In a ruling handed down on 9 October 2024, the French Supreme Court (Cour de cassation) reiterated the arbitrators’ discretionary power to choose the methods for assessing damages, in compliance with the principle of contradiction.
In this case, the dispute was between Swiss Re Direct Investments and several Ivorian parties, including Manzima Holding and Manzi Finances. It concerned a contract under which Swiss Re had acquired various securities (shares and convertible bonds) from Manzi Finances. Disagreements over the performance of the contract led Swiss Re to initiate arbitration proceedings under the aegis of the ICC.
The arbitral tribunal ordered the Ivorian parties to pay Swiss Re the sum of 12.7 million euros as repayment of the price of the convertible bonds, and 11.4 million euros as compensation for an “excess premium”.
The Ivorian parties brought an action to set aside the arbitral award for breach of the principle of contradiction (articles 1510 and 1520-4° of the French Civil Procedure Code). They complained that the arbitral tribunal had adopted a method of calculating the “excess price” without submitting it to the parties’ adversarial debate.
The Paris Court of Appeal annulled the award, but only insofar as it ordered the Ivorian parties to repay the price of the convertible bonds.
The Ivorian parties appealed to the French Supreme Court against the appeal ruling, claiming that the ruling did not uphold their claim for annulment based on the application of a formula for calculating the “excess price” without submitting it to the parties for discussion.
The Cour de cassation dismissed the appeal, on the grounds that the principle of contradiction requires a debate on the relevant facts and means, but not a prior validation of the arbitrators’ reasoning or methods. The arbitrators were therefore free to adopt the calculation method they considered most appropriate, provided it was based on the elements discussed during the arbitration.
