Société Euro Herramientas v. Société The Stanley Works Limited

At a glance

Parties

Euro Herramientas S.A.U. (Spain), appellant, v. The Stanley Works Limited (United Kingdom), respondent

Case no.

Cour d'appel de Versailles, 12e chambre, RG No. 19/07463

Court

Cour d'appel de Versailles (Court of Appeal of Versailles), France

Forum and rules

French court proceeding; arbitration clause provides for AAA rules, seat Hartford, Connecticut

Treaty

New York Convention 1958, Article II(3); French Code of Civil Procedure, Articles 1448 and 1506

Court

Thérèse Andrieu (President), Florence Squlmagnon, Véronique Muller

Sector

Distribution of industrial and DIY tools

Outcome

Judgment of 12 March 2020 upholding the Versailles Commercial Court's ruling that it lacked jurisdiction because of the arbitration clause; the counterclaim for abusive proceedings stayed dismissed.

Amount

Euro Herramientas was ordered to pay EUR 5,000 under Article 700 CPC on appeal, on top of the EUR 10,000 awarded at first instance, plus costs. Stanley's claim for EUR 25,000 for abusive proceedings was rejected.

The dispute

On 24 April 2007 the US company Stanley Assembly Technologies and the Spanish company Euro Herramientas signed a contract for the distribution of Stanley products in Spain and Portugal. Article 23 of the contract provided for AAA arbitration in Hartford, Connecticut. The contract expired on 31 December 2007, and on 14 October 2008 Euro Herramientas was told it would not be renewed for 2009. On 13 July 2018 Euro Herramientas sued another Stanley group company, The Stanley Works Limited (UK), before the Versailles Commercial Court for sums due under the distribution relationship and an alleged commercial agency. It said it had a separate, oral contract with Stanley Works Limited through that company's branch in Trappes. Stanley Works Limited objected that the court lacked jurisdiction because of the arbitration clause. Euro Herramientas replied that the clause did not apply to a non-signatory or to an oral contract after expiry, that the jurisdiction clause on its invoices prevailed, and that arbitration would defeat the agent's mandatory right to indemnity.

Key holdings

1. The dispute is governed by the rules on international arbitration. Under Article 1448 CPC and Article II(3) of the New York Convention, the only question for the State court is whether the arbitration clause is manifestly inapplicable to the relationship between Euro Herramientas and Stanley Works Limited. p. 6
2. Stanley Works Limited acted in performing the 24 April 2007 distribution contract. Correspondence went to its Trappes branch under Article 19, and the invoices covered the contract's customers at the agreed commission rates. Euro Herramientas produced no evidence of a separate relationship. The clause can therefore extend to parties involved in performing the contract. p. 7
3. Article 23 expressly survives termination of the contract. In any case, an arbitration clause is not affected by the expiry, lapse or termination of the main contract. pp. 7–8
4. The jurisdiction clause on the invoices does not exclude arbitration. Under Article 15, the contract prevails over orders, and any conflict between the clauses is irrelevant once the arbitration clause is not manifestly inapplicable. p. 8
5. Invoking a public policy rule does not exclude the arbitration agreement, because the arbitrator can apply public policy rules. The commercial agent's indemnity under Articles L 134-1 et seq. of the Commercial Code is protective domestic public policy, not an internationally mandatory rule reserved to State courts. pp. 8–9
6. The claim for abusive proceedings fails because no gross error amounting to fraud was shown. The first-instance judgment is confirmed in full. Euro Herramientas pays the appeal costs and EUR 5,000 under Article 700 CPC. p. 9

Procedural history

1. 24 April 2007Distribution contract signed between Stanley Assembly Technologies and Euro Herramientas.
2. 14 October 2008Euro Herramientas is told that the contract will not be renewed for 2009.
3. 13 July 2018Euro Herramientas sues The Stanley Works Limited before the Versailles Commercial Court.
4. 27 September 2019The Versailles Commercial Court declares that it lacks jurisdiction, dismisses Stanley's counterclaim and awards Stanley EUR 10,000 under Article 700 CPC.
5. 23 October 2019Euro Herramientas appeals. On 7 November 2019 it is authorised to summon the respondent for a fixed hearing date.
6. 14 January 2020Hearing before the Court of Appeal.
7. 12 March 2020The Court of Appeal confirms the judgment in full.

Tribunal, counsel and experts

Decided by

• Thérèse Andrieu Judge, Cour d'appel de Versailles (President)
• Florence Squlmagnon Judge, Cour d'appel de Versailles
• Véronique Muller Judge, Cour d'appel de Versailles

For the claimant

SELARL des Deux Palais · SCP Alfredo P., Bayssieres V., Marti de Anzizu C.

For the respondent

SELARL Lexavoue Paris-Versailles · Jacques-Antoine Robert

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Keywords

• New York Convention Article II(3)
• referral to arbitration
• manifestly inapplicable
• Article 1448 CPC
• extension of arbitration clause to non-signatory
• group of companies
• Stanley Black & Decker
• distribution contract
• commercial agent indemnity
• internationally mandatory rules
• survival of arbitration clause
• jurisdiction clause in invoices
• American Arbitration Association
• Hartford Connecticut
• abusive proceedings
• France

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