Paris Court of Appeal, No. 17/04601

Paris Court of Appeal, First Pole, First Chamber, 18 June 2019, No. 17/04601

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

Disclaimer: Only the part relating to annulment proceedings is transcribed

In an award issued in Paris on 16 May 2013, under the supervision of the International Chamber of Commerce, in the case between the companies E F G (QTS), subcontractor of electromechanical works, and the Qatari Arabian Construction Company WLL (QACC), prime contractor of a building construction project in Doha (E). The arbitral tribunal, composed of Messrs. A-B and C-D, arbitrators, and Mr. X, chairman, among other provisions, noted the termination of the subcontracting agreement concluded in March 2006 between the parties due to QTS' failure to meet its obligations, ordered QTS to pay QACC various sums and declared, after compensation, that QTS owed QACC the sum of Qatari rial 83,334,970.19.

On 1 August 2013, QTS applied to set aside the award and notified its application on 27 December 2013 to the registry of this court via the French Virtual Private Network for Lawyers (RPVA).

In an order dated 3 July 2014, the Pre-trial judge (in French: Conseiller de la mise en l’état) granted QTS’s application and declared QACC’s submissions, notified on 14 May 2014, as inadmissible because they were filed out of time.

On 17 July 2014, QACC referred this order to the court. The case was registered under number RG 14/15339. By judgment of 18 November 2014, ruling on the referral, the court noted that the proceedings had been interrupted by the judgment of 25 February 2014 of the Court of First Instance of the E having pronounced the dissolution and early liquidation of QTS, ordered QACC, unless the appointed liquidator, Mr. I J I K, intervened voluntarily, to bring the case against him before 31 December 2014 and ordered, in the meantime, the stay of the proceedings.

The case was resumed on the initiative of QTS and its liquidator, who participated in the proceedings by submissions filed on 25 November 2014. The case was registered under the new number RG 14/00665.

By judgment of 6 January 2015 (RG 14/00665), ruling on a referral, the Court of Appeal reversed the order of the Pre-trial Judge and ruled that QACC was not liable to the penalty provided for in Article 911 of the Code of Civil Procedure for having filed its statement of defence on 14 May 2014. The court held that the proceedings had been discontinued, and the liquidator had been the only person to represent QTS from 25 January 2014 onwards, date of the judicial liquidation of QTS.

With regard to the action to set aside the award filed by QTS, the Court of Appeal, by judgment of 10 March 2015 (RG 13/16108), dismissed this action.

QTS appealed to the Court of Cassation against the decision of the Court of Appeal dated 6 January 2015 ruling on the referral (RG 14/00665) and against the decision of 10 March 2015 ruling on the action for setting aside the award (RG 13/16108).

By judgment on 6 July 2016 (appeal no. P15-15.850), the Court of Cassation reversed the aforementioned judgments of 6 January and 10 March 2015 and returned, consequently, the proceedings and the parties to their status quo ante and, for the proceedings to be determined in accordance with the law, transmit them to the Court of Appeal of Paris on the ground that the Court of Cassation had taken up the case ex officio:

“In view of Articles 2412 of the Civil Code, 509, 909 and 911 of the Code of Civil Procedure;

Whereas it follows from the first two of these texts that the recognition of a foreign judgment in the French legal system requires the review of the indirect international jurisdiction of the court of origin based on the connection between the dispute and the court, its compliance with substantive and procedural international public policy, and the absence of fraud of law;

Whereas, in order to declare QACC’s submissions admissible, (the judgment) holds that the proceedings were interrupted as of the date of the dissolution and liquidation of QTS and were not resumed until 6 November 2014, the date on which the liquidator filed his submissions in respect of voluntary intervention in the resumption of proceedings;

That in so ruling, when, without an enforcement (in French: Exequatur), the decision which pronounced the opening of the judicial liquidation abroad could not produce any effect, so that QACC’s submissions were necessarily inadmissible as late, the Court of Appeal violated the above-mentioned texts;

And given that the reversal of the decision by the Court of Cassation leads to the annulment of the second decision which, by dismissing the action to set aside the award, is the consequence thereof”.

Following this judgment and pursuant to an act of 9 January 2017, QTS brought the case before this court, ruling on a transmission after reversal of the two aforementioned judgments by the Court of Cassation, i.e. the judgment of 6 January 2015 (RG 14/00665 handed down on summary judgment) and the judgment of 10 March 2015 (RG 13/16108 handed down on the set aside the award). The referral after reversal of the judgment handed down on appeal was registered under number RG 17/13578, and the one relating to the judgment rejecting the action for setting aside the award was registered under number RG 17/04601.

By notice of 7 September 2017, the parties were notified of the setting of case RG 17/13578 concerning the judgment of the Court of Appeal of 6 January 2015 at the court hearing of 5 December 2017. The parties did not appear at this hearing.

By judgment of 30 January 2018, ruling on referral, this court ordered the resumption of the proceedings and the transmission of the case to the magistrate in charge of the pre-trial investigation for regularisation of the proceedings in accordance with the provisions of Article 1036 of the Code of Civil Procedure and setting of a new timetable. This court requested the court administration service to send a letter as provided for in Article 1036 of the Code of Civil Procedure, together with a copy of the statement of referral, indicating the obligation to appoint a lawyer and the service of the statement of referral by QACC.

A new notice of setting was sent to the parties on 23 March 2018 so that the transmission after reversal, in the matter of the referral, could be pleaded at the collective hearing on 11 September 2018.

In a new decision handed down on 9 October 2018, this court requested QTS to furnish proof of the steps taken with the competent authorities of the State where the document is to be delivered, and transmitted the case to the Pre-trial judge.

On the action to set aside the award

By submissions notified on 12 January 2015, Mr I J I K, as liquidator in the judicial liquidation of QTS, requests the court to set aside the award and order QACC to pay him the sum of 25,000 euros pursuant to Article 700 of the Code of Civil Procedure. He alleges that the arbitrators failed to comply with their mission and violated due process (in French: Principe de contradiction).

On the ground relating to the arbitrator’s failure to comply with his mission (Article 1520-3 of the Code of Civil Procedure):

The claimant claims that the arbitrators, by refraining to rule on its allegations, disregarded their mission, since the parties chose the French law applicable to international arbitration, which requires that reasons be given for the awards.

However, the failure to state reasons for an award is not a ground for initiating an action for setting aside the award under French international arbitration law, with the result that, apart from cases of violation of international public policy, which were not raised in the present case, or failure to comply with due process (in French: Principe de contradiction), the reasons given for the award are beyond the control of the setting aside judge.

The ground of appeal can therefore only be dismissed.

On the ground, based on the violation of due process (in French: Principe de contradiction) (Article 1520-4 of the Code of Civil Procedure):

QTS claims that it did not have a proper access to all the evidence on which the expert and the court relied to allow QACC’s counterclaims, since the arbitrator did not list the documents on which he relied and QACC did not provide him with a copy of all the documents it produced.

On 7 July 2011, the arbitral tribunal issued the final version of Procedural Order No. 4 on the specifics and modalities of the expertise proceedings, after having invited the parties to comment. In this order, it appointed Mr. Z Y as expert and confirmed the scope of his mission (paragraph 169 of the award). The expert’s missions consisted in assessing the extent, nature and value of the works carried out by the subcontractor, QTS, as well as the works, repairs and corrective measures carried out on the unfinished site by the prime contractor, QACC. Paragraphs 10 and 11 of the same order specified that the parties had to forward their documents to the expert and that the documents taken into consideration by the expert had to be accessible to the other party without having to send one copy to the opposing party with regard to the volume of some of these documents.

On 22 August 2011, the expert delivered his first report entitled by the arbitral tribunal “Main report of the expert”. This main report included 18 annexes, with a list of the documents provided by the parties and used by the expert (Award §183), in annex 2. On 15 September 2011, after an extension of time, each party submitted its comments on the expert’s report. These observations were also sent to the expert. From 19 to 21 September 2011, a hearing in Paris (entitled the “Main hearing” by the arbitral tribunal), focused on cross-examining the expert about his main report and reviewing the parties' observations of 15 September 2011. QTS confirmed at the end of the hearing that, like QACC, it had no objections to the way in which the proceedings have been conducted, which shows that it did not raise any objection to the compliance with due process (in French: Principe de contradiction) (Award §183 to 186).

On 2 November 2011, the Tribunal issued its Procedural Order No. 11 in which it confirmed Mr. Y’s reappointment as an expert with an “additional mission” (Award §189) and with a new procedural timetable for the additional mission under the same procedure.

On 15 February 2012 the expert submitted his supplementary report, which included 26 annexes. On 5 March 2012 both parties filed their observations on the supplementary report to the expert with various exhibits. After requesting more hearing time, including an additional day of hearing and more time for cross-examination, QTS filed an application on 12 March 2012 to dismiss the main report and the supplementary report, which consisted mainly of a challenge to the exhibits retained by the expert and his methods of reasoning and calculation. This application was dismissed by Procedural Order No. 13 dated 19 March 2012.

From 20 March 2012, QTS made further comments in which it requested a response to QACC’s documents and claimed that the expert had failed to list the exhibits on which it had relied. The hearing from 24 to 26 March 2012 began with the parties' comments on QTS’s observations of 20 March 2012 (Award §§ 201 to 213). As the Award points out (§ 290), the failure of the expert to submit a new list of all the documents together with his supplementary report was due to the fact that he had already drawn up a list of documents together with his initial report. Thus, the information at issue was only an update of the original documents.

As a result, QTS was sufficiently well informed about the documents chosen by the arbitrator. Moreover, the parties attended all meetings organised by the expert and had access to the expert’s rooms which contained a list of all documents available for inspection (Award §290 (vi)) and in accordance with Procedural Order No. 4 (§§ 10 and 11), which provides that the parties were to forward their documents to the expert and that the documents taken into consideration by the expert had to be accessible to the other party without having to send one copy to the opposing party with regard to the volume of some of these documents. This solution was accepted and implemented by both QACC and QTS, which did not give rise to any objection during the initial expert appraisal operations.

The argument that the expert and the arbitral tribunal relied on documents that had not been regularly disclosed lacks any evidence.

It follows from the aforementioned that the application to set aside the award must be dismissed. This dismissal confers enforcement (in French: Exequatur) on the arbitral 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:

QTS cannot benefit from these provisions.

FOR THESE REASONS,

(….)

Dismisses the action for setting aside the award made between the parties on 16 May 2013.