ICC Rules: 1988

Claimant: French company

Defendant: Egyptian public-sector corporation

Defendant is successor to a state-owned organization with which Claimant had entered into a contract relating to the design, delivery and erection of industrial facilities. As a preliminary issue in the settlement of the dispute between the parties, the Arbitral Tribunal had to decide on its own jurisdiction over the case, following Defendant's claim that Claimant had waived its right to refer the dispute to arbitration, and thus to the benefit of the arbitration clause, by initiating proceedings in the state courts addressing the merits of the case. The Arbitral Tribunal responded as follows:

'In the course of the proceedings, Defendant did not waive its objection to the Tribunal's jurisdiction to address Claimant's claims insofar as Claimant allegedly had waived its right to have its claims adjudicated by the Tribunal by seeking to have a municipal French Court address the merits of the case . . . When declaring that it "no longer insists" on this objection . . ., it did not express any waiver.

. . . Claimant instituted proceedings before French municipal Courts in order to block payment of the guarantee deposit by the issuing bank according to Article 6 of the Contract. Whereas an injunction to refrain from payment was awarded by the Tribunal de Commerce de Paris . . ., the Paris Cour d'Appel decided . . ., that there was no evidence to show that the call of the guarantee had been abusive or fraudulent . . . Payment was made . . . to the ultimate benefit of Defendant.

The French Courts addressed exclusively the issue of the payment of the bond in summary proceedings. Such proceedings can be compared to interim or conservatory measures as referred to in Article 8(5) of the ICC Rules on Arbitration. No adjudication on the merits of the claim could be made by the French Courts. Claimant was not entitled to claim such decision and did therefore in no way waive its right to address the merits of the case before the Arbitral Tribunal. Any unilateral undertaking would anyhow have no effect with regard to the arbitration clause agreed upon in Article 19 of the Contract. The Tribunal rejects therefore Defendant's objection to its jurisdiction with respect to Claimant's claims.'