Paris Court of Appeal, 4 May 2018, Aperam Stainless France v. Mutares Holding-27 AG, no. 17/23095

By a contract dated 21 March 2017, the French company Aperam Stainless France (“Aperam”) sold to Mutares Holding-27 AG (“Mutares”), a German company, the entire share capital of a company and that of its subsidiary. The price was set at one euro, but the contract included a mechanism to adjust the final price thereafter.

As part of this mechanism, Mutares had to issue a price proposal, which could be accepted or rejected by Aperam. Were there to be a disagreement between the parties, the contract provided for recourse to the President of the Commercial Court of Paris to appoint an expert who would determine the price. Another provision of the contract stipulated that all disputes arising out of the interpretation or the execution of the contract were to be submitted to an ICC arbitration.

As the parties did not reach an agreement on the final price, Aperam turned to the state courts to appoint an expert. Mutares invoked the lack of jurisdiction of the state courts in favor of an arbitral tribunal. By an order dated 8 December 2017, the judge of interim measures recognized this lack of jurisdiction. Aperam consequently appealed this decision.

The Court of Appeal held that the judge of interim measures was correct in declaring its lack of jurisdiction in favour of the arbitral tribunal.

The Court stated that it is necessary to determine the scope of the expert’s mission according to the article providing for his appointment. This mission has to be compared with the mission that falls within the jurisdiction of the arbitral tribunal.

The Court noted that the clause relating to the price is to be conceived as a special rule, derogating from the arbitration clause. As a derogation from the contract, the clause is to be interpreted strictly. The Court considered that the mission of the expert, which is established pursuant to Article 1592 of the French Civil Code, is restrictive in nature.

A dispute was raised before the judge of interim measures regarding the validity of Aperam’s notification of its refusal of the price. The Court considered that it is not within the expert’s mission to determine whether this notification was validly made or not. However, without a valid notification, the proceedings would become void. This reason alone justifies the lack of jurisdiction of the state judge in favour of the arbitral tribunal.

2018-06-27T20:15:20+00:00 May 4th, 2018|Court of Appeal, Paris Court of Appeal|0 Comments

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