- Cour d'appel de Paris (1er Ch.C.)
- Société FORASOL v. Société mixte Franco-Kazakh CISTM
LONG-TERM CONTRACTS - CATERING SERVICE CONTRACT - BETWEEN A FRENCH COMPANY AND A FRENCH-KAZAKH COMPANY
REFERENCE BY ARBITRAL TRIBUNAL TO THE UNIDROIT PRINCIPLES AS A "CODIFICATION" OF INTERNATIONAL TRADE USAGES - WITHOUT EXPRESS AUTHORIZATION BY PARTIES - REFERENCE DOES NOT EXCEED TERMS OF SUBMISSION IF OF NO DIRECT IMPACT ON THE MERITS OF THE DECISION
Plaintiff, a French company in charge of perforation activities in Kazakhstan had entered into a contract with Defendant, a mixed French-Kazakh company for catering services for its employees. The contract, which was governed by French law, had a fixed term but provided for tacit renewal in the absence of notice of cancellation by Defendant three months before expiry. Two days before the three month period began to run, Plaintiff sent a notice of cancellation to Defendant, which however reached the latter two days after the three months had begun to run.
The parties disputed the effectiveness of the notice and commenced arbitration proceedings. The sole Arbitrator held that with resepct to notices exchanged in contractual relationships there was no clear rule in French law as to whether the dispatch principle or the receipt principle prevailed, and therefore on the basis of Article 13(5) of the ICC Rules of Arbitration, referred to the usages of international trade and found that according to them it was the receipt principle that was generally accepted. In this context the Arbitrator also referred to the UNIDROIT Principles, indicated as a "codification" of such usages, without however citing Article 1.9(2) which expressly sets out the receipt principle.
In challenging the award Plaintiff claimed that the sole Arbitrator, in applying international trade usages and the UNIDROIT Principles without being requested by the parties to do so, had violated the principle laid down in Article 1502 (3) and (4), i.e., the arbitral tribunal's duty not to exceed the terms of the submission to arbitration, and the right of the parties to present their case.
The Cour d'appel rejected the objection on the ground that according to both Article 13(5) of the ICC Rules of Arbitration and Article 1496 of the French Code of Civil Procedure the arbitral tribunal is entitled to base its decision on the rules of law it considers most appropriate and to refer to trade usages. In the case at hand the reference to the latter was all the more so justified as the law chosen by the parties as the applicable law did not provide a clear answer to the issue at stake. Nor did the Arbitrator exceed the terms of the submission to arbitration by referring to the UNIDROIT Principles as the reference to them had no direct impact on the decision.
Revue de l'Arbitrage, 1999, p. 86 et seq.}}