Headnote

Arbitration – Power of attorney – Representation of parties – Terms of reference – Unsworn testimony

Summary of facts

The Petitioners entered into an agreement with the Respondent for the purchase of a luxurious dress. Since the Petitioners failed to make full payment of the price, the Respondent requested the Court to appoint an arbitrator to resolve the parties’ dispute, as they had agreed in their agreement to resort to arbitration in the case of a dispute. The Court of First Instance appointed an arbitrator, who issued an award in favour of the Respondent. The Respondent initiated an action for the ratification of the award before the Court of First Instance, which ratified the award. The Petitioners appealed before the Court of Appeal, which confirmed the decision of the Court of First Instance. Thereafter, the Petitioners filed a petition to cassation.

Held

The petition to cassation was dismissed.

The power of attorney of the Respondent’s representative can only be contested by the Respondent.

If either party fails to agree on arbitrators or if the appointed arbitrator is precluded from acting or disagreed over the appointment of an arbitrator, the court may appoint one.

The arbitrator’s attendance at the hearings is sufficient to constitute an implicit acceptance of his nomination and mandate.

The award is not void if it does not rely on the unsworn testimony of the witness.

The arbitrator may rely on foreign documents as long as the other side does not object to it during the procedure and the issue is not one of public policy.

Judgment

The Petitioners argue that the power of attorney given by the Respondent’s representatives to the attorney who instituted the action was not accompanied by proof of their authority to appoint attorneys to agree to arbitration and execute an arbitration agreement.

The relationship between the parties and their attorneys before the lower courts is a matter that concerns the parties alone and may not be contested by others or by the court of its own initiative as long as the party itself does not question the power of attorney that it granted to its representative. An agreement to arbitrate that was agreed without specific authority provided in the power of attorney is sanctioned by the relative nullity of the agreement to arbitrate that only the grantor of the power of attorney has the right to raise. The Respondent has not denied giving a power of attorney to the attorney who instituted the action. The Petitioner therefore cannot dispute the power of attorney or claim nullity of the arbitral award on the basis that the Respondent’s attorney exceeded his powers because the power of attorney did not authorize him to agree to arbitrate or execute an arbitration agreement.

The Petitioners argued that the Respondent instituted the action in court without regard to the arbitration clause and without any objection from the Petitioner. In light of this, the arbitration clause is void and the Court of First Instance should have heard the action and not referred it to arbitration.

Pursuant to Article 203.1 and 204 of the Civil Procedure Code, where the parties have agreed to arbitrate any disputes that may arise in relation to the performance of their contract but failed to agree on arbitrators or had agreed on an arbitrator who was then precluded from acting or disagreed over the appointment of an arbitrator, the [Page108:] court originally competent to hear the dispute shall appoint whatever arbitrators are required by normal litigation procedures. The Petitioner and the Respondent had agreed under Clause 12 of their agreement that any dispute or difference arising between the parties to the agreement would be referred to arbitration before a sole arbitrator who was to be appointed. A dispute arose between the parties concerning the performance of the agreement, and the Respondent asked the Petitioner to perform its obligations or, should it refuse to pay the amount owing to the Respondent, to appoint an arbitrator on its behalf within seven days in order to commence arbitration. When the Petitioner refrained from nominating an arbitrator, the Respondent approached the Court of First Instance to appoint an arbitrator. Therefore, this argument is groundless.

The Petitioners further argued that the award was rendered without terms of reference. Article 203.3 of the Civil Procedure Code provides: “The subject matter of the dispute must be defined in the arbitration document or during the course of proceedings even if the arbitrators are authorized to conduct conciliation; otherwise the arbitration shall be deemed null and void.” This means that an agreement to arbitrate may be set out in a contract or separately in an arbitration document. An arbitration clause in a contract removes the need to establish terms of reference or an arbitration document in order to validate the proceedings. Since the parties included an arbitration agreement in their contract, there was no need for separate terms of reference.

The Petitioners argued that the arbitrator’s acceptance of his appointment must be evidenced in writing or recorded in the minutes of hearing. Neither party communicated its acceptance to the arbitrator nor was such acceptance recorded in the minutes of hearing. Moreover, the Petitioners argued that the arbitrator did not have the witnesses take the oath. The arbitrator further accepted foreign documents that were not accompanied by certified translations, despite the Petitioners’ insistence on the production of the originals.

The arbitrator’s attendance at the hearings is sufficient to constitute an implicit acceptance of his nomination and mandate. Furthermore, the minutes of the hearing indicate that all the witnesses heard by the arbitrator had taken the oath, except for the Respondent’s witness, who was not questioned by the arbitrator but by the Petitioners’ attorney. While unsworn testimony is void, the arbitral award did not rely on that witness’s testimony. Therefore, the Court rejects the Petitioners’ argument in this regard.

Furthermore, while Article 45.4 of the Civil Procedure Code requires that documents drafted in a foreign language be accompanied by certified translations into Arabic, the court may rely on foreign documents after acquainting itself with their content, as long as the other side does not object to the content or insist on an Arabic translation. The issue is not one of public policy and as long as the other side accepts the documents and discusses their content, it cannot then claim that an award that relied on those documents is void.

Accordingly, the present petition to cassation is dismissed.