Court of Cassation, No. 11-16.444 | Rory Wheeler, avocat (Paris) & solicitor (England)

Court of Cassation, First Civil Chamber, 25 June 2014, No. 11-16.444

ANTOINE TABET GROUP (GAT)

Vs.

THE REPUBLIC OF CONGO

Summary

Having pointed out that the undisclosed circumstances, relating to the business relations of an arbitrator with a group of companies of which one of the subsidiaries is a third party to the arbitration proceedings, could not, in combination with the other elements of the case, be of such a nature, as to aﬀect said arbitrator’s judgment, nor to raise reasonable doubt in the minds of the parties as to the latter’s impartiality and independence, a court of appeal rightly decided to reject a ground based on the improper constitution of the arbitral tribunal.

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

On the first ground:

Whereas, according to the judgment under appeal (Paris, 17 March 2011), on 27 April 1992 and 9 March 1993, Antoine Tabet Group (hereinafter GAT), a company incorporated under Lebanese law whose business is to carry out and finance public works, concluded two contracts with the Republic of Congo for the financing of works, which were to be carried out in that country; whereas, by three subsequent agreements, concluded respectively on 24 January 1996 (the so-called tripartite agreement), then in 2001 (the general protocol known as PGA), and 2003 (the general settlement agreement known as AGT), the company TEP Congo, belonging to the Total group, guaranteed the payment of certain sums owed by the Republic of Congo to GAT by undertaking to pay, directly in the hands of this company, the amount of the oil exploitation royalty which it owes to the Congolese authorities; as difficulties had arisen between GAT and the Republic of Congo, the latter decided to initiate arbitration proceedings in Paris, under the aegis of the International Chamber of Commerce (ICC), which led to the issuance of several partial awards and then a final award, dated 26 October 2009, which, after settling the account between the parties, ordered GAT to pay the Republic of Congo a certain sum; After having filed a challenge against the chairman of the arbitral tribunal on the grounds that he was a director of a Total group shareholder, which was rejected by the ICC Court of Arbitration on 30 May 2008, GAT filed an action for annulment of the final award, claiming that the Chairman of the arbitral tribunal had not met the requirements of independence and impartiality;

Whereas GAT complains that the judge rejects its action for the annulment of this award, then, according to the appeal:

that the arbitrator who, in view of his capacity as director and associate lawyer, has maintained a frequent and regular relationship with a group of companies that has guaranteed the award issued against one of the parties to the dispute judged by the arbitral tribunal, is required to disclose the entirety of this situation to the other party to allow his challenge, such situation being objectively likely to call into question his independence in the minds of the parties; in deciding that the financial agreement between the Republic of Congo and the company TEP Congo, a Total Group company with which the arbitrator has business relations, has no impact on the arbitrator’s impartiality insofar as the company TEP Congo had in any event to pay a debt of 70 million euros, either to GAT, or to the Republic of Congo, when the mere fact that the arbitrator had business relations with the guarantor company was nevertheless necessarily of such a nature as to create reasonable doubt, in the minds of the parties, as to his independence and impartiality, the court of appeal did not draw the legal consequences that were evinced by its own findings and violated Articles 1502-2 and 1452, paragraph 2, of the Code of Civil Procedure, together with Article 7.2 of the Rules of Arbitration of the International Chamber of Commerce and Article 6 § of the Human Rights Fundamental Freedoms
that it is up to the judge of the regularity of the arbitral award to assess the independence and impartiality of the arbitrator, noting any circumstance likely to aﬀect the arbitrator’s judgement and to provoke in the minds of the parties a reasonable doubt on these qualities, which are of the very essence of the arbitral function; that by merely noting in the case at hand that the commitment of the company TEP Congo, a company of the Total Group with which the arbitrator had a business relationship, was financially neutral , the payment being made either to the Antoine Tabet Group, or to the Republic of Congo, and by neglecting to investigate the causes of this confidential agreement, the Court of Appeal, on the contrary, which was to characterize concretely the reasons why TEP Congo had thus undertaken to raise to 70 million dollars the award issued against the Republic of Congo, as these were necessarily likely to aﬀect the arbitrator’s judgement, deprived its decision of a legal basis in the light of articles 1502-2 and 1452 paragraph 2 of the code of civil procedure;
that the exhibitor argued, in its submissions in the appeal, that the arbitrator was a partner of a law firm which highlighted its activities in the Republic of Congo, and in particular the fact of being an investment specialist with excellent relations with several institutions including the ministries of the Republic, a fact that had not been revealed by the interested party; that by refraining from responding to this decisive ground, which nevertheless highlighted circumstances likely to certainly affect the judgment of the arbitrator in charge of deciding a dispute involving the Republic of Congo, the Court of Appeal violated Article 455 of the Code of Civil Procedure;

Whereas however, the judgment, after restating the terms of the three agreements, concluded in 1996, 2001 and 2003, infers that the mechanism is neutral for the company TEP Congo since this company will pay 70 million US$, whether or not the Republic of Congo is condemned, this payment being made to the benefit of either the company GAT or the Republic of Congo, and draws the consequence that the outcome of the arbitration procedure will have no impact on the financial situation of TEP Congo, which is not a party to the procedure, thus ruling out the existence of any conﬂit of interests that might create a risk of a lack of independence and impartiality of Mr. Y…; having thus shown that the undisclosed circumstances relating to the arbitrator’s relationship between business and the Total group, when taken together with the other elements of the case, could not, in light of the other elements of the case, be likely to aﬀect his judgment or to provoke, in the minds of the parties, reasonable doubt as to the qualities of impartiality and independence, the Court of Appeal, which was neither obliged to carry out the research invoked in the second branch nor to respond to the mere argument mentioned in the third, rightly decided to reject the ground based on the irregular constitution of the arbitral tribunal;

FOR THESE REASONS, without it being necessary to rule on the second ground, which is not sufficient to allow the appeal to be admitted

DISMISSES the appeal;

Orders the Antoine Tabet company Group to pay the costs;

Having regard to Article 700 of the Code of Civil Procedure, orders GAT to pay the Republic of Congo the sum of 3,000 euros and rejects her request;

Thus done and judged by the First Civil Chamber of the Cassation Court, and pronounced by the president in its public hearing of the twenty-fifth of June two thousand and fourteen.