## Facts

- In February 1995, Dallah Real Estate & Tourism Holding Co. (Dallah) approached the Government of Pakistan’s Ministry of Religious Affairs (MORA) with a proposal to provide long-term leased housing in Saudi Arabia for Pakistani Hajj pilgrims.
- Dallah stated that it had been entrusted with responsibilities connected to the Holy Sites in Mecca and offered MORA leases for housing complexes to host pilgrims.
- In July 1995, Dallah and MORA officials signed a memorandum of understanding (MOU) describing a project in which Dallah would build housing complexes on land to be leased and would arrange financing for the project.
- In early 1996, Pakistan announced that the Awami Hajj Trust (the Trust) would provide funding in connection with the arrangement described in the MOU.
- Senior Pakistani officials—including the Minister of Religious Affairs, the Secretary of MORA, and the Minister of Finance—served on the Trust’s board.
- In September 1996, Dallah signed a further agreement naming the Trust (not MORA) as the Pakistani contracting party; this agreement contained an ICC arbitration clause with a Paris seat.
- In December 1996, the Trust ceased to exist legally because the presidential decree establishing it was not renewed.
- In January 1997, the Secretary of MORA accused Dallah of failing to comply with the arrangement reflected in the MOU.
- Dallah commenced ICC arbitration naming MORA as the respondent, relying on the September 1996 agreement’s arbitration clause and asserting that MORA (and the State) should be treated as bound by that clause.
- The arbitral tribunal issued an award accepting jurisdiction over MORA, and MORA brought proceedings before the Paris Court of Appeal seeking to set aside the award on jurisdiction, arguing that the Trust—not MORA—had negotiated and signed the September 1996 agreement and its arbitration clause.

## Issues

1. Whether, under French rules applicable to international arbitration, MORA (a non-signatory to the September 1996 agreement) was nevertheless bound by the ICC arbitration clause.
2. Whether the arbitral tribunal therefore lacked jurisdiction, requiring annulment of the award in set-aside proceedings before the Paris Court of Appeal.

## Decision

- The Paris Court of Appeal rejected MORA’s application to set aside the tribunal’s award on jurisdiction.
- The court concluded that MORA was bound by the arbitration clause contained in the September 1996 agreement, even though the Trust was the named signatory.
- Because MORA was bound by the arbitration agreement, the tribunal had jurisdiction and annulment was not warranted.

## Legal Principles

- In an international arbitration seated in France, the existence and effectiveness of the arbitration agreement are assessed under French substantive rules of international arbitration, not by strict reliance on domestic contract formalities.
- An arbitration clause may bind a non-signatory where the facts show that the non-signatory participated in the negotiation, conclusion, or performance of the overall contractual operation in a manner consistent with being a true party to it.
- The use of an intermediate entity to sign the contract does not, by itself, prevent extending the arbitration agreement to another actor when that actor’s involvement and conduct show an intention to be bound in the transaction as a whole.
- In set-aside proceedings, the court examines for itself whether an arbitration agreement existed and whether the tribunal had jurisdiction, based on the record and the circumstances of the parties’ dealings.

## Conclusion

The Paris Court of Appeal refused to annul the ICC tribunal’s jurisdictional award, holding that MORA’s participation and role in the Hajj housing project supported treating it as bound by the September 1996 agreement’s arbitration clause despite the Trust being the contract’s named signatory.


Judgment of 17 February 2011, Government of Pakistan, Mininistry of Religious Affairs v. Dallah Real Estate & Tourism Holding Co., XXXVI Y.B. Comm. Arb. 590 (2011)