Court of Cassation, No. 16-18.029 | Rory Wheeler, avocat (Paris) & solicitor (England)

Court of Cassation, First Civil Chamber, 1 June 2017, No. 16-18.029

POLO GARMENTS MAJUNGA

DS 2

MESSRS. X

CEBELEC

Vs.

THE REPUBLIC OF MADAGASCAR

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

Whereas, according to the decision under appeal (Paris, 15 March 2016), Polo Garments Majunga (PGM) is a company incorporated under Malagasy law. Its capital is held by Mr. Peter X.. as well as DS 2, a company incorporated under Luxembourg law, and is also held by Messrs. Peter and Kristof X. PGM is involved in the manufacture of textile articles in Madagascar. The factory having been looted and burnt down, its insurer, the Malagasy company Ny Havana (the insurer), refused to cover the accident claiming that it was the consequence of political events. A decision of the Mahajanga Court of Appeal of 4 July 2011 ordered the insurer to pay to PGM a certain amount. The public prosecutor at the Supreme Court of Madagascar lodged a claim in cassation in the interest of the law, thus suspending the execution of the decision. PGM, DS 2, and Messrs. X. filed a request for arbitration against the Republic of Madagascar with the International Chamber of Commerce on the basis of the bilateral treaty for the protection of investments concluded between the Republic of Madagascar and the Belgian-Luxembourg Economic Union and requested that the former be ordered to pay them various sums. The award, rendered in Paris on 29 August 2014, stated that the claim for the payment of the amount set in the Malagasy decision was unfounded and condemned the Republic of Madagascar to pay various sums. The latter filed a claim for the annulment of this award.

On the admissibility of Cebelec’s appeal, contested by the defence:

Having regard to Articles 330 and 609 of the Code of Civil Procedure;

Whereas, Cebelec lodged a claim in cassation against the decision that declared its intervention inadmissible.

Whereas, Cebelec, which only intervened incidentally before the court of appeal to support PGM, DS 2, and Messrs. X., cannot claim to have any right of its own. The decision did not render any condemnation against Celebec, not even to the payment of the costs. Therefore, the latter is not admissible to lodge a claim in cassation.

On the sole ground of appeal, hereinafter annexed:

Whereas, PGM, DS 2, and Messrs. X. complain that the judgement sets aside the award.

Whereas, the decision finds that PGM, DS 2, and Messrs. X. requested from the arbitral tribunal, on one hand, damages corresponding to the amount charged to the insurer in the operative part of the decision of the Mahajanga Court of Appeal, and on the other hand, interest up to 6%. The Court of Appeal notes that the award holds that, if there is a causality link between the violations of its obligations by the Republic of Madagascar and the loss by PGM of the benefit of the amount granted by the Malagasy decision since the introduction of the appeal in the interest of the law, this causality link does not exist between the violations and the other damages claimed. The Court of Appeal adds that the arbitral tribunal deduced from the foregoing that, in the absence of this appeal, PGM could have used the sums granted starting from the lodging of this appeal and until the award, and that the damages allocated by the award compensate for the lost profit. In light of these findings and statements, the Court of Appeal held, without any distortion, that the legal basis justifying the award was different from the legal basis formulated in the claim. Therefore, the arbitral tribunal disregarded the adversarial principle, that the ground is unfounded.

FOR THESE REASONS:

DECLARES the appeal inadmissible in so far as it is brought by Cebelec.

DISMISSES the appeal in so far as it is brought by Polo Garments Majunga, DS 2, and Messrs. X.

ORDERS them, as well as Cebelec, to pay the costs.

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

Thus done and ruled by the Court of Cassation, First Civil Chamber, and delivered by the President during his public hearing of the first of June two thousand and seventeen.