Société Egyptian General Petroleum Corporation v. Société National Gas Company (NATGAS)

At a glance

Parties

Egyptian General Petroleum Corporation (EGPC), an Egyptian public establishment (applicant; respondent in the arbitration), v. National Gas Company (NATGAS), an Egyptian company (claimant in the arbitration)

Case no.

Cour d'appel de Paris, Pôle 1 – Chambre 1, RG No. 17/19850

Court

Cour d'appel de Paris (Court of Appeal of Paris), sitting as the court of remand after the Cour de cassation judgment of 1 June 2017

Underlying award(s)

CRCICA award rendered in Cairo on 12 September 2009 by Mr Issa, Mr Zein-el-Abidine and Mr Afaki (president)

Forum and rules

Appeal against an exequatur order (French Code of Civil Procedure, Articles 1520 and 1525); New York Convention, Article VII(1); underlying arbitration under the CRCICA Rules

Treaty

Contract arbitration clause (Article 20 of the contract of 6 January 1999); New York Convention 1958; France–Egypt Convention of 15 March 1982 on judicial cooperation in civil matters

Court

Anne Beauvois (presiding), Jean Lecaroz, Laure Aldebert

Sector

Natural gas distribution

Outcome

The Court confirmed the Paris exequatur order of 19 May 2010, although Egyptian courts had annulled the award, and rejected all of EGPC's grounds.

Amount

Award: EGP 253,424,668.31 (about EUR 30 million) plus interest. Costs before the Court: EGPC pays NATGAS EUR 150,000 under Article 700 CPC, plus the costs of the proceedings.

The dispute

NATGAS and EGPC, the Egyptian public body for oil and gas, signed a contract on 6 January 1999 (amended on 24 September 2001). Under it, NATGAS was to build, operate and maintain a natural gas network supplying two regions in eastern Egypt. The Egyptian pound was devalued by a decree of 28 January 2003, which raised the cost of NATGAS's US dollar and euro loans. NATGAS asked EGPC to bear this extra cost under Article 7 of the contract and started a CRCICA arbitration on 2 February 2008. The award of 12 September 2009 ordered EGPC to pay EGP 253,424,668.31 plus interest. The Paris exequatur of the award went through two rounds of appeal and cassation. On this second remand, EGPC argued four things: the contract and its arbitration clause had passed to the holding company EGAS; the clause was void under Egyptian public policy because the competent minister had not approved it; the tribunal had raised legal grounds of its own motion; and late, illegible accounting documents had breached due process and equality of arms.

Key holdings

1. The exequatur judge reviews the tribunal's decision on its jurisdiction by examining all the law and facts bearing on the scope of the arbitration agreement. The arbitration clause is independent of the main contract. Its existence and effectiveness depend on the parties' common intention, subject to French mandatory rules and international public policy, without reference to any national law. p. 5
2. There was no transfer to EGAS that removed EGPC as a party to the clause. Neither Decree No. 1009 of 19 July 2001 nor the Ministerial Order of 9 August 2001 assigned the contract to EGAS. EGPC kept performing the contract, including issuing at least 23 cheques to NATGAS between December 2004 and May 2011. The tribunal therefore did not rule without an arbitration agreement. pp. 5–6
3. Annulment of the award by the Cairo Court of Appeal on 27 May 2010 is no bar to exequatur in France. Under Article VII(1) of the New York Convention (to which Article 33 of the France–Egypt Convention of 1982 refers), the more favourable French law of international arbitration applies, and it does not list foreign annulment as a ground for refusal. pp. 6–7
4. Under the principle of validity of the arbitration agreement, the parties' will alone validates the clause. An Egyptian rule requiring ministerial approval for a public body to agree to arbitration is therefore irrelevant. In any event, the arbitration was not purely domestic: the project had Italian technical partners, Italian lenders and Italian suppliers. p. 7
5. The tribunal did not raise any ground of its own motion. NATGAS had relied on Article 22 of Egyptian Law No. 27 of 1994 in its post-hearing brief, and Article 21 of the CRCICA Rules, cited in addition, states the same rule. EGPC itself had put the lateness of its objection into debate. The tribunal also dealt with the merits of the ministerial-approval argument. pp. 8–9
6. There was no breach of due process or equality of arms over the accounting documents produced at the hearing. EGPC got the extra time it asked for, questioned NATGAS's expert, and filed a further expert report. The tribunal could refuse EGPC's late request for an expert panel. The complaint about how damages were assessed amounts to a request for review of the merits. pp. 10–11
7. The exequatur order is confirmed. EGPC pays NATGAS EUR 150,000 under Article 700 CPC and bears the costs of the proceedings. p. 11

Procedural history

1. 2 February 2008NATGAS files a request for arbitration with the CRCICA under Article 20 of the contract.
2. 12 September 2009The award, rendered in Cairo, orders EGPC to pay EGP 253,424,668.31 plus interest.
3. 19 May 2010The President of the Tribunal de grande instance de Paris grants exequatur. The Cairo Court of Appeal annuls the award on 27 May 2010.
4. 24 November 2011The Paris Court of Appeal confirms the exequatur order.
5. 26 June 2013The Cour de cassation quashes that judgment on due-process grounds and remands the case to the Versailles Court of Appeal.
6. 29 October 2015The Versailles Court of Appeal confirms the exequatur order.
7. 1 June 2017The Cour de cassation quashes the Versailles judgment on the jurisdiction ground (Articles 1520(1) and 1525 CPC) and remands the case to the Paris Court of Appeal.
8. 21 May 2019The Paris Court of Appeal confirms the exequatur order and orders EGPC to pay EUR 150,000 and the costs.

Tribunal, counsel and experts

Decided by

• Anne Beauvois Judge, Cour d'appel de Paris (presiding judge)
• Jean Lecaroz Judge, Cour d'appel de Paris
• Laure Aldebert Judge, Cour d'appel de Paris

For the claimant

SELARL Pellerin - De Maria - Guerre

For the respondent

SELARL Lexavoue Paris-Versailles · Florian Bouaziz

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Keywords

• exequatur
• enforcement of annulled award
• New York Convention Article VII(1)
• more-favourable-right provision
• CRCICA
• Egypt
• natural gas
• currency devaluation
• Egyptian pound
• EGAS
• assignment of arbitration clause
• principle of validity of arbitration agreement
• ministerial approval
• due process
• equality of arms
• late jurisdictional objection
• France–Egypt judicial cooperation convention
• Cour de cassation remand

Summary generated with AI from the published documents — refer to the award for the authoritative text.