Cosfidel ordered goods from Fang’s Bag who, for reasons of urgency, shipped them by air freight. Refusing to cover this additional cost, Cosfidel deducted the amount of these transport costs from the invoices issued by First Smart Asia, on behalf of the supplier, for other orders.
A dispute linked to these invoices arose and Cosfidel sued First Smart Asia before the Commercial Court. The suit, due to lack of due diligence by Cosfidel, was canceled.
Cosfidel then seized the ICC on the basis of the arbitration clause stipulated in the general conditions of purchase. The arbitration procedure was withdrawn for non-payment of fees by First Smart Asia and Fang’s Bag.
Smart Asia then restarted the suit to obtain the payment of the balance of the invoices. Cosfidel challenged the Court’s jurisdiction based on the arbitration clause.
The Court of Appeal held that Cosfidel did not show any disloyalty or contradictory behavior by first seizing the state judge, changing its mind by failing to comply with the due diligence requirement and then seizing the arbitral institution. The Court accepted the challenge of jurisdiction.
Smart Asia appeals before the Cour de cassation, invoking the principle of estoppel. The Cour de cassation upholds the appeal. It states that, in view of the facts, Cosfidel had adopted a contradictory behavior to the detriment of First Asia and Fang’s Bag. Hence, the Court of Appeal, which did not find the behaviour contradictory despite the facts, violated the principle of estoppel.