Omnium de Traitement et de Valorisation SA v. Hilmarton Ltd.

Omnium de Traitement et de Valorisation SA (OTV) (plaintiff), a French company, and Hilmarton Ltd. (defendant), an English company, entered into a contract under which Hilmarton agreed to provide legal and tax advice to OTV and assist OTV in obtaining a contract to design and construct a drainage project for the city of Algiers in Algeria. In return, OTV agreed to pay Hilmarton 5 percent of the awarded contract. The contract contained an arbitration clause, calling for arbitration of any disputes in Switzerland and stating that Swiss law applied to the contract. An Algerian statute prohibited the use of a middleman in connection with any government contract related to foreign trade. After OTV was awarded the contract, a dispute arose regarding the payment of Hilmarton’s fees. Hilmarton commenced arbitration in Switzerland. After two rounds of arbitration and intervening court proceedings, the sole arbitrator issued an award in favor of Hilmarton. The arbitrator found that although the contract between the parties breached the Algerian statute that prohibited intervention of a middleman in bids for public contacts, there was no evidence of bribery or similarly corrupt conduct and, therefore, the Algerian statute was not a defense to Hilmarton’s claim. Hilmarton successfully sought enforcement of the award in Swiss court. Hilmarton also filed an action in England to enforce the award. The lower court granted Hilmarton leave to enforce the award, and OTV petitioned the England and Wales High Court of Justice to set aside the lower court’s order and to refuse enforcement of the award as contrary to the public policy of England. Specifically, OTV argued that the award violated public policy because the underlying contract between the parties was unlawful in Algeria.