## Facts

- Hilmarton Ltd. (U.K.) and Omnium de Traitement et de Valorisation (OTV) (France) entered into a contract under which Hilmarton would provide legal and tax advice and assist OTV in obtaining a public works contract with the City of Algiers (Algeria) for a drainage project.
- OTV agreed to pay Hilmarton a fee equal to 5% of the value of the contract awarded.
- The contract contained an arbitration clause providing for arbitration in Switzerland and applying Swiss law.
- Algerian law prohibited the use of intermediaries (“middlemen”) in connection with certain government contracts related to foreign trade, calling into question the fee arrangement.
- After OTV obtained the Algiers contract, OTV disputed payment of Hilmarton’s fee, and Hilmarton commenced arbitration in Switzerland.
- A sole arbitrator seated in Geneva issued an ICC award on 19 August 1988 rejecting Hilmarton’s claims, reasoning that the arrangement violated the Algerian statute and conflicted with Swiss public policy.
- Hilmarton later succeeded in having that award set aside by Swiss courts.
- Despite the Swiss set-aside, OTV sought recognition and enforcement (exequatur) of the 19 August 1988 award in France; the President of the Tribunal de grande instance de Paris granted exequatur by order of 27 February 1990.
- The Paris Court of Appeal affirmed the exequatur order on 19 December 1991.
- Hilmarton filed a pourvoi in cassation, arguing that an award annulled at the seat could not be enforced in France and invoking, among other grounds, Article V(1)(e) of the New York Convention and the 1869 Franco–Swiss Convention.

## Issues

1. Whether a French court may recognize and enforce an international arbitral award rendered in Switzerland even though Swiss courts set it aside.
2. Whether Article VII(1) of the New York Convention permits the enforcing party to rely on more favorable French rules on recognition and enforcement rather than the Convention’s refusal ground in Article V(1)(e).
3. Whether enforcement in France of an award annulled at the seat violates French international public policy (as reflected in former Article 1502 of the Code de procédure civile).

## Decision

- The Cour de cassation (First Civil Chamber) rejected Hilmarton’s pourvoi and affirmed the Paris Court of Appeal’s decision maintaining exequatur in France.
- The court held that Hilmarton’s reliance on the 1869 Franco–Swiss Convention was ineffective because the treaty’s effects had ceased as of 1 January 1992.
- Applying Article VII(1) of the New York Convention, the court ruled that OTV could invoke French rules governing recognition and enforcement of awards rendered abroad.
- Under former Article 1502 of the Code de procédure civile, annulment at the seat was not a listed ground to refuse recognition or enforcement; therefore, the Swiss setting-aside did not bar enforcement in France.
- The court concluded that incorporating the award into the French legal order was not contrary to French international public policy.

## Legal Principles

- New York Convention Article V(1)(e) allows a court to refuse enforcement where an award has been set aside at the seat, but it does not require refusal in every case.
- New York Convention Article VII(1) permits an enforcing party to rely on national law that is more favorable to recognition and enforcement than the Convention’s refusal grounds.
- Under French law on international arbitration (former Article 1502 Code de procédure civile), the grounds for refusing recognition of an international award are limited to those listed in the statute; foreign annulment is not, by itself, one of them.
- In French international arbitration law, an international award may be recognized in France even if it has been set aside at the seat, provided recognition does not conflict with French international public policy.

## Conclusion

The French Cour de cassation held that France could recognize and enforce the Swiss-seated ICC award despite its annulment in Switzerland because, through New York Convention Article VII(1), OTV was entitled to rely on French enforcement rules (former Article 1502 Code de procédure civile), which did not treat annulment at the seat as a ground to deny exequatur, and enforcement was not contrary to French international public policy.


Hilmarton Ltd. v. Omnium de Traitement et de Valorisation-OTV, [1994] 20 Y.B. Com. Arb. 663 (France)