Commercial Arbitration: France

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

France

France is a party to the New York Convention, which entered into force on 24 September 1959. France applies the New York Convention on the basis of reciprocity. On 27 November 1989, France withdrew its commercial reservation.

As French arbitration law is more liberal than the New York Convention, the Convention has a limited scope of application before the French courts (article 7(1) of the New York Convention) (Civ. 1, 29 June 2007, Putrabali, No. 05-18.053).

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

France

France is a party to various multilateral treaties, including the European Convention on International Commercial Arbitration (signed on 21 April 1961).

It is also a party to the Energy Charter Treaty (signed on 17 December 1994) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (signed on 18 March 1965), which contain provisions on recognition and enforcement.

3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

France

French arbitration law is set out in the French Code of Civil Procedure (FCCP), as interpreted by French case law. Articles 1442 to 1503 of the FCCP apply to domestic arbitration (together with articles 2059 to 2061 of the French Civil Code (FCC)), while articles 1504 to 1527 of the FCCP apply to international arbitration. An arbitration is considered international where it “involves the interests of international commerce” (FCCP, article 1504).

French arbitration law is not based on the UNCITRAL Model Law.

The FCCP applies to all arbitral proceedings with a seat in France. Some provisions are mandatory and others only apply where the parties have not agreed otherwise.

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

France

France has a large number of arbitration bodies. The International Chamber of Commerce, considered to be one of the leading arbitral institutions globally, is headquartered in Paris.

Other arbitral institutions located in France include the French Arbitration Association, the Mediation and Arbitration Centre of Paris, the International Arbitration Chamber of Paris, and the European Court of Arbitration.

All of these institutions can act as appointing authority. 

There are also a number of specialised arbitral institutions, such as the Maritime Arbitration Chamber of Paris and the French Reinsurance and Insurance Arbitration Centre.

5. Can foreign arbitral providers operate in your jurisdiction?

France

Yes.

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

France

The International Chamber of the Paris Court of Appeal was created in 2018, with jurisdiction to hear all disputes relating to international arbitration (for instance, applications to set aside arbitration awards and appeals against orders denying recognition or enforcement of international arbitration awards made in France or abroad).

French courts (in particular, in Paris) are familiar with arbitration and France is considered to be a particularly arbitration-friendly jurisdiction. For instance, an arbitral award set aside at the seat of arbitration may be recognised or enforced in France (Civ. 1, 29 June 2007, Putrabali, No. 05-18.053).

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

France

An arbitration agreement may cover existing or future disputes (FCCP, article 1442) provided they are arbitrable (see question 8).

In domestic arbitration, the arbitration agreement must be in writing (FCCP, article 1443) and designate the arbitrators or provide for a method of appointment (FCCP, article 1444).

In domestic arbitration, where there is an existing dispute, the arbitration agreement must define the scope of the dispute (FCCP, article 1445). If the arbitration agreement relates to future disputes, it is not binding on a non-professional party, unless that party chooses to rely on it (FCC, article 2061).

By contrast, in international arbitration, the validity of an arbitration agreement is not subject to any particular conditions, whether substantive (Civ. 1, 5 January 1999, Zanzi, No. 96-24.430) or procedural (FCC, article 1507), although it is common for such agreements to be concluded in writing. The validity of a clause is assessed by reference to the common intention of the parties, subject to international public policy, without reference to any domestic law (Civ. 1, 20 December 1993, Dalico, No. 91-16.828).

8. Are any types of dispute non-arbitrable? If so, which?

France

Certain disputes are not arbitrable, for example, those involving certain types of extra-patrimonial rights (eg, personal status), criminal sanctions or tax liability.

Generally speaking, disputes involving economic interests are arbitrable.

The fact that  public policy rules are involved does not render the dispute inarbitrable (Paris, 29 March 1991, Ganz, Rev. arb. 1991, 478). However, in respect of certain types of relationship (for example, international employment relationships, Soc., 12 March 2008, No. 01-44.654), an agreement to arbitrate future disputes is not binding on an employee unless it chooses to rely on it once the dispute has arisen.

Whether a dispute is arbitrable requires a case-by-case analysis and certain areas of law have given rise to nuanced and evolving solutions. For instance, while the licensing or assignment of IP rights is arbitrable, the validity of IP rights was generally considered to be inarbitrable until a 2008 decision of the Paris Court of Appeal holding that the decision of an arbitrator about this is binding inter partes (Paris, 28 February 2008, Rev. arb. 2009,168).

9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

France

Under French law, a contract, and thus an arbitration clause, is, in principle, only binding between the parties (FCC, article 1199).

However, French courts consider that a third party may be bound by an arbitration clause where it has been directly involved in the negotiation, performance or termination of the contract containing the arbitration clause, this involvement being viewed as giving rise to a presumption of implied consent to the clause (Civ. 1, 27 March 2007, No. 04-20.842). This issue can, for example, arise in situations involving state entities, groups of companies or interrelated contracts.

A third party may also be bound by an arbitration clause as a result of “piercing the corporate veil” where the third party has sought to hide his or her identity behind a legal entity (Civ. 1, 11 June 1991, Orri, No. 90-11.282).

Finally, a third party may be bound by an arbitration clause if the contractual rights to which the arbitration clause refers have been assigned to that party (Civ. 1, 27 March 2007, No. 04-20.842).

French arbitration law does not contain specific provisions regarding joinder or third-party notices. In the context of ad hoc arbitration, the French courts consider that an arbitral tribunal may not allow joinder unless all the parties agree. In the context of institutional arbitration, the joinder of third parties will be decided in accordance with the applicable arbitration rules.  

10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

France

There are no specific provisions on consolidation in French arbitration law. It is generally accepted that an arbitral tribunal with a seat in France may not consolidate separate arbitral proceedings without the parties' consent (which can be express or implied). This consent may be the result of the parties' choice of arbitration rules.

11. Is the "group of companies doctrine" recognised in your jurisdiction?

France

Although there is no “group of companies doctrine” as such, French courts rely on various concepts to extend the effects of an arbitration clause signed by a member of a group of companies to another entity of this group, including the concepts of “alter ego”, fraud or manifest abuse (Paris, 16 October 2018, Rev. arb. 2018, 837) or the involvement in the negotiation, performance or termination of the contract containing the arbitration clause (see question 9).

12. Are arbitration clauses considered separable from the main contract?

France

Arbitration clauses are considered legally autonomous and separable from the main contract (FCCP, articles 1447 and 1506 – 1°). Their validity is therefore not affected by the invalidity, the non-existence or the ineffectiveness of the main contract.

13. 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 tribunals jurisdiction and competence?

France

The principle of competence-competence is well recognised in France in both domestic and international arbitration.

Pursuant to the “positive” effect of this principle, the arbitral tribunal has priority over state courts to decide on its own jurisdiction (FCCP, articles 1465 and 1506 – 3°). Pursuant to its “negative” effect, French courts must decline jurisdiction in the presence of an arbitration agreement, unless (i) the arbitral tribunal is not yet seized and (ii) the court finds that the arbitration agreement is manifestly null or manifestly inapplicable (FCCP, article 1448). This negative effect does not prevent a party to request interim or conservatory measures before the French courts, unless the parties agree otherwise (see question 26).

However, French courts retain the power to review the jurisdiction of the arbitral tribunal at the annulment or enforcement stage of an arbitral award (FCCP, article 1520 – 1°).

14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

France

There are no particular constraints on the drafting of an arbitration clause, although the clause should clearly express the intent of the parties to submit their dispute to arbitration. It is also recommended that the parties indicate the nature and scope of the disputes covered by the clause, and agree on the applicable procedural rules (whether institutional or ad hoc), the language of the proceedings and the substantive law applicable to the contract.

If the parties wish to waive their right to apply to set aside the award, they must expressly state this in the clause (FCCP, article 1522).

15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

France

Both institutional and ad hoc international arbitrations are common in France. UNCITRAL Rules are frequently used in ad hoc international arbitrations.

16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

France

Pursuant to a key principle of French international public policy, the parties must have equal rights in respect of the designation of the arbitral tribunal (Civ. 1, 7 January 1992, Dutco, Rev. arb. 1992, 470). Therefore, when drafting a multi-party arbitration agreement, parties should ensure that their method of appointment of the arbitral tribunal complies with this principle. For instance, parties can agree that the claimants jointly appoint an arbitrator and that the respondents do the same and that the presiding arbitrator is then appointed by the two co-arbitrators, but if one side is unable to agree on a nomination, the entire tribunal will have to be appointed by the agreed appointing authority (institution or otherwise).

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

France

French arbitration law does not contain specific provisions as to the commencement of arbitral proceedings. Therefore, parties should provide for this in their arbitration clause either directly or by reference to arbitration rules. In practice, arbitral proceedings are commenced with a request for arbitration from one party to the other (or, as the case may be, to the relevant arbitral institution).

The arbitral tribunal is deemed to be constituted and seized of the dispute once all arbitrators have accepted their appointment (FCCP, articles 1456 and 1506 – 2°). In international arbitration, the parties can agree otherwise.

Aside from the French limitation provisions that may apply to the dispute (if governed by French law), there is no specific provision on limitation periods relating to the commencement of arbitral proceedings.

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

France

In domestic arbitration, the arbitral tribunal decides in accordance with the rules of law unless the parties empower it to decide ex aequo bono (FCCP, article 1478).

In international arbitration, the arbitral tribunal must apply the law chosen by the parties or, failing such choice, the law it considers appropriate. It must also take into account trade usages (FCCP, article 1511). The applicable law may be a national law, transnational rules of law (eg, lex mercatoria) or general principles of law (eg, UNIDROIT Principles). When determining the substantive law in the absence of a choice, the arbitral tribunal is under no duty toapply conflicts of laws rules.

Where the substantive law is unclear, the arbitral tribunal may ask the parties for clarification and additional legal evidence and remains ultimately free to interpret it as it sees fit.

The arbitral tribunal may also be asked to act ex aequo et bono (FCCP, article 1512).

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

France

In domestic arbitration, only a physical person may act as arbitrator.

Save for this, there are no specific restrictions placed on the parties' choice of arbitrator, unless otherwise agreed by the parties (nationality, experience, professional or legal skills…).

Nevertheless, the parties should have equal rights in respect of the designation of the arbitral tribunal. Any arbitrator (sole arbitrator, co-arbitrator or chairperson) must be and remain impartial and independent of the parties throughout the arbitral proceedings (FCCP, articles 1456 and 1506 – 2°).

20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

France

Foreigners may act as arbitrators in France. However, visa requirements might apply depending on their country of origin.

21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

France

A distinction must be drawn between institutional and ad hoc arbitration (FCCP, articles 1452 and 1506 – 2°). In the latter case, if a party fails to appoint an arbitrator, the appointment will be made by either the appointing authority agreed upon by the parties or the judge who has jurisdiction to support the arbitration at the seat of the arbitration (in domestic arbitration, the president of the Tribunal judiciaire, unless the clause expressly refers to the president of the Commercial Court (FCCP, article 1459) and in international arbitration, the president of the Paris Tribunal judiciaire (FCCP, article 1505).

In the case of institutional arbitration, the arbitral institution makes the appointment in accordance with the applicable rules.

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

France

Arbitrators cannot be sued for errors in their reasoning or decision. Nevertheless, arbitrators may incur civil liability in the event of wilful misconduct, fraud, gross negligence or denial of justice (Civ. 1, 15 January 2014, No. 11-17.196). Moreover, an arbitrator who fails to disclose circumstances or facts that could raise doubts as to his or her independence or impartiality may be held liable if the award is subsequently set aside on that ground.

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

France

There is no specific means to secure payment of arbitrators' fees. In practice, arbitrators or arbitral institutions often ask for an advance on costs, payable in equal shares by the parties.

Arbitrators can sue a party that refuses to pay them. The French Supreme Court has held that parties to an arbitration are jointly liable for the payment of the arbitrators’ fees (Civ. 1, 1 February 2017, No. 15-25.687).

Institutions will generally provide fundholding services.

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

France

A party may challenge an arbitrator for lack of independence or impartiality (FCCP, articles 1456 and 1506 – 2°). An arbitrator must disclose any fact or circumstance that may affect the arbitrator's judgement or create in the mind of the parties a reasonable doubt as to the arbitrator's independence or impartiality. A challenge may also be brought if the arbitrator lacks a competence that is specifically required at the time of appointment.

In the case of ad hoc arbitration, challenges may be made to the relevant judge within one month of the disclosure or discovery of the fact in question.

In the case of institutional arbitration, the institution will decide the issue in accordance with its rules (FCCP, article 1456 – 3°).

French courts do not directly refer to the IBA Guidelines on Conflicts of Interest in International Arbitration. The Guidelines may however be taken into account by the arbitrator when deciding what to disclose and by arbitral institutions when ruling on a challenge.

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

France

Before the tribunal is constituted, state courts have jurisdiction to order interim relief, unless the parties agree otherwise.

State courts may order different types of measures such as: (i) an interim payment of any undisputed amount, (ii) investigative measures, or (iii) any measure to protect the status quo, or to ensure compliance with the award.

French courts do not order anti-suit injunctions.

Once the arbitral tribunal is constituted, it may order any interim relief it deems appropriate, save for attachment orders over which the French courts have exclusive jurisdiction.

Arbitral tribunals have a broad discretion in respect of the types of interim measure they can order, although they do not have powers to compel performance of their orders.

Anti-suit injunctions have in practice been ordered by arbitral tribunals seated in France.

26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

France

Although it has been argued that the French courts could, in theory, order a party to provide security for costs, this is not done in practice.

An arbitral tribunal seated in France may order a party to provide security for costs.

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

France

In domestic arbitration, the fundamental rules of French civil procedure must be applied by the arbitral tribunal (FCCP, article 1464).

In international arbitration, the parties and tribunals are free to determine the rules governing the conduct of the procedure, provided certain mandatory guarantees are respected (ie, equality between the parties and due process (FCCP, article 1510)). In addition, there is an obligation of loyalty imposed on the parties and the arbitrator (FCCP, article 1464 – 3°and 1506 - 3°), the scope and content of which are still debated.

28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

France

The failure of a party to participate in an arbitration does not invalidate it, as long as the party is informed of its existence and is not prevented from participating.

Failure to participate in the arbitration does not constitute an acknowledgment of the other party’s claim. In practice, when a party fails to participate, the tribunal will consider and decide on the factual and legal basis of the other party’s claims.

There is no specific recourse available against an award on the grounds of the non-participation of a party in the arbitration, provided that due process has been respected.

29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

France

It is for each party to establish, through evidence, the facts supporting its claim. The tribunal may order fact-finding measures, but cannot base its decision on facts which have not been established through evidence in the course of the arbitration.

The parties and the tribunal are largely free to determine rules for the taking of evidence, and the tribunal has discretion as to the admissibility and weight of evidence adduced before it.

In practice, documentary evidence is important, and written witness statements and expert reports are commonplace. Where witnesses or experts provide written evidence, requests for them to testify orally and be cross-examined during a hearing are rarely denied.

The IBA Rules on the Taking of Evidence in International Arbitration are widely recognised and routinely referred to in international arbitrations. The Prague Rules are also referred to, from time to time, by tribunals having their seat in France.

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

France

Before the arbitral tribunal is constituted, a party may request the French courts, including ex parte if justified, to order any investigative measure necessary to preserve or obtain evidence. These measures may include document production, hearing of a witness, fact finding measures or the appointment of an expert (FCCP, articles 1449 and 145).

After the tribunal is constituted, and if invited to do so by the arbitral tribunal, a party to an arbitration may also request an injunction from the President of the Tribunal judiciaire requiring a third party to produce documentary evidence in aid of the arbitration (FCCP, articles 1469 and 1506 – 3°).

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

France

Arbitral tribunals may order a party to the arbitration to produce documents, including on its own motion, and may also order a party to pay a penalty for non-compliance. Failure to abide by an order for production of documents will allow the tribunal to draw adverse inferences.

Parties to international arbitration may also request the state courts to order a third party to produce documents (FCCP, article 1469).

32. Is it mandatory to have a final hearing on the merits?

France

No, although hearings on the merits are common in practice.

33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

France

Yes.

34. Can the tribunal decide by majority?

France

In domestic arbitration, a tribunal may decide by majority, but the award is signed by all arbitrators (FCCP, article 1480).

In international arbitration, unless the parties agree otherwise, the award can be rendered by majority. If there is no majority, the president of the arbitral tribunal decides alone and states this in the award. An award rendered by majority or by the president alone has the same legal effect as a unanimous award (FCCP, article 1513).

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

France

The types of remedies or relief available will vary depending on the laws applicable to the merits and the procedure. French law does not prohibit any specific type of remedies or relief, unless it is contrary to international public policy. Punitive damages may be considered to be contrary to international public policy if they are disproportionate (Civ. 1, 1 December 2010, No. 09-13.303).

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

France

Yes, as long as the principle of collegiality and the confidentiality of deliberations is complied with (Paris, 9 October 2008, No. 07/06619). In France, dissenting opinions are, however, not common in practice.

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

France

An arbitral award must indicate (i) the full names of the parties as well as their domicile or registered office, (ii) where applicable, the names of the parties’ counsel, (iii) the names of the arbitrators who rendered the award, (iv) the date of the award, and (v) the place where the award was issued (FCCP, articles 1481 and 1506 – 2°). The award must also set out the claims and arguments of the parties, state the grounds on which it was rendered (FCCP, articles 1482 and 1506 – 2°).

In domestic arbitration, it must be signed by all arbitrators (FCCP, article 1480).

In domestic arbitration, unlike in international arbitration, an award that does not comply with these conditions is void (FCCP, article 1483).

38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

France

In domestic arbitration, if the arbitration agreement does not specify a time limit, the award must be made within six months from the date of the referral to arbitration. This duration can be limited or extended by the parties or the relevant judge (FCCP, article 1463).

In international arbitration, French law does not impose a time limit in respect of the award. The parties can agree on a time limit.

In both domestic and international arbitration, unless the parties agree otherwise, an award issued outside the time limit is subject to challenge.

The award can be challenged within one month of the date on which it is served on the unsuccessful party (FCCP, articles 1494 and 1519).  

Service is performed by a bailiff, unless the parties agree otherwise (FCCP, article 1519 and Aix-en-Provence, 14 November 2019, No. 19-01608).

A party may request the tribunal to interpret the award, to correct material errors and omissions or to complete the award. The request must be made within three months of the service of the award. The arbitral tribunal must render the corrected award within three months of the date of referral. If the arbitral tribunal cannot be reconvened, the court that would have had jurisdiction in the absence of an arbitration agreement has jurisdiction to interpret and correct the award (FCCP, articles 1485, 1486 and 1506 – 4°).

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

France

French law is silent on the issue of costs but the tribunal has a discretionary power to award costs. For instance, the arbitral tribunal can order a party to reimburse all or part of the fees of the other party’s counsel. The “costs follow the event/loser pays” principle is commonly applied in practice.

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

France

The arbitral tribunal can include interest on both the principal claim and costs. In France, a decree issued each semester determines the legal interest rate. However, the parties are free to contractually agree on, and the Tribunal is free to apply, a different interest rate.

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

France

In domestic arbitration, an award cannot be appealed on the merits unless otherwise agreed by the parties (FCCP, article 1489). In the event of a successful appeal, the court may modify or set aside the award (FCCP, article 1489).

An international award rendered in France cannot be appealed – it can only be challenged in annulment proceedings (FCCP, article 1518).

42. Are there any other bases on which an award may be challenged, and if so what?

France

In domestic arbitration, an award may be annulled where:

• the arbitral tribunal wrongly declined or upheld jurisdiction;
• the arbitral tribunal was improperly constituted;
• the arbitral tribunal did not comply with its terms of reference;
• the award is contrary to public policy; or
• the award fails to give reasons,  or to set out the date on which it is rendered or the name of the arbitrator(s), or to state that it is rendered by majority or the award is not signed. (FCCP, article 1492).

Parties cannot waive their right to annulment unless they agreed to an appeal on the merits (FCCP, article 1491).

In international arbitration, an award may be annulled where:

• the arbitral tribunal wrongly declined or upheld jurisdiction;
• the arbitral tribunal was improperly constituted;
• the arbitral tribunal did not comply with its mission;
• the arbitral tribunal violated the principle that both parties should have the right to be heard; or
• the recognition or enforcement of the award is contrary to international public policy (FCCP, article 1520).

Further, in certain circumstances such as fraud or false testimony, a party can seek the revision of a domestic or international award before the arbitral tribunal itself, or before the court of appeal if the tribunal cannot be reconvened (FCCP, articles 1502 and 1506).

43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

France

In international (although not domestic) arbitration, the parties may at any time waive their right to seek annulment of the award (FCCP, article 1522). However, the parties can nevertheless appeal the enforcement order on the grounds provided for in article 1520 of the FCCP.

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

France

The setting aside of a foreign award by the courts at the seat of arbitration is not a ground for refusing enforcement in France (Civ. 1, 29 June 2007, Putrabali, No. 05-18.053).

French courts may only review international awards on the basis of the five grounds provided for in article 1520 of the FCCP.

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

France

The French courts tend to interpret the grounds for refusing the enforcement of awards strictly, and most arbitral awards are successfully enforced in France. However, recently, a new trend has appeared with the French courts extending the scope of the ground for setting aside the award on the basis of breach of international public policy that “is not limited to the evidence produced before the arbitrators nor bound by the findings, assessments and qualifications made by them” (Civ. 1, 23 March 2022, Belokon, No.17.17981).

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

France

French law recognises the immunity from enforcement of states and state entities.

Articles L. 111-1-1 to L. 111-1-3 of the French Code of Civil Enforcement Proceedings (FCCEP), which were introduced by the "Sapin II Law" of 9 December 2016, govern the implementation of enforcement measures against state assets.

Authorisation from a judge is required prior to taking enforcement measures against foreign state assets (FCCEP, article L. 111-1-1).

Article L. 111-1-2(1) of the FCCEP provides that such enforcement measures may only be authorised by the judge if one of the following conditions is met:

• the state has expressly consented to the measure;
• the state has reserved or allocated the assets to the satisfaction of the claim that is the subject of the proceedings; or
• a judgment or arbitral award has been rendered against the foreign state and the assets concerned are specifically used or intended to be used by that state other than for non-commercial public service purposes and have a link with the entity against which the proceedings have been brought.

As regards diplomatic immunity, an express waiver of such immunity by the state is required in order to enforce against diplomatic assets (FCCEP, article L. 111-1-3).

47. To what extent are arbitral proceedings in your jurisdiction confidential?

France

Domestic arbitration proceedings are confidential, subject to any contrary legal requirements, unless the parties agree otherwise (FCCP, article 1464).

There is no corresponding provision for international arbitration proceedings, and these are thus generally considered not to be confidential unless the parties agree otherwise or unless the tribunal orders otherwise. 

The arbitral tribunal's deliberations are confidential, both in domestic and international arbitration (FCCP, articles 1479 and 1506 - 4°).

48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

France

The provisions of the FCCP regarding the confidentiality of domestic arbitration do not make express provision as to the extent of the duty of confidentiality, and in particular the extent to which it covers pleadings and evidence filed in the arbitration. The safest course, in both domestic and international arbitration, is therefore for the parties to reach an express agreement in this regard.

Where the evidence and pleading are confidential and are not otherwise in the public domain, they can, in principle, not be used other than for the purposes of the proceedings in which they were exchanged. However, commentators suggest that public policy rules requiring disclosure may, where appropriate, prevail over the confidentiality obligation. This gives scope for a tribunal or court to rule that such documents should be disclosed in the context of other proceedings, notwithstanding their confidential nature.

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

France

Arbitrators are required to be independent and impartial and to disclose any matters that might cast doubt on their independence or impartiality (FCCP, articles 1456 and 1506 - 2°).

Aside from this, there are no binding ethical codes or standards in France that apply specifically to arbitrators or arbitration counsel, although arbitrators and counsel that are members of a national bar may have obligations as a result of their membership of that bar. In France, the legal profession is regulated by the National Interior Regulations, supplemented by the rules of each individual regional bar. French-qualified lawyers and lawyers qualified in a European Union member state are also required to respect the Code of Conduct for European Lawyers when engaging in cross-border practice.

Arbitrators and counsel may also have regard to soft law instruments such as the IBA Guidelines on Conflicts of Interest in International Arbitration and the IBA Guidelines on Party Representation in International Arbitration, although these are not binding unless the parties otherwise agree.

50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

France

The FCCP does not impose any unusual procedural constraints on the parties to an arbitration. In general, the parties are free to reach agreement on procedural questions, failing which they will be decided by the arbitral Tribunal.

Parties to an arbitration seated in France may wish to bear in mind that in French court proceedings, by comparison to common law courts, judges tend to be restrained in their orders for production of documents. There also tends to be less emphasis on the evidence of witnesses, with judges paying greater regard to the documentary record than oral testimony. While these procedural provisions have no direct application in arbitration, they may have an indirect impact on the approach that French parties and arbitrators would tend to adopt when determining procedural issues in an arbitration context. 

French law is silent on the subject of witness preparation in international arbitration. To clarify the extent to which counsel are free to prepare witnesses for examination and cross-examination in international arbitral proceedings, the Paris Bar Council issued a resolution in 2008 that states that preparation of a witness is not a breach of a French lawyer's ethical duties. Counsel should, however, refrain from conduct that might inappropriately influence the testimony of the witness or expert.

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

France

French law does not prohibit third-party funding in arbitration proceedings. This was confirmed by the Paris Bar Council in a resolution adopted on 21 February 2017, which underlined the potential benefits of third-party funding to both clients and their counsel in international arbitration. The resolution also places an obligation on counsel to encourage their clients to disclose details of third-party funding arrangements to the arbitral tribunal.

French lawyers may, however, only take instructions, and take payment, directly from a client or the client’s agent. A third-party funder would, therefore, normally provide money to the client and not directly to counsel in an arbitration.

The authors thank Luc Masset, Mounira Belhandouz and Patricia Khoury (interns) for their assistance in the preparation of this chapter.