Paris Court of Appeal, No. 19/02239

Paris Court of Appeal, Pole 1 - First Chamber, 8 October 2019, No. 19/02239

AREAS DOMMAGES
vs.
SAS GSA

According to a memorandum dated 15 February 2008, ARES DAMAGES (Areas), a mutual insurance company, delegated to GSA, a general insurance broker, the subscription and management of insurance contracts, the management of accidents and the collecting of premiums paid by policyholders. The memorandum provides for an arbitration clause in its chapter XI.

Considering that the amounts called by GSA were exceptionally low and not in line with the amounts that should have been applied, Areas initiated arbitration proceedings on 31 May 2013. The arbitral tribunal was constituted on 23 March 2014.

By an arbitral award issued in Paris on 25 July 2018 in the dispute between GSA and Areas, the arbitral tribunal, composed of Messrs. Y Z and A B, arbitrators, and Mr. C D, Chairman:

• decided that GSA’s breaches, within the meaning of 2° of the termination clause in Chapter IX of the Draft agreement, are not evidenced by Areas and dismissed Areas' claims for payment of damages by GSA,
• decided that Y’s termination of the Draft settlement agreement was unlawful (in French: Rupture brutale) and that Areas must compensate GSA for the damaging consequences of this termination, taking into account the profits lost during the 6 months' notice period that was not respected,
• ordered Areas to pay GSA damages in the amount of 1,000,000 euros, this sum bearing interest at the legal rate as from the notification of this award to the parties' counsel;
• ordered Areas to pay the full costs of the legal expertise, i.e. 110,000 euros,
• ordered Areas to pay GSA 50,000 euros under Article 700 of the Code of Civil Procedure,
• decided that Areas and GSA must share the cost of the arbitration provided for by mutual agreement in the delegation memorandum, in which each party bears the fees owed to the arbitrator it has appointed and half of the fees owed to the Third Arbitrator,
• dismissed all other claims of the parties.

X filed on 20 August 2018 by Virtual Private Network Lawyer (RPVA) a “Statement of Appeal” mentioning under the computer tab “Subject/Scope of Appeal: Action to set aside the award […].

GSA raised an objection before the Pre-trial judge by way of a statement of claim notified on 9 November 2018 requesting, principally, to dismiss the appeal brought by Areas against the arbitral award of 25 July 2018, alternatively, to order the provisional enforcement, without provision of security, of the entire arbitral award, and in any event to order Areas to pay all of the costs of the present proceedings.

By order issued on 10 January 2019, the Pre-trial judge dismissed the appeal filed on 20 August 2018 by Areas against the award of 25 July 2018, ordering Areas to pay GSA the sum of 5,000 euros pursuant to Article 700 of the Code of Civil Procedure, in addition to the costs.

After pointing out that in matters of domestic arbitration, the award was not subject to appeal but to an action to set aside, the Pre-trial judge considered that as the court had been petitioned on appeal, regardless of the information included on it or the document attached to the statement of appeal, without the latter document having been notified to GSA’s lawyer and without Areas stating a technical impossibility, this appeal should be declared inadmissible.

X filed a referral against this order.

In its submissions notified on 20 August 2019, Areas requested the court to state that it had brought an action for setting aside the award before the court of appeal, to overturn the Pre-trial judge’s order, to state that its appeal was admissible, to dismiss GSA’s claims, and to order GSA to pay it the sum of 20,000 euros pursuant to Article 700 of the code of civil procedure, in addition to the costs paid by the counsels.

In its submissions notified on 8 April 2019, GSA requested the court to confirm the order of 10 January 2019, to dismiss Areas' claims, to rule inadmissible the appeal filed on 20 August 2018 by Areas against the arbitral award issued on 25 July 2018 and to order Areas to pay it the sum of 20,000 euros under Article 700 of the code of civil procedure, in addition to costs.

UPON WHICH

Under the terms of Article 1489 of the Code of Civil Procedure, “An arbitral award shall not be subject to appeal, unless otherwise agreed by the parties.” and under the terms of Article 1491 of the same code: “An action to set aside an award may be brought except where the parties have agreed that the award may be appealed”.

In the present case, it is common ground that the parties did not agree on a right to appeal, so that only the action to set aside the award in dispute was available.

On 20 August 2018, Areas filed an electronic statement of appeal in which it is stated under the computer tab “Subject/Scope of Appeal: Appeal to set aside the award […].”

The single fact that Areas' counsel registered the case under the computer tab “Statement of Appeal”, rather than under the tab “Other Remedies at the Diligence of the Parties”, would not, without disproportionately affecting the right to appeal, be sanctioned by inadmissibility, if it was clear from the statements relating to the subject-matter of the document that Areas' intention was to bring an action for set aside the award.

The decision taken should therefore be reversed.

FOR THESE REASONS,

Overturns the order of the Pre-trial judge,

Ruling again:

Declares admissible the action of the company AREAS DAMAGES to set aside the award issued in Paris on 25 July 2018,

Holds that the costs and expenses of the incident will follow the fate of those of the main proceedings.