Court of Cassation, No. 14-13.336

Court of Cassation, First Civil Chamber, 18 March 2015, 14-13.336

MARIOTT INTERNATIONAL HOTELS (MARIOTT)

vs.

JNAH DEVELOPMENT SAL (JNAH)

Summary

An action for the annulment of an arbitral award is only open in the cases listed exhaustively by Article 1520 of the Code of Civil Procedure. This text is considered to be violated by a court of appeal that annuls the award of an arbitral tribunal by holding that the latter wrongfully declared itself incompetent, even though its own findings reveal that this tribunal, in interpreting the power of attorney given by one of the parties to a representative ad litem, ruled on only on a question relating to the admissibility of the request for arbitration

Whereas, according to the judgments under appeal (Paris, 4 June 2013 and 17 December 2013), the Lebanese company Jnah Development Sal (Jnah) entrusted the operation of a hotel that it owns in Beirut to the American company Marriott international hotels (Marriott) by contracts dated 21 December 1994. Disputes arose between the parties, and following two separate arbitration proceedings initiated by Jnah and Marriott respectively under the auspices of the ICC as per the arbitration clauses, two awards entitled “Jnah I” and Jnah II" were rendered on 30 October 2003 and 4 June 2009. During the “Jnah II” proceedings, family

X… who holds 80% of the capital of Jnah transferred the two awards, the new purchasers approving the transfer to Mr X… “of the outcome of the dispute” between Marriott and Jnah, and giving Mr X a power of attorney to act on behalf of Jnah. Mr X…, on behalf of Jnah, filed a third request for arbitration on 14 June 2010 to obtain damages as compensation for the prejudice resulting from the termination of the contract by Marriott. By award of 3 February 2012, the arbitral tribunal declared itself incompetent with respect to this procedure on the grounds that the power of attorney was limited to the proceeding in progress, i.e., “Jnah II”, and did not authorise the initiation of a new arbitration. Mr X…, acting on behalf of Jnah, filed a claim for the annulment of the award. On the basis of an incident, Mariott lodged a claim before the Counsel of the Pre-Trial Chamber who dismissed the objection for the annulment of the declaration of the action for annulment. Marriott referred the order to the Court of Appeal.

On the first ground, hereinafter annexed:

Whereas, Marriott contests the judgment of 4 June 2013 rendered upon referral of the order of the Counsel of the Pre-Trial Chamber, for dismissing the objection for annulment of the declaration regarding the action filed by Jnah for the annulment of the award.

Whereas, the judgment finds that Mr X… had a special power of attorney to defend the rights of Jnah and initiate specific proceedings. The ground, which in its first branch, merely invokes provisions of the Code of Civil Procedure relating to the power of the legal representative of the company, is inoperative. In addition, in its last three branches, the ground which contests the additional grounds of the judgement cannot be admitted.

On the second branch of the second ground:

Having regard to Article 1520, 1, of the Code of Civil Procedure;

Whereas, in order to annul the award of 3 February 2012, the judgment of 17 December 2013 retains that the arbitral tribunal assessed the extent of its jurisdictional power and wrongly declared itself incompetent.

Whereas, in so ruling, although the court of appeal’s own findings entail that, in interpreting the power of attorney given by Jnah to Mr X… in order to verify whether it authorised him to initiate the arbitration, the arbitral tribunal had ruled on a question relating to the admissibility of the request for arbitration by having regard to the power on which Mr X… relied to represent Jnah before the arbitrators and without having regard to the scope of its competence. The Court of Appeal violated the above-mentioned text.

FOR THESE REASONS, without it being necessary to rule on other grounds:

DISMISSES the appeal in so far as it is brought against the judgment of 4 June 2013;

CANCELS AND OVERTURNS, in all of its provisions, the judgment delivered on 17 December 2013, between the parties, by the Paris Court of Appeal; accordingly, resets the cause and the parties to the state in which they were before the said judgment and, in order serve justice, sends them back before the Court of Appeal of Versailles;

Leaves to each of the parties the burden of its own costs;

Having regard to Article 700 of the Code of Civil Procedure, dismisses the claims;

States that, upon the steps taken by the Public Prosecutor at the Court of Cassation, the present judgment will be transmitted to be transcribed in the margin or following the overturned judgment.

Thus done and ruled by the Court of Cassation, First Civil Chamber, and delivered by the President during his public hearing of the eighteenth of March two thousand and fifteen.