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Société Iranienne du Gaz v. Sociéte Pipeline Service

  • Georges R. Delaume

Extract

In 1978 a French company (Pipeline) and the National Iranian Gas Company (NIGC) entered into a contract (governed by Iranian law) for the supply and erection of gas pipeline installations linking certain Iranian cities. Apparently not paid for its services, Pipeline brought an action in France against NIGC. NIGC’s plea of immunity was denied by the Court of Appeal of Versailles, whose decision was reversed by the Court of Cassation.

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1 Judgment of May 2, 1990, Cass. civ. Ire, 80 Revue Critique de Droit International Privé [RCDIP] 140, 141.

2 France long ago adopted the restrictive theory of sovereign immunity, under which foreign states generally are not accorded immunity in respect of their private or commercial activities. The application of the restrictive theory varies depending upon the test used for determining whether an act is commercial. Under the “purpose” test, an act would be considered sovereign if performed for a public purpose. That test has been criticized on the ground that, literally applied, it would eviscerate the “restrictive” theory of immunity since all acts of the sovereign might be construed as having a public purpose. Victory Transport Inc. v. Comisaria General, 336 F.2d 354 (2d Cir. 1964), cert, denied, 381 U.S. 934 (1965). In the United States, the “nature of the act” test was codified in the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §1603(d) (1988).

3 See in favor of a commercial characterization: Societe Levant Express Transport v. Chemins de Fer du Gouvernement Iranien, Judgment of Feb. 25, 1969, Cass. civ. Ire, 59 RCDIP 102 (1970) (involving an action against the Iranian National Railways for compensation for losses suffered during rail transportation in Iran); Société Hôtel George V v. Etat Espagnol, Jan. 17, 1973, Cass. civ. Ire, 63 RCDIP 125 (1974), 65 ILR 61 (1984) (concerning a dispute relating to a commercial lease contracted by the National Spanish Tourism Agency); Banque Camerounaise de Développement v. Société des Etablissements Robber, Nov. 18, 1986, Cass. civ. Ire, 76 RCDIP 773 (1987) (relating to banking guarantees given by the Cameroon Development Bank to creditors of the Republic of Cameroon for preliminary work connected with the construction of a hospital). See in favor of a sovereign characterization: Entreprise Pérignon v. Gouvernement des Etats Unis, Dec. 8, 1964, Cass. civ. Ire, 69 Revue Générale de Droit International Public 532 (1965), 45 ILR 82 (1972) (action brought against the United States for payment for work performed under contracts to build apartments to be used by U.S. official, which contained “dispute clauses” considered as effectively “linked to the prerogatives of the public power of the U.S.,” 45 ILR at 83); Société Internationale des Plantations d’Hévéas v. Société Lao Import Export, Oct. 20, 1987, Cass. civ. Ire, 77 RCDIP 727 (1988) (concerning the nationalization by the Laotian Government of plantations formerly owned by French corporations).

4 Société Eurodif v. République Islamique d’Iran, Mar. 14, 1984, Cass. civ. Ire, 1984 Semaine Juridique II, No. 20,205, 111 Journal du Droit [JDI] 598 (1984), translated in 23 ILM 1062 (1984); République Islamique d’Iran v. Société Eurodif, July 19, 1986, Cour d’appel, Versailles, reprinted in 2 ICSID Rev. 161 (1987) (concerning the attachment of commercial assets of Iran).

5 Kuwait News Agency v. Parrott, June 12, 1990, Cass. civ. Ire, also reported in 80 RCDIP 140, 142.

6 Société Nationale Algérienne de Transports et de Commercialisation des Hydrocarbures “Sonatrach” v. Migeon, Oct. 1, 1985, Cass. civ. Ire, 113 JDI 170 (1986), translated in 26 ILM 998 (1987). This case involved a suit for damages following termination of a contract of employment brought by a Frenchman against the Algerian national oil company. The Court of Cassation ruled that, unlike a state, agencies and instrumentalities are not entitled to immunity (in this case immunity from execution against the commercial assets of SONATRACH).

7 See Prof. Bourel’s comment on the case, 80 RCDIP at 143–47.

8 Id.

9 In cases involving the compatibility of provisional measures (attachment/garnishment) and arbitration, the Court of Cassation has been accused of applying double standards to the treatment of Iran and of French corporations. See Prof. Fouchard’s comment under Cass., République Islamique d’Iran v. Société Framatome, Mar. 20, 1989, Cass. civ. Ire, and Eurodif v. République Islamique d’Iran, June 28, 1989, Cass. civ. Ire, 1989 Revue de l’Arbitrage 653, 667. These cases also appear in 117 JDI 1004(1990).

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Société Iranienne du Gaz v. Sociéte Pipeline Service

  • Georges R. Delaume

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