Time limit to seek revision

Case information
June 3, 2013
4A_666/2012
Interest to foreign readers: 
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Very interesting
Topics: 
Revision of award
Original language: 
French

Parties

Appellant: 
Respondent: 
Introductory note: 

The case involved a dispute between two French companies for the renovation work done on a hotel in the French Antilles. Pursuant to an arbitration clause providing for ICC arbitration in Geneva under French law, a three-member ICC tribunal (Pierre-Yves Gunter chairman, with arbitrators Emmanuel Vuillard and Christophe Lapp) issued an award in April 2012, which was then rectified in June 2012, because the award had overlooked an amount paid by an insurance company that should have been deducted from the amount awarded.

 

While the award was not appealed to the Federal Tribunal, a petition for revision was filed in November 2012, because, allegedly, the other party had intentionally withheld evidence from the Arbitral Tribunal, specifically by only submitting cost estimates when it had the actual invoices. A criminal complaint had been filed in Paris in October 2012 in this respect.

 

However, the Petitioner had also sought to oppose enforcement in the Paris courts and, seeking leave to do so, it submitted a draft petition, which suggested that in June 2012, already it was aware of the new facts and evidence relied upon for the purpose of revision, but it claimed to have discovered them only in July 2012 during a hearing in Paris.

 

As Swiss law has a time limit of 90 days to submit a petition for revision, the issue had to be addressed and the following is relatively interesting in the opinion:

 

(i)         When the alleged ground for revision has no connection to the rectification of an award, the time limit to seek revision on the basis of new facts and evidence starts from the notification of the award and not from the notification of the rectification of the award. (See section 5.2.2 of the opinion in this respect.)

(ii)        If a Petitioner alleges that a crime was committed to its detriment but the criminal investigation is still pending, the time limit to seek revision does not start running and the petition for revision is premature. (See section 5.2.2 of the opinion in this respect.)

 

For those of you who are interested in the somewhat intricate Swiss practice as to the revision of international arbitral awards, I enclose a short article I wrote on this issue. It contains all important references.

Translation: 

4A_666/20121

Judgment of June 3, 2013

First Civil Law Court

Federal Judge Klett (Mrs.), Presiding

Federal Judge Kolly

Federal Judge Niquille (Mrs.)

Clerk of the Court: Carruzzo

 

 

X.________

Represented by Ms. Dominique Amaudruz

Petitioner

 

v.

 

 

Y._________ SNC

Represented by Mr. Charles C. Adams and Ms. Vanessa Liborio

Respondent

 

 

Facts:

 

A.

In a contract of April 10, 2007, the French company Y.________ SCN (hereafter Y.________) assigned X.________, another French company, with designing and renovating a hotel it owns on the island of [name of island omitted], French Antilles.

 

A dispute arose between the parties as to the performance of their respective obligations.

 

B.

B.a

On December 11, 2009, Y._________ seized the Court of Arbitration of the International Chamber of Commerce (ICC) of an arbitration request against X.________, based on the arbitration clause in the general conditions relating to this contract. A three-member arbitral tribunal was constituted and the seat of the arbitration was set in Geneva.

 

In a final award of April 25, 2012, the Arbitral Tribunal, applying French law, ordered X.________ to pay the amount of EUR 11’224’534.97 with interest to Y.________ due to the disturbances and faults in the renovation work of the hotel. Up to EUR 9’000’170.62, this amount was awarded to the Claimant “as a recovery of the costs of repair of the air conditioning system” (§ XI of the dispositive part). After setting off the respective claims, the Arbitral Tribunal ordered X.________ to pay to Y.________ the amount of EUR 10’113’494.64 with legal and contractual interest (§ XII of the operative part).

 

Further to an application for correction submitted by the Defendant on May 10, 2012, the Arbitral Tribunal acknowledged in an Addendum of June 28, 2012, that it had omitted to deduct from the amount awarded to the Claimant the compensation of EUR 3’448’834.-- paid to the latter by an insurance company. Consequently, it reduced the aforesaid claim of EUR 9’000’170.62, reducing the total amount owed by X.________ to Y.________ to EUR 7’775’700.97 before set off against its own claim and consequently to EUR 6’664’660.64, the balance of the Claimant’s claims after set off (§ XII of the rectified operative part of the award).

 

The final award of April 25, 2012, and the Addendum of June 28, 2012, were not appealed to the Federal Tribunal in a civil law appeal within the meaning of Art. 77 (1) a LTF2 (RS 173. 110).

 

B.b

These two decisions were the subject of two enforcement decisions issued by the President of the Paris Court of First Instance on May 16 and July 26, 2012, pursuant to a petition by Y.________. The latter also carried out a preventive seizure of securities belonging to X.________.

 

On June 28, 2012, X.________ applied to the First President of the Paris Court of Appeal to be allowed to initiate litigation against Y.________ with a view to stopping enforcement of the final award. A draft request for provisional measures was attached in which X.________ argued, among other things, that the Claimant had prevailed in the arbitration on the basis of mere cost estimates it submitted, which concerned work that did not correspond to the compensation of an actual loss. The magistrate seized authorized the suit. However he denied X.________’s petition to stop the enforcement proceedings in a decision of July 13, 2012.

 

X.________ appealed the enforcement decision of May 16, 2012, to the Paris Court of Appeal, arguing that the award to be enforced had been fraudulently obtained by Y.________. That procedure is still pending.

 

On August 1, 2012, X.________ filed a declaration of cessation of payments. In a judgment of August 7, 2012, the Commercial Court of Nanterre opened bankruptcy proceedings concerning the company and provisionally set the date of cessation of payments at May 1, 2012.

 

Finally, on October 31, 2012, X.________ filed a criminal complaint for fraud in judicial proceedings against Y.________ with the State Attorney at the Court of Great Instance of Nanterre. In an email sent to counsel for X.________ on January 29, 2013, the Prosecutor states that he is conducting a preliminary investigation entrusted to the Financial Brigade. However Y._________ states that to this day it has not been contacted by any authority in connection with the filing of this criminal complaint.

 

C.

On November 8, 2012, X.________ (hereafter: the Petitioner) seized the Federal Tribunal of a petition for revision with a request for a stay of enforcement, with a view to obtaining the annulment of the final award of April 25, 2012, and of the Addendum of June 28, 2012, the case being sent back to the Arbitral Tribunal for additional investigation and a new award. Moreover, the Petitioner asks the Federal Tribunal to state that the new award shall be issued only on the basis of the final invoices concerning the work done by Y.________, which it should be ordered to produce. Moreover, it seeks a finding that § XII of the rectified operative part of the final award could not order it to pay to Y.________ an amount exceeding EUR 3’564’490.--.

 

In a letter of its chairman of November 21, 2012, the Arbitral Tribunal stated that it did not intend to participate in the revision proceedings. On December 5, 2012, it produced the case file.

 

In its answer of December 13, 2012, Y.________ (hereafter: the Respondent) submitted that the matter is not capable of revision and, in the alternative, that the petition should be rejected. The Federal Tribunal was also invited not to divulge the names of the parties in the version of the judgment published on its website and, as the case may be, in the official report of its judgments.

 

The Appellant filed a reply with additional exhibits on February 4, 2013. It maintained the submissions of its petition for revision. A new exhibit was attached to a letter sent to the Federal Tribunal on the 26th of the same month.

 

In its rejoinder of February 28, 2013, to which various additional exhibits were attached, the Respondent reiterated the submissions in its answer and as a preliminary, opposed a stay of enforcement during the revision proceedings. In a separate letter of the same day, it challenged the admissibility of the exhibit filed by the Appellant on February 26, 2013, and, in the event it was admitted, it applied for leave to formulate its observations as to the contents of this exhibit.

 

On March 22, and April 10, 2013, the Petitioner and the Respondent filed a third and fourth brief. The Respondent seized the opportunity to express its view as to the admissibility and the pertinence of the aforesaid exhibit.

 

 

 

Reasons:

 

1.

The seat of the arbitration was in Geneva. At least one of the parties (in this case both) did not have its domicile in Switzerland at the decisive time. The provisions of Chapter 12 of the Private International Law (PILA3 RS 291) are accordingly applicable (Art. 176(1) PILA).

 

2.

The Respondent’s submission that the names of the parties should be anonymized in this judgment has no bearing of its own because according to Art. 27(2) LTF the practice in this respect is that judgments shall be published in an anonymized format (judgment 4A_669/2012 of April 17, 2013, at 2.3).

 

3.

3.1

PILA contains no provision concerning the revision of arbitral awards. This lacuna has been resolved by the case law of the Federal Tribunal. The grounds for revision of awards were the ones at Art. 137 OJ.4 They now fall within Art. 123 LTF. The Federal Tribunal is the judicial body having jurisdiction to address a petition for revision of any international arbitral award, whether final, partial, or interlocutory. If it upholds the petition, the Court does not decide the merits, but sends the case back to the arbitral tribunal which decided the matter or to a new arbitral tribunal to be constituted (ATF 134 III 2865 at 2 and references).

 

3.2

The petition for revision relates not only to the final award of April 25, 2012, but also to the June 28, 2012, addendum. An addendum is generally an additional award that the arbitral tribunal issues when it overlooked a claim or a submission (ATF 131 III 164 at 1. 1 p.166 and the authors quoted). This is not the case here: the Arbitral Tribunal did not supplement an incomplete award; it merely corrected “a material arithmetic error” according to its own words (Addendum n. 37) contained in an award in its own right. Therefore this is not an additional award but a rectification of the award, which shares the fate of the original award and will become void ipso facto should the award be annulled (ATF 130 III 755 at 1.3 p.763).

 

The Petitioner’s submissions as summarized above (see section C. paragraph 1) are clearly inadmissible in the light of the aforesaid case law, to the extent that they seek anything else than the annulment of the final award and the Addendum with the case sent back to the Arbitral Tribunal for a new decision.

 

4.

4.1

In support of its petition for revision, the Petitioner invokes the late discovery of pertinent facts and conclusive evidence that the Respondent deliberately concealed during the arbitral proceedings (Art. 123(2)(a) LTF). On this basis, it also argues that its opponent committed fraud in the proceedings, which influenced the decision made by the arbitrators to its detriment (Art. 123(1) LTF).

 

In short, according to the Petitioner, the Respondent filed the invoices of the contractors who repaired the deficiencies of the air conditioning systems of its hotel only after the arbitral proceedings were closed although it could and should have done so during the proceedings, as had been requested. For this reason, the Arbitral Tribunal set the damages awarded to the other party on the basis of mere cost estimates it had submitted. However, a comparison of the invoices with the cost estimates would show that a large part of the work carried out had no connection with the deficiencies attributed to the Petitioner. In all likelihood there is other work, of embellishment particularly, that the Respondent connived with its contractors to carry out at the Petitioner’s cost. Finally, according to the opinion issued by forensic expert A.________ in a parallel procedure, the amount awarded to the Respondent exceeded by at least EUR 3’100’171.62 the amount to which this party would normally be entitled.

 

According to the Petitioner, the discovery of these new facts and evidence occurred on July 11, 2012, at the earliest, at a hearing before the Paris Court of Appeal in the provisional proceedings mentioned above (see section B.b, paragraph 2). Certainly, on that occasion, the Respondent submitted Exhibit 9, a set of invoices and applications for payments on account from the companies V.________ and W.________ that had carried out work in its hotel, for the first time. Eventually, the forensic expert A.________ confirmed in a note of August 6, 2012, the Petitioner’s suspicion as to the Respondent’s attempt to make it bear the cost of work without connection with the deficiencies that triggered the arbitral procedure.

 

4.2

The Respondent first argues that the matter is not capable of revision. According to the Respondent, the Petitioner had the burden of proving that its alleged knowledge of the new facts and evidence dated back to July 11, 2012, only and failed to do so. In reality, the contents of the petition attached to its aforesaid request of June 28, 2012, submitted to the First President of the Paris Court of Appeal would show that at that time already it had sufficient knowledge of the new fact invoked in its petition for revision. Thus, by taking this date as dies a quo, the petition should have been filed on October 29, 2012, at the latest. Submitted on November 8, 2012, it would be late and consequently inadmissible.

 

As to the merits, the Respondent argues the absence of any pertinent facts or conclusive evidence allegedly discovered after the award. It emphasizes, moreover, that the Petitioner never asked during the arbitral proceedings that the final invoices of contractors V.________ or W.________ concerning the repair of the defective air conditioning be produced and that it did not challenge the production of cost estimates for the work concerned either. The Respondent also argues, on the basis of the exhibits attached to its answer to the petition for revision, that the cost estimates were indeed carried out by these two companies and that it paid the corresponding invoices. Moreover, the total amount of the effective repair work on the air conditioning was higher than what it had estimated on September 30, 2011, the date by which it had been told by the Arbitral Tribunal to formulate its quantum claim definitively. Hence, still according to the Respondent, taking into account the aforesaid invoices would not have led the arbitrators to issue an award more favorable to the Petitioner.

 

Furthermore, the Respondent denies ever committing a crime that influenced the decision of the arbitrators to the detriment of its opponent. It asserts in this respect that it did not mislead the Arbitral Tribunal when it submitted the contracts, cost estimates and invoices in its possession as of September 30, 2011, because it was impossible to quantify its damage more precisely as the repair work contractors W.________ and V.________ had been given were being carried out and terminated at the end of March or the beginning of April, 2012.

 

5.

5.1

As to the grounds stated at Art. 123 LTF, the petition for revision must be filed with the Federal Tribunal under penalty of forfeiture within 90 days after the discovery of the ground for revision, taking into account that the legal time limit is stayed pursuant to Art. 46 LTF (see judgment 4A_222/2011 of August 22, 2011, at 2.2, penultimate paragraph6), yet at the earliest from the notification of the full award or from the closure of the criminal proceedings (Art. 124(1) d. LTF). When several grounds for revision are invoked, the time limit starts separately for each of them; accordingly it is not the longest time limit that applies for the entire petition for revision (Pierre Ferrari, Commentary of the LTF, 2009, n. 8 ad. Art. 124 LTF).

 

As to the ground for revision mentioned at Art. 123(2)(a) LTF, its discovery implies that the petitioner has sufficiently certain knowledge of the new fact to be able to invoke it, even though he may not be able to adduce conclusive evidence; a mere supposition is not sufficient. As to the conclusive evidence, the petitioner must have a document or sufficient knowledge to require its admission. It behooves the petitioner to establish the decisive circumstances to verify compliance with the aforesaid time limit (see judgment 4A_570/20117 of July 23, 2012, at 4.1).

 

With regard to Art. 123(1) LTF, the time limit starts when the petitioner becomes aware of the judgment in force or when a judgment is no longer possible, when he becomes aware of the crime and its proof (see judgment 4A_596/20088 of October 6, 2009, at 3.3 and the quoted authors).

 

5.2

5.2.1

The Petitioner claims that its suspicion that the Respondent was attempting to make it pay the cost of work without connection with the deficiencies that triggered the arbitral proceedings was confirmed on July 11, 2012, when the Respondent, in the circumstances mentioned above (see 4.1, last par.) filed a set of invoices and applications for payment on account from contractors V.________ and W.________. However, in the draft petition attached to the request sent to the First President of the Paris Court of Appeal on June 28, 2012 with a view to stopping the enforcement of the final award, the Petitioner already argued that the Arbitral Tribunal had ordered it to pay EUR 9’000’170.62 to the Respondent on the basis of mere cost estimates coming from one construction company which did not appear to correspond to reality. It also added: “[t]oday, the forensic examination in course shows that the work described in these cost estimates… was not carried out [by the Respondent] or does not correspond to compensation for an actual loss.” Thus, the Petitioner itself acknowledges that as of June 28, 2012, it already had conclusive evidence – a forensic analysis – substantiating its suspicion as to the allegedly fraudulent behavior of its opponent. Hence it cannot rely on the filing of the aforesaid exhibits by the Respondents on July 11, 2012, in order to place there the dies a quo determining the time limit within which it must file its petition for revision. It would indeed be contrary to the exceptional nature of revision proceedings and to the spirit of the case law relating to Art. 124 (1)(d) LTF to allow a party discovering conclusive evidence to postpone the filing of its petition for revision and to benefit from the subsequent discovery of new evidence summarily corroborating the previous one in order to artificially benefit from an extension of the deadline contained in this provision.

 

In this case, the start of the 90 day time limit, within which the Petitioner should have filed its petition for revision, must accordingly be set on June 28, 2012. Stayed between July 15, and August 15, 2012, pursuant to Art. 46(1)(c) LTF, the time limit expired on Monday, October 29, 2012, pursuant to Art. 45(1) LTF. Filed on November 8, 2012, the petition for revision is consequently inadmissible.

 

5.2.2

Admittedly, pursuant to Art. 124(1)(d) LTF, the time limit within which the request for revision based on the discovery of new pertinent facts or evidence should be filed could not start before the full award was notified. The case at hand has a peculiar feature in this respect, because the final award of April 25, 2012, was rectified by and Addendum of June 28, 2012. One may therefore be tempted to set the start of the time limit when the Addendum was notified. However the date of such notification does not appear from the briefs and the exhibits submitted to the Federal Tribunal and the Petitioner – which must establish the determining circumstances to verify compliance with the aforesaid time limit – does not demonstrate or even argue that there would not have been more than 90 days between reception of the Addendum and the filing of the petition for revision. In any event, the case law should be applied here by analogy, according to which the procedure for rectification and an appeal against the original award must not interfere with each other (ATF 131 III 164). Consequently, if, as is the case here, the object of the application for rectification (i.e. the correction of an arithmetical error) has nothing to do with the grounds for revision invoked, there is no reason to postpone the start of the time limit of Art. 124 (1)(d) LTF to the date the rectification of the award is notified.

 

Moreover the provision quoted provides that the time limit for filing a petition for revision within the meaning of Art. 123(1) LTF does not start before the criminal proceedings are closed (see judgment 4A_234/20089 of August 14, 2008, at 3.1 and the references). Such is the case here because, according to the Petitioner’s very explanations, the procedure initiated by its criminal complaint of October 31, 2012, is presently in a preliminary investigation.

 

As to the ground for revision based on the commission of a crime, the petition for revision is therefore premature. How to deal with such petitions is controversial. Sometimes the Federal Tribunal held them inadmissible (ATF 71 II 286 at 2; judgment B 25/96 of August 14, 1996), sometimes it rejected them (AFT 86 II 198, p. 200 i.f.). The issue is essentially theoretical as it is unchallenged on the one hand that the Federal Tribunal cannot review the merits of a petition for revision filed prematurely, and on the other hand, that a premature petition carries no disadvantage for the Petitioner as he may renew it at the proper time if he still has an interest to obtain revision (ATF 123 I 283 at 2 p. 286; aforesaid judgment B 25/96).

 

This being so, with a view to simplification, the matter is also held to be incapable of revision with regard to Art. 123(1) LTF in addition to being undoubtedly incapable of revision on the basis of Art. 12(2)(a) LTF.

 

6.

The petition for revision being disposed of, the request for a stay of enforcement becomes moot.

 

7.

In view of the outcome, the Petitioner shall pay the costs of the revision procedure (Art. 66(1) LTF) and compensate the Respondent (Art. 68(1) and (2) LTF).

 

 

Therefore, the Federal Tribunal pronounces:

 

 

1. The matter is incapable of revision.

 

2. The judicial costs set at CHF 22’000 shall be borne by the Petitioner.

 

3. The Petitioner shall pay to the Respondent an amount of CHF 24’000 for the federal judicial proceedings.

 

4. This judgment shall be notified to the representatives of the parties and to the Chairman of the Arbitral Tribunal.

 

Lausanne, June 3, 2013

 

 

In the name of the First Civil Law Court of the Swiss Federal Tribunal

 

 

The Presiding Judge:                                                    The Clerk:

 

 

Klett (Mrs.)                                                                  Carruzzo

 
  • 1. Translator’s Note: Quote as X.________ v. Y.________ SNC, 4A_666/2012. The original decision is in French. The text is available on the website of the Federal Tribunal, www.bger.ch.
  • 2. Translator’s Note: LTF is the French abbreviation of the Federal Statute of June 17, 2005, organizing the Federal Tribunal, RS 173. 110.
  • 3. Translator’s Note: PILA is the most commonly used English abbreviation for the Federal Statute on International Private Law of December 18, 1987, RS 291.
  • 4. Translator’s Note: OJ is the French abbreviation for the previous Swiss statute organizing the Federal Tribunal.
  • 5. Translator’s Note: The English translation of this decision is available here: http://www.swissarbitrationdecisions.com/request-for-revision-of-an-arbitral-award.
  • 6. Translator’s Note: The English translation of this decision is available here:
  • 7. Translator’s Note: The English translation of this decision is available here:
  • 8. Translator’s Note: The English translation of this decision is available here:     
  • 9. Translator’s Note: The English translation of this decision is available here: