INTERNATIONAL ARBITRATION AND THE ARBITRATOR'S POWER TO DECIDE ON ITS OWN JURISDICTION AS A PRIORITY
LexInter | April 21, 2008 | 0 Comments

INTERNATIONAL ARBITRATION AND THE ARBITRATOR’S POWER TO DECIDE ON ITS OWN JURISDICTION AS A PRIORITY

On the single plea, taken in its three branches, which is admissible:Whereas the maritime co-ownership Jules Verne and various other plaintiffs, (hereafter the co-ownership Jules Verne) owners of the ship “Tag Heuer” had brought before the commercial court of Paris, to obtain compensation for the consequences of damage , the American classification society “American Bureau of Shipping” (ABS), which opposed, on the basis of the arbitration clause inserted in the classification contract, the jurisdiction of the designated arbitration court – arbitration in New York, according to the rules of the “society of maritime arbitrators inc” -, and, seized the American jurisdiction, which, by judgment of March 27, 1999 of the court of appeal of the “District Court” of New-york, declared the clause d ‘arbitration enforceable against the Jules Verne co-ownership;

Whereas the Jules Verne co-ownership criticizes the judgment under appeal, (Paris, 4 December 2002), rendered after cassation ( 1st civ, 26 June 2001 , B n ° 183) for having declared the French state courts incompetent, then, according to the means:1 / that article 7.1 of the New York Convention of June 10, 1958 for the recognition and enforcement of foreign arbitral awards only reserves national law when it authorizes a party to invoke an arbitral award in a case where the agreement does not allow it; that on the other hand, this text does not give precedence to national law with regard to the conditions under which a state court must refuse to rule in the presence of an arbitration agreement so that, in ruling to the contrary, the court of appeal violated Articles 2 and 7.1 of the New York Convention, together Article 55 of the constitution;

2 / that the rules relating to arbitration stipulated in the arbitration clause do not recognize the arbitrator’s power to rule on his own jurisdiction, by refraining from investigating whether the law chosen by the parties gave to the arbitrator this power to rule on its own jurisdiction, the court of appeal deprived of legal basis its decision with regard to article 1458 of the new code of civil procedure;3 / that by judging that the arbitration clause appearing in the classification contract was not manifestly inapplicable to the Jules Vernes co-ownership and to its members, however not signatories, whereas this contract clearly excluded that persons other than its signatories could become parties in the contract, the court of appeal violated article 1458 of the new code of civil procedure;

But since the judgment holds, first of all, rightly, that the New York Convention, ratified by the United States and France, reserves the application of a more favorable domestic law for the recognition of the validity of the arbitration agreement; that he then states, exactly, that the principle of validity of the international arbitration convention and that according to which it is for the arbitrator to rule on his own jurisdiction are substantive rules of French law on international arbitration, which establish, on the one hand, the legality of the arbitration clause independently of any reference to a state law and, on the other hand, the effectiveness of the arbitration by allowing the arbitrator, seized of a challenge to its jurisdictional power, to decide it as a matter of priority; that the combination of the principles of validity and competence-competence consequently prohibits the French state judge from carrying out a substantial and in-depth examination of the arbitration agreement, regardless of the place where the tribunal sits arbitration, the only limit within which the judge can examine the arbitration clause before having to check its existence or its validity in the context of an appeal against the award, being that of its nullity or of its manifest inapplicability;
And given that having noted that in the state of the American decision having ruled that the arbitration clause was enforceable against the Jules Verne co-ownership, the complex analysis in fact and in law of the dispute could not lead to setting aside the clause of arbitration, the court of appeal, which did not have to refer to a procedural law, rightly deduced that the arbitration clause not being manifestly inapplicable, the French judge had encroached on arbitral jurisdiction;From which it follows that the means, inoperative in its first two branches, is ill-founded in its third;

FOR THESE REASONS :DISMISSES the appeal;

Orders the applicants to pay the costs;
Considering article 700 of the new code of civil procedure, rejects the request of the maritime co-ownership Jules Verne and the other applicants and condemns them in solidum to pay to the company American bureau of shipping (ABS) the sum of 4000 euros;
Thus done and judged by the Court of Cassation, first civil chamber, and pronounced by the president in his public hearing of June 7, two thousand and six.



Publication: Bulletin 2006 IN ° 287 p. 251 Contested
decision: Paris Court of Appeal, 2002-12-04

Court of Cassation
Civil Chamber 1

Public hearing of June 26, 2001 Cassation.


Appeal number: 99-17120
Published in the bulletin

President: M. Lemontey.
Rapporteur: M. Ancel.
Advocate General: Ms. Petit.
Lawyers: M. Foussard, SCP Delaporte et Briard, SCP Parmentier and Didier.

FRENCH REPUBLIC
 

IN THE NAME OF THE FRENCH PEOPLE

On the first plea:
Considering the principle according to which it is up to the arbitrator to rule on his own competence;
Whereas, in order to declare the Paris Commercial Court competent to hear the dispute between the maritime co-ownership Jules Verne, owner of the vessel “Tag Hauer”, and the insurers of this vessel, to the American classification society American Board of Shipping (ABS ), with regard to compensation for the consequences of damage, the Court of Appeal held that the arbitration clause invoked by the company ABS, stipulated in the classification contract, was inapplicable to the applicants;
Whereas in determining itself thus, without noting the manifest nullity of the arbitration agreement, the only one likely to obstruct the aforementioned principle, which establishes the priority of the arbitral competence to rule on the existence, the validity and the scope of the arbitration agreement, the court of appeal did not give a legal basis for its decision;
FOR THESE REASONS, and without there being any need to rule on the other means:BREAK AND ANNUL, in all its provisions, the judgment rendered on May 19, 1999, between the parties, by the Paris 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 Paris, otherwise composed.

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