Norsolor S.A. (France) v. Pabalk Ticaret Sirketi S.A. (Turkey)

Norsolor S.A. (defendant) was a French corporation. Norsolor and its agent in Turkey, Pabalk Ticaret Sirketi S.A. (Pabalk) (plaintiff), were parties to an agency agreement containing an arbitration provision. After Norsolor terminated the agency agreement with Pabalk, Pabalk initiated arbitration proceedings against Norsolor in Vienna, Austria, to be conducted under the arbitration rules of the International Chamber of Commerce (ICC). The Austrian arbitral tribunal did not apply the laws of any particular country in evaluating the dispute; instead, it applied general principles of lex mercatoria. The arbitral tribunal awarded damages to Pabalk, which then filed in the Paris Judicial Court to enforce the award. The lower court granted Pabalk leave to enforce the award, and Norsolor objected, arguing that the arbitral tribunal exceeded its authority and violated ICC rules by referring to the lex mercatoria rather than specific national laws. The lower court rejected Norsolor’s objection, finding that the arbitral tribunal was permitted to apply the lex mercatoria to the dispute and, in so doing, did not act outside the bounds of the arbitration agreement. Norsolor filed an action in an Austrian court seeking to set aside the arbitral award and appealed the decision of the Paris Judicial Court. The court of appeal in Austria set aside the arbitral award. The French court of appeal annulled the previous order granting Pabalk leave to enforce the award on the ground that a court in the country where the award was issued had set the award aside. Pabalk appealed to the France Court of Cassation.