Paris Court of Appeal, No. 13/16108

Court of appeal Paris, 10 march 2015, n° 13/16108

QATAR TECHNICAL SUPPORT W.L.L vs. QATARI ARABIAN CONSTRUCTION COMPANY W.L.L

Qatari Arabian Construction Company WLL (QACC), primary contractor of a building construction project in Doha, concluded in March 2006 with the company Qatar Technical Support (QTS) a sub-contract for electromechanical works.

Disputes having arisen between the parties, QTS, on 24 January 2010, initiated an arbitration procedure in accordance with the arbitration clause stipulated in the contract.

By an award rendered in Paris on 16 May 2013 under the supervision of the International Chamber of Commerce, the arbitral tribunal composed of MM. C-O and E-G, arbitrators and Mr. T, president, has, in substance:

  • noted the termination of the contract due to QTS’s breaches of its obligations and set the termination date on the date the site was abandoned,

  • said that QAAC had not committed any breach in the performance of its obligations to pay for the work,

  • ordered QTS to pay QAAC various sums for the work that the project manager had carried out and the materials that it provided to make up for the deficiency of the subcontractor,

  • ordered QTS to compensate QAAC for administrative, financial and insurance costs, as well as for its loss of earnings on the main market,

  • authorized QAAC to liquidate the performance guarantee and to offset its value with the market balance,

  • set at 84,334,970.19 QAR the final balance, due by QTS to QAAC, after compensation between the amount remaining due by QAAC on the market and the various indemnities payable by QTS,

  • set at 5% the simple annual interest rate on this sum as of 30 November 2009,

  • ruled on the costs of arbitration and expertise,

  • rejected any other request.

QTS appealed for annulment of the award on 1 st August 2013.

It petitioned the pre-trial judge seeking to declare inadmissible as late the pleadings of QAAC. The order which granted this request was reversed by a judgment of this court of 6 January 2015, the proceedings having been interrupted by the opening of liquidation proceedings against QTS by a judgment of the court of first instance of Qatar of 25 February 2014 which had not been brought to the knowledge of the pre-trial advisor.

By pleadings notified on 12 January 2015, Mr. BCDJF, in his capacity as liquidator of QTS, asks the court to annul the award and order QAAC to pay the sum of 25,000 euros in application of article 700 of the code of civil procedure. He invokes the violation by the arbitrators of their mission and the violation of due process.

By submissions notified on 14 January 2015, QAAC asks the court to dismiss the appeal for annulment, to say that this rejection has the effect of conferring enforceability of the award, and to condemn QTS, taken in the person of its liquidator, to pay the sum of 40,000 euros in application of article 700 of the code of civil procedure.

UPON WHICH:

On the ground alleging violation by the arbitrators of their mission (Article 1520-3 of the Code of Civil Procedure):

The appellant maintains that the arbitrators, by ruling without complying with the mandate conferred upon them, since the parties had chosen the French law applicable to international arbitration which requires awards to state the reasons for the decision.

Whereas the failure to state reasons for an award is not a case that can lead to annulment in French international arbitration law, so that, apart from cases of violation of international public order, not invoked in the present case, or breach of due process (in French: principe de contradiction), the motivation of the award escapes the control of the annulment judge; that the means can therefore only be rejected;

On the ground alleging breach of due process (in French: principe de contradiction) (Article 1520-4 of the code of civil procedure):

QTS maintains that it did not have useful access to all the evidence on which the expert and the tribunal relied upon to uphold QAAC’s counterclaims, since the arbitrators did not draw up the list of documents on which they relied and that QAAC did not provide them with a copy of all the documents that it produced.

Whereas an expert was appointed by the arbitral tribunal on 7 July 2011 to assess the extent, quality and value of the works executed by the subcontractor, namely QTS, as well as that of the works, repairs and corrective measures carried out on the site unfinished by the project manager, QAAC;

Whereas due to the volume and nature of certain relevant documents, the arbitral tribunal issued, with the agreement of the parties, a procedural order No. 1 providing that these documents, duly organised, labeled, and accompanied by a complete list, given to the expert and to the other party, would be consulted by the expert in rooms made available by the parties in their presence, finally, that the expert would communicate to the parties a list of the documents on which he intended to base his report;

Whereas on 22 August 2011, the expert delivered a first report, known as the ‘main report’ to which was annexed the list of documents provided by the two parties on which it was based; that when invited to present its observations on this report, QTS, in particular during the hearing of 21 September 2011, criticized certain analyzes of it, but did not formulate any objection concerning the respect of the adversarial proceedings and declared itself satisfied with the way in which the procedure had been carried out until then (transcript of the proceedings, pp. 525 and 526);

Whereas on 2 November 2011, the arbitral tribunal extended the expert’s mission by procedural order No. 11; that this order as well as the procedural order No. 12 fixed the same rules of organization of the expert operations as previously;

Whereas after the filing of the additional report, on 15 February 2012, QTS complained that the expert had not drawn up the list of documents on which he had relied; that during the hearing of 24 March 2012, the parties and the arbitral tribunal were able to question the expert on this point, and the latter indicated that these were the same documents, simply updated, as those which were annexed to the main report;

Whereas, on the one hand, that QTS, contrary to what it claims, was thus sufficiently informed on the identification of the documents which were used by the arbitrators, on the other hand, that the consistent method, due to the nature and volume of certain documents, not to communicate them in copies, but to make them available to the other party and to the expert in an appropriate room provided by each party in its own premises, was the solution which had been accepted by the two parties, implemented by QAAC as well as by QTS and which had raised no objection from the latter during the first appraisal operations;

That thus, the ground alleging that the expert and the arbitral tribunal would have relied on documents which had not been regularly communicated is lacking in fact;

Whereas it follows from the foregoing that the appeal must be dismissed; that this rejection confers the enforcement of the arbitration award, in accordance with the provisions of paragraph 2 of article 1527 of the code of civil procedure;

On article 700 of the code of civil procedure:

Whereas QTS, who succumbs, cannot benefit from these provisions and will be ordered to pay QAAC on this basis the sum of 40,000 euros;

FOR THESE REASONS:

Dismisses the appeal for annulment of the arbitration award rendered between the parties on May 16, 2013.

Holds that this rejection confers enforcement of the award.

Orders the company QATAR TECHNICAL SUPPORT WLL, taken in the person of Mr. BCDBF, its liquidator, to pay the costs which will be recovered in accordance with the provisions of Article 699 of the Code of Civil Procedure, and to pay the sum of 40,000 euros to the QATARI ARABIAN CONSTRUCTION COMPANY WLL in application of article 700 of the code of civil procedure.