Ayoub-Farid Saab and Fadi Saab v Cyprus

Case summary

At a glance

Parties: Ayoub-Farid Michel Saab and Fadi Michel Saab (Lebanon) v. the Republic of Cyprus
Case no.: ICC Case No. 20588/ZF/AYZ; Paris Court of Appeal RG 19/09863; Court of Cassation appeal no. 22-19.229
Forum and rules: ICC arbitration seated in Paris; set-aside proceedings in the French courts
Treaty: Lebanon–Cyprus BIT (2001)
Court: Paris Court of Appeal, International Commercial Chamber (François Ancel, President; Laure Aldebert; Fabienne Schaller); French Court of Cassation, First Civil Chamber (Mme Champalaune, President)
Underlying award(s): Partial award on jurisdiction of 10 September 2015; Final Award of 15 January 2019 (claims dismissed)
Sector: Banking
Outcome: The set-aside application against the Final Award was rejected (22 March 2022), and the appeal to the Court of Cassation was dismissed (9 October 2024).
Amount: Costs (article 700 CPC): EUR 80,000 against the Saabs in the Court of Appeal (Saabs had sought EUR 250,000; Cyprus had sought EUR 150,000); EUR 3,000 against them in the Court of Cassation.

The dispute

Two Lebanese brothers, Ayoub-Farid and Fadi Saab, were bankers who owned the capital of Federal Bank of the Middle East (FBME), a bank incorporated in Tanzania with a branch in Cyprus. On 17 July 2014 the US Treasury's Financial Crimes Enforcement Network (FinCEN) issued notices naming FBME an "institution of primary money-laundering concern". The Central Bank of Cyprus then took control of the Cypriot branch and froze its assets. The branch was put into judicial liquidation in 2016. The Saabs started ICC arbitration on 28 October 2014 under the Lebanon–Cyprus BIT. The tribunal upheld its jurisdiction in 2015 but dismissed the claims in its Final Award of 15 January 2019. In Paris the Saabs then sought to set aside the Final Award. They argued that the tribunal had wrongly declined jurisdiction by refusing to examine the basis of the FinCEN notices, had departed from its mandate, had relied on heavily redacted documents in breach of due process, and had violated international public policy.

Key holdings

The tribunal used the word "jurisdiction" when it refused to review the merits of the FinCEN notices and treated them as facts "whether they are true or false". This was not a ruling on jurisdiction under article 1520(1) of the Code of Civil Procedure. It was an assessment of the facts on the merits, which the court does not review. The jurisdiction ground was therefore rejected. Set-Aside Decision ¶¶ 30–33
The tribunal decided the merits and did not reopen jurisdiction, so it did not act ultra petita. The ground that it failed to comply with its mandate (article 1520(3)) was rejected. Set-Aside Decision ¶¶ 34–37
There was no breach of due process. The Saabs had themselves filed the redacted Cyprus–US exchanges (exhibits C 781 to C 803). The tribunal had admitted them only to the extent their content was understandable (award ¶ 402). Nothing showed that the tribunal relied on secret content the parties had not been able to debate. The tribunal found that the alleged conspiracy was not proven (¶ 665) and stated that it did not rely on the US court decisions (¶ 886). Set-Aside Decision ¶¶ 41–50
There was no breach of international public policy and no denial of justice. The partial award dealt with jurisdiction and the final award with the merits, so the two do not contradict each other. The other complaints repeated grounds that had already failed. Set-Aside Decision ¶¶ 51–56
The Court of Cassation upheld the Court of Appeal's reasoning. The tribunal had placed the verification of the FinCEN notices outside its mission and had decided the merits; it had not ruled on its own jurisdiction. The annulment judge's control of jurisdiction does not extend to a review of the merits of the award. Cassation ¶¶ 7–9
The Court of Appeal's findings showed that the heavily redacted documents were not used as a basis for the award and that every exhibit had been open to debate by both sides. The Saabs therefore had not been put at a clear disadvantage, and the appeal was dismissed with EUR 3,000 in costs. Cassation ¶¶ 11–17

Procedural history

28 October 2014The Saabs file a request for arbitration with the ICC Secretariat.
10 September 2015Partial award: the tribunal rejects Cyprus's objection and upholds its jurisdiction.
15 January 2019Final Award rendered in Paris: claims dismissed; no breach of the BIT.
5 June 2019The Saabs apply to the Paris Court of Appeal to set aside the Final Award.
5 April 2020Fadi Saab dies. His son Michel Norbert Saab continues the proceedings as his heir.
22 March 2022The Paris Court of Appeal rejects the set-aside application and awards Cyprus EUR 80,000 in costs.
9 October 2024The Court of Cassation dismisses the appeal (no. 22-19.229).