Implicit extension of the time limit to render the award and rejection of the modification by the court of appeals of the arbitral tribunal’s decision

French Supreme Court, First Civil Chamber, 11 September 2013, n°12-26.180

On 11 September 2013, the French Cour de cassation rendered a decision precising (i) the modalities to prolong the time limit to render the award and (ii) the limit of the court of appeal’s powers.

The facts of the case were the following: on 2 September 2008, the Compagnie européenne portuaire et d’aménagement (“CEPA”) undertook to sell CF Partners all the shares it possessed in a third company, Yacht club international Marina Baie des Anges.  The agreement contained a price revision clause.  The assignment of the shares was signed on 6 March 2009.  However, the parties disagreeing on the price at the contractual date, CF Partners commenced arbitration before a sole arbitrator in accordance with the arbitration agreement contained in the assignment agreement.

On 26 October 2009, the Sole Arbitrator accepted his mission.  The award was rendered on 30 June 2010, finding that the assignment agreement’s price should be decreased.

By two judgments dated 21 June (principal judgment) and 5 July 2012 (decision correcting a material error), the Court of Appeals of Aix-en-Provence dismissed CEPA’s challenge of the award and ordered payment of the awarded amount, plus 8% contractual interests per year from 30 June 2010, i.e., the date of the award.

CEPA brought the challenge before the Cour de cassation, arguing in essence that:

  • The Sole Arbitrator had let the time limit for rendering the award lapse since over six months had passed between the date he accepted his mission and the date he rendered the award;
  • By ordering payment of contractual interests from the date of the award, the Court of Appeals had violated Articles 1487 para. 1 and 1498 para. 2 of the French Code of Civil Procedure.

The Cour de cassation:

  • Rejected the first argument, finding that by participating to the procedure, including by sending the Sole Arbitrator on several occasions comments on the draft award without invoking the fact that the time limit to render the award had lapsed, CEPA had manifested its will to participate to the arbitral procedure until the award was rendered;
  • Ordered the partial annulment of the Court of Appeals’ decision as regards the contractual interests, holding that “the court of appeals before which the challenge of an arbitral award is brought cannot modify the decision rendered by the arbitrator by adding to it”.

The decision is available here.

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