In SNF v Cytec Industries BV, the French Cour de Cassation (France's court of final recourse) decided that a French court may not review a tribunal's application of community competition rules in order to refuse to enforce an arbitral award, unless the enforcement would amount to a 'flagrant, real and concrete violation of international public policy'. This is an interesting application in the French context of the ECJ's Ecoswiss ruling. In Ecoswiss, the ECJ found that the non-application or misapplication of community competition law may give rise to a public policy defence in enforcement proceedings.
The dispute arose when SNF unilaterally rescinded its contract with Cytec. It claimed that the contract breached Article 81 of the EC Treaty (prohibiting anti-competitive agreements) and Article 82 (regarding abuse of a dominant position). In response, Cytec brought ICC arbitration proceedings in Brussels. In an award rendered in 2002, the tribunal found that the contract was void for breach of Article 81, for which SNF and Cytec shared responsibility, but that Cytec's actions did not constitute abuse of a dominant position. In a second award rendered in 2004, the tribunal ordered damages against SNF only, as SNF was found not to have suffered loss.
SNF challenged the award both in Belgium (the seat of the arbitration) and France (where enforcement was sought) alleging that the arbitrators had misapplied EC law. The award was set aside in Belgium, but enforcement was granted in the Paris Court of Appeal, on the basis of the Hilmarton jurisprudence by which French courts are not prohibited from enforcing awards which have been annulled in the jurisdiction of their seat.
SNF went on to challenge the Paris court's decision on enforcement on international public policy grounds, arguing that the tribunal had misapplied EC competition law. The Cour de Cassation rejected the appeal, and held that any review by the courts of an arbitral tribunal's application of competition rules should be a purely formal review, except in relation to 'flagrant, real and concrete breaches of international public policy'.
This decision reaffirms France's pro-enforcement stance in relation to arbitration and the reluctance of the courts to reopen issues considered by an arbitral tribunal or to review the merits of an award. In the court's view it is not sitting in judgment of the trial, but in judgment of the result of the award. It also demonstrates the strength of the principle of procedural autonomy of the Member States, as compared to the principle of effectiveness of EC Competition law or harmonisation of arbitration law within the EU.
(SNF v Cytec Industries BV, judgment no. 680 of 4 June 2008 of the French Cour de Cassation)