The claimant, a North African company, claimed for loss of profit resulting from the respondent's failure to design and construct an industrial plant (A) in compliance with their contract. The respondent, a French company, counterclaimed for losses alleged to have been incurred as a result of breaches by the claimant, including the wrongful calling of guarantees and the cost of unpaid extracontractual services supplied to assist the claimant. It requested a conservatory measure ordering the claimant to provide security for a subsequent award in its favour.

La demanderesse, une société nord-africaine, se prévalut d'un manque à gagner résultant du non-respect par la défenderesse d'un contrat de conception et de construction industrielle (A). La défenderesse, une société française, introduisit une demande reconventionnelle d'indemnisation des pertes que lui auraient causées les manquements de la demanderesse, dont l'appel abusif à des garanties et le coût de services extracontractuels impayés destinés à assister la demanderesse. Elle sollicita une mesure conservatoire imposant à la demanderesse de fournir une garantie pour couvrir une sentence ultérieure en sa faveur.

El demandante, una sociedad norteafricana, alegó una pérdida de beneficios debida al incumplimiento del demandado de diseñar y construir una planta industrial (A) de conformidad con lo estipulado en el contrato. El demandado, una sociedad francesa, presentó una demanda reconvencional por las presuntas pérdidas sufridas por las infracciones del demandante, incluyendo la ejecución ilegal de garantías y el importe de los servicios extracontractuales prestados no pagados en concepto de asistencia al demandante. El demandado solicitó una medida cautelar que obligara al demandante a ofrecer una garantía por un laudo subsiguiente en su favor.

'3. The Respondent has requested an interim award from this tribunal pursuant to Article 23(1) of the ICC Rules of Arbitration 1998 ordering the Claimant:

(i) to deposit on an interest bearing account open with a first class bank in France acceptable to the Respondent, acting as escrow agent (séquestre) for the Claimant and the Respondent, an amount of ..., as security for the payment of any sums awarded by the tribunal to the Respondent, such amount (together with the interest accrued thereon) to be released by such bank only upon presentation of an original or certified copy of the final award of the tribunal [ ...] (ii) alternatively, to provide the Respondent with an on-demand guarantee in the same amount ...

4. There are substantial claims and counterclaims arising from the performance of the Contract by the Parties. The Respondent's counterclaim includes the sum of ... as the amount that the Respondent paid in June 1997 as a result of the Claimant's calls on various contractual bank guarantees. The Respondent alleges these calls were unlawful; this allegation is denied by the Claimant.

The Respondent states that the privatization policy of the ... government [in the Claimant's state] (in its opinion, the indirect owner of the Claimant) applies to the Claimant and that, with respect to the Claimant, it is being carried out through a disposal of assets rather than a sale of shares. The Respondent alleges that by the time a final award is made in this arbitration " ... the Claimant will have been de facto liquidated, leaving the Respondent with nothing but an empty shell from which to recover its losses ..."; this is the risk from which the Respondent seeks protection through the orders sought in its request for conservatory measures (hereinafter, "the Request").

Both Parties agree that this tribunal has the jurisdiction to make the orders sought. However, the Claimant submits that the Request is " ... baseless in fact and groundless in law ...".

5. The Respondent is in fact seeking a conservatory measure to facilitate the enforcement of a final award in its favour. The requested order is quantified by reference to the call on the contractual bank guarantees, but there is no connection between such call and the risk from which the Respondent seeks protection, other than the fact that the restoration of the status quo ante the call would provide a significant measure of security for the Respondent. The Respondent argues that the call on the guarantees created a " ... fundamental imbalance between the Parties which, pursuant to well-established principles of arbitral case law, should be corrected ...".

6. We consider that this Request should be decided through a proper assessment of the risk that there may be insufficient assets to meet a possible award in the Respondent's favour. We note:

(a) The Claimant is a well-established and reputable corporation. There is no suggestion of real financial difficulties or a risk, at this stage of the procedure, of an inability to meet an award against it in this arbitration, apart from the alleged risk that the Claimant's privatization is likely to be effected through a disposal of assets thereby reducing the Claimant to a mere shell company;

(b) There is no evidence of fraud or a deliberate intention by the Claimant to avoid the execution of an eventual award. The Claimant's dealings with its assets are in accordance with a legitimate objective entirely unrelated to this arbitration; namely the privatization policies of the ... government;

(c) As the Claimant states in its Response, privatization must not be confused with liquidation. In the absence of evidence to the contrary, we must assume that the ... government's privatization policies will be carried out with due regard for the contingent liabilities of the Claimant;

(d) The evidence as to the disposal of the Claimant's assets relates to its [B] complex and, with the exception of the exchange of some land for shares in the [a local company], there is no evidence of the disposal of-or of plans to dispose of-the assets of its [A] complex other than by inference from the ... government's commitment to its policy of privatization;

(e) The Respondent alleges that " ... the [A]complex is a structurally loss-making concern ...". Prior to determination in the final award, any conclusions based on the problems of the [A] complex must also take into account the Claimant's allegation that the Respondent's poor performance of the Contract may be substantially responsible for these problems; and

(f) In its Response to the Request, the Claimant states that it has assets of [amount]. Whatever the problems of the [A] complex there is no doubt that, at this stage of the procedure, it possesses substantial assets, including [several plants], and a 5% stake in [the aforementioned local company];

In light of these circumstances, we consider that the Respondent has failed to establish, at this stage of the procedure, a sufficient degree of risk that the Claimant will not have sufficient assets to meet an award against it to justify the measures sought.

Further, we do not accept that the orders are otherwise required to redress a " ... fundamental imbalance ..." between the Parties. The status quo should in this case be judged as at the date the arbitration was initiated ... and both Parties still stand in the same unsecured positions respecting the large sums at issue in this arbitration as existed at that time.

INTERIM AWARD: In light of the foregoing, this arbitral tribunal rejects the Respondent's Request for a Conservatory Measure.'