Compromise Clause. - Insertion Into A Contract. - Action For Nullity Of The Contract. - Competence Of The Common Law Jurisdiction.
LexInter | November 30, 2002 | 0 Comments

Compromise clause. – Insertion into a contract. – Action for nullity of the contract. – Competence of the common law jurisdiction.

In domestic arbitration law, the arbitration clause presents, in relation to the main agreement in which it is inserted, a legal autonomy which excludes, unless otherwise agreed, that it may be affected by a possible ineffectiveness of this agreement.

It is up to the arbitrator, except in cases where non-arbitrability relates to the matter, to implement the mandatory rules of law, under the control of the annulment judge.

Legally justifies its decision by responding to the allegedly abandoned conclusions the Court of Appeal which holds that the legal person designated by the parties in the arbitration clause does not have, under article 1451 of the new Code of Civil Procedure, according to which the mission arbitrator can only be entrusted to natural persons, the power to organize the arbitration, thus necessarily referring to the provisions of article 1455 of the same Code which regulates the conditions of exercise of this power, which are subject to the control of the cancellation judge.

COMM. – April 9, 2002 . PARTIAL BREAKDOWN WITHOUT RETURN

No. 98-16.829. – Toulouse CA, April 23, 1998. – M. Toulousy c / general partnership Philam

  1. Dumas, Pt. – M. Métivet, Rap.- M. Jobard, Av. Gén.- SCP Vincent et Ohl, Av.

Court of Cassation
Civil Chamber 2

Public hearing of April 4, 2002 Rejection.

N ° of appeal: 00-18009
Published in the bulletin

President: M. Ancel.
Rapporteur: Mr. Etienne.
Advocate General: M. Joinet.
Lawyers: M. Hemery, SCP Piwnica and Molinié.

FRENCH REPUBLIC
IN THE NAME OF THE FRENCH PEOPLE

Whereas, according to the judgment under appeal (Paris, 11 May 2000), that, on the basis of an arbitration clause inserted in a subcontracting contract, the company Bouygues seized an arbitrator of difficulties opposing it to the company Constructions Métaux Tourangelles (the company CMT), to the rights of which the company Barbot CM is located, and concerning the conditions of execution of the contract; that during arbitration operations, a summary judgment, on appeal from the arbitrator and the Bouygues company, decided that a state judge was not competent to order the arbitrator to suspend the continuation of its operations pending the judgment to be issued on the appeal lodged by Bouygues against a judgment pronouncing the cancellation of the subcontracting contract;

On the first ground: (Publication without interest);

On the second plea:

Whereas the Barbot CM company criticizes the judgment for having refused to annul the arbitration award, then, according to the means:

1 ° that the clause of a contract which provides for internal arbitration and which, moreover, already designates the arbitrator by name, does not have an independent character and that its validity does not survive the cancellation of the contract ; that results from it that the cassation of the judgment having rejected the action in nullity of this contract will entail consequently cancellation of the judgment attacked, by application of Article 625 of the new Code of civil procedure;

2 ° that, in any event, the arbitration award which rules by applying the contractual stipulations is directly dependent on the decision relating to the validity of the contract; that it follows that in this respect again, the cassation of the invalidation judgment having declared this contract valid will consequently entail the annulment of the sentence applying this contract and of the judgment refusing to cancel it, by application of article 625 of the new Code of Civil Procedure;

3 ° that assuming that the arbitrator could rule without waiting for the outcome of the dispute relating to the validity of the contract, he must then, before applying it, rule on the objection of nullity raised before him ; that in deciding that by applying a contract whose validity it refused to examine, the arbitrator had not committed a denial of justice violating a rule of public order, the court of appeal disregarded the Articles 4 of the Civil Code and 1484-6 ° of the new Code of Civil Procedure;

But given that the arbitration clause presenting, in relation to the main agreement in which it is inserted, a legal autonomy which excludes it from being affected by the ineffectiveness of this act, the judgment rightly holds that the any nullity of the subcontract has no effect on the validity of the arbitration clause;

And whereas after noting that, under cover of a violation of public order, the company Barbot CM resumed its criticisms on the autonomy of the arbitration clause and contested the substance of the sentence, which escaped recourse in annulment, without showing that the solution brought to the dispute was contrary to public order, the Court of Appeal rightly held that the sentence could not be annulled;

From which it follows that the plea is unfounded;

For these reasons :

DISMISSES the appeal.

Publication: Bulletin 2002 II N ° 68 p. 57 Contested

decision: Paris Court of Appeal, 2000-05-11
Titrations

Court of Cassation
Civil Chamber 2
Public hearing of May 14, 1997 Cassation.
N ° of appeal: 94-20776
Published in the bulletin

President: M. Zakine.
Rapporteur: M. Buffet.
Advocate General: Mr. Tatu.
Lawyers: M. Odent, SCP Le Griel.

FRENCH REPUBLIC

IN THE NAME OF THE FRENCH PEOPLE

On the sole means:

Considering articles 1458, paragraph 2, and 1466 of the new Code of Civil Procedure;

Whereas it is up to the arbitrators to rule on the validity or the limits of their nomination ; that the state jurisdiction, if the arbitral tribunal is not yet seized, must declare itself incompetent, unless the arbitration agreement is manifestly void;

Expected, according to the judgment under appeal and the productions, that Mr. and Mrs. Papin concluded in 1987 with the company Promodes a franchise contract relating to the exploitation of their business; that this contract included a clause entitled “Contestation and interpretation of this agreement” which stipulated that “all disputes which may give rise to the interpretation and execution of this agreement shall be submitted to three arbitrators” and laid down the terms of the arbitration; that in 1992 the couple Papin informed the company Promodes that they raised a dispute on the agreement concluded and requested the implementation of the arbitration; that the company Promodes appointed an arbitrator and made a reservation on the arbitrator appointed by the Papin couple who turned out to be their lawyer; that in 1993, the Prodim company having put them on formal notice to settle unpaid franchise contributions, the Papin spouses brought proceedings against the Promodes and Prodim companies before a commercial court for reimbursement of sums for an overpayment of contributions , in payment of damages and nullity of the agreement concluded in 1987; that the companies opposed the arbitration clause and the incompetence of the commercial court, and that they formed a contradiction against the judgment of the commercial court which had retained its jurisdiction;

Whereas, to declare the competent commercial court, the judgment holds that the applicants do not present a dispute on the interpretation or the execution of the franchise contract, but invoke the nullity of the contract, and that the assessment of the validity of the contract does not fall under the arbitration agreement and is beyond the jurisdiction of the arbitrators;

That by ruling thus, without finding that the arbitration convention would have been manifestly null, the court of appeal did not give legal basis to its decision;

FOR THESE REASONS :

BREAK AND CANCELED, in all its provisions, the judgment rendered on September 22, 1994, between the parties, by the Douai Court of Appeal; returns, consequently, the cause and the parts in the state where they were before the aforementioned judgment and, to be done right, returns them before the court of appeal of Douai, otherwise composed.
Publication: Bulletin 1997 II N ° 141 p. 82

Contested decision: Douai Court of Appeal, 1994-09-22

Precedents in case law: To be reconciled: Civil Chamber 2, 1995-05-10, Bulletin 1995, II, n ° 135, p. 77 (cassation).

Codes cited: new Code of Civil Procedure 1458 al. 2, 1466.

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