## Facts

- In 1974, Southern Pacific Properties Ltd. (SPP) and the Egyptian General Organization for Tourism and Hotels (EGOTH) entered agreements to develop tourism projects in Egypt.
- A supplementary agreement contained an ICC arbitration clause and was described as made between SPP and EGOTH.
- The supplementary agreement also bore a minister of tourism notation and signature stating, in substance, “approved, agreed and ratified.”
- After Egypt cancelled the project, SPP initiated ICC arbitration in Paris against EGOTH and the Arab Republic of Egypt, asserting Egypt was bound to arbitrate due to the minister’s endorsement.
- The ICC tribunal upheld jurisdiction over Egypt and later issued an award against both EGOTH and Egypt.
- Egypt sought annulment in the Paris Court of Appeal, arguing it had not consented to arbitration and was not a party to the arbitration agreement.
- The Paris Court of Appeal set aside the award as to Egypt, concluding the minister signed as EGOTH’s supervising authority and did not bind the State to the arbitration clause.
- SPP appealed to the French Court of Cassation, contending the arbitral tribunal’s jurisdictional ruling should control under compétence-compétence.

## Issues

1. In an action to set aside an international arbitral award rendered in France, may a court independently determine whether an arbitration agreement exists and binds a party, notwithstanding the tribunal’s prior jurisdictional ruling?
2. Did the minister of tourism’s “approved, agreed and ratified” signature on a contract between SPP and EGOTH constitute Egypt’s consent to be bound by the ICC arbitration clause?

## Decision

- The Court of Cassation dismissed SPP’s appeal and upheld the annulment of the award as against Egypt.
- The court held that, at the annulment stage, French courts may independently review the existence of an arbitration agreement under the statutory ground permitting vacatur where arbitrators decided in the absence of such an agreement.
- On the contract record, Egypt was not a party to the arbitration agreement; the minister’s endorsement did not amount to State consent to arbitrate.

## Legal Principles

- Competence-compétence gives arbitrators authority to decide jurisdiction in the first instance, but it does not bar courts from determining whether an arbitration agreement exists when reviewing an award for annulment.
- When annulment is sought on the ground that arbitrators acted without an arbitration agreement, the reviewing court is not bound by the tribunal’s jurisdictional characterization and may examine the issue independently.
- State consent to arbitration must be established by sufficiently clear indicia; a ministerial “approval/ratification” consistent with administrative supervision of a public entity does not, without more, make the State a party to the arbitration agreement.

## Conclusion

The French Court of Cassation confirmed that, despite competence-compétence, courts may independently assess whether an arbitration agreement exists at the annulment stage, and it upheld vacatur of an ICC award against Egypt because the minister’s signature was deemed supervisory rather than a clear expression of State consent to arbitrate.


S. Pac. Props. Ltd. v. Arab Republic of Egypt, 26 I.L.M. 1004 (Fr. Cass. 1987)