount of EUR16,007,146.81 that TEP Congo may have to pay to TABET in execution of a judicial decision rendered by a Swiss national court, the interest that would be paid on the sequestered sum being attached to the principal, the sequestration ending upon instruction and according to the terms issued by the arbitral tribunal at the latest within 15 days of the notification of the final award';
rejected TABET’s request for interim and protective measures;

Whereas on 11 December 2003, the President of the Arbitral Tribunal issued Procedural Order No. 10 which:

enjoins the parties to sign the sequestration agreement in the form of the text annexed to the order or in any form meeting the agreement of the parties and the sequestration, within ten days of the notification;
in the event that TEP Congo transfers to TABET a sum greater than EUR16,007,146.81 before the sequestration agreement is concluded, orders TABET to deposit the difference between the sum paid and the deposit in the hands of the President of the Bar Association at the Paris Court of Appeal acting as sequestrator, under the conditions set out in the appendix;

Whereas the award of 8 December 2003 was the subject of an action for annulment which was rejected by a judgment of this court of 11 May 2006, against which the appeal in cassation was rejected on 6 February 2008; whereas the procedural order no. 10 of 11 December 2003 was the subject of an action for annulment which was declared inadmissible by a judgment of this court of 29 October 2009, against which the appeal in cassation was rejected on 12 October 2011;

Whereas it is the appellant’s responsibility to submit at the first appeal instance all the pleas in law which he or she considers are such as to substantiate the appeal;

Whereas TABET cannot avoid this rule by claiming that the present appeal, artificially directed against the ‘whole’ constituted by the award of 8 December 2003 and the order of 11 December 2003, would not have the same object as the previous appeals directed separately against each of these two decisions;

That the appeal should therefore be declared inadmissible;

On the request that the order of 11 December 2003 be declared unenforceable:

Whereas the appeal filed on the basis of Articles 1502 and 1504 of the Code of Civil Procedure, in the wording applicable at the date of the contested decision, can have no other object than the annulment of an international award;

That an application which does not seek annulment but seeks to have a procedural order declared unenforceable is therefore inadmissible before the court of appeal;

On Article 700 of the Code of Civil Procedure:

Whereas TABET, cannot benefit from the provisions of article 700 of the code of civil procedure; that he will be condemned on this basis to pay the sum of EUR80,000 to CONGO;

FOR THESE REASONS

Dismisses the action for annulment of the award of 8 December 2003 and the order of 11 December 2003, as well as the application for a declaration that this order is not enforceable.

Orders GROUPE ANTOINE TABET to pay the costs which will be recovered in accordance with the provisions of Article 699 of the Code of Civil Procedure.

Condemns the company GROUPE ANTOINE TABET to pay the REPUBLIC OF CONGO the sum of EUR80,000 in application of article 700 of the code of civil procedure.