This document was contributed under the ICC x Jus Mundi Partnership.
| ICC | International Chamber of Commerce |
| [Respondent] | [Respondent] (also referred to as the "Respondent") |
| ICC Rules | Rules of Arbitration of the International Chamber of Commerce in force as from 1 March 2017 |
| Claimant | [Claimant 1] (also referred to as "[Claimant 1]") |
| [Claimant 1] | [Claimant 1] or the Claimant (also referred to as the "Claimant") |
| CMC | Case Management Conference |
| Additional Party | [Claimant 2] |
| Claimants | [Claimant 1] and [Claimant 2] collectively |
| Contract | The "Terms and Conditions" and the "Purchase Order" collectively |
| ICC Secretariat | The Secretariat of the ICC Court |
| Parties | The Claimants and Respondent collectively |
| Request for Arbitration | The Claimant’s Request for Arbitration of 9 September 2017 |
| PILA | Swiss Federal Act on Private International Law |
| PO1 | Procedural Order No. 1 |
| PO2 | Procedural Order No. 2 |
| PO3 | Procedural Order No. 3 |
| Purchase Order | The Purchase Order dated 13 October 2016 |
| Respondent | [Respondent] (also referred to as "[Respondent]") |
| Terms and Conditions | Order Terms and Conditions for Erection Works dated 13 October 2016 |
| ToR | Terms of Reference |
The Sole Arbitrator, appointed by the International Court of Arbitration of the ICC (the "ICC Court"), upon the proposal of the Italian National Committee, is:
Dr. Michele Potestà
LÉVY KAUFMANN-KOHLER
Attorneys at law
3-5 rue du Conseil-Général
P.O. Box 552
CH-1211 Geneva 4
Telephone: [Redacted]
Fax: [Redacted]
Email: [Redacted]
The arbitration agreement is contained in Article 24 of the Terms and Conditions. Article 24 reads as follows:
"All disputes arising from or in connection with this contract and the purchase order(s) herein under shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said rules. Place of arbitration shall be Genf, Switzerland. The Contract shall be governed and construed by the substantive law of Switzerland, excluding the United Nations Convention on the International Sale of Goods (CISG)."3
Terms and Conditions, Art. 24, Exh. C-2.
The arbitration agreement does not specify the language of the arbitration. After hearing the Parties, pursuant to Article 20 of the ICC Rules, on 20 March 2018, the Sole Arbitrator issued Procedural Order No. 1 ("PO1"), in which he determined that English shall be the language of this arbitration, with the following specifications:
"(a) As of today’s date, the Parties’ correspondence and submission shall be solely in English; (b) The Parties may file evidence, including witness statements, and legal authorities in either English or French, without the need to translate them into the other language [...]."4
Procedural Order No. 1, 20 March 2018 ("PO1"), para. 16.
On 9 September 2017, the Secretariat of the ICC Court (the "ICC Secretariat") received a request for arbitration from the Claimant, dated 9 September 2017 (the "Request for Arbitration"). Pursuant to Article 4(2) of the ICC Rules, this arbitration commenced on 9 September 2017.
On 8 March 2018, pursuant to Article 13(3) of the ICC Rules, upon proposal from the Italian National Committee, the ICC Court appointed Dr. Michele Potestà as Sole Arbitrator.
On 5 April 2018, the ICC Court extended the time limit for establishing the Terms of Reference until 31 May 2018 (Article 23(2) of the ICC Rules).
On 3 May 2018, the ICC Secretariat invited the Claimants to substitute for the Respondent in the payment of the first instalment of the balance of the advance on costs. On the same day, the ICC Court fixed 30 November 2018 as the time limit for the final award based upon the procedural timetable established (Article 31(1) of the ICC Rules).
On 8 May 2018, the Claimants requested the ICC Court to fix separate advances on costs for the principal claims and for the Respondent’s counterclaims, pursuant to Article 37(3) of the ICC Rules.
On 7 June 2018, the ICC Secretariat informed that the ICC Court had fixed separate advances on costs (Article 37 of the ICC Rules) in the amount of US$ 80 000, and requested payment thereof.
On 29 August 2018, the Secretary General of the ICC Court granted the Respondent fifteen additional days to pay the amount request, failing which the relevant claims would be considered withdrawn without prejudice to their reintroduction at a later date in another proceeding (Article 37(6) of the ICC Rules).
On 17 September 2018, the ICC Secretariat informed that, as the time limit indicated in the ICC Secretariat’s letter of 29 August 2018 had expired and no payment nor objection from the Respondent had been received, "pursuant to Article 37(6) of the Rules, Respondent’s claims [were] considered withdrawn as of 17 September 2018".
Further to a communication of 20 September 2018 addressed to the ICC Secretariat, on the same date the Respondent addressed a comunication to the Sole Arbitrator, in which it took note of the ICC decision with respect to the withdrawal of the counterclaims, which it considered "justified" ("Je pris note de la décision de la CCI qui est bien justifiée"). However, the Respondent suggested that it appeared necessary to amend the Terms of Reference, in order to take into account such decision. The Claimants provided their comments on 27 September 2018.
On 1 October 2018, the Sole Arbitrator confirmed that the withdrawal of the counterclaims pursuant to Article 37(6) of the ICC Rules had been duly recorded in the letter from the ICC Secretariat of 17 September 2018, that it had been acknowledged by the Respondent in its communication of 20 September 2018 and by the Claimants in their letter of 27 September 2018. Thus, under the circumstances, the Sole Arbitrator did not consider it necessary to amend the Terms of Reference.
On 26 October 2018, in accordance with Article 27 of the ICC Rules, the Sole Arbitrator declared the proceedings closed with respect to the matters to be decided in this Partial Award, and informed the Parties that he would submit his draft Partial Award to the ICC Court for approval pursuant to Article 34 of the ICC Rules the following day.
In this phase of the arbitration, the Claimants have sought the following relief:
"75. In light of the above, the Claimant respectfully requests the Sole Arbitrator to issue a Partial Award:
i. Declaring that the commercial claims brought in Mauritania against the Claimant and its subsidiary, as well as the provisional measures the Respondent sought against them, were in breach of the Arbitration Agreement;
ii. To order the Respondent to cease and desist making domestic claims in breach of the arbitration agreement;
iii. Ordering the Respondent to pay all costs arising out of this application, including the Claimant’s counsel’s fees and expenses.
76. For the avoidance of doubt, the Claimant reserves its right to further quantify, amend and expand the foregoing prayer for relief during the subsequent phases of this arbitration."5
Claimants’ Reply on the Breach of the Arbitration Agreement, paras. 75-76. See also Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 103-104.
In this phase of the arbitration, the Respondent has sought the following relief:
"In light of the foregoing, the respondent respectfully requests the sole arbitrator to issue a partial sentence:
(i) Deny all applications by [Claimant 1]
(ii) Accept that [Claimant 2] be joined to the conflict independently of [Claimant 1] or declare the contract invalid
(iii) Order [Claimant 1] to pay all costs arising from this application, including the guarantor's fees and expenses
To avoid ambiguity, the respondent reserves the right to quantify, modify and extend the request for repair during the subsequent stages of this arbitration."6
Respondent’s Reply on the Breach of the Arbitration Agreement, Section V. See also Respondent’s Answer on the Breach of the Arbitration Agreement, Section VII.
Thus, in accordance with the Parties’ agreement and Annex 1 of PO2, in this Partial Award the Sole Arbitrator decides on all the issues, claims, and requests for relief in relation to the following two questions:
See Respondent’s Answer, Request for Joinder and Counterclaims, para. 11 ("Le Contrat liant [Respondent] et [Claimant 2], [Respondent] requiert que [Claimant 2] soit jointe à la procédure d'arbitrage commencée par [Claimant 1] en tant que Partie intervenante et Défenderesse reconventionnelle aux côtés de [Claimant 1]"); Respondent’s Answer on the Breach of the Arbitration Agreement, Section VII ("[...] [Respondent] request[s] the following: [...] accept that [Claimant 2] be attached to the conflict regardless if not declare the contract not valid") (in the French version: "Accepter que [Claimant 2] soit jointe au conflit indépendamment sinon déclarer le contrat non valide"); Respondent’s Reply on the Breach of the Arbitration Agreement, Section V ("the respondent respectfully requests the sole arbitrator to issue a partial sentence: [...] (ii) Accept that [Claimant 2] be joined to the conflict independently of [Claimant 1] or declare the contract invalid"). See also ToR, para. 33(iii). In its 1 October 2018 communication, the Respondent however suggested that the name of "[Claimant 2]" be removed from the caption of this arbitration. The Sole Arbitrator notes, however, that the Respondent did not request to modify its prayers for relief in connection to the joinder of the Additional Party. Thus, the Sole Arbitrator considers that the Respondent’s suggestion contained in its 1 October 2018 communication has no effect in respect of the position which the Respondent has consistently maintained throughout the entire proceeding that [Claimant 2] should be joined to these proceedings.
Request for Joinder and Counterclaims, para. 6; Letter from [Respondent] to the Sole Arbitrator, 27 April 2018, p. 1; Respondent’s Answer on the Breach of the Arbitration Agreement, paras. 3, 42; Respondent’s Reply on the Breach of the Arbitration Agreement, para. 3.
In addition, the Respondent has made a number of arguments on the denomination of [Claimant 2]. In its Answer to the Request for Arbitration, the Respondent acknowledged that [Claimant 2] was a succursale of [Claimant 1].12 In its subsequent submissions, however, the Respondent argued that [Claimant 2] is an "inexistent" or "fictitious" entity, because its denomination does not conform to the name of the succursale established by [Claimant 1] in Mauritania.13 The Respondent refers to two excerpts from the Mauritanian Register of Commerce (registre du commerce) (Exhibits R-4 and R-35)14 to argue that "[Claimant 2]" is not the name used in the two excerpts, which "argument is totally sufficient to conclude that [Claimant 2] does not exist".15
See Respondent’s Answer, Request for Joinder and Counterclaims, para. 7 (arguing that "[Claimant 2] est une succursale de [Claimant 1] qui a été créée dans le seul but de la construction d'une cimenterie basée à Nouakchott en Mauritanie. Le numéro de [Claimant 2] au Registre du Commerce est le [Redacted], son numéro fiscal est le [Redacted] et son directeur était à l'époque des faits Monsieur [Person 9]").
Respondent’s Answer on the Breach of the Arbitration Agreement, paras. 4, 38-40.
Respondent’s Answer on the Breach of the Arbitration Agreement, paras. 60-63.
Respondent’s Answer on the Breach of the Arbitration Agreement, para. 63. See also Respondent’s Reply on the Breach of the Arbitration Agreement, para. 34.
The Respondent maintains that:
"The fact that the contract refers to [Claimant 2] and not to the so-called 'branch [Claimant 1] 'in Mauritania’ [a]s indicated in the commercial register proves that [Claimant 2] is not the branch of [Claimant 1] in Mauritania so somehow fictitious. Articles 47 and 340 of the Mauritanian Code of Commerce require that the name indicated on the commercial register must be included in the documents, letters, invoices, announcements, publications or other material issued by the company and intended for third parties because the Companies are designated by a corporate name."16
Respondent’s Reply on the Breach of the Arbitration Agreement, para. 34.
The Respondent has also repeatedly referred to a "scam" from [Claimant 1 and Claimant 2]’s managers and submits that [Respondent] was "the victim of a scam in which the actors are the leaders of [Claimant 1] in using a fictitious company called [Claimant 2] while there is a branch of [Claimant 1] in Mauritania who wears a different name".17 It has further argued that:
"In any event, the purchase order explicitly refers to [Claimant 2] and [Respondent], as two autonomous companies. The fact that a leader of [Claimant 1] signs a document of [Claimant 2] and uses the stamp of [Claimant 2] confirms the scam of the leaders of [Claimant 1] who are made designer as needed in this fictitious entity."18 [sic]
Respondent’s Answer on the Breach of the Arbitration Agreement, para. 52.
Respondent’s Reply on the Breach of the Arbitration Agreement, para. 36.
The Claimants submit that [Claimant 2] is a mere succursale of [Claimant 1].20 It was registered as a branch office of [Claimant 1] at the Mauritanian Register of Commerce under no. [Redacted], pursuant to Article 39 of the Mauritanian Code of Commerce.21 As such, so the Claimants argue, [Claimant 2] cannot be regarded as a separate entity from its parent company, but is rather a representation of its economic activity.22 Because [Claimant 2] is "devoid of any independent personality from [Claimant 1]", any act undertaken by the former directly engages the responsibility of the latter.23
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 80-86.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 81-82, 93.
Claimant’s Reply to Counterclaims and Comments on Joinder, para. 52 et seq.; Additional Party’s Answer to Request for Joinder, para. 2; Claimants’ Submission on the Breach of the Arbitration Agreement, para. 80.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 83, 95.
The Claimants contend that the Respondent was always aware of the legal status of [Claimant 2].24 They submit that the succursale is clearly identified in the contractual documents. In particular, the Purchase Order sent to [Respondent] in the form of a letterhead explicitly indicates the registration number, i.e., no. [Redacted], which is identical to the information contained in the Register of Commerce excerpt for [Claimant 2], and the tax number.25 Thus, "there is nothing to suggest that [Claimant 1 and Claimant 2] was trying to trick [Respondent] in any manner".26
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 94-99.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 97-98; Claimants’ Reply on the Breach of the Arbitration Agreement, para. 66.
Claimants’ Reply on the Breach of the Arbitration Agreement, para. 66.
In view of the foregoing, initially the Claimants argued that the Additional Party could not be a Party to the current arbitration for lack of an independent legal personality.29 In their latest submissions, however, the Claimants withdrew their "objection to [Claimant 2] being joined" to these proceedings.30 The Claimants have made the following statements:
"[...] in light of the legal uncertainty concerning the legal status of succursales under Mauritanian law, the Claimant withdraws its objection to [Claimant 2] being joined to these arbitral proceedings, and it requests that any award be therefore issued in the name of both [Claimant 1] and its succursale for ease of enforcement in Mauritania.
[...] in order to avoid any difficulty related to the enforcement of the future award in Mauritania and to simplify the present arbitral proceedings, the Claimant is of the view that the safest route for the Sole Arbitrator to take would be to issue an award in the name of both [Claimant 1] and its Mauritanian emanation (succursale)."31
See Reply to the Counterclaims and Response to Request for Joinder, Section IV; Answer to the Request for Joinder, para. 12(a); ToR, para. 40.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 86, 102; Claimants’ Reply on the Breach of the Arbitration Agreement, para. 64.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 86, 102.
The Respondent has stated that it has no objection to [Claimant 1]’s standing (qualité pour agir) in this arbitration.32 By contrast, the Respondent complains that [Claimant 2] is not a party to the arbitration and requests the Sole Arbitrator to join [Claimant 2] to the arbitration or, alternatively, declare the contract invalid.33
See Respondent’s Answer, Request for Joinder and Counterclaims, para. 12 ("[Claimant 1] ayant déposé la Requête d'arbitrage, il faut donc conclure qu'elle souhaite se soumettre à la compétence du Tribunal arbitral tel que prévue par l'article 24 des Conditions générales. [Respondent] ne conteste pas la qualité pour agir de [Claimant 1]." Emphasis added); Terms of Reference, para. 39 ("The Respondent has stated that it has no objection on the Claimant's standing (qualité pour agir) in this arbitration (see Answer, Request for Joinder and Counterclaims, para. 12).").
See Respondent’s Answer, Request for Joinder and Counterclaims, para. 11 ("Le Contrat liant [Respondent] et [Claimant 2], [Respondent] requiert que [Claimant 2] soit jointe à la procédure d'arbitrage commencée par [Claimant 1] en tant que Partie intervenante et Défenderesse reconventionnelle aux côtés de [Claimant 1]"); Respondent’s Answer on the Breach of the Arbitration Agreement, Section VII ("[...] [Respondent] request[s] the following: [...] accept that [Claimant 2] be attached to the conflict regardless if not declare the contract not valid") (in the French version: "Accepter que [Claimant 2] soit jointe au conflit indépendamment sinon déclarer le contrat non valide"); Respondent’s Reply on the Breach of the Arbitration Agreement, Section V ("the respondent respectfully requests the sole arbitrator to issue a partial sentence: [...] (ii) Accept that [Claimant 2] be joined to the conflict independently of [Claimant 1] or declare the contract invalid"). See also ToR, para. 33(iii). In its 1 October 2018 communication, the Respondent however suggested that the name of "[Claimant 2]" be removed from the caption of this arbitration. The Sole Arbitrator notes, however, that the Respondent did not request to modify its prayers for relief in connection to the joinder of the Additional Party. Thus, the Sole Arbitrator considers that the Respondent’s suggestion contained in its 1 October 2018 communication has no effect in respect of the position which the Respondent has consistently maintained throughout the entire proceeding that [Claimant 2] should be joined to these proceedings. Furthermore, in light of the Sole Arbitrator’s decision on the joinder of and the jurisdiction over the Additional Party (on which see infra in the text), there is no reason to change the caption of this arbitration.
With regard to the request for "joinder" of the Additional Party, the Sole Arbitrator notes that under the ICC Rules, an Additional Party is joined automatically at the date on which the Request for Joinder is received by the ICC Secretariat. Article 7(1) of the ICC Rules provides as follows:
"A party wishing to join an additional party to the arbitration shall submit its request for arbitration against the additional party (the 'Request for Joinder’) to the Secretariat. The date on which the Request for Joinder is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of arbitration against the additional party. Any such joinder shall be subject to the provisions of Articles 6(3)-6(7) and 9. No additional party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the additional party, otherwise agree. The Secretariat may fix a time limit for the submission of a Request for Joinder."
By referring to Articles 6(3)-6(7) and 9 and repeating the language of Article 4(2), the joinder provision in the ICC Rules makes it clear that the Request for Joinder has effects that are equivalent to those of a Request for Arbitration. This means that any party against which a Request for Joinder is made automatically becomes a party to the arbitration when the ICC Secretariat receives that Request, subject of course to Articles 6(3) and 6(4) and to the arbitral tribunal's affirming jurisdiction over that party. This means that a joined party can be removed by the ICC Court if it makes a negative decision under Article 6(4) or later by the arbitral tribunal if it lacks jurisdiction over that party.34
See J. Fry, S. Greenberg, F. Mazza, The Secretariat's Guide to ICC Arbitration, a Practical Commentary on the 2012 ICC Rules of Arbitration from the Secretariat of the ICC International Court of Arbitration, 2012, p. 94, para. 3-290.
The foregoing is sufficient to resolve the Parties’ requests in relation to the joinder of and the jurisdiction over the Additional Party. In other words, given the Sole Arbitrator’s holdings, the Sole Arbitrator need not address the Respondent’s request that the Contract be declared invalid. Indeed, that request is clearly framed as an alternative request for relief in the event that the Sole Arbitrator were to deny the Respondent’s request to join the Additional Party,37 quod non.
See Respondent’s Answer on the Breach of the Arbitration Agreement, Section VII ("[...] [Respondent] request[s] the following: [...] accept that [Claimant 2] be attached to the conflict regardless if not declare the contract not valid", emphasis added) (in the French version: "Accepter que [Claimant 2] soit jointe au conflit indépendamment sinon déclarer le contrat non valide"); Respondent’s Reply on the Breach of the Arbitration Agreement, Section V ("the respondent respectfully requests the sole arbitrator to issue a partial sentence: [...] (ii) Accept that [Claimant 2] be joined to the conflict independently of [Claimant 1] or declare the contract invalid", emphasis added). See also Respondent’s Answer on the Breach of the Arbitration Agreement, para. 66 ("[Respondent] will want to remember that any exclusion of [Claimant 2] of this conflict would result in the elimination by the contracting party and would render the contract completely invalid") (in the French version: "[Respondent] voudra rappeler que toute exclusion de [Claimant 2] de ce conflit se traduirait par l’élimination par la partie contractante et rendrait le contrat totalement non valide.").
The Terms and Conditions were entered into by "[Respondent]" and "[Claimant 2]".39 The Terms and Conditions refer to and incorporate, inter alia, the "Purchase Order".40 The Purchase Order was sent to the Respondent on a letterhead bearing the following name: "[Claimant 2]". Moreover, each page of the Purchase Order bears the following footer, which, inter alia, refers to "[Claimant 2]", the Register of Commerce registration number, and the tax number:
[Redacted image]
See Terms and Conditions, p. 1, Exh. C-2.
See Terms and Conditions, Art. 1, Exh. C-2; Purchase Order, Exh. C-1.
Business registry excerpt for [Claimant 2], Exh. C-24, Registre du Commerce de Succursale de [Claimant 1] 17/03/2015, Exh. R-4.
The excerpt from the Register of Commerce dated 11 February 2015 (Exhibit R-35), also signed by the chief registrar of the Tribunal de Commerce prés Tribunal de la Wilaya de Nouakchott, and entitled "DECLARATIONS AUX FINS D’IMMATRICULATION", in turn refers to the denomination of the entity in question as follows:
SUCCURSALE "[Claimant 1]/[Claimant 2]"
Thus, the denominations of the entity in question in the two excerpts from the Register of Commerce are non-identical. This notwithstanding, it is clear in the Sole Arbitrator’s mind that the two excerpts refer to the same succursale, as is shown by (i) the same "chronological register no." (Registre chronologique n.) (which in both cases is no. [Redacted]), and (ii) the same "analytical register no." (Registre analytique n.) (which in both cases is no. [Redacted]). Furthermore, there is no allegation from the Respondent, let alone proof, that either of the excerpts from the Register of Commerce is untrustworthy or should be discountenanced.
The contractual documents, on their part, refer to the following denominations: "[Claimant 2]";42 "[Claimant 2]";43 and "[Claimant 2]".44 In addition, the Purchase Order refers to the following Register of Commerce number on the footer of each page: [Redacted].45 Despite the different names across the contractual documents and the fact that these denominations are not identical to the names found in the excerpts from the Register of Commerce, it is clear to the Sole Arbitrator that the entity referred to in the Terms and Conditions and the Purchase Order is the same succursale which was registered in the Mauritanian Register of Commerce under no. [Redacted], which number is indicated in all relevant documents.
See Terms and Conditions, Exh. C-2 (name of contracting party).
See Purchase Order, Exh. C-1 (letterhead).
See Purchase Order, Exh. C-1 (footer; signature page).
See Purchase Order, Exh. C-1.
In other words, the fact that the Purchase Order refers to the branch with an abbreviated form is irrelevant, as the branch is clearly identified through its registration number which matches the number in the Register of Commerce. The fact that a third party, [third party company], indicated in a letter to the Respondent dated 27 February 2018 that "the company [third party company] has no accounts nor deals with the company of [Claimant 2]"46 is of no relevance in this context and is not sufficient to prove that [Claimant 2] is "inexistent" or "fictitious".
Réponse [third party company] sur la saisie conservatoire, Exh. R-10.
The Claimants contend that the Sole Arbitrator has exclusive power to determine his own jurisdiction.50 Pursuant to the principle of competence-competence, enshrined in Article 186 of the Swiss Private International Law Act (the "PILA"), the lex arbitri in this case,51 the arbitral tribunal has "priority jurisdiction" over all attributes of the dispute, including its jurisdictional aspects and the determination of the scope of the arbitration agreement.52 This position is, in the Claimants’ view, consistent with Article II(3) of the New York Convention, to which both Switzerland and Mauritania are parties, whereby courts of contracting States must enforce the parties’ arbitration agreements and refrain from hearing disputes that were meant to be arbitrated, unless certain limited exceptions are met.53
The Claimants explain that the Parties discussed the Steel Structure Works in a meeting held on 6 October 2016, following which the Claimants sent the Respondent pictures delimiting the scope of the works to be performed by the Respondent, containing battery limits graphics.59 The Claimants contend that both Battery Limit No. 132 and Battery Limit No. 233 show that the steel structure works for the grinding building fell within the ambit of the Respondent’s work.60 Thus, the "real and common intention" of the Parties was to include the Steel Structure Works within the scope of work of the Contract.61
Claimants’ Submission on the Breach of the Arbitration Agreement, para. 35, discussing [Claimant 1 and Claimant 2] and [Respondent] email exchange, email from [Claimant 1 and Claimant 2] to [Respondent], 8 October 2016, Exh. C-4.
Claimants’ Submission on the Breach of the Arbitration Agreement, para. 35, discussing [Claimant 1 and Claimant 2] and [Respondent] email exchange, email from [Claimant 1 and Claimant 2] to [Respondent], 8 October 2016, Exh. C-4, and Battery limit No. 2, attachment to email from [Claimant 1 and Claimant 2] to [Respondent], 8 October 2016, Exh. C-3.
Claimants’ Reply on the Breach of the Arbitration Agreement, paras. 39-41.
The Claimants’ position is that the Parties’ 8 October 2016 email was used to draft the Purchase Order. Although the latter indicates that the Respondent’s scope of work comprises "the complete mechanical of the grinding building", the express reference to the "mutual discussion on Oct 6th, 2016" makes it plain that the Steel Structure Works were included in the Respondent’s scope of works.62 For the Claimants, the fact that the Steel Structure Works were not explicitly listed in Article 1 of the Purchase Order was due to a mere "mistake" by [Claimant 1 and Claimant 2] that was recognized in the Minutes of the Meeting dated 20 January 2017.63 In addition, so the Claimants maintain, a number of other contract documents and specifications, which form part of the Contract, refer to the Steel Structure Works.64
Claimants’ Submission on the Breach of the Arbitration Agreement, para. 36, discussing Purchase Order, 13 October 2016, Exh. C-1.
Claimants’ Reply on the Breach of the Arbitration Agreement, para. 42, discussing Minutes of the Meeting #01, attachment to email from [Claimant 1 and Claimant 2] to [Respondent], 20 January 2017, Exh. C-14.
Claimants’ Submission on the Breach of the Arbitration Agreement, para. 37, discussing B204333-PLA-SPEC0001-Rev01- Volume l.v- General Site Conditions, Article 7.4, Exh. C-27; [third party company] - CIVIL WORK, Technical specification, Article 5.2 Steel Structures, Exh. C-28; Volume Il.i General Conditions of Purchase, 9 February 2015, Article 1.1 cc), Exh. C-29; Volume II.ii-Specification of Documentation, 9 February 2015, Article 4.4.2, Exh. C-30; B204333-TDC-0005-Rev00-Volume II.iii-Delivery and Performance Deadlines, Article 2.2.f, Exh. C-31; B204333-TDC-0006-Rev00-Volume II.iv-Inspections and Trials, Article 3.4, Exh. C-32. See also Claimants’ Reply on the Breach of the Arbitration Agreement, paras. 43-44.
Second, regardless of whether the claims brought before the Mauritanian courts are deemed to "arise from the Contract", the Claimants maintain that they are in any event "in connection with" the Contract.65 They contend that the Respondent’s argument that payment for "additional" Steel Construction Works were governed by an email exchange and that such email exchange refers to a new agreement between the Parties is incorrect.66 In the Claimants’ view, the email exchanges explicitly concern a potential "contract ammendment [sic]" rather than the formation of a new agreement.67 In this respect, the Claimants contend that such proposed amendment, which was never finally entered into, was envisaged merely to "pacify" the Respondent.68 They consider that "even if a binding agreement had been reached all disputes in relation to that amendment would also have been subject to the Arbitration Agreement".69
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 39-46; Claimants’ Reply on the Breach of the Arbitration Agreement, paras. 52-57.
Claimants’ Submission on the Breach of the Arbitration Agreement, paras. 41-43.
Claimants’ Submission on the Breach of the Arbitration Agreement, para. 43, discussing email from [Claimant 1 and Claimant 2] to [Respondent], 2 March 2017, Exh. C-17.
Claimants’ Reply on the Breach of the Arbitration Agreement, para. 44.
Claimants’ Reply on the Breach of the Arbitration Agreement, para. 57.
The Claimants further contend that the Respondent breached the arbitration agreement by requesting provisional relief from Mauritanian courts.73 In this regard, the Claimants are of the view that the ICC Rules impose strict conditions for parties to be able to seek provisional measures before state courts, and none of these conditions were met in the case at hand.74 The Claimants argue that pursuant to Article 28(2) of the ICC Rules, any request for interim relief filed in State courts prior to the constitution of the arbitral tribunal must meet the following three requirements: (i) the request must be filed within a competent court; (ii) the party filing such a request must have an intent to resort to arbitration; and (iii) the party must notify the ICC Secretariat of such a request.75
For the Respondent, the claims submitted before the Mauritanian courts concern the so-called Steel Structure Works (travaux métallurgiques structurels),87 which are not within the scope of the Contract.88 The terms of the Contract are clear as they specifically relate to two offers made by the Respondent, nos. 028 and 039, which form part of the Contract inasmuch as they are explicitly referred to in the Purchase Order.89 The Respondent maintains that it had made several offers to [Claimant 2] concerning several parts of the building, and only offers nos. [Redacted] and [Redacted] were ultimately retained and became the subject of the Contract.90
Respondent’s Answer, Request for Joinder and Counterclaims, para. 19.
Respondent’s Answer, Request for Joinder and Counterclaims, para. 19.
Respondent’s Answer, Request for Joinder and Counterclaims, para. 20, discussing Exh. R-6 and Exh. R-7. See also Respondent’s Reply on the Breach of the Arbitration Agreement, para. 12.
Respondent’s Answer, Request for Joinder and Counterclaims, para. 21; Respondent’s Reply on the Breach of the Arbitration Agreement, para. 21.
The Respondent further points to Article 1 of the Contract, which provides as follows:
"The Contract constitutes the entire agreement between the Parties with respect to the subject matter of the Contract and supersedes all communications, negotiations and agreements (whether written or oral) of the Parties with respect thereto made prior to the date of the Contract."
The Respondent disagrees with the Claimants’ argument that the mention of the Steel Structure Works in the Contract was an "oversight" (oubli) and contends that on 2 February 2017, when the Contract was already being performed, [Claimant 2] acknowledged the Steel Structure Works as "additional" works outside of the Contract, for which it agreed to pay 153’766 Euros.95
Respondent’s Reply on the Breach of the Arbitration Agreement, para. 23, discussing Acceptation des travaux supplémentaires structures, Exh. R-20, and Validation des travaux supplémentaire [Claimant 1 and Claimant 2], Exh. R-22.
With regard to the principle of competence-competence, the Respondent maintains that the Sole Arbitrator has the power to rule on its own jurisdiction, but only within the framework of the Contract and not in respect of matters that fall outside its scope.96 The Respondent argues as follows:
"[...] the single arbitrator may decide the jurisdiction which seemed to him to be the best appropriate but in the framework of the contract. Outside the work topics of the complaint in Mauritania are outside independent contracts it.
[...] [Respondent] had considered and rightly so that all the work of rehabilitation of mechanical parts before their assembly and the work of correction of these parts are in connection with the contract because these same parts are listed in the scope of the work of the good of command, although the extent of the work covers only the fitting only under the supervision of [Claimant 2]. These same works are covered and rated by the two offers [Redacted] and [Redacted] the basis of the terms and conditions and of the good of command and an integral part of the contract documents. By against the steels of structures are independent of the contract and are covered by an offer that had not been restraint and is not covered by the scope of the work of the contract. These works are independent of the contract and are at the basis of the work out of contract."97 [sic]
Respondent’s Answer on the Breach of the Arbitration Agreement, paras. 18-19.
Respondent’s Answer on the Breach of the Arbitration Agreement, paras. 19-20.
The Respondent argues that, because the Steel Structure Works were excluded from the scope of work agreed under the Contract, the Respondent was free to initiate proceedings before Mauritanian courts in connection with those works:
"[Respondent] has filed the complaint relating to work outside of this contract to the Mauritanian Tribunal of Commerce because it had the free choice to go to the institution which seemed to him the most appropriate from the point of view that the commitments to go to arbitration only exist to the extent of the work that exist in the good of command and or in relationship with the latter".98 [sic]
Respondent’s Answer on the Breach of the Arbitration Agreement, para. 14.
Hence, the Respondent contends that it did not breach the arbitration agreement when it filed the civil complaint before the Tribunal of Commerce of Nouakchott (including a request for interim relief), as such complaint related to works outside of the contractual scope of work:
"The complaint filed with the Tribunal of Nouakchott is relative to the work out contracts and this is clearly stated in the title of the complaint and in its content. It is relative to the work of steel structures, damages and interest and the costs of justice for this. Disputes relating to work performed outside contract may not therefore be submitted to the arbitration clause. Accordingly, as it refers only to amounts related to these work outside contract, the decision of the Tribunal of Commerce of Nouakchott does not violate the arbitration clause in the contract."99
Respondent’s Answer on the Breach of the Arbitration Agreement, para. 57.
Pursuant to Article 186(1) of the PILA,101 the lex arbitri in this case, and Article 6(5) of the ICC Rules (2017),102 the Sole Arbitrator has the power to decide on his own jurisdiction, including on any objections thereto.
The arbitration agreement provides as follows:
"All disputes arising from or in connection with this contract and the purchase order(s) herein under shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said rules. Place of arbitration shall be Genf, Switzerland. The Contract shall be governed and construed by the substantive law of Switzerland, excluding the United Nations Convention on the International Sale of Goods (CISG)."103
Terms and Conditions, Art. 24, Exh. C-2.
The (subjective and objective) interpretation starts with the text of the disputed clause.106 Other means of interpretation can also be used as "supplementary means" ("moyens complémentaires") of interpretation (e.g. history of the negotiations, purpose of the disputed clause, behavior of the parties).107 In practice, the wording of a clause carries an important weight and will often be determinative in the interpretation. As remarked by the Swiss Federal Tribunal, while a "purely literal interpretation is prohibited", a court (or arbitral tribunal) should not depart from the literal or ordinary meaning of the text adopted by the parties unless there is "serious reason" to think that it does not correspond to their intention.108
P. Gauch, W. Schluep and P. Tercier, Partie Générale du Droit des Obligations, Vol. I (2nd ed. 1982), para. 840 ("Le point de départ de toute interprétation est la lettre (Wortlaut) c’est-à-dire le sens des mots utilisés par les parties [...] Il faut en principe partir de l’idée que les parties ont utilisé les termes dans le sens courant qu’ils avaient au moment de la conclusion du contrat").
B. Winiger, Art. 18, in L. Thévenoz and F. Werro (eds), Commentaire Romand. Code des obligations I (2nd ed. 2012), pp. 141-143.
See, e.g., Decision of the Swiss Federal Tribunal, 136 III 186, para. 3.2.1 ("Il n'y a [...] pas lieu de s'écarter du sens littéral du texte adopté par les intéressés lorsqu'il n'existe aucune raison sérieuse de penser qu'il ne correspond pas à leur volonté"); Decision of the Swiss Federal Tribunal, 4A_124/2014, 7 July 2014, para. 3.4.1.
The Sole Arbitrator notes that the text of the Contract does not mention the Steel Erection Works, whereas it refers to other types of works. The Terms and Conditions explicitly refer to a number of documents which shall form part of the Contract ("The Contract Agreement between the parties shall consist of the following documents [...]").110 In particular they list two offers (nos. [Redacted] and [Redacted]).111 It is undisputed that neither offer concerns the Steel Structure Works.
Terms and Conditions, 13 October 2016, Art. 1, Exh. C-2.
See Terms and Conditions, Art. 1, Exh. C-2 (referring to "Offer No. [Redacted] and [Redacted]").
The Purchase Order, for its part, lists the following items within the "scope of work" set out in its first paragraph:
"- Finalisation of the complete mechanical of the grinding Building
- Finalisation of the erection of the cement silos
- Finalisation of the erection of the conveyor belt incl. bridge
- Mechanical erection of the mill shell lining
- Erection of pipes, ducts and chutes (PDC) as well as compressed air system and fire fighting system"112
Purchase Order, 13 October 2016, at Pos 1), Exh. C-1.
The Contract also contains an "entire agreement clause", which reads as follows:
"The Contract constitutes the entire agreement between the Parties with respect to the subject matter of the Contract and supersedes all communications, negotiations and agreements (whether written or oral) of the Parties with respect thereto made prior to the date of the Contract."113
Terms and Conditions, 13 October 2016, Article 1, Exh. C-2.
This, however, is not the end of the matter. It is undisputed that, subsequent to the conclusion of the Contract and while the Contract was being performed, the Parties agreed that [Respondent] would carry out the Steel Structure Works. The agreement of principle as to the performance of such works is not in dispute. As already noted, the Claimants’ primary argument is that these works were agreed already in the "original" Contract.116 The Respondent, for its part, does not dispute the principle that such works were agreed between the Parties, as in fact it brought claims before the Mauritanian courts to complain about the alleged non-performance of [Claimant 2]’s obligations in that respect. However, it contends that such works were agreed subsequently and independently from the Contract.117 Neither Party has, however, provided any further written document signed by both Parties that would memorialize such agreement.
The Claimants’ argument is that "[a]t a meeting on 28 February 2017 [...], the Parties agreed that the Respondent would be paid additional amounts for the steel structure works" (that had already been included in the scope of the Contract but were not mentioned due to a "mistake"). See Request for Arbitration, para. 66.
See Respondent’s Reply on the Breach of the Arbitration Agreement, para. 16 ("[Claimant 1 and Claimant 2] denies [the Steel Structure Works] sometimes and considers that they are already in the contract while they were estimated and evaluated in agreement with [Claimant 2] at a later date ", emphasis added; and in the French version: "[Claimant 1 and Claimant 2] nie ces travaux parfois et considère qu’ils sont déjà dans le contrat alors qu’ils ont été estimés et évalués en accord avec [Claimant 2] ultérieurement"); Respondent’s Answer, Request for Joinder and Counterclaims, para. 27 (describing meetings between the Parties in February 2017 and the agreement between the Parties to carry out the additional works).
Instead, both Parties have referred to meetings between the Parties in early 2017 at which the Steel Erection Works were discussed and to documents evidencing the Parties’ discussions on those works.118 In particular, one of the communications between the Parties speaks of a proposal for an "amendment" of the Contract, whose purpose was to "extend" "[Respondent][’s] contractual scope of works" to include "[f]inali[z]ation of the complete steel structure erection works of the grinding building".119
See in particular email from [Claimant 1 and Claimant 2] to [Respondent], 2 March 2017, Exh. C-17/Exh. R-21 (recording that discussions between the Parties held on 28 February 2017 and [Claimant 1 and Claimant 2]’s statement that "Acc. your proposal we agree to the following points: - [Respondent] announced extra costs for the steel structure works in the height of € 153.766,00,-- net (without VAT) [...] Accordingly we will prepare an contract ammendment [sic] with the following points: 1.) [Respondent] contractual scope of works will be extended by: a. Finalisation of the complete steel structure erection works of the grinding building [...]"); Validation des travaux supplémentaire [Claimant 1 and Claimant 2], Exh. R-22 ("[Claimant 1 and Claimant 2] does acknowledge the additional works for steel structure with a value of EUR 153.766,--net, in this case we would like to point out that [Respondent] informed [Claimant 1 and Claimant 2] about additional cost in February 2017, 4 month after [Respondent] commenced the works"); Minutes of the Meeting #01, attachment to email from [Claimant 1 and Claimant 2] to [Respondent], 20 January 2017, Exh. C-14; Acceptation des travaux supplémentaires structures, Exh. R-20.
See email from [Claimant 1 and Claimant 2] to [Respondent], 2 March 2017, Exh. C-17 ("I discussed with my colleagues on site concerning your meeting you had on Tuesday, the 28/02/2017. Your proposal is well noted and I already informed Mr. [Person 9] and Mr. [Person 10]. Acc. your proposal we agree to the following points: - [Respondent] announced extra costs for the steel structure works in the height of € 153.766,00,-- net (without VAT)[;] -[Respondent] accept[s] the back charge costs from [Claimant 1 and Claimant 2] in height of € 90.000,00,-- net (without VAT)[.] Accordingly we will prepare an contract amendment [sic] with the following points: 1.) [Respondent] contractual scope of works will be extended by: a. Finalisation of the complete steel structure erection works of the grinding building [...]", emphasis added.)
In a decision of 2011, the Swiss Federal Tribunal, in the context of a CAS award, found for instance that the arbitration agreement contained in a contract extended to a network of related contracts, provided none contained diverging dispute resolution mechanisms. The Swiss Federal Tribunal stated that:
"[I]t is admitted that the scope of such an arbitration clause in a contract could extend to the additional or accessory contracts unless they contain a specific dispute resolution clause of different contents."120
Swiss Federal Tribunal, 1st Civil Court, Decision dated 20 September 2011, No. 4A_103/2011, para. 3.2.2, Exh. CL-38.
Swiss scholars generally agree with this approach. As explained by Berger and Kellerhals:
"It is broadly accepted that an arbitration clause contained in any given contract, in case of doubt, also covers claims arising from subsequent legal relationships between the same parties that are connected to the original contract. This includes, in particular, claims arising from addenda or supplements by which the main contract was changed or amended by mutual agreement. [...] In the circumstances of the case, a different conclusion may be justified if the subsequent legal relationship only has an indirect and distant connection with the original contract that contains the arbitration clause. It must be stressed that the principles explained above [...] only apply insofar as the contract that governs the subsequent legal relationship does not provide for its own dispute resolution mechanism. If that contract contains an arbitration agreement of its own or even a forum-selection clause, the parties must normally be deemed to have intended that the new dispute resolution agreement shall replace the former (jus posterior derogat priori)."121
B. Berger and F. Kellerhals, International and Domestic Arbitration in Switzerland, 3rd ed. 2015, paras. 515-516, emphasis in the original, internal footnotes omitted.
As further clarified by Girsberger and Voser:
"In general, disputes arising out of later legal relationships which are connected to earlier contracts containing an arbitration clause are encompassed by the arbitration agreement. However, if a subsequent contract contains a clause conferring jurisdiction on the state courts or an arbitration clause that differs from the previous clauses, it may not easily be presumed that the earlier clause has been tacitly extended (or replaced). On the other hand, where a contract deals with the same subject matter as earlier contracts but contains an arbitration clause that differs from the one contained in the earlier contract, it may be inferred that the parties agreed to amend the earlier arbitration clause."122
D. Girsberger and N. Voser, International Arbitration: Comparative and Swiss Perspectives (3rd ed. 2016), para. 589, emphasis added, internal footnotes omitted.
C. Müller, Arbitration Agreement, in M. Arroyo, Arbitration in Switzerland: The Practitioner’s Guide, Kluwer Law (2013), para. 51, Exh. CL-37. See also G. Kaufmann-Kohler, A. Rigozzi, International Arbitration: Law and Practice in Switzerland, Oxford University Press (2015), para. 3.142, Exh. CL-36, ("An arbitration clause contained in a contract applies to disputes arising out of the contract’s annexes as well as to separate contractual documents amending the original contract, unless provided otherwise").
The Sole Arbitrator turns now to the Respondent’s request for interim relief before the Mauritanian courts. In that regard, the Claimants have invoked Article 28(2) of the ICC Rules to argue that the Respondent violated the arbitration agreement (which incorporates the ICC Rules).
Article 28(2) of the ICC Rules provides as follows:
"Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof."
As is clear from its wording, Article 28(2) expressly permits parties to seek interim or conservatory relief from a "competent judicial authority", i.e. outside the framework of ICC arbitration. As explained in the ICC Secretariat’s Guide to ICC Arbitration, this provision "clearly specifies that applying for such measures will not constitute a breach of the parties’ arbitration agreement".130
Article 28(2) further distinguishes between interim measures requested by a party to the "competent judicial authority" before the file is transmitted to the arbitral tribunal and after the occurrence of such event. It is only after the transmission of the file to the arbitral tribunal that the ICC Rules require "appropriate circumstances" for parties to resort to state courts for interim relief. By contrast, when no arbitral tribunal is yet in place, the ICC Rules allow a party to seek interim relief before a competent court without further specification ("the parties may apply to any competent judicial authority for interim or conservatory measures").
For the foregoing reasons, the Sole Arbitrator makes the following decision:
a. The Sole Arbitrator has jurisdiction over [Claimant 2], i.e. the entity registered as "SUCCURSALE [Claimant 1] en Mauritanie" in the Register of Commerce of the Tribunal de Commerce prés Tribunal de la Wilaya de Nouakchott under registration number [Redacted];
b. The Sole Arbitrator has jurisdiction over the disputes involving [Claimant 1] and [Claimant 2], on the one side, and [Respondent], on the other side, arising from and in connection with the Contract, and over disputes arising from and in connection with the Steel Structure Works;
c. [Respondent] breached the arbitration agreement contained in Article 24 of the Terms and Conditions by initiating a civil complaint before the Commercial Court of Nouakchott, to the extent held in the body of this Award;
d. [Respondent] is liable for any damages incurred to [Claimant 1] and [Claimant 2] arising from the breach referred to in paragraph 172.c above, to be quantified in the subsequent phase of this arbitration;
e. The Claimants’ claim that the Respondent breached the arbitration agreement by seeking interim relief before the Commercial Court of Nouakchott is denied;
f. The Respondent shall cease and desist from making or continuing civil/commercial claims in breach of the arbitration agreement before the Mauritanian courts;
g. The determination on the costs incurred by the Parties in relation to this phase of the arbitration is deferred to the final award.
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