Arbitration & ADR, France updates

Paris Court of Appeal confirms expansive scope of Article 1466 of Code of Civil Procedure
Freshfields Bruckhaus Deringer LLP
  • France
  • 08 August 2019

The Paris Court of Appeal recently clarified the scope of application of Article 1466 of the Code of Civil Procedure and for the first time confirmed that Article 1466 can also limit a party's ability to seek annulment based on a variety of arguments, whether relating to procedural irregularities or otherwise, that could have been raised in the arbitration.

French court rules that mandatory expert determination provisions do not render arbitration clauses inapplicable
Freshfields Bruckhaus Deringer LLP
  • France
  • 16 May 2019

The Court of Cassation recently confirmed the quasi-absolute priority given to arbitral tribunals to determine questions relating to their jurisdiction, even when this involves rules of French public order. Although this is well established in French case law, it is the first time that the court has upheld an arbitration clause that conferred on a tribunal the statutory power to value shares in lieu of a party-appointed or judicially appointed expert.

Paris Court of Appeal may revisit definition of 'investment' under Energy Charter Treaty
Freshfields Bruckhaus Deringer LLP
  • France
  • 31 January 2019

The US District Court for the District of Columbia recently lifted a stay of proceedings to confirm an award issued by an ad hoc tribunal in Paris under the Energy Charter Treaty. The district court noted that the French Court of Cassation had overturned a decision of the Paris Court of Appeal setting aside the award. This article revisits the relevant facts and issues that gave rise to the setting aside of the award in France, and the subsequent reversal at the highest instance.

Paris Court of Appeal exerts power to review allegations of corruption during enforcement proceedings
Freshfields Bruckhaus Deringer LLP
  • France
  • 08 November 2018

Consistent with France's reputation as a pro-arbitration jurisdiction, the French civil courts' review of arbitral awards on grounds of public policy is traditionally limited in terms of both standard and content. However, in recent years, the scope of the courts' review in this regard has been tested in certain Paris Court of Appeal decisions which reviewed the underlying evidence rather than the arbitral tribunal's own determinations in the relevant award.

Arbitrators' duty of disclosure
Freshfields Bruckhaus Deringer LLP
  • France
  • 04 January 2018

Parties' ability to choose their arbitrators remains one of the most frequently mentioned advantages of arbitration over litigation. However, this freedom makes sense only if it preserves the overarching duties of arbitrators and judges alike – that is, the duty to be and remain independent and impartial from the parties.

Paris Court of Appeal rules on Iraq war's impact on due process in arbitral proceedings
Freshfields Bruckhaus Deringer LLP
  • France
  • 16 March 2017

The Paris Court of Appeal recently set aside an award on the grounds of a violation of the principle of equality of arms. The court had to rule on the Iraq war's impact on due process in arbitral proceedings between the Republic of Iraq and two German companies. This decision comes as a reminder that arbitration is a jurisdictional process where parties and arbitrators, while enjoying considerable freedom and flexibility, should be mindful of due process and fair trial guarantees.

Principle of procedural estoppel under French arbitration law
Freshfields Bruckhaus Deringer LLP
  • France
  • 03 November 2016

The French courts recently supported the rigorous application of the principle of procedural estoppel and reiterated their commitment to the enforcement of agreements that govern arbitral proceedings. The principle prevents parties from relying on alleged irregularities that affect arbitration proceedings before the French courts if the requesting party has not initially raised them before the arbitral tribunal.

Independence and impartiality: Supreme Court confirms stern approach to duty of disclosure
Freshfields Bruckhaus Deringer LLP
  • France
  • 21 April 2016

A recent Supreme Court decision confirms French law's strict approach in matters involving arbitrators' independence and impartiality. The court found that despite an arbitrator's previous disclosure that his firm had had an inactive relationship with the parent company of one of the parties to the arbitration, his later failure to disclose that this relationship had resumed created reasonable doubt as to his independence and impartiality.

Acknowledgement that civil courts can rule on enforcement of foreign awards involving public law matters
Freshfields Bruckhaus Deringer LLP
  • France
  • 17 December 2015

The jurisdictional duality which characterises the French legal system triggers practical difficulties in international arbitrations, especially when they involve the recognition and enforcement in France of arbitral awards relating to issues of French administrative law. The Cour de Cassation recently decided on this issue, holding that civil courts have jurisdiction to rule on the recognition and enforcement of any foreign arbitral award.

Diplomatic immunity from enforcement: Supreme Court shatters the shield
Freshfields Bruckhaus Deringer LLP
  • France
  • 13 August 2015

The issue of sovereign immunity from enforcement is highly sensitive. It is regarded as a vital component of state sovereignty and as necessary to preserve peaceful relationships between states, and should be recognised as a matter of international comity. However, the interests of international commerce and private parties cannot be denied. The Supreme Court recently issued a key decision focusing on diplomatic assets.

Dilatory challenges of awards and fraudulent arbitration proceedings in crosshairs
Freshfields Bruckhaus Deringer LLP
  • France
  • 30 April 2015

Two recent Paris Court of Appeal decisions offer a contrasting perspective on the challenges associated with arbitration: while the enforcement of awards that have been recognised must be facilitated and applications for stays of enforcement are held to the most stringent standards, the legitimacy of arbitration requires that the legal process remain immune from suspicions of corruption and fraud.

Challenges of arbitrators: clarification on timeframe and standard of review
Freshfields Bruckhaus Deringer LLP
  • France
  • 04 December 2014

In order to enhance the flexibility of the arbitral process, French arbitration law allows parties to nominate their arbitrators, either directly or by reference to arbitration rules. Two recent decisions on conflicts of interest are illustrative of the approach of French courts, which seek to strike a delicate balance between giving arbitration users added freedom and ensuring that due process and fair trial guarantees apply

Paris Court of Appeal issues three confirmations in one decision
Freshfields Bruckhaus Deringer LLP
  • France
  • 29 May 2014

In its April 1 2014 decision the Paris Court of Appeal has reiterated its well-established position in relation to the enforcement of arbitral awards set aside at the seat of arbitration, confirmed the arbitrators' duty of disclosure, and restated the respective roles played by the arbitrators' duty of disclosure and the parties' duty of loyalty in arbitration proceedings.

Bilateral option clause – importance of clear and unequivocal wording
Freshfields Bruckhaus Deringer LLP
  • France
  • 10 April 2014

The Supreme Court has upheld the validity and enforceability of a bilateral option clause which gave both parties the option to resolve their dispute by way of arbitration or through domestic courts. While this decision clarifies the French courts' position regarding bilateral option clauses, it raises concerns as to the validity of sole option clauses.

Enforcement of international arbitration awards: further developments
Freshfields Bruckhaus Deringer LLP
  • France
  • 03 October 2013

Reforms to French arbitration law determined that appellate review would no longer automatically stay execution of an award. A member of Parliament questioned this regime, which does not provide for an adversarial debate at the level of the application for an exequatur order, by posing a question to the minister of justice. The minister recently responded that exequatur proceedings are to remain ex parte – for now, at least.

Enforcement of international arbitration awards: latest developments
Freshfields Bruckhaus Deringer LLP
  • France
  • 14 March 2013

When French arbitration law was reformed in 2011, one major innovation was to amend the position on the stay of enforcement of international arbitral awards pending the outcome of annulment proceedings or of an appeal against an order granting leave to enforce (exequatur). However, the courts' severity towards requests for a stay of execution has given rise to concerns about exequatur proceedings.

Defining 'arbitral awards': Supreme Court weighs in
Freshfields Bruckhaus Deringer LLP
  • France
  • 29 November 2012

According to the French law on international arbitration, an action to set aside is available against international arbitral awards issued in France. Therefore, such an action may be instituted only against arbitral awards. The distinction between arbitral awards and other communications issued by tribunals can be unclear; however, a decision of the Supreme Court provides useful guidance.

Award annulled due to withdrawn counterclaims introduced by insolvent defendant
Freshfields Bruckhaus Deringer LLP
  • France
  • 12 April 2012

The interaction between insolvency proceedings and arbitration is treated differently in different countries. The French legal position is clear: the supervening insolvency of a party does not render a dispute inarbitrable. In a recent decision the Paris Court of Appeal found that the International Court of Arbitration of the International Chamber of Commerce had committed an "excessive measure" justifying the annulment of an award.

Supreme Court reiterates autonomy of the international arbitral legal order
Freshfields Bruckhaus Deringer LLP
  • France
  • 19 January 2012

In a recent case the Supreme Court reaffirmed the existence of an arbitral legal order, independent of any national legal order. It held that the arbitral proceedings in question were detached from the French judicial order, since the tribunal's seat was located in Sweden and proceedings were governed by the United Nations Commission on International Trade Law rules.

Arbitrators cannot seek a ruling on the constitutionality of statutory provisions
Freshfields Bruckhaus Deringer LLP
  • France
  • 13 October 2011

Since March 2010 the ordinary French courts have been able to challenge the constitutionality of a statute or statutory provision through a specific procedure. However, the reform was silent on the issue of whether arbitral tribunals enjoy similar rights to ask the Supreme Court to refer a matter to the Constitutional Council. In a recent decision, the Supreme Court found no basis for such rights to be allowed to arbitrators.

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