Sociétés Tecnimont SpA and TCM FR SA v. Société Fosmax LNG

At a glance

Parties

Tecnimont SpA and TCM FR SA v. Fosmax LNG

Case no.

Conseil d'État No. 443342

Court

France, Conseil d'État (Section du contentieux, 7th and 2nd chambers combined)

Underlying award(s)

ICC Award No. 22883/GR, rendered in Paris on 24 June 2020

Forum and rules

Annulment action before the French administrative courts; underlying ICC arbitration

Treaty

Contract arbitration clause (amendment of 11 July 2011); New York Convention Article V cited

Sector

LNG terminal construction

Outcome

Annulment application rejected (20 July 2021). The rejection confers exequatur on the award.

Amount

Award: EUR 31,966,704.57 with capitalised default interest, payable jointly and severally to Fosmax LNG. Costs: EUR 2,000 payable by each applicant to Fosmax LNG; the applicants had sought EUR 10,000.

The dispute

Gaz de France awarded a contract on 17 May 2004 to build an LNG terminal at Fos Cavaou to the STS consortium. The consortium was made up of Sofregaz (later TCM FR), SN Technigaz and Saipem; Tecnimont joined in 2008. The contract was assigned to the Gaz de France subsidiary later named Fosmax LNG. An amendment of 11 July 2011 added an ICC arbitration clause. Fosmax LNG claimed for delay and defects, and STS counterclaimed for cost overruns. A first award of 13 February 2015 was partly annulled by the Conseil d'État on 9 November 2016, on Fosmax's claim to recover the cost of works performed at the consortium's expense and risk. In the resumed arbitration, the award of 24 June 2020 ordered the STS members to pay EUR 31,966,704.57 for works carried out "en régie". Tecnimont and TCM FR asked the Conseil d'État to annul that award. They argued that it lacked reasoning, disregarded the res judicata of the 2015 award, and was contrary to public policy.

Key holdings

1. Standard of review. For an award made in France in a dispute over a contract between a French public entity and a foreign party that involves international trade interests, the Conseil d'État checks that the arbitration agreement is lawful. Beyond that, it hears only two kinds of grounds: irregularity (wrongful acceptance or refusal of jurisdiction, irregular composition, failure to follow the mandate, breach of due process, lack of reasons) and breach of public policy. ¶ 3
2. The award was reasoned. It ruled on who was responsible for the failures to perform that led to the works being carried out "en régie". Complaints that the tribunal did not answer the attributability argument sufficiently cannot be raised in this action. ¶ 4
3. The res judicata argument based on the 13 February 2015 award cannot be raised in this action. By ruling freely on the validity and content of the works and by awarding default interest, the tribunal did not wrongly assume jurisdiction. ¶ 5
4. Two arguments were rejected as ineffective because neither shows a breach of public policy: that the tribunal applied the "régie" rules when their conditions were not met, and that a private party cannot be ordered to pay a sum it does not owe. ¶ 6
5. Rejection of an annulment application against such an award confers exequatur on it. Exequatur is therefore granted to the award of 24 June 2020. ¶¶ 8–9
6. Costs. Tecnimont and TCM FR must each pay EUR 2,000 to Fosmax LNG under Article L. 761-1 of the Code of Administrative Justice. ¶ 10

Procedural history

1. 17 May 2004Construction contract for the Fos Cavaou LNG terminal awarded to the STS consortium.
2. 11 July 2011Amendment adds an ICC arbitration clause to the contract.
3. 13 February 2015First ICC award: STS to pay Fosmax EUR 68,805,345; Fosmax to pay STS EUR 128,162,021.
4. 11 April 2016The Tribunal des conflits holds that the administrative courts have jurisdiction over the annulment action.
5. 9 November 2016The Conseil d'État partly annuls the 2015 award, as regards Fosmax's claim for EUR 36,359,758.
6. 14 June 2017Fosmax LNG files a new request with the ICC tribunal.
7. 24 June 2020Second ICC award (No. 22883/GR): EUR 31,966,704.57 awarded to Fosmax LNG.
8. 24 August 2020Tecnimont and TCM FR file the annulment application.
9. 20 July 2021The Conseil d'État rejects the application and confers exequatur on the award.

Tribunal, counsel and experts

Decided by

• Guillaume Leforestier Conseil d'État, Conseil d'État (Rapporteur)
• Mireille Le Corre Conseil d'État, Conseil d'État (Rapporteure publique)

For the claimant

SCP Piwnica, Molinié

For the respondent

SCP Matuchansky, Poupot, Valdelièvre

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Keywords

• annulment
• exequatur
• Conseil d'État
• public policy
• res judicata
• LNG terminal
• Fos Cavaou
• Gaz de France
• public law contract
• international trade interests
• ICC
• New York Convention Article V
• travaux en régie
• duty to give reasons
• administrative courts jurisdiction

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