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BKMI Industrienlagen GmbH & Siemens AG v. Dutco
"dutco" AND "paris court of Construction, Cour de Cassation (1er Chambre Civile),
appeal" Pourvoi N° 89-18708 89-18726, 7 January 1992
Document information
Facts
Publication Siemens AG (Siemens),BKMI Industrienlagen GmbH (BKMI) and Dutco Construction Company
(Dutco) entered into a consortium agreement on 21 March 1981, for the construction of a cement
Yearbook Commercial plant in Oman. In 1986 Dutco commenced anICC arbitration against Siemens andBKMI and the
Arbitration 1993 - Volume latter two parties appointed a single arbitrator, but under protest and with all due
XVIII reservations.
In a partial award, the arbitral tribunal affirmed that it had been validly constituted and that
it could continue as a multi-party arbitration and that it had been properly constituted. The
Jurisdiction Paris Court of Appeal upheld the award in a decision of 5 May 1989. The Court of Cassation
France overturned the decision of the Court of Appeal and referred the case to the Versailles Court of
P 140 Appeal, holding that the principle of equality of the parties in appointing arbitrators is a
P 141 matter of public policy and can be waived only after the dispute has arisen.
Court
Excerpt
Court of Cassation of France,
First Civil Law Chamber [1] “In view of Arts. 1502(2) and 1504 of the New Code of Civil Procedure (1) and Art. 6 of the Civil
Code; (2)
[2] “Considering that the principle of the equality of the parties in the appointment of
Case date arbitrators is a matter of public policy (ordre public) which can be waived only after a dispute
has arisen;
7 January 1992
[3] “Considering that on 26 March 1981, a consortium agreement was concluded between Dutco
(Dubai) and two German companies,BKMI and Siemens, for the construction of a cement plant
in Oman; that is was stipulated in that agreement that all differences would be settled
Case number according to the Arbitration Rules of the International Chamber of Commerce by three
Pourvoi N° 89-18708 89-18726 arbitrators to be appointed according to theICC Rules; that upon the single request for
arbitration submitted by Dutco against its two contractual partners separately in respect of
separate credits concerning the two firms, an arbitral tribunal was constituted consisting of
Parties three arbitrators, one of whom was appointed - under protest and with all due reservations -
jointly by the two defendants; that the arbitral tribunal decided that it had been regularly
Petitioner, BKMI constituted and that the arbitral procedure should be continued in the form of a multi-party
Industrienlagen GmbH arbitration against the two defendants;
Petitioner, Siemens AG
Respondent, Dutco P 141 [4] “Considering that in rejecting the request for annulment of the award in question submitted
Construction P 142 byBKMI and Siemens, the contested judgment held that the arbitral clause contained in the
agreement binding the three companies unambiguously expressed the common will of the
parties to such a contract to submit differences arising from their agreement to three
arbitrators, and that it follows necessarily from the multi-party nature of the contract itself,
Key words entailing the foreseeable possibility of differences which might oppose the three partners, that
composition of arbitral the parties had accepted the possibility of a single tribunal composed of three arbitrators
tribunal in multi-party deciding on a dispute among the three partners, including the arrangements that such a
arbitration situation would entail;
equality of parties in [5] “Considering that that judgment was in violation of the above-mentioned provisions of law;
appointing arbitrators is a
matter of public policy P 142 [6] “For these reasons, and without it being necessary to decide on the other complaints of the
appeal, the decision of 5 May 1989 is annulled....”

Publication Source
Revue de l'arbitrage (1992) References
pp. 470-472 with note by P.
Bellet, pp. 473-482; Journal
du Droit International (1992)
pp. 712-713 with the
Conclusions of the Attorney
General, pp. 713-726 and
note Ch. Jarosson, pp. 726-
736. Original in French.

Bibliographic reference

1
© 2018 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
'BKMI Industrienlagen GmbH
& Siemens AG v. Dutco
Construction, Cour de
Cassation (1er Chambre
Civile), Pourvoi N° 89-18708
89-18726, 7 January 1992', in
Albert Jan van den Berg (ed),
Yearbook Commercial
Arbitration 1993 - Volume
XVIII, Yearbook Commercial
Arbitration, Volume 18
(© Kluwer Law International;
Kluwer Law International
1993) pp. 140 - 142
2) Art. 6 of the French Civil Code reads:
© 2018 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
1) Arts. 1502(2) and 1504 of the French New Code of Civil Procedure read:
“Article 1502
An appeal against a decision granting recognition or enforcement may be brought only in
the following cases:
(....)
2. If the arbitral tribunal was irregularly composed or the sole arbitrator irregularly
appointed;
(....)”
“Article 1504
An arbitral award rendered in France in international arbitral proceedings is subject to an
action to set aside on the grounds set forth in Article 1502.
An order to enforce such an award may not be appealed in any manner. However, the action
to set aside encompasses ipso jure, within the limits of the terms of the action of which the
Court of Appeal has been seized, appeal against the decision of the enforcement judge
having issued such an order, or having declined jurisdiction.”
“One may not waive by private agreement laws which involve public policy and morality.”
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