The Court of Appeal held that where it is shown that a party clearly manifested its acceptance of an arbitration agreement, the trial court was correct to rule that the contract was valid and that arbitration must proceed as laid out therein. The French Supreme Court highlighted that the validity of an arbitration agreement in a contract should be distinguished by reference to the particular centre for arbitration: if the contract is ambiguous about the reference, it will only be valid if both parties agree to the centre expressly or implicitly; if the contract is specific about the centre, it will be valid as soon as one party contacts the centre, thereby completing the offer and acceptance necessary to form a common law contract.
The Paris Court of Appeal deemed that the exclusion of liability clause did not exist, because it aimed at absolving the institution of responsibility for its essential obligations. The ICC, pursuant to its rules, was obligated to provide an effective and efficient arbitration, suitable screening for impartial arbitrators, and a more involved oversight of the arbitral process. The Court of Cassation overturned the Court of Appeal‘s finding: the ICC could not be held liable for shortcomings in the arbitrators' reasoning and for their failure to consider European Union competition law. Accordingly, the ICC had properly performed the contract. The decision stated as follows: “the obligation of the ICC Court was to provide the parties with a proper structure allowing for efficient arbitration proceedings, i.e., conducted according to the expected dispatch, according to the chosen rules and which lead to the rending of an award that is enforceable.”.
The Court of Appeal‘s decision was challenged for having held that the contract‘s nullity invoked was of a relative nature, subject to a statute of limitations of five years pursuant to Article 1304 of the Civil Code: 1) in basing its decision on an inoperative criterion owing to the harm caused to pecuniary interests of the claimant in the nullity proceedings; 2) and although the lack of consideration concerned the general good as it eliminated the contract‘s role as an instrument of economic and social exchange, resulting in a prescription period of 30 years for the nullity proceedings.
The French Supreme Court recognised a contract between the ICC and the parties to the arbitration, and held that under the contract, the ICC is contractually obligated to fulfil its essential function as an arbitral institution, i.e., to follow the rules applicable to the arbitration, and therefore, is potentially liable for any breach of the arbitration agreement. The Court noted that the ICC will not be granted immunity but instead will incur liability for the breach of its contractual obligations. These obligations are not to ensure perfect arbitral proceedings, instead the Court held that the ICC forms a contract with each of the parties thereby committing to provide the means for an efficient arbitration. The ICC is obligated to provide an effective and efficient arbitration, suitable screening for impartial arbitrators, and a more involved oversight of the arbitral process.
Fouchard, Gaillard, Goldman explain the rationale as to how the contract between the institution and the parties comes into effect. They state that a permanent offer of contract is put out by the arbitral institution, by drafting and publishing its rules and providing fixed conditions for acceptance. This offer is accepted by the parties when they agree to resolve potential disputes through a particular institution in their contract with each other. “The contract is not perfected until the institution receives notice through receipt of request for arbitration by the parties.”
Essentially, once arbitrators accept an appointment, they have duties and obligations to both parties and hence, if an arbitrator or the institution which is administering the arbitration breach an express or implied term of the arbitration agreement, they may be liable under their contractual liabilities.
On the last claim of Cubic concerning the alleged violation of Article 6.1 ECHR, the Court stated that Cubic had not managed to prove that it was deprived of an equitable procedure because of an unreasonable delay of the decision or because of lack of independence/impartiality of the arbitrators.