Compagnie des Bauxites de Guinee. v. Hammermills, Inc.

Compagnie des Bauxites de Guinee (CBG) (plaintiff) and Hammermills, Inc. (defendant) entered into a contract for the purchase and sale of ore-crushing and ore-handling equipment for use at CBG’s bauxite-crushing facility. The contract provided that all disputes between the parties would be settled through arbitration, pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC). Eventually, a dispute arose, and CBG initiated arbitration proceedings, alleging that Hammermills had breached the contract. The sole arbitrator heard the merits and took the matter under advisement. Pursuant to the Rules of the ICC, which provided for the award of legal costs, the arbitrator requested a statement of legal costs from each party, which each party provided. Also pursuant to the ICC rules, the arbitrator submitted a draft award to the ICC Court of Arbitration, which had to approve the form of the draft prior to issuance of the award. The draft award submitted to the ICC Court of Arbitration did not contain the award of legal costs. After receiving approval of the draft award from the ICC Court of Arbitration as to form, the arbitrator added the award of legal costs to the final award before signing it. Upon receiving the award, CBG filed an action to vacate, modify, or correct the arbitration award, asserting that the award of Hammermills’ legal fees was improper because the award denied CBG due process in that CBG did not receive adequate notice of the arbitrator’s intention to assess legal fees and had no opportunity to be heard on the issue. CBG also argued that the arbitrator’s addition of the fees after the approval by the ICC Court of Arbitration violated ICC procedures. Hammermills filed a counterpetition seeking recognition and enforcement of the arbitral award, and it submitted a sworn affidavit from the ICC Secretariat’s counsel that the ICC rules did not set forth any specific procedures regarding the award of legal fees and that such award was in the arbitrator’s sole discretion.