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Arbitration agreements

Validity

What are the validity requirements for an arbitration agreement?

In international arbitration, French courts do not undertake a conflict-of-laws analysis and deem arbitration agreements to be valid provided that the parties consented and the arbitration agreement does not violate French international public order (Cass 1st Civ, December 20 1993, Dalico).

Accordingly, there are no formal requirements for arbitration agreements (Article 1507 of the Code of Civil Procedure). For instance, arbitration clauses incorporated by reference to a general document which contains them are valid and binding (Cass 1st Civ, November 6 2016).

This approach is actually more favourable than the New York Convention – in particular, Article II, which requires an arbitration agreement to be in writing. In accordance with Article VII(1) of the New York Convention, French courts therefore disregard the convention in favour of Book IV, Title II of the Code of Civil Procedure.

Enforcement of agreements

How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

French courts must enforce arbitration agreements and decline jurisdiction over any dispute that is allegedly covered by an arbitration agreement (Article 1448 of the Code of Civil Procedure). The exception is that French courts may assert jurisdiction over the dispute when two conditions are cumulatively met:

  • the dispute has not yet been referred to an arbitral tribunal; and
  • the arbitration agreement is manifestly invalid or inapplicable.

The second limb of the rule provides for a stringent test that is seldom met in practice. However, according to Article 1448(2) of the Code of Civil Procedure, French courts cannot decline jurisdiction on their own motion; it is for the parties to allege the existence of an arbitration agreement. Further, a party cannot seek declaratory relief from a court determining that an arbitration clause is invalid.

Consolidation

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

There is no express rule on this issue. In the absence of consent from all the parties involved, there is no possibility to join a third party or to consolidate related arbitration proceedings. Such consent may be implied from the choice of a particular set of arbitration rules in the arbitration agreement, such as the International Chamber of Commerce Rules of Arbitration, which allow for the joinder of additional parties.

Choice of law

How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Pursuant to Article 1511(1) of the Code of Civil Procedure, “the arbitral tribunal shall decide the dispute 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 it considers appropriate”. This is understood as encompassing rules other than national laws (eg, transnational rules, the International Institute for the Unification of Private Law Principles). In the absence of such choice, the tribunal applies the rules of law which it deems appropriate. It may even choose a “set of rules drawn from international trade practice as established in the jurisprudence of national courts” (Cass 1st Civ, October 22 1991).

Importantly, according to Article 1511(2) of the Code of Civil Procedure, the tribunal must be mindful of relevant trade usages.

Separability

Are there any provisions on the separability of arbitration agreements?

Article 1447 of the Code of Civil Procedure provides that an arbitration agreement should be considered entirely separate from the underlying contract, which means that the arbitration clause will still stand even if the main contract is found to be void (Cass 1st Civ, May 17 963, Gosset; Cass 1st Civ, October 25 2005, Omenex). This holds true even if the contract is deemed non-existent or never to have been concluded – that is to say, an arbitration agreement might be valid even though the parties never agreed to the main contract (Cass 1st Civ, December 6 1988, Navimpex).

Multiparty agreements

Are multiparty agreements recognised?

Article 1453 of the Code of Civil Procedure implicitly allows multi-party arbitration proceedings. However, in such proceedings, the principle of equality between the parties grants to each individual party the right to choose its arbitrator, and such right may be waived only after the dispute arises (Cass 1st Civ, January 7 1992, Dutco). Under Article 1453 of the Code of Civil Procedure, if all the parties involved fail to agree on the constitution of the tribunal, the arbitral institution or, where there is no such institution, the judge acting in support of the arbitration, will appoint the arbitrators.

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