National arbitration laws
What legislation applies to arbitration in your jurisdiction?
The developments discussed below concern international arbitration only.
French arbitration law was codified in 2011. The main source of legislation on arbitration is Book IV of the Code of Civil Procedure. Title I deals with domestic arbitration, while Title II relates to international arbitration. Many provisions contained in Title I apply equally to international arbitration by virtue of Article 1506 of the code. Pursuant to Article 1504, an arbitration is international “when international trade interests are at stake” – that is, where the economic operation at stake involves a transfer of goods, money or know-how beyond borders, irrespective of the nationality of the parties, the applicable law or the location of the seat of the arbitration.
Other provisions relating to arbitration are scattered across the Civil Code (Articles 2059-2061), the Commercial Code (Articles L.721-3 and L.721-5) and other codes (eg, Article L.311-6 of the Code of Administrative Justice and Article L.615-17 of the IP Code).
Are there any mandatory laws?
Although French arbitration law gives the parties significant flexibility to agree their own procedural rules, they cannot depart from the following mandatory principles and provisions:
- The arbitration agreement is separable from the main contract (Article 1447 of the Code of Civil Procedure).
- The tribunal has jurisdiction to decide its own competence (Articles 1448 and 1465).
- Both the parties and arbitrators must act diligently and in good faith in the conduct of the proceedings (Article 1464).
- The tribunal must treat both parties equally and uphold the principle of due process (Article 1510).
- The deliberations of the tribunal must remain secret (Article 1479).
- The award should make reference to the submissions of the parties and state its reasons (Article 1482).
- The award is final and binding (Article 1484).
- The parties cannot waive their right to appeal the decision granting exequatur of an award (Article 1522).
- When an arbitral award was obtained by fraud, the award can be challenged in revision proceedings (Article 1502).
New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?
Yes. France signed the New York Convention on November 25 1958 and it entered into force on September 24 1959. However, the convention plays a residual role in France. Pursuant to Article VII(1) of the convention, “[t]he provisions of the present Convention shall not… deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon”. Article 1520 of the Code of Civil Procedure is more favourable to the recognition and enforcement of foreign awards than the convention.
Are there any reservations to the general obligations of the convention?
France initially made two reservations: the ‘commercial’ reservation and the ‘reciprocity’ reservation. The commercial reservation was withdrawn in 1989, and the reciprocity reservation now has little relevance since French law is more favourable to arbitration than the convention, and thus applies to enforcement and recognition issues in accordance with Article VII(1) of the convention.
Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?
France is a party to the 1961 European Convention on International Commercial Arbitration and the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
France is also a party to the 1968 Brussels Convention on Enforcement of Judgments in Civil and Commercial Matters (now replaced by the Brussels I Regulation) and the 1988 Lugano Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters. Such conventions are generally inapposite to arbitration, except with regard to a few specific issues (eg, the enforcement of arbitral anti-suit injunctions and the award of damages for the initiation of court proceedings in breach of an arbitral agreement).
In addition, France is party to more than 100 bilateral investment treaties.
Has your jurisdiction adopted the UNCITRAL Model Law?
Are there any impending plans to reform the arbitration laws in your jurisdiction?
No. The last major reform was implemented through Decree 2011-48 (January 13 2011) and came into force on May 1 2011. More recently, Law 2016-1547 (November 18 2016) modified Article 2061 of the Civil Code to allow non-professionals to resort to domestic arbitration for purely internal disputes.
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.
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.
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).
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.
Criteria for arbitrators
Are there any restrictions?
In international arbitration, there are no restrictions on the number of arbitrators and legal persons can be appointed as arbitrators.
Even though possession of civil rights is expressly required only in domestic arbitrations, it is generally accepted that such requirement similarly applies to international arbitrations.
Further, some restrictions are inherent to certain professions that apply both to domestic and international arbitration. Active French judges cannot serve as arbitrators; conversely, French law professors can act as arbitrators unless it would be contrary to the state’s interests. More generally, other French civil servants may act as arbitrators on the condition that they are not remunerated for their work and obtain appropriate authorisation from their supervisor.
What can be stipulated about the tribunal in the agreement?
The arbitration agreement can either appoint the arbitrators directly or provide a procedure for appointing them (Article 1508 of the Code of Civil Procedure). In the latter case, the arbitration agreement can set out the procedure to be followed or simply make reference to a set of institutional or procedural rules. If there is any inconsistency between the procedure set in the clause and the rules incorporated by reference, usually the former are followed. The appointment of the tribunal should abide by the overarching principle of equality between the parties unless the parties agree otherwise after the inception of the dispute (Cass 1st Civ, January 7 1992, Dutco).
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?
In international arbitration, there is no default number of arbitrators.
Article 1452 provides a default procedure for appointing the tribunal:
- The arbitral institution or, where there is no such institution, the judge acting in support of the arbitration, appoints the sole arbitrator.
- Both parties appoint one arbitrator and the two arbitrators then choose the third arbitrator. In this case the arbitral institution or, where there is no such institution, the judge acting in support of the arbitration, will supplement any failure by the parties or the party-appointed arbitrators to make an appointment within one month.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?
Article 1456(2) of the Code of Civil Procedure provides that a prospective arbitrator must disclose any element which may affect his or her independence and impartiality before accepting the appointment.
According to Article 1454 of the code, the parties may refer any dispute relating to the constitution of the tribunal to the arbitral institution (eg, where a party refuses to confirm the appointment of an arbitrator) or, where there is no such institution, the judge acting in support of the arbitration. Similarly, once the tribunal is constituted, a party’s challenge of an arbitrator should be submitted to the arbitral institution or, in its absence, the judge acting in support of the arbitration (Article 1456(3) of the code).
Under Article 1458 of the Code of Civil Procedure, an arbitrator can be disqualified on the agreement of all the parties to the proceedings.
How should an objection to jurisdiction be raised?
Under Article 1465 of the Code of Civil Procedure, the tribunal has exclusive jurisdiction to rule on objections to its jurisdiction.
According to the majority of legal scholars, a party must raise all its objections to the tribunal’s jurisdiction before addressing the merits of the case, otherwise it is deemed to have waived any jurisdictional objection. By way of exception, if the jurisdictional issue is grounded on international public policy, which is outside the parties’ autonomy, a party is still entitled to raise this objection at a later stage of the proceedings.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
An arbitrator can step down after his or her appointment if there is a legitimate reason that prevents him or her from fulfilling the relevant duties (Article 1457 of the Code of Civil Procedure). The parties can also unanimously decide to remove an arbitrator (Article 1458). Further, an arbitrator might be successfully challenged by one party (Article 1456).
In these circumstances, the parties may decide jointly on how to appoint a substitute arbitrator. Failing such an agreement, Article 1473 instructs the parties to follow the same procedure used for the appointment of the original arbitrator.
Powers and obligations
What powers and obligations do arbitrators have?
A tribunal is empowered to order any provisional or interim measure that it deems appropriate (Article 1468 of the Code of Civil Procedure).
The tribunal’s powers include investigative measures such as the appointment of an expert to provide forensic evidence, the examination of a witness or requests for document production (Article 1467).
If a party fails to comply with the tribunal’s orders, the tribunal may draw adverse inferences against it.
The arbitrators’ primary obligation is to decide the dispute submitted to them (Article 1457) in a timely manner (Article 1464). The award must be rendered within the timeframe agreed by the parties or, in the absence of such agreement, within six months (Article 1456). In the course of the proceedings, arbitrators must act loyally and in good faith towards the parties. In particular, arbitrators must be independent and impartial, and fulfil their duty to disclose any circumstances that may cast doubts regarding their ability to maintain this standard. They must be diligent in their handling of the evidence submitted by the parties and uphold essential principles of procedural fairness (eg, the equal treatment of the parties). Each arbitrator must take part in the deliberations of the tribunal and the making of the award.
Liability of arbitrators
Are arbitrators immune from liability?
On the one hand, in principle an arbitrator is immune from liability in the exercise of his or her jurisdictional mandate, except in case of “violation of his or her duties [that is] incompatible with his or her mandate” (Paris Court of Appeals, May 22 1991). This includes misrepresentation, fraud, denial of justice, criminal offence or lack of impartiality and independence. Accordingly, arbitrators cannot be held liable for the content of the award.
On the other hand, an arbitrator can be found liable for any breach of his or her contractual obligations towards the parties (Paris Court of Appeals, October 12 1995). For instance, according to Article 1479 of the Code of Civil Procedure, arbitrators must ensure the secrecy of deliberations. However, a breach of confidentiality is only a civil wrong and not a criminal offence.
Communicating with the tribunal
How do the parties communicate with the tribunal?
The parties, together with the tribunal, may choose any means of communication they see fit. Nonetheless, the tribunal must always ensure that the principle of adversarial proceedings is respected which means, for example, that each party must have immediate access to all documents communicated to the tribunal by the other parties. In this vein, the tribunal can, pursuant to Article 1476(2) of the Code of Civil Procedure, refuse to admit into evidence documents filled after the deadline set out in the procedural calendar. The tribunal may, for practical reasons, engage in ex parte communications with one of the parties. However, in this case the tribunal must inform all of the other parties of these discussions and their content immediately.
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?
The tribunal is not required to reach a unanimous decision; a majority decision suffices. If a minority of the tribunal refuses to sign the award, the award must mention this, but it will still have the same effect as if it had been signed by all of the arbitrators.
The parties can waive the requirement of a majority decision.
If the tribunal is tied, the presiding arbitrator may decide alone (Article 1513(1) of the Code of Civil Procedure).
Are there any disputes incapable of being referred to arbitration?
Arbitrability is addressed in Articles 2059 and 2060 of the Civil Code.
Under Article 2059, a dispute relating to rights which parties are not free to dispose of cannot be referred to domestic arbitration. Whether Article 2059 applies to international arbitrations seated in Paris is subject to debate.
Article 2060 sets out an illustrative list of disputes incapable of being referred to arbitration, including matters of status or capacity of natural persons, divorce and legal separation. Article 2060 states that matters relating to public order may not be submitted to arbitration. However, in the context of international arbitration, French courts have ruled that arbitral tribunals can decide on matters involving public order.
According to Article 2060(1), matters involving public entities cannot be submitted to arbitration. By way of exception, certain public entities engaging in industrial and commercial activities can be authorised by decree to submit their disputes to arbitration (Article 2060(2)). These limitations do not apply to international arbitration; it suffices to prove the public entities’ consent without referring to their national law (Cass 1st Civ, May 2 1966, Galakis; Paris Court of Appeals, June 13 1996, KFTCIC).
If a party objects to the arbitrability of the dispute based on French administrative public order, as an exception it must initiate annulment proceedings in front of the French administrative courts rather than French civil courts (French Conflicts Tribunal, May 17 2010, Inserm).
Can the arbitrability of a dispute be challenged?
Yes. The parties can object to the arbitrability of the dispute, both before the tribunal and later in enforcement proceedings.
Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
French arbitration law adopts an expansive version of the principle of competence-competence.
On the one hand, this principle empowers the tribunal to rule on its own jurisdiction. This principle is enshrined in Article 1465 of the Code of Civil Procedure (and applies to international arbitration by virtue of Article 1506(3) of the code).
On the other hand, this principle prevents national courts from deciding on the jurisdiction of the tribunal, except when the tribunal has not been constituted yet and the clause is manifestly void or inapplicable.
After the tribunal has been constituted, a party may challenge the tribunal’s decision on its jurisdiction only in subsequent annulment or enforcement proceedings.
Starting an arbitration proceeding
What is needed to commence arbitration?
In most cases, the proceedings start with one party sending a request for arbitration to the other parties and (if applicable) to an institution for notification to the other parties. The next step is the filing of an answer, the constitution of the tribunal and agreement of the timetable and specific procedural rules.
Under Article 1456(1) of the Code of Civil Procedure, the proceedings are deemed to be commenced as of the appointment of the members of the tribunal. However, the parties can agree to a different starting point.
Are there any limitation periods for the commencement of arbitration?
A claim would be admissible only provided that all relevant statutes of limitation are complied with. That aside, there is no specific limitation period regarding the commencement of arbitration proceedings. However, the parties can provide for a specific limitation period in their arbitration agreement.
In addition, submitting a claim to arbitration interrupts any limitation period, as it would in litigation.
Are there any procedural rules that arbitrators must follow?
Parties are free to choose the procedural rules in the arbitration agreement or at any time during the proceedings. Without such agreement, the tribunal may conduct proceedings as it sees fit without having to comply with the specific civil procedure provisions (Article 1509 of the Code of Civil Procedure). The tribunal must always ensure that the parties are treated equally and must uphold the principle of due process (Articles 1464(2) and 1510). In addition, both the parties and the tribunal must act diligently and in good faith in the conduct of the proceedings (Article 1464(3)).
Are dissenting opinions permitted under the law of your jurisdiction?
Dissenting opinions are permitted (Article 1513 of the Code of Civil Procedure; Paris Court of Appeals, October 9 2008).
Can local courts intervene in proceedings?
Before the tribunal is constituted, any party can apply to the local courts for interim or conservatory measures or measures relating to the taking of evidence (Article 1449 of the Code of Civil Procedure).
In the absence of an arbitral institution, the parties can refer a dispute relating to the constitution of the tribunal to the judge acting in support of the arbitration (Article 1454).
If a third party holds a document relevant for the purposes of the proceedings, the tribunal may allow a party to seek an order for disclosure from the judge having jurisdiction over the third party (Article 1469).
Can the local courts assist in choosing arbitrators?
Where the parties have not referred their dispute to an arbitral institution, the judge acting in support of the arbitration will decide on any dispute relating to the constitution of the tribunal (Article 1454 of the Code of Civil Procedure).
The judge acting in support of the arbitration may eventually choose arbitrators when:
- the parties cannot agree on the sole arbitrator (Article 1452(1));
- the party-appointed arbitrators fail to choose the third arbitrator (Article 1452(2)); or
- parties to multi-party arbitration proceedings cannot reach an agreement on the appointment of arbitrators (Article 1453).
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
There are no specific provisions with regard to default arbitration proceedings.
French case law considers awards rendered by default to be valid. The defendant party must have been informed of the existence of the arbitral proceedings. However, the award may be set aside if the defendant proves that it was materially impossible for it to appear before the tribunal. In addition, the absent party must have had the possibility to intervene at any stage of the proceedings and present its arguments, which means that it must be kept informed of the subsequent development of the proceedings. Moreover, the absent party cannot be deemed to acquiesce to the claims presented by the other party.
Since arbitration is purely contractual in nature, a tribunal cannot order a third party to appear before it.
In what instances can third parties be bound by an arbitration agreement or award?
The French courts’ have an extensive approach to the effects of arbitration agreements on third parties.
In particular, a party taking part in the negotiation, performance or termination of the underlying contract (which contains the arbitration agreement) – or assuming the rights and obligations of an initial party – can be bound by its arbitration clause (Cass 1st Civ, March 27 2007).
Arbitral awards have no res judicata effect on third parties. However, the parties can rely on the award in its relation to third parties in order to ascertain the new legal obligations between the parties to the award.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
The parties are free to choose the language of the proceedings, as French arbitration law sets no default rules. Most institutional arbitration rules provide that when the parties do not agree on the language of the proceedings, the tribunal can determine the language of the arbitration (eg, Article 20 of the 2012 International Chamber of Commerce Rules of Arbitration).
Regarding the seat of arbitration, the parties can choose this in the arbitration clause or in a subsequent agreement. If there is no agreement, in ad hoc arbitration the seat will be decided by the arbitrators. For institutional arbitrations, arbitration rules generally provide that it will be for the institution to determine the place of arbitration.
How is evidence obtained by the tribunal?
Unless the parties agree otherwise (Article 1056(3) of the Code of Civil Procedure), the tribunal can order a party to produce documents and even impose penalties on recalcitrant parties (Article 1467).
If a third party holds a document relevant for the purposes of the proceedings, the tribunal may allow a party to seek an order for disclosure from the judge having jurisdiction over such third party (Article 1469).
What kinds of evidence are acceptable?
The parties usually decide on the rules applicable to the taking of evidence. They either do so directly or through a reference to institutional rules of procedure. Among other things, the parties can decide to allow or refuse discovery. Arbitrators generally enjoy broad discretion to determine the admissibility or relevance of any evidence and may take guidance from the International Bar Association (IBA) Rules on the Taking of Evidence in International Commercial Arbitration (without necessarily being bound by them).
Is confidentiality ensured?
French arbitration law provides for the confidentiality of domestic arbitration only.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
In enforcement proceedings before French courts, the arbitral award and the arbitration clause are not part of the public record. However, the parties’ written pleadings filed to set aside an international award rendered in France, or an appeal against the ex parte decision granting recognition of the award, are part of the public record, and French courts do not have to protect the confidentiality of these pleadings.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
No professional standard exists in and of itself. However, a consistent body of ethical rules has flourished. It concerns primarily arbitrators’ independence and impartiality. The IBA Guidelines on Conflicts of Interest in International Arbitration plays a key role in this regard. Other ethical standards have been adopted by arbitral institutions as well.
Ethical rules for counsel in arbitration is a delicate issue, with several sets of rules potentially applicable (ie, those of the lawyer’s jurisdiction and the seat of arbitration, or any set of generally accepted principles, such as the IBA Principles of Conduct for the Legal Profession).
Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?
Usually, the tribunal assesses the costs of arbitration, which include administrative costs, arbitrators’ fees and all other costs incurred by the parties in relation to the preparation and conduct of proceedings.
The tribunal decides on the allocation of costs according to the rules found in the parties’ agreement or the arbitration rules. Most of the time, the tribunal apportions costs between the parties depending on the relative success of their claims.
Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?
No specific provision expressly empowers tribunals to order security for costs. This issue is under debate in France.
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
Arbitral awards are recognised and enforced in France when applicants can prove their existence and their recognition and enforcement does not violate international public policy (Article 1514 of the Code of Civil Procedure).
Under Article 1515, the applicant must provide the original award and the arbitration agreement or authenticated copies of these documents (with French translations where applicable).
The president of the Tribunal de Grande Instance de Paris has jurisdiction over the recognition and enforcement of international arbitral awards.
Exequatur of awards is granted in ex parte proceedings where representation by a French attorney is mandatory (Article 813 of the Code of Civil Procedure).
Timeframe for delivery
Are there any time limits on delivery of the award?
Parties may agree a timeframe for the tribunal to decide the dispute.
No express rule governs this issue in international arbitration.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
All remedies are available provided that they are not contrary to French international public order.
In 2009 the Court of Cassation put an end to the debate surrounding the enforcement of arbitral anti-suit injunctions, which it held to be enforceable in France (Cass 1st Civ, October 14 2009).
The enforcement of awards of punitive damages is debated. In French law, damages can only be compensatory and therefore should not exceed the amount of the loss sustained by the injured party. However, punitive damages are not per se contrary to French international public order, provided that the amount of those damages is not “disproportionate in light of the loss sustained and the contractual breach” (Cass 1st Civ, December 1 2010).
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Pending constitution of the tribunal, local courts may order instruction measures (ie, measures aimed at obtaining evidence or preventing the disappearance or destruction of evidence), as well as provisional and conservatory measures (Articles 1449 and 1506(1) of the Code of Civil Procedure).
Once the tribunal has been constituted, the tribunal may issue any conservatory or provisional measures that it deems appropriate and may attach penalties to such orders (Article 1468). However, pursuant to the same article, national courts retain exclusive jurisdiction to order conservatory attachments and judicial securities. Similarly, only local courts can order third parties to produce documents in relation to the arbitration proceedings (Article 1467).
Can interest be awarded?
It is commonly accepted that tribunals can award interest and that they enjoy a broad discretion to do so. In most cases, the applicable law or the terms of the contract provide little guidance on this.
At what rate?
There is no express rule on this issue. However, French courts consider that, according to Article 1153-1 of the Civil Code, the amount of compensation awarded accrues interest at the statutory rate from the date of the award, even if the award is silent on this point (Cass 1st Civ, June 30 2004).
Is the award final and binding?
Awards are binding as soon as they are rendered (Article 1484 of the Code of Civil Procedure).
In international arbitration, awards can be challenged only in annulment proceedings (Article 1518) and are per se provisionally enforceable (Article 1526).
Notwithstanding this, if the award is provisionally enforceable and enforcement may lead to excessive consequences, national courts may stay or set conditions for enforcement of the award (Articles 1497 and 1526).
What if there are any mistakes?
After the award is rendered, the parties can apply to the tribunal to interpret the award, rectify clerical mistakes or make an additional award where it failed to rule on a claim. The tribunal must do so after hearing the parties or giving them the opportunity to be heard. If the tribunal cannot be reconvened and if the parties cannot agree on the constitution of a new tribunal, the national courts will have jurisdiction to decide the aforementioned requests (Articles 1485 and 1506(4) of the Code of Civil Procedure).
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
The parties are entitled to waive their right to bring an action to set aside the award. However, the enforcement of the award can always be challenged (Article 1522 of the Code of Civil Procedure).
What is the procedure for challenging awards?
Awards rendered in France may be challenged by way of either an action to set aside the award (Article 1518 of the Code of Civil Procedure) or an appeal against the order granting enforcement within one month following service of the order or award (Article 1523). Since the 2011 reform, Article 1522 of the code provides that parties can waive their right to bring an action to set aside the award. Challenges must be brought before the appeal court of the place where the award was made (Article 1519 of the Code of Civil Procedure).
On what grounds can parties appeal an award?
Article 1520 of the Code of Civil Procedure provides only the following limited grounds for setting aside awards:
- The tribunal wrongly upheld or declined jurisdiction.
- The tribunal was not properly constituted.
- The tribunal ruled without complying with its mandate.
- The principles of due process and fair trial were violated.
- The award is contrary to public policy.
What steps can be taken to enforce the award if there is a failure to comply?
If the losing party does not comply with the award voluntarily, the winning party may commence enforcement proceedings. Under French law, the winning party may seek assistance from bailiffs to locate the losing party’s assets and conduct the necessary operations for the enforcement of the award.
Can awards be enforced in local courts?
The parties must seek exequatur of the award before it can be enforced in local courts.
How enforceable is the award internationally?
This depends on the rules of the foreign state in which enforcement of the award is sought, together with applicable treaties.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
In principle, assets belonging to sovereign states are immune from execution in France unless they are:
- assets used by the state for purely commercial purposes; or
- assets over which the state has specifically waived its immunity.
In 2016 Articles L.111-1-1, L.111-1-2 and L.111-1-3 of the Code of Civil Execution Procedures clarified the conditions under which enforcement proceedings can target state assets.
Are there any other bases on which an award may be challenged, and if so, by what?
Parties may apply to the tribunal for revision of the award in circumstances where:
- the winning party obtained a favourable decision by fraud;
- a party withheld decisive evidence;
- the tribunal ruled on the basis of evidence that was judicially found to be fabricated or forged after the award was rendered; or
- the tribunal ruled on the basis of statements and testimonies that were judicially found to false after the award was rendered.
How enforceable are foreign arbitral awards in your jurisdiction?
In general, French courts are liberal regarding the recognition and enforcement of arbitral awards.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
French courts can recognise and enforce an arbitral award regardless of the fact that the award was set aside at the seat of arbitration (eg, Cass 1st Civ, June 10 1997, Hilmarton; Cass 1st Civ, June 29 2007, Putrabali).
Rules and restrictions
Are there rules or restrictions on third-party funders?
No legal provisions or case law regulate or restrict third-party funding in France.
Class-action or group arbitration
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?
Recently, class actions have been introduced into French litigation. No similar provision exists for arbitration.
Are there any hot topics or trends emerging in arbitration in your jurisdiction?
The ongoing revision proceedings before the Paris Court of Appeals in the well-known Tapie case have attracted particular attention on two legal points:
- In international arbitration, according to Article 1502(2) of the Code of Civil Procedure, a request for revision of the award must be submitted to the same arbitral tribunal. However, this provision fails to contemplate the possibility – as occurred in Tapie – that a party applies for revision of the award alleging that an arbitrator committed a fraud. In such case, some legal scholars argue that a new tribunal should be constituted. This issue remains unsettled: the Paris Court of Appeals instead ruled that this arbitration was merely domestic which implied that the Paris Court of Appeals had jurisdiction to revise the award in lieu of the arbitral tribunal (Article 1502(3)).
- Therefore, much of the debate centred on the domestic or international character of the Tapie arbitration. Under Article 1504, an arbitration is international when international trade interests are at stake. In Tapie the Paris Court of Appeals subtly distinguished between situations where the parties generally expressed their consent to arbitration in an arbitration clause included in the main contract and those where the parties agreed to refer a specific dispute to arbitration. In the former case, the Paris Court of Appeals reaffirmed its jurisprudence that all of the stakeholders and features of the economic transaction set in the main contract should be taken into account to determine whether international trade interests were at stake. On the contrary, the Paris Court of Appeals held that, in the latter case, as happened in the Tapie arbitration, the international or domestic character of the arbitration will depend only on the parties and the specifics of the dispute. Following this restrictive approach, the Paris Court of Appeals ruled that the Tapie arbitration was domestic.
The Court of Cassation recently upheld this decision (Cass 1st Civ, June 30 2016).
In 2016 the Paris Court of Appeals issued three decisions on annulment proceedings initiated against investor-state arbitral awards. The first decision annulled the award because it awarded damages under a legal basis that had not been claimed or discussed by the parties (Paris Court of Appeals, March 15 2016). More interestingly, in the second case the Paris Court of Appeals found that the tribunal wrongly upheld its jurisdiction under the Energy Charter Treaty since the Paris Court of Appeals interpreted the language contained in Article 1(6) c) “claims to money… associated with an investment” as referring to an objective notion of investment which would include a substantial contribution that was lacking in this case (Paris Court of Appeals, April 12 2016). In the final case, the Paris Court of Appeals denied the request to vacate the award as it considered that the tribunal had rightly stated that the claimant was a private entity that was not to be conflated with one of its main shareholders, the Republic of Tatarstan, and as such had standing to bring a claim under the Russia-Ukraine Bilateral Investment Treaty (Paris Court of Appeals, November 29 2016).