French Supreme Court: Defaulting party to the proceedings – Burden of proof of the violation of due process

French Supreme Court, 1st Civil Chamber, 5 November 2014, no 13-11.745

In a judgement issued on 5 November 2014, the French Supreme Court ruled on the question of proof of compliance with due process in arbitration.

In this case, a Luxembourg Company sought enforcement in France of an ICC award rendered in New York by a sole arbitrator, following a procedure in which the defendant – a Russian company – failed to participate, considering the arbitration agreement was non-existent.

On 15 January 2013, the Paris Court of Appeal rejected the Luxembourg Company’s enforcement application on the basis of non compliance with due process by the arbitrator. The Court of Appeal considered that the claimant did not bring evidence proving the receipt by the defendant of the procedural orders, the arbitrator’s letters amending the provisional timetable of the proceedings, the summons for the hearing, as well as requests by the arbitrator to make its observations on new procedural documents before the award is made.

The Court of Appeal thus has held that “the evidence of receipt of such documents formally denied by the [Russian Company, defendant] cannot be inferred from the fact that the arbitrator, had he been informed of any difficulty in delivering the correspondence, would have notified the ICC ” even though the award specifically mentioned the receipt by the defendant of all of these documents, supported by delivery notes from private postal operator.

The French Supreme annulled this decision on the ground that it reverses the burden of proof of Article 1315 of the French Civil Code which provides that “whoever claims the performance of an obligation must prove it” – in the matter at hand, the Russian Company, defendant.

Indeed, the Supreme Court noted that the award explicitly stated that all the documents of the arbitrator had been received directly by the defendant as proven by the delivery notes from private postal operator.

Without referring to the principle of estoppel – although it was raised by one of the parties – it seems likely the Supreme Court, with this decision, sanctions the attempt of a party deliberately refusing to participate to the proceedings to later invoke any possible irregularity of the award.

Once again, the Supreme Court demonstrates its will to promote the efficiency of arbitration by limiting parties’ dilatory behavior in connection with annulment or enforcement proceedings, all the more when the party deliberately refused to participate to the proceedings.

The decision is available here.

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