Cases & Deals

Leading French industrial group obtains recognition and enforcement of ICC award in Morocco against two Moroccan companies

Clients Leading French industrial group

Jones Day successfully obtained the enforcement of an ICC award in Morocco for a leading French industrial group against two Moroccan companies following the termination of a contract for the delivery of a cement plant. The Arbitral Tribunal seated in Geneva found in an award issued in 2011 that it had jurisdiction over the mother company in Morocco, given its involvement in the negotiation, performance and termination of the contract signed by its subsidiary. The Tribunal also noted that the mother company had left its subsidiary without sufficient assets to face a finding of liability after the termination. The Arbitral Tribunal further found the Moroccan mother company and its subsidiary jointly liable for damages, and arbitration costs, in excess of €20 million before interests. The ICC award dismissed all claims submitted against Jones Day's client. In December 2012, a first instance court in Casablanca accepted the recognition of the ICC award against the Moroccan subsidiary but refused the enforcement against the mother company, on the ground that it was not a signatory of the contract containing the arbitration clause. In a landmark decision issued in January 2015 under the Moroccan arbitration law of 2007, the Court of Appeal reversed the first instance court decision and fully granted the recognition of the ICC award against both Moroccan companies. Jones Day successfully assisted its client in the arbitration and in the enforcement proceedings before local courts in Morocco (with local counsel), to eventually obtain the recognition of the ICC award and its enforcement. This is the first decision in Morocco recognizing the possibility to extend the arbitration agreement to a company involved in the negotiation and performance of the contract. While adopting the position accepted in many jurisdictions in Europe and in some North African countries, the Court of Appeal of Casablanca has sent a positive and strong signal to foreign investors who wish to submit any potential dispute to international arbitration.