## Facts

- Société d’Investissement Kal (“Kal”) was a Tunisian construction company owned primarily by nationals of Saudi Arabia.
- Kal hired Tunisian architects to prepare plans for a resort project in Tunisia.
- The parties’ contract included an arbitration clause referring contractual disputes to arbitration under the International Chamber of Commerce (ICC) in Paris, France.
- A dispute arose concerning fees owed for the architects’ work.
- The parties submitted the dispute to ICC arbitration in Paris, and the arbitral tribunal ruled in favor of the architects.
- Kal did not voluntarily comply with the award.
- The architects initiated proceedings in Tunisia seeking recognition and enforcement of the Paris-seated ICC award.
- Tunisia was a party to the 1958 New York Convention and had made the Article I(3) reservation limiting Convention application to disputes arising from relationships considered “commercial” under Tunisian law.
- Tunisian lower courts refused enforcement on the ground that architectural work was not “commercial” under Tunisian law and therefore fell outside the Convention as applied in Tunisia.
- The matter was appealed to the Tunisian Cour de Cassation.

## Issues

1. Whether a fee dispute arising from a contract for architectural services connected to a resort construction project constitutes a “commercial” relationship under Tunisian law for purposes of Tunisia’s Article I(3) New York Convention reservation.
2. If the relationship is “commercial” within the meaning of the reservation, whether the foreign-seated ICC award must be recognized and enforced in Tunisia absent a Convention ground for refusal.

## Decision

- The Tunisian Cour de Cassation set aside the lower courts’ refusal to enforce the award.
- The court held that the underlying relationship was “commercial” for purposes of Tunisia’s Article I(3 reservation), bringing the award within the New York Convention’s scope as applied in Tunisia.
- As a result, the refusal to enforce based solely on the noncommercial classification adopted by the lower courts could not stand, and the case was resolved consistently with recognition and enforcement of the ICC award.

## Legal Principles

- For a state applying the New York Convention subject to an Article I(3) “commercial” reservation, the “commercial” character of the relationship may be determined by the nature and purpose of the transaction rather than by a narrow label attached to a profession.
- Contracts for professional services that are integral to a construction or development project may qualify as “commercial” relationships for purposes of the Convention’s commercial reservation.
- Once an award falls within the Convention’s scope, a court should not deny recognition or enforcement unless a refusal ground recognized by the Convention is established.

## Conclusion

The Tunisian Cour de Cassation reversed lower-court decisions that had denied enforcement of a Paris-seated ICC award on the theory that architectural work was not “commercial” under Tunisian law, holding instead that the resort-design services arose from a commercial relationship within Tunisia’s New York Convention reservation and therefore could be enforced under the Convention’s framework.


Judgment of 10 November 1993, XXIII Y.B. Comm. Arb. 770 (1998) (Tunisian Cour de Cassation)