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Partial Award on Jurisdiction, Joinder, and Breach of the Arbitration Agreement

FREQUENTLY USED ABBREVIATIONS

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

I. INTRODUCTION

1.
This is an arbitration brought under the Rules of Arbitration of the International Chamber of Commerce ("ICC") in force as from 1 March 2017 (the "ICC Rules"). The seat of this arbitration is Geneva, Switzerland.

II. THE PARTIES

A. The Claimant and the Additional Party

2.

The Claimant is [Claimant 1] (hereinafter the "Claimant" or "[Claimant 1]"). The Claimant’s address is:

[Claimant 1]
[Redacted]
Austria

3.

The Additional Party is [Claimant 2] (hereinafter the "Additional Party" or "[Claimant 2]"). The Additional Party’s address is:

[Claimant 2]
[Redacted]
Mauritania

4.
The Claimant and the Additional Party are collectively referred to as the "Claimants".
5.

The Claimants are represented in this arbitration by:

[Person 1]
[Person 2]
[Person 3]
[Person 4]
ACERIS LAW
Rue du Rhône 14
1204 Geneva
Switzerland
Tel: [Redacted]
Fax: [Redacted]
Email: [Redacted]
[Redacted]
[Redacted]
[Redacted]

B. The Respondent

6.

The Respondent is [Respondent] (hereinafter the "Respondent" or "[Respondent]"). The Respondent’s address is:

[Respondent]
[Redacted]
Mauritania
Tel: [Redacted]
E-mail: [Redacted]

7.

The Respondent is represented in this arbitration by:

[Person 5]
LANDOLT & KOCH
17 Rue du Mont-Blanc
1201 Geneva
Switzerland
Tel: [Redacted]
Fax: [Redacted]
Email: [Redacted]

Cheikh [Person 6]
Tel: [Redacted]
Email: [Redacted]

8.
The Claimants and the Respondent are collectively referred to as the "Parties".

III. THE SOLE ARBITRATOR

9.

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]

IV. THE CONTRACT

10.
This arbitration has been initiated pursuant to Article 24 of the Order Terms and Conditions for Erection Works dated 13 October 2016 (the "Terms and Conditions"), entered into between [Claimant 2] and [Respondent],1 and the Purchase Order dated 13 October 2016 (the "Purchase Order")2 (together referred to as the "Contract"), to resolve a dispute arising from and in connection with the Contract for the erection of a cement grinding plant in Mauritania.

A. Arbitration Agreement

11.

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

B. Applicable Law

12.

Article 24 of the Terms and Conditions, quoted in full at the preceding paragraph, provides as follows:

"[...] 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)."

C. Language of the arbitration

13.

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

V. PROCEDURAL HISTORY

14.

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.

15.
On 30 November 2017, the Respondent submitted its "Réponse à la Requête d’Arbitrage, Demande d’intervention et Demande reconventionnelle" (the "Respondent’s Answer, Request for Joinder and Counterclaims"), which was received by the ICC Secretariat on 5 December 2017.
16.
On 5 January 2018, the Claimant submitted its Reply to the Counterclaims and Response to Request for Joinder (the "Claimant’s Reply to Counterclaims and Response to Request for Joinder").
17.
On 9 January 2018, the ICC Secretariat acknowledged receipt of the US$ 5 000 non-refundable filing fee from Respondent for its Request for Joinder of [Claimant 2], and notified the Request for Joinder to the Additional Party.
18.
On 8 February 2018, the Additional Party submitted its Answer to the Respondent’s Request for Joinder (the "Additional Party’s Answer to Request for Joinder").
19.
On 22 February 2018, the ICC Secretary General decided not to refer the matter concerning the Additional Party’s jurisdictional plea to the Court and that the matter would be decided by the Sole Arbitrator.
20.

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.

21.
As invited in the Sole Arbitrator’s letter of 12 March 2018, on 16 March 2018 the Parties provided further comments on the language of the arbitration.
22.
On 20 March 2018, the Sole Arbitrator issued PO1, in which he determined that English would be the language of the arbitration, subject to certain specifications (see supra para. 13).
23.

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).

24.
On 6 April 2018, the Parties and the Sole Arbitrator held a first procedural hearing via telephone conference in which they finalized and agreed the Terms of Reference and discussed case management (the "Case Management Conference" or "CMC"). In addition to the Sole Arbitrator, Messrs. [Person 1] and [Person 7] attended on behalf of the Claimants, and Ms. [Person 5] and Mr. [Person 6] on behalf of the Respondent. During the CMC, the Sole Arbitrator consulted the Parties on the procedural steps to be followed in this arbitration. The results of those consultations were reflected in Procedural Order No. 2, issued on 6 April 2018 ("PO2"), which contains the procedural rules applicable to this arbitration as well as the calendar for the first phase of the proceedings.
25.
On 12 April 2018, the Sole Arbitrator dispatched original and electronic copies of the Terms of Reference, signed by the Parties and the Sole Arbitrator, to the Parties and the ICC Secretariat.
26.
On 20 April 2018, the Claimant filed a request for interim relief, together with a witness statement from Mr. [Person 8] and a legal authority CL-4.
27.
On the same day, the Sole Arbitrator invited the Respondent to provide its comments to the Claimant’s request by 27 April 2018.
28.
On 23 April 2018, Ms. [Person 5], counsel for the Respondent, informed the Sole Arbitrator that she would "not be involved in providing the comments that [the Sole Arbitrator] requested in [his] email".
29.
On 26 April 2018, the Respondent provided its comments to the Claimant’s request in a letter dated 27 April 2018, with exhibits R-10 to R-12.
30.
On 1 May 2018, the Sole Arbitrator issued Procedural Order No. 3 on "Interim relief" ("PO3"), in which he denied the Claimant’s requests and reserved costs for a later decision.
31.

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).

VI. THE PARTIES’ PRAYERS FOR RELIEF

66.

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

67.

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

VII. SCOPE OF THIS AWARD

68.
At the CMC, the Parties agreed to bifurcate the proceedings between a first phase and a second phase. The Parties agreed that the first phase would deal with the following two issues: (i) the Tribunal’s jurisdiction over, and the joinder of, the Additional Party, and (ii) the Respondent’s alleged breach of the arbitration agreement.7 At the CMC, the Parties further agreed that the first phase of the arbitration would be document-only.8
69.
The agreement of the Parties on the calendar was memorialized in the Sole Arbitrator’s letter to the Parties of 6 April 2018 and in Annex 1 to PO2 of the same date.
70.
Both Parties request the Sole Arbitrator to issue a partial award.9
71.

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:

  1. The joinder of the Additional Party and the Tribunal’s jurisdiction over the Additional Party (infra at VIII), and
  2. Whether the Respondent breached the arbitration agreement by commencing court proceedings before Mauritanian courts (infra at IX).

VIII. THE JOINDER OF AND THE JURISDICTION OVER THE ADDITIONAL PARTY

72.
This section deals with the joinder of and the jurisdiction over the Additional Party. After setting out the Parties’ positions (infra at VIII.A and VIII.B), the Sole Arbitrator provides his analysis (infra at VIII.C).

A. The Respondent’s position

73.

The Respondent requests that [Claimant 2] be joined to these proceedings.10 It argues that [Respondent] has no contractual relationship with [Claimant 1], since [Respondent] concluded the Contract with [Claimant 2].11

74.

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

75.

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

76.

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]

77.
The Respondent finally contends that "[t]he leaders [Claimant 1] used a false name by signing a contract on behalf of [Claimant 2] also using false addresses".19

B. The Claimants’ position

78.

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

79.

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

80.
Furthermore, the Claimants maintain that the Respondent’s allegation that any contract entered into by a company branch must contain a reference to its parent company is unsubstantiated.27 In any event, the Claimants submit that the Purchase Order makes specific reference to [Claimant 1], the parent company, immediately before the signatures, and the document is signed by both the branch manager (i.e., the manager of the succursale), [Person 9], and [Person 10], on behalf of the parent company.28
81.

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

C. Analysis

82.
[Claimant 1] initiated these proceedings on the basis of Article 24 of the Terms and Conditions, which text is reproduced supra at para. 11.
83.

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

84.

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."

85.

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

86.
In this case, the Request for Joinder was received by the ICC Secretariat on 5 December 2017, which thus is the date on which the Additional Party was joined to these proceedings. This being so, the Sole Arbitrator need not take a decision on the "joinder".
87.
With regard to the Sole Arbitrator’s jurisdiction over the Additional Party, which is a question for the Tribunal to determine, the Sole Arbitrator notes that, while at the initial stages of the arbitration the Claimants objected to [Claimant 2] being a party to these proceedings, they subsequently withdrew such objection.35 The Claimants now expressly request "that any award be [...] issued in the name of both [Claimant 1] and its succursale ".36
89.
Therefore, the Sole Arbitrator has jurisdiction over [Claimant 2] and the arbitration proceedings shall continue as between [Claimant 1] and [Claimant 2], on the one side, and [Respondent] on the other side.
90.

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.

IX. WHETHER THE RESPONDENT BREACHED THE ARBITRATION AGREEMENT

103.
In this section, the Sole Arbitrator deals with the Parties’ requests in relation to the Respondent’s alleged breach of the arbitration agreement contained in Article 24 of the Terms and Conditions. After setting out the Parties’ positions (infra at IX.A and IX.B), the Sole Arbitrator provides his analysis (infra at IX.C).

A. The Claimants’ position

104.
The Claimants argue that the Respondent breached the arbitration agreement contained in Article 24 of the Terms and Conditions by bringing claims which fall within the scope of the arbitration clause before Mauritanian courts.47
105.
The Claimants argue that ICC arbitration is the proper forum for the Parties’ dispute.48 They point to Article 24 of the Terms and Conditions which provides that all disputes arising "from or in connection with "the Contract and the purchase order(s) must be settled through ICC arbitration.49
106.

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

107.
The Claimants maintain that the claims which the Respondent submitted to Mauritanian courts fall within the scope of the arbitration agreement.54 They contend that Article 24 of the Terms and Conditions is broadly worded and embraces a wide class of disputes.55 The Claimants argue that, under the rules applicable to the interpretation of arbitration agreements under Swiss law, the Steel Structure Works fall within the Respondent’s scope of work of the Contract following both a subjective interpretation and an objective interpretation.56
108.
First, the Claimants are of the view that the claims submitted by the Respondent to the Mauritanian courts "arise from the Contract".57 They contend that the so-called "Steel Structure Works" were discussed by the Parties in their precontractual negotiations and were explicitly included in the scope of the Contract, hence constituting an integral part of the Respondent’s obligations.58
109.

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

110.

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

111.

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

112.
Furthermore, according to an "objective" interpretation of the Contract and the arbitration agreement, the circumstances preceding and accompanying the conclusion of the Purchase Order would lead a reasonable person to conclude that the Steel Structure Works were included in the Contract. Indeed, the omission in the Contract would not make sense given the overall purpose and context of the agreement. The Steel Structure Works were indispensable to the completion of the project. This, moreover, is supported by the fact that the Respondent initiated work on them, before claiming additional payments.70
113.
Therefore, the Claimants argue that any claims or disputes that pertain to payment or remuneration or amendment under the Contract must be deemed as "arising from or in connection with" the Contract and the Purchase Order(s), and therefore fall within the scope of the arbitration agreement.71
114.
This being so, the Claimants maintain that the Respondent breached the arbitration agreement when it seized the Tribunal of Commerce of Nouakchott with its request dated 17 May 2017. In that regard, the Claimants also argue that the Respondent did not bring the Terms and Conditions to the court’s attention, thus failing to make the court aware of the fact that there was an arbitration agreement in force between the Parties.72
115.

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

116.
According to the Claimants, none of these conditions were met in this case, because the request for interim relief was presented before an incompetent court and followed an improper procedure;76 it was never the Respondent’s intention to resort to arbitration;77 and the Respondent sent no notification to the ICC relating to the submission of the request for Conservatory Sequestration filed with the Commercial Court of Nouakchott.78
117.
Finally, the Claimants maintain that the Respondent’s request for conservatory sequestration before the Mauritanian courts was "abusive".79 They contend that abuse with respect to provisional relief can be established in cases when the request is made for purposes other than those underlining provisional measures, such as maintaining the status quo or preventing irreparable harm.80 The Claimants maintain that "[t]he main purpose of [the Respondent’s] action was merely to harm the Claimant".81
118.
The Claimants argue that they were prevented from raising ab initio any objection to the jurisdiction of the President of the Commercial Court of Nouakchott to order the requested sequestration order, because the Respondent filed its request for interim relief ex parte.82 After the Claimants were notified of the sequestration order, they requested cancelation of the order. They explain that only on 12 April 2018, i.e. 11 months after its issuance, was the sequestration order cancelled by the Court of Appeal of Nouakchott on the ground that the Sole Arbitrator had exclusive jurisdiction to issue conservatory measures.83 The Claimants complain that as a result of the sequestration order, they were unable to use their domestic bank accounts for almost 11 months, harming their ability to complete the project in Mauritania.84
119.
For these reasons, the Claimants request the Sole Arbitrator to declare that the Respondent’s civil actions were brought in breach of the Parties’ arbitration agreement and to order the Respondent to cease and desist pursuing all such domestic actions.85

B. The Respondent’s position

120.
The Respondent submits that the claims which it brought before the Mauritanian courts concerned works outside of the Contract (travaux effectués hors Contrat) and thus do not fall within the scope of the arbitration agreement.86
121.

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

122.
Thus, for the Respondent the Steel Structure Works are "wholly independent" from the Contract and relate to an offer that was not retained in the Contract and the Purchase Order.91
123.

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."

124.
The Respondent contends that the scope of the works has been "completely frozen" (totalment figée)92 in Article 1 of the Contract, as a result of which any prior discussions between the Parties are irrelevant.93
125.
Furthermore, the Respondent argues that the other contractual documents and specifications, which form part of the Contract, and on which the Claimants rely, are merely of a general nature and generally accompany any contract.94
126.

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

127.

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]

128.

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]

129.

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

130.
Finally, the Respondent denies having "concealed" the Contract when filing its request with the Mauritanian courts.100

C. Analysis

1. Introductory remarks

131.
The question that the Sole Arbitrator must resolve is whether the Respondent breached the arbitration agreement contained in Article 24 of the Terms and Conditions by bringing claims before the Mauritanian courts that allegedly fall within the scope of the Contract and the arbitration agreement.
132.
It is undisputed between the Parties that the claims brought before the Mauritanian courts concern the so-called Steel Structure Works. The Parties disagree as to whether or not those works fall within the scope of the arbitration agreement. This is a question of jurisdiction of the Sole Arbitrator, which must preliminarily be determined before examining whether the Respondent breached the arbitration agreement. Indeed, only in the event that the Steel Structure Works were deemed to fall within the Sole Arbitrator’s jurisdiction could [Respondent] have breached the arbitration agreement conferring jurisdiction on this Tribunal. Thus, the Sole Arbitrator examines first whether he has jurisdiction over disputes concerning the Steel Structure Works (infra at IX.C.2) and, if the answer to this question is in the affirmative, whether the Respondent breached the arbitration agreement (infra at IX.C.3).

2. Jurisdiction over disputes arising from and in connection with the Steel Structure Works

133.

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.

134.

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

135.
The Claimants contend that the claims brought before the local court proceedings deal with matters within the scope of the Contract, as they are both "arising from" and "in connection with" the Contract. The Respondent, for its part, contends that the Steel Structure Works concern works outside of the Contract (hors contrat).
136.
Under Swiss law, the interpretation of a contract, including an arbitration agreement, is subject to a two-step approach. First, the court (or arbitral tribunal) must try to identify the true and common intention of the parties (so-called "subjective interpretation").104 If such true and common intention of the parties cannot be established, the court (or arbitral tribunal) must interpret the disputed clause from the perspective of a good faith addressee of the declaration of intent (so-called "objective interpretation").105
137.

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

138.
The Sole Arbitrator thus starts from the wording of the arbitration agreement. In this respect, he notes that Article 24 is broadly phrased as it not only refers to disputes "arising from" but also "in connection with" the Contract and the purchase order(s). This broad wording is generally accepted to provide a basis for "comprehensive jurisdiction" in relation to all kinds of contractual claims that may arise in the context of the contract in which the arbitration clause is contained.109 The question is thus whether the dispute concerning the Steel Structure Works falls within the broadly worded arbitration clause contained in the Contract or, said otherwise, whether the Contract includes within its scope the Steel Structure Works.
139.

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.

140.

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

141.
The list of the works appears precisely drafted and it would defeat the ordinary meaning of the terms in their context to include the Steel Structure Works within such list.
142.
Thus, the wording of the Contract, as originally entered into, clearly suggests that the Parties did not intend to include the Steel Structure Works in the Contract.
143.

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

144.
On the one hand, this clause could be interpreted as limiting the Sole Arbitrator’s ability to look to evidence of the Parties’ conduct before the conclusion of the Contract. On the other hand, the Purchase Order (which forms part of the Contract) explicitly refers to "[the Parties’] mutual discussion on Oct 6th, 2016",114 which suggests that the Parties’ conduct before the conclusion of the Contract might be considered relevant in the interpretative exercise. Be that as it may, the Sole Arbitrator does not deem that the Parties’ prior conduct provides any conclusive evidence that would rebut his conclusion that the text of the Contract, as originally entered into, did not include the Steel Erection Works within its scope.
145.
The Sole Arbitrator further agrees with the Respondent that the contractual documents and specifications invoked by the Claimants115 are too general in nature to infer that the Steel Structure Works can be deemed included in the Contract.
146.
In conclusion, the Sole Arbitrator is of the view that the Contract as originally entered into between the Parties did not include the Steel Erection Works.
147.

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.

148.

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

149.
Even if no formal contract amendment ultimately materialized, it is not in dispute that the Respondent carried out the works to give effect to the agreement reached with [Claimant 2], even though the Parties diverge as to the mode of performance and payment (which are questions for the merits and are not relevant in this context). Having regard to the entirety of the evidence submitted into the record, the Sole Arbitrator considers that, while the Contract did not originally refer to the Steel Erection Works, in early 2017 an agreement between the Parties supplementing the Contract was reached concerning the performance of the additional Steel Erection Works. The Parties apparently did not consider it necessary to formalize the new agreement reached, which Swiss substantive law did not require them to, and, importantly, they did not enter into a specific dispute resolution clause for these additional works.
150.
The true question thus is whether the supplemental agreement must be deemed to be covered by the arbitration clause in the original Contract.
151.
Under Swiss law, an arbitration agreement contained in a contract may under certain circumstances be deemed to extend to other contractual relationships between the Parties.
152.

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

153.

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

154.

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

155.

Or, in the words of Prof. Christoph Müller,

"Unless otherwise agreed upon, an arbitration agreement also extends to disputes arising out of addenda supplementing, modifying or expanding the original contract."123

156.
This being the position under Swiss law, the Sole Arbitrator considers that in this case there is a clear structural connexity between the "original" Contract and the agreement reached by the Parties in early 2017 in relation to the Steel Structure Works. In the Sole Arbitrator’s view, proof of this structural link is the fact that (i) the Steel Structure Works and the works referred to in the original Contract are part of the same project; (ii) the Parties did not consider it necessary to formalize the subsequent relationship concerning the additional works, and, (iii) importantly, they did not enter into a specific dispute resolution clause for the subsequent contract, whether in the form of a different arbitration mechanism or, to the extent more relevant here, in the form of a choice of court provision in favor of Mauritanian courts.124
157.
When the Parties agreed to the additional Steel Erection Works, they were thus clearly positioning themselves within the framework of the existing Contract - as is confirmed by the term "amendment" which is used in one of the communications exchanged between the Parties. In other words, having regard to all of the circumstances at the time the Parties entered into the agreement with regard to the Steel Erection Works, there can be no doubt that the Parties intended to subject those works to the dispute resolution clause in force under the only Contract in which they had formalized their contractual relationship.
158.
In conclusion, through the agreement reached between the Parties in early 2017, the Parties intended to bring the Steel Erection Works within the scope of the Contract and thus the Steel Erection Works must be deemed to fall within the scope of the Contract (as supplemented) and the arbitration agreement contained therein. As a result, the Sole Arbitrator has jurisdiction over disputes arising from and in connection with the Contract, including disputes arising from and in connection with the Steel Structure Works.

3. Whether the Respondent breached the arbitration agreement

159.
Having concluded that the Steel Structure Works fall within the jurisdiction of the Sole Arbitrator, the Sole Arbitrator now considers whether the Respondent breached the arbitration agreement by bringing claims before the Mauritanian courts in relation to the Steel Structure Works.
160.
The Respondent filed both the civil complaint125 and the request for ex parte interim relief126 with the President of the Commercial Court of Nouakchott in May 2017, before the commencement of these arbitration proceedings.127 For the purposes of assessing whether the Respondent committed a breach of the arbitration agreement, it is convenient to treat these two proceedings separately.
161.
Starting from the initiation of the "main" civil complaint before the Commercial Court of Nouakchott,128 which was aimed at seizing the Mauritanian courts with the Parties’ dispute in connection with the Steel Construction Works, the Sole Arbitrator considers that the Respondent’s conduct breached the arbitration agreement contained in Article 24 of the Terms and Conditions. The Sole Arbitrator has concluded above that the Steel Structure Works fall within the scope of the arbitration agreement.129 An arbitration agreement produces both a "prorogation" (or positive) effect and a "derogation" (or negative) effect. It confers jurisdiction upon the arbitral tribunal over a certain legal relationship (positive effect), while at the same time it oust the jurisdiction of the courts (negative effect). Thus, according to the arbitration agreement’s negative effect, a party may not initiate court litigation in respect of matters that fall within the scope of the arbitration agreement.
163.

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).

164.

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."

165.

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

166.

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").

167.
In this case, it is undisputed that the Respondent requested the Mauritanian courts to order provisional measures before the file was transmitted to the arbitral tribunal. Under the circumstances, the Sole Arbitrator sees no reason why [Respondent]’s decision to seek such relief before the Mauritanian courts prior to the commencement of the arbitration can be deemed to be in breach of the arbitration agreement. The Claimants have provided no convincing arguments as to why the Mauritanian courts were not the "competent judicial authority" to hear the Respondent’s request for interim relief, given the courts’ proximity with the situation. Furthermore, with regard to the Claimants’ allegations of procedural improprieties before the Mauritanian courts, the Sole Arbitrator considers that it is not for him to second-guess the procedure followed by the domestic courts.
168.
In addition, while it is true that the Respondent did not notify the ICC Secretariat of the request for interim relief filed before the courts, the Sole Arbitrator does not consider this circumstance relevant in establishing whether a breach has occurred, as in any event the arbitration was commenced shortly thereafter and [Claimant 1] itself brought the Respondent’s court actions to the attention of the ICC and the Sole Arbitrator in its Request for Arbitration.
169.
In conclusion, the Sole Arbitrator denies the Claimants’ claim that the Respondent breached the arbitration agreement by seeking interim relief before the Commercial Court of Nouakchott.
170.
Moreover, the Sole Arbitrator is of the view that the Respondent did not abuse its right to seek interim relief. The doctrine of abuse of rights prohibits the exercise of a right for purposes other than those for which the right was established. It is commonly accepted that the threshold for establishing an abuse of right is high. Under the circumstance, the Sole Arbitrator considers that the Claimants have not sufficiently established that the Respondent exercised its right to request interim relief for purposes other than to preserve the status quo pending the determination of the dispute on the merits (a purpose typically pursued through provisional measures). The Claimants’ abuse of rights arguments are thus rejected.
171.
The foregoing considerations concern past occurrences. For the future, given the Sole Arbitrator’s holding on the scope of his jurisdiction, the Respondent shall immediately cease and desist from making civil/commercial claims in breach of the arbitration agreement before the Mauritanian courts.

X. DECISION

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