Paris Court of Appeal, No. 13/17643
Paris Court of Appeal, 16 December 2014, No. 13/17643
MR. E-F A (MR. A)
EKNET RESEARCH CORPORATION
VS.
STRATEK PLASTICS LTD
SEALED AIR CORPORATION (PREVIOUSLY STAMFORD POLYMER RESEARCH LABORATORY, HEREINAFTER POLYMER)
Mr. E-F A, a physics researcher, signed at the end of 1998, via the company Eknet Research Corporation registered in the State of Delaware and of which he was a shareholder, a development and royalties contract with a new start-up, the company Plastitech, created in the Isle of Man in August 1999.
In 2002, with a view to a capital increase, the investors set up Stratek Plastics Limited in Dublin.
On 18 April 2002, Eknet and Mr. A signed two contracts with Stratek.
In addition, as of 2002, Mr. A has been a member of the Board of Directors of Stratek as a director and major shareholder.
In 2006 Stratek concluded a license agreement with the company Coperion.
Mr. A states that in September 2006 he was deprived of all remuneration and was suspended from his duties, while Stratek discontinued its cooperation with him and Eknet.
On 18 October 2006, Stratek notified Mr. A of the termination of the service contract signed on 18 April 2002.
On 18 November 2006, Mr. A was dismissed from his position as director of Stratek, and in September 2006 Stratek ceased to pay Eknet the sums due in execution of the service contract.
In November 2006, Stratek and its American subsidiary Stamford Polymer Research Laboratory (POLYMER, now owned by Sealed Air Corporation) notified Mr. A and Eknet of a request for arbitration, pursuant to the arbitration clause stipulated in the service contract signed on 18 April 2002, on the grounds of breaches of the provisions of this contract.
In an award rendered in New York on 15 February 2008, the arbitral tribunal constituted under the aegis of the ICDR and composed of Mr. X and Mrs. Siber Weinstock, arbitrators, and Mrs. Drucker, chairman, ordered Mr. A, pursuant to the employment rules enacted by the American Arbitration Association, to regularize the patent assignment deeds in execution of the undertaking he had given for this purpose. Mr. A, together with Eknet, was also ordered to reimburse costs and advances amounting to nearly 90,000 euros, including interest.
In a judgment dated 16 May 2008, the Superior Court of New Heaven (Connecticut) granted exequatur to this award; the Connecticut Court of Appeals dismissed Mr. A’s appeal against this judgment on 23 March 2010.
By an order dated 16 July 2012, the President of the Paris Regional Court also granted exequatur to the arbitral award rendered on 15 February 2008.
On 17 April 2013, at the request of Stratek and POLYMER, two attachments were made against Mr. A’s assets, which Mr. A. sought to have declared null and void and to have them released before the enforcement judge of the Bayonne Regional Court, on the grounds that the time limit for appeal had not expired due to the irregular service of the exequatur order of 16 July 2012.
The enforcement judge granted this request in a judgment dated 7 February 2014.
On 3 September 2013, Mr. A and Eknet appealed against the exequatur order of 16 July 2012.
In a decision dated 4 November 2014, the Paris Court of Appeal dismissed Mr. A’s claim for forgery, which he had raised in order to have a document produced by Stratek excluded from the proceedings.
Having regard to the submissions served on 12 November 2014 by Mr. A and Eknet Research Corporation, which request the Court, under Articles 31, 32, 117, 122 and 1515 to 1517 of the Code of Civil Procedure, to declare null and void the exequatur order of 16 July 2012 granted to Stamford Polymer Research Laboratory, Inc., which no longer existed, no longer had legal personality and no right to act, and to declare the exequatur order of 16 July 2012 granted to Stratek Plastics Limited null and void on the grounds that Stratek Plastics Limited had no interest in asking for the exequatur of the arbitral award of 13 July 2012; in the alternative, on the merits, and under Articles 1520 and 1525 of the Code of Civil Procedure, to overturn the order and condemn the respondents to pay them jointly and severally the sum of 40,000 euros under Article 700 of the Code of Civil Procedure;
Having regard to the submissions served on 12 November 2014 by Stratek Plastics Limited, which asks the Court, under Articles 1514 to 1525 of the Code of Civil Procedure, to declare the appeal filed by Eknet Research Corporation inadmissible, to exclude from the proceedings the documents produced by the appellants in English without translation into French, to dismiss Mr. A’s application for a declaration of nullity of the order and to order him to pay the sum of 10,000 euros under Article 700 of the Code of Civil Procedure;
Having regard to the submissions served on 13 November 2014 by Sealed Air Corporation, which asks the Court to find that it was not a plaintiff in the exequatur application under appeal, and consequently, to dismiss the appellants' claims against it and order them to pay it the sum of 5,000 euros each under Article 700 of the Code of Civil Procedure;
UPON WHICH,
On the admissibility of the appeal.
Considering that Stratek claims that Eknet no longer exists legally since 3 January 2010 and deduces that the appeal filed by this company would be inadmissible;
But whereas the law of the State of Delaware, in which Eknet Company is incorporated, provides for the possibility, following the abandonment or cancellation of a Company’s Certificate of Incorporation, to restore the Company, with the same force and effect as if its Certificate of Incorporation had not been abandoned or cancelled, i.e. with retroactive effect;
that in the present case, a certificate of renewal and restoration of the charter of the Eknet company is produced in the proceedings;
that, consequently, Eknet’s legal existence was re-established with retroactive effect to the date on which that existence had disappeared;
Considering furthermore that the statement of appeal of 3 September 2013 was made jointly by Mr. A and Eknet;
that Mr. A’s capacity and interest in appealing against the exequatur order issued on 16 July 2012 are not disputed;
Considering that, therefore, the appeal is admissible;
On the admissibility of the application for exequatur.
Considering that Mr. A and the company Eknet claim that the company POLYMER ceased to exist legally on 21 December 2010, when it was absorbed by the company Sealed Air;
that they deduce from this the inadmissibility of the exequatur application filed on 13 July 2012 by this company before the President of the Paris trial court;
However, considering that the application for exequatur of 13 July 2012 was filed by Stratek, and not by POLYMER;
Considering furthermore that Mr. A and Eknet claim that Stratek, which did not advance any of the sums whose repayment was ordered by the arbitral tribunal, had no interest in acting in execution of the award of 13 July 2012 and was therefore inadmissible to request its enforcement;
But considering that under the terms of the said award, the claimants, namely Stratek and POLYMER, had their claims for reimbursement of costs and advances granted by the arbitral tribunal;
that Stratek is therefore the holder of a claim under the terms of the arbitral award of 15 February 2008;
that it is therefore irrelevant, with regard to Stratek’s interest in acting, whether the costs and advances, whose reimbursement was ordered by the arbitral tribunal, and which form the basis of this claim, have actually been paid by Stratek or by POLYMER;
that Stratek, whose capacity to act is not disputed, also had an interest in requesting the enforcement of the arbitral award of 15 February 2008
that it had a legitimate interest in the success of this claim within the meaning of Article 31 of the Code of Civil Procedure;
Considering finally that Mr. A and Eknet claim that Stratek did not produce the original of the arbitration agreement, nor a copy with the requirements for authenticity within the meaning of Article 1515 of the Code of Civil Procedure;
However, considering that it appears from the documents filed in the proceedings that Stratek produced the arbitral award of 15 February 2008, for which it requests exequatur, as well as its translation into French;
that furthermore, Mr. A and Eknet, at the proceedings before the court, also produced the service contract of 18 April 2002 containing the arbitration agreement on the basis of which the arbitral tribunal was competent, as well as a translation of this document into French;
that, therefore, the conditions laid down in Article 1515 of the Code of Civil Procedure are satisfied;
Considering that in view of these elements, the application for enforcement of 13 July 2012 is admissible;
On the admissibility of the documents filed in the proceedings.
Considering that during the debates, Mr. A and Eknet are producing several documents in English which do not include a translation into French language;
Considering that under the terms of the Villers- Cotteret order of 25 August 1539 on the act of justice, only the French language is used before the French courts;
that, moreover, the production of documents in a foreign language prevents them from being usefully discussed and constitutes an obstacle to the adversarial principle;
However, considering that in the present case, of the forty-five documents produced by Mr. A and Eknet, only the document produced under number 28 and entitled “Defendants' Pre-Hearing Brief of 19 August 2007” is in English without any translation into French;
that, moreover, the respondents do not contest the content of the translations made by the appellants, they merely criticize the fact that the appellants are the authors;
that finally, the respondents do not show how the partial translation of certain documents would betray their content;
Considering that, therefore, only exhibit number 28 produced by Mr. A and Eknet will be excluded from the proceedings;
On the jurisdiction of the arbitral tribunal
Considering that Mr. A and Eknet claim that Mr. A did not accept the arbitration clause on the basis of which the arbitral tribunal retained jurisdiction, and that the appearance of consent is due to fraudulent alterations to the service contract concluded between the parties on 18 April 2002;
that they deduce that the arbitral tribunal wrongly declared itself competent and that, therefore, the arbitral award of 15 February 2008 was made in violation of Article 1520-1 of the Code of Civil Procedure and that its exequatur in France must be refused;
But considering that it is not contested that the signature affixed to the disputed service contract is that of Mr. A;
that Mr. A’s acceptance of the arbitration clause stipulated in this contract is therefore presumed, unless proof of fraudulent alteration of the provisions of the contract or falsification of Mr. A’s signature is provided;
Considering that in the present case, Mr. A does not deny his signature; that neither him nor Eknet have filed an action for forgery against the service contract of 18 April 2002; that there is therefore no evidence that Mr. A did not accept the arbitration clause stipulated in this contract;
that, therefore, the ground alleging the lack of jurisdiction of the arbitral tribunal must be dismissed;
On the respect of the mission of the arbitral tribunal.
Considering that Mr. A and Eknet complain that the arbitral tribunal failed to rule on the counterclaim submitted by them and based on the failure to comply with the provisions applicable to the termination of the service contract;
that they also claim that the arbitral tribunal failed to specify the distribution of the amount of the condemnation between Mr. A and Eknet and that it committed serious errors and omissions in determining the amount of the condemnation;
they deduce that the arbitral tribunal did not rule in accordance with the mission entrusted to it and that, since the arbitral award of 15 February 2008 was made in violation of Article 1520-3 of the Code of Civil Procedure, its exequatur in France must be refused;
However, considering that it appears from the documents filed during the proceedings that the arbitral tribunal ruled on all the counterclaims presented by Mr. A and Eknet, and that it rejected them;
Considering that while the question of the distribution of the amount of the condemnation pronounced by the arbitral tribunal between Mr. A and Eknet, may be relevant at the stage of enforcement of the award, it does not affect its exequatur;
Considering that the errors and omissions relied upon by Mr. A and Eknet regarding the determination of the amount of the condemnation made by the arbitral tribunal have been the subject of a request for rectification before the same tribunal, that request was rejected by a decision that was not referred to the Court;
that in reality, under cover of the ground based on what the arbitral tribunal would have ruled without complying with its mission, the appellants who criticize the motivation of the arbitral tribunal, try to obtain the revision of the award on the merits, which is prohibited to the judge of the exequatur;
that this ground must be rejected;
On the respect of the adversarial principle by the arbitral tribunal.
Considering that Mr. A and Eknet complain that the arbitral tribunal refused to take into consideration their situation of impecuniosity, preventing them from participating usefully in the arbitration proceedings;
that they deduce that the arbitral tribunal failed to respect the adversarial principle and the right of access to justice and that, therefore, the exequatur in France of the arbitral award of 15 February 2008 must be refused because it was made in violation of Article 1520-4 of the Code of Civil Procedure;
However, considering that Mr. A and Eknet do not demonstrate, other than by simple assertion, the situation of impecuniosity which they claim;
that, moreover, they were assisted by a lawyer during the arbitration proceedings;
that the ground must be rejected;
On the infringement of French international public policy with regard to the recognition or enforcement of the arbitral award.
Considering that Mr. A and Eknet argue that, taken together, the three grounds they invoke in support of the refusal of exequatur of the arbitral award dated 15 February 2008 also characterize the award’s conflict with French international public policy, which is an obstacle to its recognition or enforcement on French territory;
But considering that this ground for refusal of exequatur is autonomous from the other grounds listed in Article 1520 of the Code of Civil Procedure;
that, in order for this ground to be accepted, it must be demonstrated that recognition or enforcement of the award would be contrary to French international public policy, independently from the arguments invoked in support of the other grounds for refusal of exequatur;
that in the present case, Mr. A and Eknet have not provided any evidence to show how French international public policy would be effectively violated if the arbitral award of 15 February 2008 were to be recognized or enforced, whereas taken individually, each of the grounds for non-recognition referred to in paragraphs -1, -3 and -4 of article 1520 of the Code of Civil Procedure have been set aside;
Considering that the exequatur order undertaken will be confirmed in all its provisions;
Considering that Mr. A and the company Eknet Research Corporation, who are unsuccessful, must be ordered to bear the costs of the appeal;
that they cannot therefore claim the application of the provisions of Article 700 of the Code of Civil Procedure in their favor, and will be ordered jointly and severally on the same basis to pay Sealed Air Corporation the sum of 5,000 euros and Stratek Plastics Limited the sum of 10,000 euros;
FOR THESE REASONS
Declares the appeal admissible;
Declares the application for exequatur admissible;
Dismisses from the proceedings exhibit No. 28 produced by Mr. A and the company Eknet;
Confirms the order undertaken in all its provisions;
Condemns Mr. A and Eknet Research Corporation jointly and severally to pay the costs of the appeal, which may be recovered in accordance with Article 699 of the Code of Civil Procedure, as well as to pay Sealed Air Corporation the sum of 5,000 euros and Stratek Plastics Limited the sum of 10,000 euros pursuant to Article 700 of the same Code;
Rejects all other claims.
THE CLERK THE PRESIDENT