Court of Cassation, No. 15-12.363

Court of Cassation, Civil Chamber 1, 27 January 2016, No. 15-12.363

FIBRE EXCELLENCE

vs.

TEMBEC FRANCE

THE COURT OF CASSATION, FIRST CIVIL COUNCIL CHAMBER, delivered the following judgment:

On the single ground in law:

Whereas, according to the judgment under appeal (Paris, 2 December 2014), Fibre excellence and Tembec entered into a share purchase agreement under which the former was to acquire the shares of three companies belonging to the latter, at a price to be supplemented in accordance with the net working capital of the companies; whereas disputes have arisen between them, Fibre excellence implemented the arbitration clause referring to the arbitration rules of the International Chamber of Commerce (ICC); whereas the arbitral tribunal, composed of Ms. X. Y. and Z., arbitrators appointed respectively by Fibre excellence and Tembec, held the oral argument hearing on May 30, 2012; that on 28 February 2013, Mr. Z. disclosed to the parties that he had been negotiating for several months to become part of a law firm that was counsel to Tembec; on 27 March, Fibre excellence requested the arbitrator’s resignation and the Chairman of the Arbitral Tribunal acknowledged receipt of the request and informed the parties that the draft award was already subject to the ICC review process and that, pursuant to Article 22 (1) of the Rules of Arbitration, the arbitration proceedings were closed on 27 September 2012; that the ICC International Court of Arbitration, on 4 April 2013, notified the parties that the resignation of Mr Z. on the previous day would be considered at one of its forthcoming meetings, that his fees would be fixed there, if necessary, and invited the parties to make observations or comments on these points as well as pursuant to Article 12 (5) of the Rules of Arbitration; that on 2 May 2013, the ICC International Court of Arbitration accepted the resignation and decided that the remaining arbitrators would continue the arbitration pursuant to Article 12 (5) of the Rules of Arbitration; that the Award rendered on 16 May 2013 by the two remaining arbitrators declined the jurisdiction of the Arbitral Tribunal to rule on the working capital, ordered the parties to resume the expert determination on this point and rejected any other request;

Whereas Fibre excellence objects to the judgment which dismissed its action for annulment of the award;

Whereas the Court of Appeal noted that Fibre excellence, which requested the resignation of Mr. Z., was immediately informed by the chairman of the arbitral tribunal that the proceedings were closed on 27 September 2012 and that the award was already subject to the review process of the International Court of Arbitration. The court thus noted that the International Court of Arbitration invited the parties to comment on the resignation and on the implementation of Article 12 (5) of the Arbitration Rules. The Court of Appeal also held that Fibre excellence refrained from commenting on the continuation of the arbitration by their sole remaining arbitrators. Thus, the Court of Appeal concluded exactly that Fibre Excellence waived its right to rely on the ground based on the irregularity of the constitution of the arbitral tribunal; that the ground could not be upheld;

FOR THESE REASONS

REJECTS the appeal;

Orders Fibre Excellence to pay the costs;

Considering article 700 of the Code of Civil Procedure, rejects her request and orders her to pay the company Tembec the sum of 5,000 euros;

Thus done and judged by the Court of Cassation, First Civil Division, and pronounced by the president in its public hearing of the twenty-seventh of January two thousand and sixteen.