Tia Investments Limited v. Kabbadj Mohamed, MK Holding, UPM Holding and ESIAGM

At a glance

Parties

Tia Investments Limited v. Kabbadj Mohamed, MK Holding, UPM Holding and ESIAGM

Case no.

Commercial Court of Appeal of Marrakech, No. 204/8225/2019

Court

Commercial Court of Appeal of Marrakech, Morocco

Forum and rules

Moroccan court proceedings on recognition and enforcement of a foreign arbitral award (New York Convention, Articles V and VI)

Underlying award(s)

Foreign arbitral award ordering the respondents to pay the MAD equivalent of the price under a purchase promise (Promesse d'Achat); not published here

Sector

Corporate finance; share purchase and shareholder loan

Outcome

Judgment of 20 March 2019. The legible text does not show the operative part.

The dispute

Tia Investments Limited, a foreign company, had granted a shareholder loan to the Moroccan company UPM Holding. It obtained a foreign arbitral award against Kabbadj Mohamed, MK Holding, UPM Holding and ESIAGM over the price owed under a purchase promise (Promesse d'Achat) and a related contract. In that award the tribunal applied Article 9(3) of the Rome I Regulation and gave effect to Morocco's exchange-control rules (the Instruction Générale des Opérations de Change), as stated in replies R-19 and R-21 of the Office des Changes. It therefore rejected the main claim for payment in euros, but ordered the respondents to pay the equivalent amount in Moroccan dirhams (MAD). The Moroccan respondents resisted enforcement in Morocco. They relied on exchange control as a rule of Moroccan public policy, on a letter from the Office des Changes to UPM Holding asking it to suspend transfers under the loan, and on Article VI of the New York Convention to ask for a stay of enforcement. The published document is a poor-quality Arabic scan, and most of it cannot be read.

Key holdings

1. The judgment quotes the award. The arbitral tribunal held that the Instruction Générale is an overriding mandatory rule (loi de police) of the place of performance, which makes payment in euros illegal. It therefore rejected the main claim for payment in euros. pp. 35–37
2. The judgment also quotes the award's finding on the alternative claim. The Office des Changes had said that payments in dirhams between Moroccan residents fall outside its control. The tribunal therefore granted the alternative claim and ordered the respondents to pay in full the MAD equivalent of the price. pp. 24, 37–38
3. The respondents asked for a stay of enforcement under Article VI of the New York Convention. They argued that enforcement risked non-restitution of the funds and could endanger the companies' survival, and cited French case law (Swiss Oil Corporation v. Gabon, Farmex). pp. 10, 27–28
4. The respondents also invoked Moroccan exchange-control rules as part of economic public policy. They cited Articles 327-46 and 327-49 of the Moroccan Code of Civil Procedure and Article VIII of the IMF Articles of Agreement. The illegible scan does not show how the Court ruled on these arguments or on the appeal. pp. 43–44

Procedural history

1. 20 March 2019Judgment of the Commercial Court of Appeal of Marrakech in case No. 204/8225/2019.

Keywords

• New York Convention
• Article V
• Article VI
• stay of enforcement
• exequatur
• Morocco
• exchange control
• Office des Changes
• Instruction Générale des Opérations de Change
• public policy
• loi de police
• Rome I Article 9(3)
• payment in dirhams
• shareholder loan
• purchase promise
• Article 327-49 Code of Civil Procedure

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