Customs and Tax Consultancy LLC v. Democratic Republic of Congo, ICC Case No.19515/MCP/DDA
ICC · Investment (ICSID and treaty) · France · 22 Jul 2015
Why it matters
This partial award is significant for its detailed analysis of the validity of a state contract under French law, particularly regarding public policy and fraudulent concealment. It illustrates the application of French civil code articles on dol (fraud) and the consequences of non-performance in a long-term technical assistance agreement between a state and a private consultant. The award also addresses the calculation of interest on unpaid invoices and the rejection of the state's counterclaims.
Summary
Customs and Tax Consultancy LLC (CTC), a Delaware company, entered into a Technical Assistance Contract with the Democratic Republic of Congo (DRC) on 5 June 2008 to restructure the customs and excise office (OFIDA) to maximize fiscal and customs revenues. The contract was governed by French law and contained an ICC arbitration clause with seat in Paris. After the DRC terminated the contract in 2009, CTC initiated ICC arbitration in 2013. The DRC argued the contract was void for violating Congolese public procurement laws and for fraudulent misrepresentation (dol) by CTC. The tribunal rejected these arguments, finding that the contract was validly formed and that the DRC had not proven fraud. It held that the DRC breached its contractual obligations by failing to pay invoices and by wrongfully terminating the contract. The tribunal ordered the DRC to pay USD 91,696,347 for unpaid fixed and variable fees and mobilization costs, plus 1.5% monthly interest from five days after each invoice, and USD 3,750,000 for demobilization with interest from 15 January 2010. The tribunal deferred decisions on lost profits and counterclaims to a final award. The award is a partial award, with costs and remaining claims to be decided later.
The detail
Parties: Customs and Tax Consultancy LLC v. Democratic Republic of Congo, ICC Case No.19515/MCP/DDA
Case number: italaw/cases/6898
Outcome: The tribunal found the DRC breached the contract and ordered it to pay CTC USD 91,696,347 for unpaid invoices plus 1.5% monthly interest, and USD 3,750,000 for demobilization with interest, rejecting DRC's claims for annulment and revision.
Quantum: USD 95,446,347 plus interest
Applicable law: ICC Rules (2012); French law as governing law; Technical Assistance Contract dated 5 June 2008
Issues in play: The tribunal applied French contract law to determine the validity of the contract, addressing issues of public policy in public procurement and fraudulent misrepresentation (dol). It also considered the application of French civil code provisions on penalty clauses and interest rates.
Read the full decision at italaw ↗
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