Carlson Wagonlits Travel v. Seitur Agencia de Viajes

Ecuadorian travel company Seitur was the respondent in a Paris-seated ICC arbitration brought by Dutch company Carlson Wagonlit Holdings under a joint venture agreement relating to travel services in Ecuador. Seitur was unsuccessful.

Seitur brought a set-aside application to the Paris Court of Appeal, alleging reasonable doubts as to the impartiality of the arbitrator it had appointed. It alleged family ties and a friendship between the arbitrator and the manager of Polimundo, a company which took over as CWH’s joint venture partner in Ecuador. The ICC Secretariat had included Polimundo under “other relevant entities” on the Case Information document.

The Paris Court of Appeal held that Polimundo had no financial or commercial interest in the arbitration, since its outcome could only be an award of damages. The alleged ties between the arbitrator and Polimundo’s manager were therefore irrelevant. The Court of Cassation, France’s Supreme Court for non-administrative matters, dismissed Seitur’s appeal.

Original decision: Cour de cassation

The Paris Court of Appeal's decision has not been published.

7 May 2025

French Court of Cassation

Appeal no. 21-14.162

First Civil Chamber - Smaller panel outside RNSM/NA

ECLI:FR:CCASS:2025:C100306

Text of the decision

Heading 

CIV. 1
 

CR12
 

COURT OF CASSATION
______________________
 

Judgment dated 7 May 2025
 

Appeal dismissed

Ms CHAMPALAUNE, presiding judge
 

Judgment no. 306 F-D
 

Appeal no. C 21-14.162
 

F R E N C H  R E P U B L I C
 

_________________________
 

IN THE NAME OF THE FRENCH PEOPLE
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DECISION OF THE COURT OF CASSATION, FIRST CIVIL CHAMBER, 7 MAY 2025

Seitur Agencia de Viajes y Turismo, a limited liability company incorporated under Ecuadorian law, whose registered office is at [Address 1] (Ecuador), has appealed judgment no. C 21-14.162 rendered on 12 January 2021 by the Paris Court of Appeal (3rd Division, 5th Chamber) in its dispute with CW Travel Holdings N.V. (Carlston Wagon Lit Travel), a company incorporated under Dutch law, whose registered office is at [Address 2] (Netherlands), who is the respondent in the appeal before this Court.
 

The appellant raises one ground of appeal.
 

The file has been provided to the principal public prosecutor.
 

Based on the report of Ms. Tréard, judge, the submissions of SARL Cabinet Briard, Bonichot et Associés, lawyers for Seitur Agencia de Viajes y Turismo, SARL Ortscheidt, lawyers for CW Travel Holdings N.V. (Carlston Wagon Lit Travel), and the opinion of Ms Cazaux-Charles, advocate general, after oral argument at the public hearing on 11 March 2025, at which Ms Champalaune, presiding judge, Ms Tréard, judge rapporteur, Ms Guihal, senior judge, and Ms Vignes, chamber clerk, were present,
 

the First Civil Chamber of the Court of Cassation, composed of the presiding judge and judges referred to above, after having deliberated as provided for by law, rendered this judgment.

 

Summary of the dispute

Facts and procedural history
 

1. According to the judgment under appeal and the documents submitted (Paris, 12 January 2021), in 2011, the Dutch company Carlston Wagon Lit Travel Holdings ("CWT") and the Ecuadorian company Seitur Agencia de Viajes y Turismo ("Seitur") entered into a joint venture agreement to allow Seitur and its partner agencies to sell travel services under the CWT brand in Ecuador. At the end of the same year, Seitur entered into negotiations with Polimundo, another Ecuadorian agency, to implement a proposed merger. CWT approved the merger in early 2012, but it ultimately did not go ahead. CWT was informed of this on 19 February 2012.
 

2. On 15 March 2012, CWT terminated its contract with Seitur on the grounds that it had lost its International Air Transport Association accreditation ("IATA accreditation"). On the same day, Polimundo became a "CWT authorised international partner in Ecuador".
 

3. On 6 November 2012, CWT brought a case before the International Court of Arbitration of the International Chamber of Commerce (ICC) pursuant to the arbitration clause in the joint venture agreement.
 

4. The arbitrator appointed by Seitur accepted the appointment on 7 February 2013, after stating that he was impartial and independent and had no disclosures to make.
 

5. Seitur applied to the Paris Court of Appeal to set aside the arbitral award.

Grounds of appeal

Review of the ground
 

Ground of appeal, third and fourth parts

Reasons

6. Pursuant to Article 1014(2) of the French Civil Procedure Code, there is no need to give a specifically reasoned decision on this ground, which is patently not capable of resulting in the underlying decision being quashed.

Grounds of appeal

Ground of appeal, first part
 

Description of the ground
 

7. Seitur submits that the Court of Appeal erred in dismissing its application to set aside and in recognising the award, given that “before accepting an appointment, arbitrators must disclose any circumstance that may affect their independence or impartiality in the minds of the parties; where the documents issued by the arbitral institution constituting the arbitral tribunal identify, alongside the parties, persons or entities relevant to the arbitration, arbitrators must disclose any professional, personal or family relationships they have with those persons or entities;
breach of this obligation deprives the party who appointed the arbitrator of a free and informed choice, deprives the other parties of their right to challenge, and undermines oversight by the arbitral institution, thus rendering the constitution of the arbitral tribunal improper; in this case, the judgment under appeal states that 'it is undisputed that (...) the document entitled 'case information' dated 9 April 2013 lists the following companies under 'other relevant entities': 'Polimundo SA (...)'; by nevertheless finding that this reference did not amount to proof that Polimundo was actually involved in the dispute submitted to arbitration, and that Polimundo had no interest in the outcome of the arbitration, such that the arbitrator, Mr [R] [C], was not required to disclose his family ties and friendship with Polimundo manager, Ms [T] [Y], the Court of Appeal breached Articles 1456(2), 1506 and 1520(2) of the Civil Procedure Code."

Reasons

The Court's analysis
 

8. Having noted that the document entitled "Case information" dated 9 April 2013 lists Polimundo, Halliburton, Exxon Mobil, Eriksson and Netnames under "other relevant entities", the Court of Appeal was right to conclude that the reference did not amount to proof that Polimundo was actually involved in the dispute submitted to arbitration, given that the document was purely declaratory in nature.
 

9. The ground is therefore without merit.

Grounds of appeal

Ground of appeal, second part
 

Description of the ground
 

10. Seitur makes the same argument against the judgment: “Seitur argued that, following a failed merger between Seitur and Polimundo, CWT decided to terminate its partnership agreement with Seitur so it could replace Seitur with Polimundo, and that the subject matter of the dispute submitted to the arbitral tribunal was to determine whether CWT was entitled to terminate the agreement, with the contractual relationship ending if the answer was yes, and continuing if the answer was no; the Court of Appeal erred in law within the meaning of Articles 1456(2), 1506 and 1520(2) of the Civil Procedure Code by in deciding as it did without considering whether an award upholding the termination of the relationship between CWT and Seitur might give Polimundo the advantage of cementing its joint venture with CWT by eliminating all competition from Seitur or whether, conversely, an award in Seitur's favour might have the effect of compromising Polimundo's joint venture with CWT and, in any event, without considering the amount of business conducted, which showed Polimundo's interest in the arbitration and meant that the arbitrator was required to disclose his family ties and friendship with the Polimundo manager."

Reasons

The Court's analysis

11. It follows from the combined provisions of Articles 1520(2) and 1456(2) of the Civil Procedure Code, the latter made applicable in international matters by Article 1506 of the same Code, that an arbitral award rendered by an improperly constituted tribunal must be set aside, and that this is the case where an arbitrator fails to disclose any circumstance such as to give rise, in the minds of the parties, to reasonable doubt as to the arbitrator's impartiality and independence.

12. After stating that Mr [R] [C], who was appointed as arbitrator by Seitur, had indicated in his arbitrator statement that he was impartial and independent and that he had nothing to disclose in that regard, and having recalled that it was for the court hearing the set-aside application to determine whether Polimundo had an interest in the arbitration, before considering whether the arbitrator should have made certain disclosures concerning his ties to Polimundo, the Court of Appeal noted that the contractual obligations between Polimundo and CWT were established before the arbitration between CWT and Seitur was brought, that Polimundo is not a party to the arbitration and that Seitur did not submit any claims to the arbitral tribunal concerning Polimundo, either directly or indirectly. The Court of Appeal then found that any award, in the Dutch law-governed arbitration, holding CWT liable for wrongful termination could only have led to an award of damages. It thus concluded that Polimundo had no financial or commercial interest in the outcome of the arbitration, and was not interested in the result of the arbitration.

13. From these findings and statements, it was open for the Court of Appeal to conclude that Polimundo had no interest in the outcome of the dispute, such that Mr [R] [C] was not required to disclose the ties with that company and its manager, which Seitur had alleged existed.

14. The ground is therefore without merit.

Operative provision

FOR THESE REASONS, the Court:

DISMISSES the appeal;

Orders Seitur Agencia de Viajes y Turismo to pay costs;

Pursuant to Article 700 of the Civil Procedure Code, dismisses the appeal brought by Seitur Agencia de Viajes y Turismo and orders it to pay CW Travel Holdings N.V. the amount of EUR 5,000;

Thus rendered and decided by the Court of Cassation, First Civil Chamber, and delivered publicly on the seventh of May two thousand and twenty-five by making the judgment available at the Court registry, the parties having been given prior notice as provided for in Article 450(2) of the Civil Procedure Code.