France / 04 December 2002 / France, Cour d'appel de Paris / Société American Bureau of Shipping (ABS) v. Copropriété Maritime Jules Verne et al / 2001/17293
| Country | France |
| Court | France, Cour d'appel de Paris (Court of Appeal of Paris) |
| Date | 04 December 2002 |
| Parties | Société American Bureau of Shipping (ABS) v. Copropriété Maritime Jules Verne et al |
| Case number | 2001/17293 |
| Applicable NYC Provisions | II | V | V(1) | V(1)(a) | VII | VII(1) |
| Source |
Original decision obtained from the registry of the Cour d’appel de Paris |
| Summary | A US company (ABS) proceeded in 1992 to the classification of a ship (Tag Heuer) at the request of its constructor (Tencara). ABS' Specific Conditions, containing an arbitration agreement (which provided for arbitration in New York), were attached to the classification request. Tencara proceeded with payment and each invoice referred to ABS' General Conditions containing the arbitration agreement. The ship was then damaged. At the request of the insurance companies, an expert determination was ordered by the Tribunal de Grande Instance de Paris (First Instance Court of Paris), which held ABS partially responsible. The owner of the ship (the Jules Vernes co-ownership) and the insurance companies commenced proceedings before the Tribunal de Commerce de Paris (Commercial Court of Paris), which found that it had jurisdiction over the dispute. In the meantime, ABS initiated arbitral proceedings in New York against the Jules Vernes co-ownership and the insurance company of Tag Heuer, after a decision of the Federal Court of Appeal declared that they were bound by the arbitration agreement. ABS challenged the decision of the Tribunal de Commerce de Paris and of the Cour d'appel de Paris (Paris Court of Appeal) which had upheld that French Courts had jurisdiction to hear the dispute. The Cour de Cassation (Supreme Court) reversed the decision of the Cour d'appel de Paris on the ground that it had failed to establish that the arbitration agreement was manifestly null and void, which constitutes the only exception to the principle according to which arbitrators have jurisdiction to decide on their own jurisdiction and to rule on the existence, validity and applicability of an arbitration agreement. The case was remanded before the Cour d'appel de Paris. ABS invoked the principle of Compétence-Compétence and argued that there was no need to refer to the NYC. The Jules Verne co-ownership argued that article II NYC should prevail over Article 1458 of the Code of Civil Procedure and that the conditions provided under Article II NYC were not met since the arbitration arbitration was not applicable to it. It also claimed that there was a risk of denial of justice given that, according to the US Federal Arbitration Act, the arbitrators cannot rule on their own jurisdiction. The Cour d'appel de Paris reasoned that Article VII NYC reserves the right to apply domestic law in situations where it is more favorable for the recognition and validity of the arbitration agreement and that this provision necessarily applies in the context of Article II NYC given the link between Article II NYC and Article V(1)(a) on the validity of an arbitration agreement. It also explained that the principle of validity of international arbitration agreements and the principle according to which arbitrators have jurisdiction to decide on their own jurisdiction are material rules of French international arbitration law which, as opposed to Articles II and V NYC on the formal requirement of an arbitration agreement, establish the validity of an arbitration agreement irrespective of any reference to domestic law. It further noted that the principle according to which arbitrators have priority to rule on the validity of an arbitration agreement is not provided under Article II NYC which only requires the court of a Contracting State to refer the parties to arbitration, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. On the basis of these principles of French law, the Cour d'appel de Paris held that a French court may not proceed to an in-depth analysis of the arbitration agreement, the only exception being that the court may review the arbitration agreement in order to determine whether it is manifestly void or inapplicable. In the case at hand, it held that, in light of the complex facts of the case, the arbitration agreement could not be considered as manifestly void or inapplicable and therefore it found that it did not have jurisdiction over the dispute and referred the parties to arbitration. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
