Paris Court of Appeal, 10 April 2014, Pôle 1, Chamber 1, RG N°13/13075 - EIAR - Volume 3 - Issue 1
Originally from European International Arbitration Review (EIAR)
The decision of the Paris Court of Appeal1 is one of many regarding the Awards rendered in the controversial arbitration between a State entity, the Consortium de Réalisation (“CDR”), and the French businessman, Bernard Tapie (and related entities). Unsurprisingly, the Paris Court of Appeal decided that the first action to set aside the Awards was time-barred.
I. Background to the Case
The background to the Tapie saga is the bailing out of the State-owned French bank, the Crédit Lyonnais, by the French State to avoid its bankruptcy in 1993. To that end, the French State created in 1995 an ad hoc structure, the Consortium de Réalisation (“CDR”), to deal with the bank’s liabilities, including the dispute between the bank and the French businessman, Mr. Bernard Tapie (and related entities) relating mainly to the sale by the Crédit Lyonnais of Tapie's company, Adidas.
On 30 January 2008, the CDR and Mr Tapie (and related entities) entered into an arbitration agreement to settle all their disputes. The decision to go to arbitration was approved by the French Government. The Arbitral Tribunal, composed of Mr Pierre Mazeaud, Chairman, and Messrs Jean-Denis Bredin and Pierre Estoup, co-arbitrators, rendered an Award on 7 July 2008 and three further Awards on 27 November 2008 which completed and interpreted the July Award.
The Arbitral Tribunal found that Crédit Lyonnais breached its obligation to inform its proxy, Mr Tapie, that Adidas could be sold at a higher price than that set out in the mandate. The Arbitral Tribunal also found that Crédit Lyonnais breached its duty of loyalty towards Mr Tapie (and related entities), and notably its obligation not to purchase directly or indirectly the company that it was mandated to sell.2 The Arbitral Tribunal consequently ordered the CDR—i.e. the French State—to pay Mr Tapie (and related entities) damages which amounted to approximately 405 million Euros.