This country-specific Q&A provides an overview of International Arbitration laws and regulations applicable in France.
What legislation applies to arbitration in your country? Are there any mandatory laws?
French arbitration law is codified under Articles 1442 to 1527 of the French Code of Civil Procedure (“CCP”). The latest reform dates back to 13 January 2011 (Decree No. 2011-48). French law distinguishes between domestic arbitration and international arbitration where, according to the formula of Article 1504 of the CCP, “international trade interests are at stake”. Cour de cassation The internationality of arbitration relies exclusively on an economic definition according to which it is sufficient that the dispute relates to a transaction that is not economically performed in a single State, regardless of the status or nationality of the parties, the law applicable to the merits or to the arbitration, or the seat of the arbitral tribunal (Cour de cassation, 20 November 2013, No. 12-25.266; Paris Court of Appeal, 10 May 2007, No. 05-19.814).
Domestic arbitration is regulated by Articles 1442 to 1503 of the CCP while the provisions on international arbitration are embodied under Articles 1504 to 1527 CCP. Article 1506 CCP refers to a number of articles related to domestic arbitration that are also applicable to international arbitration.
Finally, the arbitration agreement is governed by Articles 2059 to 2062 of the Civil Code.
Although the decisions of the Cour de cassation and the Paris Court of Appeal do not constitute per se binding precedents, they play a crucial role in interpreting and clarifying the above-mentioned provisions.
Regarding the existence of mandatory rules, the CCP provides certain rules to ensure that “the parties are treated equally and shall uphold the principle of due process” (Article 1510 CCP). Also, the French judge may set aside the award if it is “manifestly contrary to international public policy” (Article 1520 CCP).
Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
France signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 25 November 1958 and ratified it on 25 June 1959. It entered in force on 24 September 1959. French law is however a more favourable law and would thus prevail over the Convention. As an example, pursuant to French law, an arbitral award set aside at the seat of arbitration may be recognised or enforced in France (see PT Putrabali Adyamulia v. Rena Holding and Moguntia Est Epices, Cour de cassation, First Civil Chamber, 29 June 2007; and Egyptian General Petroleum Corporation v. Natgas Company, Paris Court of Appeal, 21 May 2019; see also question no. 50).
In addition, France has made a reciprocity reservation.
What other arbitration-related treaties and conventions is your country a party to?
France has signed multilateral conventions on arbitration, including the European Convention on International Commercial Arbitration signed on 21 April 1961 and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed on 18 March 1965, which created the International Centre for the Settlement of Investment Disputes (“ICSID”).
As a member of the European Union, France is also part of 56 multilateral treaties as of 30 October 2020, such as the Comprehensive Trade and Economic Agreement between Canada and the European Union (“CETA”) of 2016 or the latest EU-Japan Economic Partnership Agreement of 2018, the EU-Viet Nam Investment Protection Agreement of 2019.
As of 30 October 2020, France is party to 115 BITs: 95 are currently in force (with the latest entry into force of the BIT between France and Colombia as of 14 October 2020), 13 have been denounced or replaced by another treaty and 7 have been signed but not ratified.
Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
French law is not based on the UNCITRAL Model Law on International Commercial Arbitration. French law is considered to be more favourable than the UNCITRAL Model Law. For example, as explained above, French law may recognise and enforce an award set aside abroad.
Are there any impending plans to reform the arbitration laws in your country?
At present, no reform of the arbitration law is being considered in France.
The last major reform dates back to Decree No. 2011-48 of 13 January 2011, which provided France with a new domestic and international arbitration law codifying some well-established case law and principles.
More recently, Law No. 2016-1547 of 18 November 2016 related to “the modernisation of the 21st century judiciary” provides a new definition of the arbitration clause (“clause compromissoire”) at Article 2061 of the Civil Code. The previous version provided that the arbitration agreements were valid if they were concluded in the course of professional activity. The new text provides: “an arbitration agreement shall be accepted by the party against which it is invoked, unless that party succeeded to all rights and obligations of the party, which initially accepted it. If one of the parties has not contracted in the course of its professional activity, the arbitration agreement cannot be invoked against that party” (free translation). Consequently, there is a shift from the condition of validity to enforceability and effectiveness of the arbitration agreement vis-à-vis certain parties. A party having entered into the arbitration agreement outside its professional activity will have the choice to submit its case either to the state courts or to an arbitral tribunal. This also means that an arbitration clause could theoretically be considered valid in areas that were so far off-limits for arbitration such as labour, consumer and administrative contracts. The issue is whether this provision would be considered applicable to international arbitration.
The Law No. 2019-222 of 23 March 2019 contains provisions related to the online arbitration (and mediation) and authorising an award to be rendered in electronic form and provides for online arbitration platform certification.
The International Chamber of the Paris Court of Appeal (“CICAP”) was created in 2018. The CICAP was set up to hear international trade disputes, including cases related to international arbitration. The procedure is tailored to the needs of international trade and to improve the efficiency of proceedings: the exhibits can be submitted without translation, pleadings can be conducted in English, and witnesses and experts can be heard in English. The first decisions were rendered by the CICAP in late 2019 beginning 2020.
What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?
The main arbitration institution in France is the International Chamber of Commerce (“ICC”), one of the leading arbitration institutions in the world. Its headquarters are located in Paris and its new Arbitration Rules will enter into force on 1 January 2021.
Other arbitration institutions are established in France: French Arbitration Association (Association Française d’Arbitrage), Mediation and Arbitration Centre of Paris (Centre de Médiation et d’Arbitrage de Paris), International Arbitration Chamber of Paris (Chambre Arbitrale Internationale de Paris), and the European Court of Arbitration located in Strasbourg.
Other more specialised institutions include amongst others: Maritime Arbitration Chamber of Paris (Chambre Arbitrale Maritime de Paris) or the Mediation and Arbitration Committee for Public Works (Comité de Médiation et d’Arbitrage des Travaux Publics), French Reinsurance and Insurance Arbitration Centre (Centre Français d’Arbitrage de Réassurance et d’Assurance).
Is there a specialist arbitration court in your country?
See questions 5 and 6.
What are the validity requirements for an arbitration agreement under the laws of your country?
Contrary to domestic arbitration, in international arbitration, no form requirement as to the validity of an arbitration agreement exists.
The parties must, of course, have the capacity and power to compromise, validly consent to the arbitration agreement and the dispute must be “arbitrable”.
Are arbitration clauses considered separable from the main contract?
The arbitration clause is separable from the main contract.
The principle of the autonomy of the arbitration agreement had been affirmed by the French case law since the Gosset ruling from the (Cour de cassation, 7 May 1963) and codified in Article 1447 CCP by the Decree of 13 January 2011, which provides that the arbitration agreement is independent from the contract to which it relates and that it is not affected if such contract is void.
Do the courts of your country apply a validation principle under which an arbitration agreement should be considered valid and enforceable if it would be so considered under at least one of the national laws potentially applicable to it?
French law has established a substantive rule according to which the arbitration agreement is autonomous from any state law (Hecht, Cour de cassation, 4 July 1972; Menicucci, Paris Court of Appeal, 13 December 1975; Gatoil, Paris Court of Appeal, 17 December 1991; Dalico, Cour de cassation, 20 Dec. 1993).
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
In the field of domestic arbitration, Article 1442, paragraph 2, CCP provides that “an arbitration clause is an agreement by which the parties to one or more contracts undertake to submit to arbitration disputes which may arise in relation to such contract(s)”. Article 1506 CCP does not extend this provision to international arbitration. Case law has accepted the extension of the arbitration clause to other contracts when there is a necessary link between those contracts (Sigma corp. v. Tecni-Ciné-Phot, Cour de cassation, 14 May 1996, No. 93-15.138) and to the contracts that form part of the same economic transaction (Glencore Grain Rotterdam v. Afric, Paris Court of Appeal, November 23, 1999; République du Congo v. Commissions import export et autres, Cour de cassation, 29 January 2014, No. 12-26.597).
Article 1453 CCP, applicable to international arbitration, provides that “if there are more than two parties to the dispute and they fail to agree on the procedure for constituting the arbitral tribunal, the person responsible for administering the arbitration or, where there is no such person, the judge acting in support of the arbitration, shall appoint the arbitrator(s)”.
Prior to the introduction of this provision in the CCP by the 2011 reform, the Cour de cassation had affirmed in the landmark case that “the principle of equality of the parties in the appointment of arbitrators is a matter of public policy and cannot be waived until after the dispute has arisen” (Siemens and BKMI v. Dutco, Cour de cassation, 7 January 1992, No. 89-18.708 and 89-18.726).
In what instances can third parties or non-signatories be bound by an arbitration agreement? Are there any recent court decisions on these issues?
French law provides that a contract is binding only between the parties (Article 1199 of the Civil Code). The principle applies to arbitration agreements. The case law has created several exceptions where a third party or a non-signatory party can be bound by an arbitration clause: (i) the extension of the arbitration clause to the parties directly involved in the negotiation or the performance of the contract (ABS and AGF Iart v. Amcor Technology et al., Cour de cassation, 27 March 2007); (ii) in case of assignment of contract or rights (Taurus Films, Cour de Cassation, 8 February 2000).
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
Pursuant to Article 2059 of the Civil Code, parties may submit to arbitration all disputes involving rights which they are free to dispose of. Article 2060 specifically refers to the matters that are not arbitrable: status and capacity of individuals, divorce and judicial separation, or disputes involving public entities, with the exception of some categories of public bodies of an industrial and commercial character. More generally, all matters of public policy are not be arbitrable. According to the new Article 2061, the arbitration clause with a consumer, in a labour or administrative contract is considered to be valid (see question No. 5).
How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?
In international arbitration, the arbitral tribunal settles the disputes in accordance with the rules of law chosen by the parties or, where no such choice has been made, in accordance with the rules of law the arbitral tribunal considers appropriate (Article 1511 CCP). The tribunal shall also take into account trade usages. The parties can also ask the arbitral tribunal to settle the dispute as “amiable compositeur” (Article 1512 CCP).
There is no mandatory set of choice of law rules. The freedom of the parties and the arbitrators as to the law applicable to the merits of the case is only limited by international public policy and mandatory rules of law.
Have the courts in your country applied the UNIDROIT or any other transnational principles as the substantive law? If so, in what circumstances have such principles been applied?
The parties’ choice of the transnational rules of law to govern their contract is effective and must be applied by the arbitral tribunals (Compania Valenciana, Cour de cassation, 22 October 1991).
For instance, the French courts systematically refuse to set aside arbitral awards applying UNIDROIT Principles of International Commercial Contracts (see in this respect the decisions of the Paris Court of Appeal No. 17/18001 of 25 February 2020 and No. 17/22943 of 23 June 2020). Case law related to the application of the Vienna Convention on the International Sale of Goods is also very frequent.
In your country, are there any restrictions in the appointment of arbitrators?
There is no particular restriction as to the appointment of the arbitrators, which is a matter of the parties’ choice. Pursuant to Article 1508 CCP, the parties can determine in the arbitration agreement, directly or by reference to arbitration rules or rules of procedure, the number and the method of appointment of the arbitrators. The appointment of the arbitrators must comply with the principle of equality of the parties, especially in the cases involving multiple parties. Once appointed, the arbitrators must fulfill the requirements of independence and impartiality (Articles 1456 and 1506 CPP).
In addition, French law provides that some professional activities are incompatible with the appointment as an arbitrator, such as state judges (except for former judges, and judges sitting in the commercial courts), public employees and elected parliamentarians.
Are there any default requirements as to the selection of a tribunal?
Article 1452 CCP provides for a default procedure for the constitution of arbitral tribunal depending on whether the dispute is to be decided by one or three arbitrators:
In case of a sole arbitrator, he or she is appointed by the institution administering the dispute, the appointing authority or, in case of failure, by the judge acting in support of the arbitration (“juge d’appui”);
In the case of three members of the arbitral tribunal, each party must appoint an arbitrator and the two arbitrators must appoint the third one. If a party fails to make the appointment within one month from the receipt of the request made by the other party or if the two arbitrators do not agree on the choice of the third arbitrator within one month from the acceptance of their appointment, the institution administering the dispute, the appointing authority or, in case of failure, the judge acting in support of the arbitration shall make the appointment of the arbitrator.
In addition, Article 1453 CCP provides that in case of a multiparty arbitration where the parties fail to agree on the modalities for the constitution of the arbitral tribunal, the institution administering the dispute, the appointing authority or, in case of failure, the judge acting in support of the arbitration, shall appoint the arbitrator(s).
Can the local courts intervene in the selection of arbitrators? If so, how?
In addition to the role of the appointing authority, the judge acting in support of the arbitration (“juge d’appui”) can decide, at the parties’ request, over the difficulties in the constitution of the arbitral tribunal.
In international arbitration, Article 1505 CCP provides that the supporting judge is, unless otherwise stipulated, the president of the Tribunal judiciaire of Paris where:
The arbitration is seated in France; or
The parties have agreed to submit the arbitration to French procedural law; or
The parties have expressly granted jurisdiction to the French courts to hear disputes relating to the arbitration proceedings; or
One of the parties is exposed to a risk of denial of justice.
Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge?
An arbitrator can be challenged if there are circumstances such as to affect his or her independence or impartiality, including cases where an arbitrator fails to make a disclosure of such circumstances (Article 1456 CCP). In addition, an arbitrator can be removed by consent of both parties (Article 1458 CCP).
Article 1456 provides that in the event of a dispute as to whether an arbitrator should be confirmed, the difficulty is settled by the institution administering the arbitration or, in case of failure, decided by the supporting judge (“juge d’appui”). The difficulty shall be submitted to the supporting judge within one month following the disclosure or finding of the ground for challenge.
In any event, the parties shall invoke any irregularity in the appointment of an arbitrator or his/her biased position without delay.
Have there been any recent developments concerning the duty of independence and impartiality of the arbitrators
The recent developments concern the duty to disclose of the arbitrators.
French courts have traditionally been in favor of a very wide disclosure obligation, imposing a subjective standard on arbitrators. Recently, the Paris Court of Appeal confirmed that, if public information available before the beginning of an arbitration can be easily retrieved by the parties, it cannot reasonably be expected that the parties continue to peruse all public sources of information likely to contain the name of the arbitrator and any related persons and entities after the beginning of proceedings (SBA v. AVME, Paris Court of Appeal, 27 March 2018, No. 16-09.386). The Cour de cassation then confirmed the Court of Appeal’s reasoning as regards the continuous disclosure obligation even with respect to the notorious facts (Cour de cassation, 3 October 2019, No. 18-15.494).
In another decision (Bouygues v. Elcir, Paris Court of Appeal, 29 May 2018, No. 15-20.168), the Court of Appeal sanctioned the reluctance of a party and the sole arbitrator to spontaneously disclose previous appointments.
In a recent decision, the CICAP considered that the arbitrator’s duty to disclose must be assessed in light of the level of notoriety of the situation, its connection with the dispute and its impact on the arbitrator’s judgment (Paris Court of Appeal, 25 February 2020, Dommo, No. 19/07575, No. 19/15816, No. 19/15817, No. 19/15818, No. 19/15819).
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
In domestic arbitration, pursuant to Article 1473 CCP, unless otherwise stipulated, the arbitral proceedings are suspended in the event of death, impediment, abstention, resignation, challenge, or dismissal of an arbitrator until the acceptance of his or her mandate by the new arbitrator.
This provision is not applicable to international arbitration. This difficulty is therefore generally settled in accordance with the arbitration rules chosen by the parties to regulate their procedure.
Are arbitrators immune from liability?
Under French law, arbitrators are not immune from liability even though the possibility for the parties to hold the arbitrators liable is limited. In particular, since the Bompard decision of the Paris Court of Appeal of 22 May 1991, arbitrators cannot be held liable for any error of law or fact.
However, an arbitrator can be held liable in case of fraud, deceit or gross misconduct (Paris Court of First Instance, 13 June 1990 and 22 May 1991).
The arbitrator may be held liable if he or she fails to, for instance, complete his or her mission, render the award within the contractual time limit or ensure that the said time limit is extended.
It should be noted that in a recent decision the Paris Court of Appeal confirmed that the violation of a fundamental principle of procedure leading to the annulment of the award on the ground of due process, does not engage the personal liability of the arbitrator (Blow Pack, Tribunal de grande instance, 22 May 2017, No. 14/4717, Paris Court of Appeal, 21 May 2019, No. 17/12238).
Is the principle of competence-competence recognized in your country?
French law recognises the principle of competence-competence. A distinctive feature of the French law is that it recognises both the positive and the negative effects of the competence-competence principle:
Positive effect: Article 1465 CCP expressly provides that the arbitral tribunal has exclusive jurisdiction to rule on its jurisdictional power.
Negative effect: state courts shall decline jurisdiction to rule on disputes subject to arbitration agreement and to rule on the validity of such agreement, unless under certain limited circumstances (see question no. 24). Article 1448 CCP also provides that the state courts may not decline jurisdiction on its own motion.
This negative effect of the principle of competence-competence is, however, counterbalanced at the stage of the recognition and enforcement of the award, in which the French judge is entitled to verify that the arbitral tribunal had jurisdiction (Cour de cassation, 6 January 1987).
What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
French courts apply the negative effect of the principle of competence-competence (see question no. 23), unless (i) the arbitral tribunal has not been constituted, or (ii) the arbitration agreement is manifestly void or manifestly not applicable (Article 1448 CCP, paragraph 1).
How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
The arbitration proceedings are usually commenced by the request for in accordance with the arbitration agreement. The notice for arbitration is not subject to any particular form and can be submitted by one of the parties (request for arbitration), or both parties (agreement to arbitrate) (Article 1462 CCP).
French law does not provide for any specific statute of limitation applicable to arbitration. However, the parties can agree on a specific time-limit for the request for arbitration.
French law, if applicable to the merits of the dispute, provides for a general limitation period of 5 years in contract and tort (Article 2221 Civil Code).
In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?
The immunity from jurisdiction of the states and state entities is recognised in French law. Such immunity concerns only acts of sovereignty and not the commercial activities of the state. The Cour de cassation considers that immunity from jurisdiction is based on the nature of the activity and not on the quality of the person exercising it (Levant Express Transport v. Iranian Government Railways Administration, Cour de cassation, 25 February 1969).
Immunity from jurisdiction can be waived as indicated by the Cour de cassation in 2011 with the following wording: “waiver must be certain, express and unequivocal” (GIE La Réunion européenne c/ Jamahiriya Arabe Libyenne, Cour de cassation, 9 March 2011, No. 09-14.743).
The waiver of the immunity form jurisdiction may be implied in some cases by accepting to submit the dispute to arbitration.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel participation?
If a respondent does not participate in the arbitration proceedings, French law does not provide for any particular procedure. Nothing prevents the proceedings from moving forward. However, the due process must be complied with. In particular, during the whole arbitration proceedings a party must be informed and provided with all the documentation exchanged. Due process also implies that both parties have been able to present their claims and respective arguments. The arbitral tribunal shall ensure that both parties have been given the possibility to participate in the proceedings.
A party refusing to participate in an arbitration may estopped from raising any irregularities or due process argument deriving from its refusal to participate at the stage of recognition, enforcement or annulment.
Can third parties voluntarily join arbitration proceedings? If all parties agree to the intervention, is the tribunal bound by this agreement? If all parties do not agree to the intervention, can the tribunal allow for it?
There is no specific provision regarding the voluntary joinder of a third party. Such voluntary intervention may occur only with the agreement of all the parties and the arbitral tribunal.
Can local courts order third parties to participate in arbitration proceedings in your country?
No provision allows local courts to order third parties to participate in arbitration proceedings. See above question no. 11.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
Pursuant to Article 1449 CCP, until the arbitral tribunal is constituted, French courts may order interim and provisional measures at the request of one of the parties.
French courts have exclusive jurisdiction to order conservatory attachment of the assets.
Are anti-suit and/or anti-arbitration injunctions available and enforceable in your country?
The anti-suit injunction is incompatible with EU law based on the Brussels I Regulation recast. The European Court of Justice has confirmed this incompatibility (Turner, ECJ, 27 Apr. 2004, case C-159/02).
Even though arbitration is excluded from the scope of the Regulation (recital 12 and article 1.2(d)), it should be noted that, in the view of the European Court of Justice, the adoption by a court of a Member State of an injunction seeking to prohibit a person from commencing or continuing proceedings before the courts of another Member State on the ground that such proceedings would be contrary to an arbitration agreement is incompatible with the Regulation (Allianz, ECJ, 10 Feb. 2009, case C-185/07).
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence? Can local courts compel witnesses to participate in arbitration proceedings?
The rules governing evidentiary matters are agreed upon by the parties. It is the parties’ responsibility to produce evidence to support their claims. The arbitral tribunal has full discretion in assessing this evidence.
Pursuant to Article 1467 CCP, the arbitral tribunal can order interim measures and hear witnesses. In addition, if a party is in possession of an item of evidence, the arbitral tribunal may enjoin a party to produce it and if necessary attach penalties to such injunction.
The arbitral tribunal can make adverse inferences in case of lack of production.
French courts may play a role in the obtaining of evidence in arbitration proceedings. If one of the parties to the arbitral proceedings intends to rely on a document held by a third party, it may, upon leave of the arbitral tribunal, had that third party summoned before the President of the Tribunal judiciaire for the purpose of obtaining the production of evidence (Article 1469 CCP). Prior to the constitution of the arbitral tribunal, the President of the Tribunal judiciaire may order measures to obtain evidence that may be used in an arbitration at the request of a party (see question no. 30).
There is no specific provision regarding the power of the local courts to compel witnesses to participate in the arbitration proceedings.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?
France does not impose any specific code of ethics or professional standards on counsel and arbitrators in arbitration proceedings.
French lawyers must nevertheless comply with the ethical rules (the National Internal Regulations and the Code of Conduct for European Lawyers). Lawyers of the Paris Bar have officially been authorised to coach witnesses for cross-examination in arbitration proceedings since 2008.
In your country, are there any rules with respect to the confidentiality of arbitration proceedings?
Contrary to domestic arbitration, international arbitrations having their seat in France are not, in principle, confidential.
Thus, the parties must enter into a specific agreement to protect the confidentiality of the proceedings.
Deliberations of the arbitral tribunal are confidential, both in domestic and international arbitration (Articles 1479 and 1506 CCP).
How are the costs of arbitration proceedings estimated and allocated?
French arbitration law does not contain any specific provision on the estimation and allocation of costs in the arbitration proceedings. Institutional rules often include provisions on costs.
The arbitral tribunals have in principle wide discretion in the allocation of costs.
Can pre- and post-award interest be included on the principal claim and costs incurred?
The arbitral tribunals may award interest on the successful claims.
Under French law, the legal interest rate is determined by decree each semester. However, parties are free to agree on a contractual interest rate.
What legal requirements are there in your country for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e. substantiated and motivated?
Pursuant to Article 1514 CCP, an arbitral award recognised or enforced in France if the parties relying on it can prove its existence and if such recognition or enforcement is not manifestly contrary to international public policy. The existence of an arbitral award shall be established by producing the the original award together with the arbitration agreement or duly certified copies of these documents (Article 1515 CCP). If these documents are not in French, a translation is required.
With respect to the motivation of awards, French law provides that the arbitral award should set forth the respective claims and arguments of the parties. The award shall also state the reasons upon which it is based (Articles 1482 and 1506 CCP).
What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?
In practice, it takes between 2 to 3 weeks to obtain the exequatur of an arbitral award in France.
Pursuant to Article 1516 CCP, the procedure relating to the request for exequatur is made on an ex parte basis. The enforcement order can however be appealed before the Paris Court of Appeal in adversarial proceedings.
Does the arbitration law of your country provide a different standard of review for recognition and enforcement of a foreign award compared with a domestic award?
The standard of review adopted by French courts for recognition and enforcement of a foreign award and a domestic award is similar.
The recognition and enforcement of a domestic award is governed by Articles 1487 and 1488 CCP, while the recognition and enforcement of a foreign award is subject to Article 1514 CCP. The only difference is that the court will assess the compliance of the domestic award with respect to French public policy, whereas for a foreign award it will use the international public policy standard.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts
French law accepts a wide range of remedies. Once the award is rendered, it can be enforced by the local courts, subject to exequatur proceedings.
The French judge considers that even punitive damages are not per se contrary to international public policy, but it is subject to verification on the proportionate nature of such damages (Fountaine Pajot, Cour de cassation, 1 December 2010, No. 09-13.303 and Uzuc, Paris Court of Appeal, 25 February 2020, No. 17/18001).
Can arbitration awards be appealed or challenged in local courts? What are the grounds and procedure?
International arbitral awards may be challenged and set aside before French courts.
Article 1518 CCP provides that the international arbitral award may only be subject to set-aside proceedings. The award cannot therefore be appealed. The set-aside application shall be brought before the Paris Court of Appeal on a limited number of grounds (Article 1520 CCP):
Wrongly upheld or decline jurisdiction; or
The arbitral tribunal was not properly constituted; or
The arbitral tribunal rules without complying with the mandate conferred upon it; or
Due process was violated; or
Recognition or enforcement of the award is contrary to international public policy.
The application shall be submitted within one month following service (“signification”) of the award, unless otherwise agreed by the parties.
Where the international award is rendered abroad, the decision regarding its recognition or enforcement may be appealed (Article 1525 CCP). The appeal shall be submitted to the Paris Court of Appeal within one month following service of the decision. The Court of Appeal can refuse recognition or enforcement of a foreign award on the basis of the five ground listed in Article 1520 CCP.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
Article 1522 CCP provides that parties may at any time expressly waive their right to bring an action to set aside the arbitral award by special agreement.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
In France, there is a specific law governing the enforcement proceedings against state assets. Law No. 2016-1691 of 9 December 2016, known as “Sapin II”, related to transparency, anti-corruption, and modernisation of economic life deals with the immunity of assets of foreign States in France.
This Law introduced three new provisions in the French Code of Civil Enforcement Proceedings: Articles L111-1-1 to L111-1-3. Prior court authorisation, on an ex parte basis, is required in order to enforce or take interim measures against the state assets. Such authorisation can only be granted if the following conditions are met:
The foreign State has expressly consented to such enforcement measures;
The foreign State has allocated or assigned the assets for the satisfaction of the claim, subject of the proceedings; or
A judgment or an arbitral award has been rendered against the foreign State, and the assets concerned are not used or not intended to be used for government non-commercial purposes provided that they are linked to the entity against which the proceedings were initiated.
Article L111-1-3 introduces the requirement of an express and specific waiver by the foreign State if the enforcement concerns the assets used or intended to be used for diplomatic, consular or special missions of the foreign States, or of the missions to international organisations.
Sapin II Law also provides with a specific exclusion of enforcement against assets of the foreign States which are beneficiaries of OECD development aid.
The recent case law has refused the stay of enforcement on the state assets (Paris Court of Appeal, Pole 5 – Ch. 16, 22 October 2019, No. 19/04161) and clarified the scope of sovereign immunity from execution for state entities in relation to a state’s diplomatic assets (Al-Kharafi c/ Libyan Investment Authority et al., Paris Court of Appeal, Pole 4- Ch. 8, 5 September 2019, No. 18/17592).
In what instances can third parties or non-signatories be bound by an award? To what extent might a third party challenge the recognition of an award?
Arbitral awards are res judicata with regard to the claims adjudicated in this award (Articles 1484 and 1506 CCP). It may therefore be invoked against third parties.
The possibility of a challenge of the arbitral award by third parties is only provided in domestic arbitration (Article 1501 CCP).
Have courts in your jurisdiction considered third party funding in connection with arbitration proceedings recently?
In France, the practice of third party funding is not regulated by law and there is little case law on the matter.
At present, only one case concerning the third party funding of an arbitration was rendered by French courts (Veolia Propreté v. Fortis AG, Paris Court of Appeal, 1 June 2006, No. 05/01038). The claim initiated by Veolia against a third party financer was dismissed for lack of jurisdiction but the Court, on the one hand, admitted the validity of third party funding agreements and, on the other hand, qualified such contracts as sui generis.
The Paris Bar adopted, on 21 February 2017, a resolution on third party funding, which expressly approves said practice under certain conditions. Referring to the lawyers’ ethical and professional duties towards their clients, the resolution provides, inter alia, that lawyers should not recommend third party funders to their clients, should wait for their clients’ instructions in this regard and refrain from meeting with third party funders in their absence. In addition, the resolution strongly recommends the disclosure of financing agreements to the arbitral tribunal and suggests that they be administered through CARPA, which is used to manage the clients’ funds.
Is emergency arbitrator relief available in your country? Is this frequently used?
French arbitration law does not contain any express provision allowing an emergency arbitrator to be called upon prior to the constitution of the arbitral tribunal.
Parties may appoint an emergency arbitrator on the ground of one of the institutional arbitration rules, such as the ICC International Court of Arbitration, the London Court of International Arbitration (“LCIA”), and the Milan Chamber of Arbitration (“CAM”) that contain specific provisions on emergency arbitration.
Are there arbitral laws or arbitration institutional rules in your country providing for simplified or expedited procedures for claims under a certain value? Are they often used?
French law does not contain any specific provision on a simplified or expedited procedure.
In the last ICC Rules revision the threshold for the application of the expedited proceedings has been raised to USD $3 million for arbitration agreements concluded on or after 1 January 2021.
The International Arbitration Chamber of Paris applies a procedure, called “Procedure PAR” for all money claims inferior and equal to EUR €100.000.
Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?
The ICC has greatly contributed to transparency in international arbitration. In particular, the names of the arbitrators is published on its website since 2016.
Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted in your country? If so, how?
No specific legal measures have been taken in France to promote diversity in the choice of arbitrators and counsel. A certain effort is noticed amongst the French arbitration community to promote diversity by designating more women, younger practitioners and persons of diverse ethnicity as arbitrators.
Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
French courts may enforce an arbitral award notwithstanding its annulment by the foreign courts at the seat of the arbitration.
French courts have confirmed on numerous occasions since Hilmarton in 2004 and Putrabali in 2007 that the annulment of an international award rendered outside France has no consequences on its recognition or enforcement in France. Such awards can therefore be recognised in France unless they are contrary to international public policy.
Recently, the Paris Court of Appeal applied this case law to a foreign domestic arbitral award rendered and annulled in Egypt (Egyptian General Petroleum Corporation v. National Gas Company, Paris Court of Appeal, 21 May 2019, No. 17/19850). In this case, both parties were Egyptian entities, the contract was to be performed in Egypt, Egyptian law was applicable to the merits, the place of the arbitration was in Egypt and the case was administered by an Egyptian institution.
Have there been any recent court decisions in your country considering the issue of corruption? What standard do local courts apply for proving of corruption? Which party bears the burden of proving corruption?
Referring to the 2003 United Nations Convention against Corruption, the Paris Court of Appeal stated that there is an international consensus on the issue (République Démocratique du Congo, Paris Court of Appeal, 16 May 2017, No. 15/17442). The mere finding that an arbitral award gives effect to a corrupt contract is contrary to international public policy.
French courts have refused to recognise and enforce an award in which the arbitrators had failed to consider some red flags indicating an activity of money laundering on the ground that such recognition and enforcement would be a “flagrant, effective and concrete” violation of international public policy (République du Kirghisistan v. Belokon, Paris Court of Appeal, 21 February 2017).
In the Alstom case (Alstom transport SA & Alstom Network UK Ltd v. Alexander Brothers Ltd, Paris Court of Appeal, 28 May 2019, No. 16/11182), the French court, which was confronted with the bribery of a foreign public official, applied the red flags method to characterize the violation of the international public policy. The court held that when faced with an allegation that an award gave effect to a contract obtained through corruption, it was bound to assess, “in fact and in law”, all elements that would allow it conclude to a “manifest, effective and concrete” violation of international public policy, irrespective of the assessment of the arbitral tribunal, and of the law chosen by the parties to govern the merits of the case (see also Paris Court of Appeal, 30 June 2020, No. 17/22515, Sheikh Faisal).
Have there been any recent court decisions in your country considering the definition and application of “public policy” in the context of enforcing or setting aside an arbitral award?
The control of the compliance of arbitral awards with international public policy is set by the Thales and Cytec decisions applying the so-called “minimalist” approach (Paris Court of Appeal, 18 November 2004, No. 2002/19606; Cour de cassation, 4 June 2008, No. 06-15.320). In recent decisions, the French courts have taken a strong stance against fraud and corruption and has exercised a strict control of international public policy in these cases (République du Congo, Paris Court of Appeal, 16 May 2017 and Alstom Transport c/ Alexander Brothers, Paris Court of Appeal, 10 April 2018 and 28 May 2019, No. 16-11182 involving corruption issues – République du Kirghizstan c/ M/ Belokon, Paris Court of Appeal, 21 February 2017, No. 15/01650 involving money laundering issues – Société MK Group c/ SARL Onix, Paris Court of Appeal, 16 January 2018, No. 15/21703 involving the principle of sovereignty of States over their natural resources).
Have there been any recent court decisions in your country considering the judgment of the Court of Justice of the European Union in Slovak Republic v Achmea BV (Case C-284/16) with respect to intra-European Union bilateral investment treaties or the Energy Charter Treaty? Are there any pending decisions?
No court decision concerning this case has been recently rendered in France.
The representatives of the Member States, including France, signed a declaration on 15 January 2019 regarding the legal consequences of said judgment and on investment protection in the European Union providing, inter alia, for the termination of all BITs concluded to date. 23 Member States, including France, signed an agreement on 5 May 2020 for the termination of intra-EU BITs concluded to date (termination agreement). The termination agreement also lists the BITs terminated.
Have there are been any recent decisions in your country considering the General Court of the European Union’s decision Micula & Ors (Joined Cases T-624/15, T-694/15 and T-694.15), ECLI:EU:T:2019:423, dated 18 June 2019? Are there any pending decisions?
No decision has been issued or is pending in France concerning the General Court of the European Union’s decision in Micula case.
What measures, if any, have arbitral institutions in your country taken in response to the COVID-19 pandemic?
The ICC International Court of Arbitration published on 9 April 2020 a guidance note outlining a series of measures to mitigate the effects of the COVID-19 pandemic on arbitration proceedings.
The Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic:
outlines the procedural tools available to parties, counsels, and tribunals to reduce the delays caused by the pandemic through greater efficiency, and
presents guidance on the organisation of conferences and hearings in the light of COVID-19 considerations, including the conduct of such conferences and hearings by audio, video, or other similar means of communication (“virtual hearing”).
Two annexes provide a checklist for a protocol on virtual hearings and suggested clauses for cyber-protocols and procedural orders dealing with their organisation.
In your country, does the insolvency of a party affect the enforceability of an arbitration agreement?
In France, the arbitration clause is binding on the organs of the insolvency proceedings if the dispute would have arisen even without the insolvency proceedings: the arbitration clauses can be invoked against the liquidator, whether the latter is claimant or respondent, in an action arising from a contract containing such a clause, because of the principle of competence-competence.
Pursuant the principle of the stay of individual proceedings, a creditor with a claim existing prior to the liquidation judgment shall submit its claim to the specific verification procedure before initiating the arbitral proceedings (Cour de cassation, 2 June 2004, No. 02-13.940).
The liquidator acts before the arbitral tribunal in the place and on behalf of the debtor.
It is worth noting that French law recognises, as part of domestic and international public policy, certain principles of insolvency law: the principle of the suspension of individual proceedings by creditors, the principle of divestment of the debtor and the principle of the interruption of the pending proceedings in the event of the opening of insolvency proceedings.
However, no enforcement measures can be taken during the insolvency proceedings (Paris Court of Appeal, 14 May 2019, No. 17/09133).
Is your country a Contracting Party to the Energy Charter Treaty? If so, has it expressed any specific views as to the current negotiations on the modernization of the Treaty?
In France, the Energy Charter Treaty and its Protocol on “Energy Efficiency and Related Environmental Aspects” were ratified on 1 September 1999 before entering into force on 27 December 1999. The International Energy Charter was signed on 20 May 2015 but has not yet been ratified.
France is taking part in the negotiations on the modernisation of the Energy Charter Treaty.
Have there been any recent developments in your jurisdiction with regard to disputes on climate change and/or human rights?
On 14 March 2019, several French non-profit associations have filed an application to Tribunal administratif of Paris Administrative Court in order to recognise French state’s obligations in the prevention of the climate change negative consequences. The case is ongoing.
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