Cubic Defense Systems Inc. v. ICC

In 1977 Cubic Defense Systems, Inc. (Cubic) (plaintiff) and the Iranian government’s Ministry of Defense and Support for the Armed Forces of Islamic Republic of Iran (the ministry) entered into two contracts establishing that Cubic would supply arms to Iraq. Each contract contained an arbitration clause. In 1979 the parties were unable to continue performing under the contract, and the terms remained unsatisfied. In 1991 the ministry filed a request to arbitrate at the International Chamber of Commerce (ICC) (defendant). The International Court of Arbitration (ICA), an arm of the ICC, informed Cubic that the ministry had requested arbitration. The arbitration terms were signed in 1993. In 1995 the arbitration tribunal issued a provisional decision stating that scheduling delays did not establish a lapse of time that barred the arbitration proceedings. Cubic criticized the arbitrators’ decision and demanded that the ICA review the decision and replace the arbitrators. Because the ICA was not authorized under its rules to question or amend the decision of an arbitral tribunal, the ICA declined to review the tribunal’s provisional decision or replace the arbitrators. In 1997 Cubic brought an action against the ICC in the regional court of Paris claiming that the ICC, through the conduct of the ICA, had failed to fulfill its contractual obligations. The regional court dismissed Cubic’s claims, finding that Cubic had failed to show that the ICC did not satisfy its obligations. Cubic appealed to the France Court of Appeal. Cubic first argued that the ICA did not conduct the arbitration proceedings in a timely manner. However, Cubic did not present any evidence to show that the ICA had failed to fulfill its duties by its grant of any particular time extension. Second, Cubic argued that the ICA had improperly refused to replace the arbitrators. Cubic did not indicate how the ICA’s refusal to replace the arbitrators violated any of its contractual obligations. Finally, Cubic argued that the ICA had failed to review the order on whether the arbitration proceedings were time barred.