Paris Court of Appeal, No. 15-16.412

Paris Court of Appeal, Pôle 1 - Chamber 1, 30 May 2017, No. 15-16.412

A.D TRADE LTD BELGIUM
vs. THE REPUBLIC OF NIGER

The Republic of Niger entered into a business relationship for several years with the Belgian company AD Trade LTD Belgium SPRL (hereafter AD Trade), in particular for the supply and maintenance of helicopters.

In 2009 and 2010, it entrusted AD Trade with the overhaul of two helicopters through contracts named Coyotte 1 and 2 which stipulated a clause assigning jurisdiction to the Nigerien courts. Payment difficulties arose and on 29 April 2011, the parties entered into a memorandum detailing various debts owed by Niger to AD Trade, including those resulting from the Coyotte contracts, setting out a timetable for their settlement and allowing AD Trade to retain the aircraft that had been sent to Russia for revision.

Due to the lack of payment, AD Trade filed a request for arbitration under a deed of the same day called ‘Guarantee of Payment of Arrears 2008-2011 of the Army’, the purpose is to ensure compliance with the deadlines indicated in the Memorandum and containing an arbitration clause.

By an arbitral award issued in Paris on 2 April 2015, the arbitral tribunal composed of MM. J and S, arbitrators, and Mr. F, Chairman, declared itself competent, ordered the Republic of Niger to pay AD Trade a sum of EUR 8,649,089 in principle, with interest, as well as three quarters of the arbitration costs, and dismissed the remainder of the claims.

On 27 July 2015, the Republic of Niger appealed against this award.

By submissions notified on 3 March 2017, the Republic of Niger requested the court to annul the award and the exequatur order issued on 4 May 2015, and to order AD Trade to pay the sum of EUR 20,000 pursuant to Article 700 of the Code of Civil Procedure. The Republic of Niger raises the incompetence of the arbitral tribunal, arguing that it did not agree to the ‘Payment Guarantee’.

By submissions notified on 14 March 2017, AD Trade requested the court to declare the ground relating to the non-existence, nullity or unenforceability of the arbitration agreement inadmissible and, in the alternative, unfounded, to dismiss the Republic of Niger’s appeal and to order it to pay the sum of EUR 50,000 pursuant to Article 700 of the Code of Civil Procedure.

UPON WHICH

On the sole ground for annulment based on the lack of jurisdiction of the arbitral tribunal (Article 1520-1 of the Code of Civil Procedure):

The Republic of Niger argues that the ground is admissible since it raises the lack of competence of the arbitrators during the arbitral proceedings. It submits that it is well-founded in stating that the Minister of National Defence, who signed the Memorandum, did not sign the Guarantee on the same day, and that he did not give a mandate to sign such a document, and it is not likely that AD Trade could legitimately have believed in such a mandate, given the circumstances of the meeting during which the Memorandum was concluded.

According to Article 1466 of the Code of Civil Procedure: ‘A party who, knowingly and without legitimate reason, fails to raise an irregularity before the arbitral tribunal in good time shall be deemed to have waived the right to raise it’;

Whereas in this case, on 23 December 2013, before the Terms of Reference were drawn up, the Republic of Niger transmitted to the claimant and the arbitrators a summary of the claims, concluding that the arbitral tribunal lacked jurisdiction by relying on the choice of court clauses stipulated in the two ‘Coyotte’ contracts and requesting that the question of jurisdiction would be the subject of a separate award;

Whereas following the signature of the Terms of Reference, the Republic of Niger stopped participating in the arbitral proceedings;

Whereas the ground of lack of jurisdiction presented to the arbitrators concerned the question of whether the claims made by AD Trade on the basis of the Memorandum and the Guarantee fell within the scope of the jurisdiction clauses contained in the ‘Coyotte’ contracts; that the Republic of Niger did not claim before the court that the Guarantee, on which the request for arbitration was expressly based, was null or non-existent and would not have been binding on it because it had not been signed by an approved person;

This irregularity, raised for the first time before the court, without the Republic of Niger alleging that it was impossible to mention it in the arbitration proceedings, is inadmissible;

Whereas the commitment to arbitration is not assessed by reference to any national law but by the application of a substantive rule derived from the principle of validity of the arbitration agreement based on the common will of the parties, the requirement of good faith and a legitimate belief in the powers of the signatory of the clause;

Whereas in the present case, the Republic of Niger invokes conditionally the existence of the Memorandum of 29 April 2011 relating to the discharge of the debts of the Ministry of National Defence towards AD Trade and argues that it is curious that this Memorandum and the alleged Guarantee containing the arbitration clause are dated the same day as the ‘Coyotte’ contracts;

Whereas, first, the ‘Coyotte’ contracts were signed by the Minister of National Defense on 1 October 2009 and that, when the Minister of the Economy and Finance countersigned them on April 29, 2011, the helicopters were already under review, and, second, the appellant does not dispute the authenticity of the signature of the Minister of National Defense, Mr. M. Y Z, affixed to the Memorandum; Whereas, in fact, it merely claims that AD Trade’s contention that the Minister had left the negotiating room to attend another meeting before signing the Guarantee and had left it to his Secretary General to do so is implausible;

Whereas, however, the appellant does not dispute the authenticity of the signature and stamp affixed to the Guarantee by ‘Colonel Major Djibo Tahirou, Secretary General’; that in view of the rank and functions of this officer, AD Trade could legitimately believe in his power to commit the Nigerien state; Whereas, it is not alleged in all circumstances that this signature, which the Republic of Niger claims was given by a person without authority, gave rise to a sanction against its author; Whereas, therefore, the arbitrators were competent to rule on a claim based on the non-execution of the Memorandum and on the Guarantee which was linked to it and which stipulated an arbitration clause;

Whereas it follows from the foregoing that the ground should be dismissed and the action for annulment rejected;

On Article 700 of the Code of Civil Procedure:

Whereas the Republic of Niger, who is unsuccessful, cannot benefit from the provisions of article 700 of the code of civil procedure, and will be condemned on this basis to pay to AD Trade the sum of EUR 30.000;

FOR THESE REASONS

DISMISSES the action for annulment of the award handed down in Paris between the parties on 2 April 2015 as well as the application for reversal of the exequatur order of 4 May 2015;

Orders the Republic of Niger to pay the costs and the sum of 30,000 euros pursuant to Article 700 of the Code of Civil Procedure.