Paris Court of Appeal, No. 17-17.127

Paris Court of Appeal - 1st Pole - 1st Chamber - 26 November 2019, No.17-17.127

SOCIETE NATIONALE DES CHEMINS DE FER TUNISIENS vs.
SA ALSTOM TRANSPORT,
ANSALDO STS SPA

Following an international invitation to tender, a contract was concluded on 7 February 2008 between the Tunisian National Railways (in French Société Nationale des Chemins de Fer Tunisiens or SNCFT), is a state owned non-administrative company, which is responsible for operation, maintenance and management of Tunisian rail network, and the French company Alstom Transport SA (Alstom) and the Italian company Ansaldo STS S. p.A (together, the Group), for the supply, assembly and commissioning of the electrification facilities on the line in the southern suburbs of Tunis.

The commissioning took place in 2012, more than two years after the contractual date.

As the parties were opposed on the cause of this delay, the Group initiated arbitration proceedings on the basis of the arbitration clause stipulated in the contract.

On September 5, 2016, the arbitration tribunal composed, under the supervision of the International Chamber of Commerce, of Mr. X and Mr. Chedli, arbitrators, and Mr. M. Y, chairman, issued an award in Paris which held that the group was liable for one-third of the delay and SNCFT for two-thirds, and ruled that SNCFT could retain the late payment penalties it had applied but ordered it to pay various indemnities, plus financial expenses, on the grounds of ‘causes of delay’, ‘disruptive events’, ‘mass variations’ and the ‘acceleration plan’, rejected the Groupement’s claims under the ‘presidential decree’, ruled on various invoices issued by the Groupement, as well as on the arbitration costs.

On 5 September 2017, SNCFT applied to set aside this award.

In its submissions, notified on 5 February 2018, it requested that the court set aside the award and order Alstom and Ansaldo to pay it the sum of €25,000 in accordance with Article 700 of the Code of Civil Procedure. It claims that the award was procured through fraud consisting of the production of a false accounting schedule, a false certificate and false witness statement.

By submissions notified on 4 May 2018, Alstom and Ansaldo, request the court, as a principal claim, to rule that the allegations of fraud have been discussed before the arbitral tribunal and are therefore unlikely to result in the award being set aside, and, as a subsidiary claim, that the action should be dismissed because no fraud was committed, and more subsidiarily, because the contested documents did not have a decisive impact on the sentence, in any event, to rule that the appellant’s complaint only affects heads 4), 5) and 6) of the award, to the exclusion of all the others, and finally to order SNCFT to pay each of them the sum of 50.000 euros pursuant to Article 700 of the Code of Civil Procedure.

UPON WHICH:

On the sole ground for setting aside the award for the violation of international public policy (Article 1520-5 of the Code of Civil Procedure):

The SNCFT maintains that the award was procured through fraud involving the production of false documents and false witness statement.

It follows from Article 1520-5 of the Code of Civil Procedure that an action for setting aside an award issued in France is available against an international award if the recognition or enforcement of that decision is contrary to international public policy. Procedural fraud in arbitration proceedings may be sanctioned in the light of international public procedural policy.

It presupposes that false documents have been produced, that false witness statements have been taken or that documents relevant to the resolution of the dispute have been fraudulently concealed from the arbitrators, thereby vitiating their decision.

In the present case, the documents, which the SNCFT argued before the court that they were fraudulent, included an accounting appendix which may have been created to substantiate the claim that Ansaldo employees had worked overtime on the site in question, and a certificate from Ansaldo’s project manager giving false explanations for the inconsistencies in that document, a report by a chartered accountant who allegedly checked the hours worked, when he was not in a position to carry out effective checks, and the witness statement of an Alstom project manager who occurred after the disputed facts, with the result that his statement was necessarily untrue.

However, SNCFT’s objections to these documents are the same as those it has raised before the arbitrators.

As the allegedly false nature of these elements was debated during the arbitration proceedings, the tribunal’s decision was not procured through fraud but results from an informed assessment of the accuracy and scope of the documents submitted to it, an assessment which it is not for the Court of appeal to review.

The ground of breach of international public policy must be rejected and the action to set aside the award must be dismissed.

On Article 700 of the Code of Civil Procedure:

The SNCFT cannot benefit from the provisions of Article 700 of the Code of Civil Procedure and will be ordered on this basis to pay the sum of 50,000 euros to Alstom and the same amount to Ansaldo.

FOR THESE REASONS:

Dismisses the action for setting aside the award made in Paris between the parties on 5 September 2016.
Orders the Tunisian National Railways to pay the costs that may be recovered in accordance with the provisions of Article 699 of the Code of Civil Procedure, as well as the sum of EUR 50,000 to Alstom Transport SA and the same sum to Ansaldo STS S.p.A pursuant to Article 700 of the Code of Civil Procedure.