A. LEGISLATION AND RULES
A.1 Legislation
The French Parliament is considering reforming French arbitration law, the current version of which was enacted in 2011.
On 12 November 2024, a working group established by the French Ministry of Justice was assigned to explore ways to reform French arbitration law. This working group is led by Thomas Clay, an arbitrator, lawyer, and law professor, along with Judge François Ancel.
The goal of this reform is to modernize French arbitration law by incorporating recent developments in French case law and other innovations. The intention is to align French arbitration law with current legal and economic realities while maintaining the French approach and perspective to international arbitration.
This potential reform is viewed as a significant milestone in both the legal and business sectors, aimed at enhancing the international standing of French arbitration law and bolstering the influence and attractiveness of Paris (and France) as a central forum for international commercial disputes. If the spirit of this reform is achieved, the result (similar to that of 2011) would be to reaffirm France’s position as an arbitration-friendly jurisdiction.
The 20-member working group comprises leading academics, practitioners, and representatives from various Paris-based arbitration institutions, committees, and other groups and initiatives. Its members include the President of the International Commercial Chamber of the Paris Court of Appeal, as well as representatives from the ICC International Court of Arbitration. Many of the working group members were also involved in the previous reform.
The working group is expected to submit a report on the proposed reforms in March 2025, aiming to unveil a new law by the summer of 2025.
A.2 Institutions, rules and infrastructure
The ICC has officially opened the doors of its newly branded Paris Hearing Centre. The new facility is designed to enhance the efficiency and accessibility of hearings, catering to the needs of parties involved in dispute resolution around the globe.
The Paris Hearing Centre provides a modern and flexible working environment, ensuring that users have the necessary resources and support for their arbitration processes.
This initiative not only strengthens Paris’s position as a leading global arbitration hub but also reflects the ICC’s ongoing dedication to innovation in international legal practices.
The new Hearing Centre is located on 40 Rue Legendre in the heart of Paris’ 17th arrondissement.
The ICC Hearing Centre is apparently taking bookings at the moment for any hearing or meeting needs, with special opening rates for its services; more information can be found on its website at https://iccwbo.org/news-publications/news/icc-opens-doors-to-paris-hearing-centre/ and https://iccwbo.org/dispute-resolution/dispute-resolution-services/icc-hearing-facilities/.
B. CASES
B. 1. French court reinforces arbitration efficiency despite ambiguities in an arbitration clause
French courts continue to demonstrate their commitment to supporting international arbitration by ensuring that imprecise arbitration clauses do not obstruct the parties’ ability to access arbitration.
The case originated from a contractual agreement between two Indian entities, Antrix Corporation Limited (“Antrix“) and Devas Multimedia Private Limited (“Devas“). This agreement included an arbitration clause that designated New Delhi as the seat of arbitration and stipulated that the proceedings would be conducted in accordance with the rules and procedures of either the ICC or the UNCITRAL.
Following a dispute, Devas initiated an arbitration procedure under the aegis of the ICC. Antrix challenged the tribunal’s jurisdiction contending that there was no mutual agreement between the parties to conduct the arbitration under the ICC rules.
On 14 September 2015, the arbitral tribunal issued an award in which it retained jurisdiction and, following its analysis on the merits, ordered Antrix to pay Devas a certain sum in damages.
Devas then sought enforcement of this award in France, and the exequatur to that effect was granted by the Paris Judicial Court on 22 October 2015.[1] This exequatur order was subsequently appealed by Antrix before the Paris Court of Appeal.
In its ruling, the Paris Court of Appeal asserted its responsibility to interpret the arbitration clause in a manner that ensured coherence and efficiency, prioritizing an interpretation that upheld the clause’s fundamental objective: to facilitate effective arbitration and prevent a party from evading its commitments or disputing its consent to arbitrate. On this basis, the Paris Court of Appeal dismissed Antrix’s appeal. The Court concluded that the specific wording of paragraph (c) of the clause indicated a shared intention of the parties to engage in either institutional arbitration, governed by ICC rules, or ad hoc arbitration. Either way, there was a clear intention shared by the parties to arbitrate any dispute. According to the Paris Court of Appeal, and contrary to Antrix’s assertions, the clause’s broad reference to “rules and procedures” encompassed the entirety of the arbitration process, including the appointment of arbitrators, rather than solely addressing post-appointment conduct.[2]
Dissatisfied with this ruling, Antrix escalated the matter to the French Court of Cassation.
Before the Court of Cassation, Antrix argued that the arbitration clause, by its clear and precise terms, stipulated that disputes related to the contract were to be resolved by an arbitral tribunal comprising three arbitrators —one appointed by each party and the third designated by the co-arbitrators. It argued that the choice between ICC and UNCITRAL rules was to occur only after the arbitrators’ appointment.
On 6 November 2024, the Court of Cassation dismissed the appeal and confirmed the Paris Court of Appeal’s interpretation of the arbitration clause, guided by principles of coherence and effectiveness or positive effect (“effet utile”) of the arbitration clause.[3] The Court held that this interpretation sought to uphold the intent and effect of the clause, ensuring that arbitration processes remained effective and preventing any party from evading their obligations or challenging their consent to arbitrate. Put simply, pursuant to the French law principle of “effet utile”, the arbitration clause should be interpreted in a way that “gives an effect to it”, by positively triggering the arbitration mechanism, as opposed to preventing a party from referring disputes to arbitration. The Court of Cassation noted that the Paris Court of Appeal recognized the parties’ mutual intent to resolve disputes through either ICC or UNCITRAL arbitration, allowing the initiating party to select the arbitration mechanism without requiring additional consent.
B. 2. The Paris Court of Appeal emphasizes the importance of effective notification throughout the arbitration process
In a recent decision dated 1 October 2024, the Paris Court of Appeal underscored the importance of proper notification in arbitration, particularly regarding non-participating parties. Indeed, the enforceability of arbitration awards is contingent upon compliance with the principle of contradiction, which mandates that all parties be appropriately informed throughout the arbitration process. A corollary of the equality of arms, this adversarial principle ensures that parties have the opportunity to engage in the proceedings and effectively present their case.
The underlying dispute involved Tunisian company Siba Plast’s claim for payment related to five commercial contracts entered into with the Libyan National Transitional Council (LNTC), a transitional government established in the aftermath of the 2011 Libyan civil war. These contracts are related to the construction, defense, and security sectors. The contracts were initially entered into in June and September 2012 by an Italian-registered company Giacorosa. On 8 April 2014, Giacorosa assigned these contracts to Siba Plast for EUR 250,000.
An arbitration clause in the amendments to the contracts (article 7 of the respective amendments) mandated disputes to be resolved in Tunisia, in accordance with Tunisian law and the Tunisian Arbitration Code.
Siba Plast initiated arbitration against Libya in Tunisia, claiming that Libya breached its contractual obligations. Libya’s failure to participate led the Tunis Court of Appeal to appoint an arbitrator in its absence. As a result, a default award was rendered on 28 November 2014, which upheld Siba Plast’s claims and required Libya to pay EUR 280 million.
On 6 March 2017, an order was issued by the Paris Judicial Court declaring the award enforceable.[4] Subsequently, on 3 June 2021, in an attempt to execute the award, Siba Plast targeted bank accounts in France held by the Libyan Investment Authority and the Libyan Foreign Bank.
Realizing the implications of the exequatur order that permitted these seizures, Libya appealed on 15 June 2021. In its appeal, Libya argued that the principle of contradiction had been violated and asserted that it had not been given a fair opportunity to present its case. Specifically, Libya contended that the arbitral tribunal had failed to adequately notify it of the proceedings and did not allow sufficient time for it to appear before the tribunal before the default award was issued.
The Paris Court of Appeal noted that according to articles 1520, 4° and 1525 of the French Code of Civil Procedure, the exequatur of the award may be denied if the principle of contradiction has been breached.[5]
This principle ensures that both parties have the opportunity to present their arguments and evidence before the tribunal, enabling a fair adversarial debate regarding all factors that influenced the arbitrators’ decision.
Upon reviewing the notification process for the LNTC regarding the arbitration, the Paris Court of Appeal identified two significant issues: first, there were inconsistencies in the email addresses used for notifications pertaining to the request for arbitration and the arbitrators’ appointment process. Second, there was insufficient evidence to demonstrate that Libya had indeed received important documents relevant to the arbitration, including invitations to attend the arbitral hearings, the transcripts of those hearings, and a new claim submitted by Siba Plast during the oral pleadings and included in the arbitral award.
The Paris Court of Appeal concluded that the principle of contradiction was breached, as Libya was deprived of the opportunity to present its case or to exercise its rights in the arbitration proceedings.
Consequently, the Court invalidated the order issued on 6 March 2017 by the Paris Judicial Court and rejected Siba Plast’s application for the exequatur of the arbitral award pursuant to articles 1520, 4° and 1525 of the French Code of Civil Procedure.
B. 3. The Court of Cassation upholds the setting aside of an arbitration award on the grounds of close personal ties between an arbitrator and a party’s counsel
A publication by the chair of an arbitral tribunal that mentions close personal connections with a party’s counsel can create objective grounds for a reasonable doubt about the arbitrator’s impartiality and independence in the mind of the opposing party. This stance was affirmed by French courts in a recent decision.
An annulment proceeding was filed with the Paris Court of Appeal with the aim of setting aside a partial award dated 10 November 2020, issued by an ICC arbitral tribunal involving the Douala International Terminal (DIT) and the Port Autonome de Douala (PAD). This dispute concerned a contract for the management and operation of a terminal at the port of Douala, Cameroon.
PAD initiated the annulment process based on claims regarding the lack of independence and impartiality of the tribunal’s chair. It pointed to a tribute published by the chair in a law journal, honoring the counsel for the opposing party who tragically passed away in April 2021 and who was also a well-known legal scholar. This tribute raised concerns with PAD as it suggested close personal ties between the chair of the arbitral tribunal and DIT’s counsel.
On 10 January 2023, the Paris Court of Appeal rendered a widely commented upon decision to annul the award. It ruled that the tribunal had been improperly constituted, stating that the tribute indicated the existence of “close” personal ties between the deceased counsel for DIT and the chair, which could create reasonable doubt in the parties’ minds regarding the latter’s independence and impartiality.[6]
DIT challenged this decision before the Court of Cassation. In its decision dated 19 June 2024, the Court of Cassation upheld the Court of Appeal’s ruling. It found that ordinary professional and academic links do not necessarily imply the existence of “close” professional or personal relationships and do not need to be disclosed. However, the Court of Cassation ruled that the tone and specific phrases used in the arbitrator’s published text suggested a “friendly relationship” that extended beyond academic sociability. Furthermore, by linking this relationship to the ongoing arbitration, the text indicated that the chair of the tribunal might not be fit to make independent judgments. This connection raised doubts in PAD’s mind about his independence and impartiality due to his relationship with DIT’s counsel, indicating that such ties should have been disclosed to allow the parties to exercise their right to challenge the chair’s independence and impartiality.[7]
B. 4. In assessing the jurisdiction of an arbitral tribunal deciding an investment dispute, the French annulment judge must assess that the dispute is directly related to activities that qualify as investments under the Bilateral Investment Treaty
In its recent ruling, the French Court of Cassation emphasized that the French annulment judge, when assessing the jurisdiction of an arbitral tribunal in investment disputes, must conduct a thorough analysis of the nature of the dispute. The judge must ensure that the dispute not only arises after the treaty has come into effect but is also directly related to activities that qualify as investments under the Bilateral Investment Treaty ((BIT).
The dispute involved a Turkish company, Etrak, and the State of Libya, concerning payments owed for public works contracts signed in the 1980s with various Libyan authorities. On 29 October 2012, the Beida Court of First Instance found that the State of Libya was to pay Etrak for receivables dating back to 1991. On 9 December 2013, a settlement agreement was signed between the parties to the dispute. Under the settlement agreement, Etrak was to receive payments.
The Beida Court of First Instance judgment was later overturned by the Beida Court of Appeal on 1 February 2018.
In response to Libya’s failure to comply with the settlement agreement, on 29 August 2016 Etrak initiated arbitration proceedings against the State of Libya before an ICC tribunal seated in Geneva, invoking the 2009 Libya-Turkey BIT.
In a later development, the Tripoli Court orally annulled the settlement agreement on 2 May 2019, asserting that the undersecretary of the Ministry of Finance – who had signed the agreement – lacked the authority to bind the State of Libya.
Following this, on 22 July 2019, the arbitral tribunal ruled in favor of Etrak, affirming its jurisdiction over all claims. The tribunal found that Libya had breached article 2(2) of the BIT by failing to provide fair and equitable treatment to Etrak’s investment and ordered the State of Libya to pay various sums.
On 21 January 2020, the Paris Judicial Court granted the exequatur to the arbitral award.
The State of Libya raised an appeal against the exequatur order and sought to enforce the judgment from the Tripoli Court that annulled the 2013 settlement agreement.
The Paris Court of Appeal ruled on 14 March 2023, confirming the arbitral tribunal’s jurisdiction and endorsing the enforcement of the award in France. The court noted that the BIT took effect on 22 April 2011. It found that the dispute arose from the failure to perform the settlement agreement. This agreement involved more than merely enforcing a previous court decision, rather it included reciprocal concessions and damages — creating a new dispute despite it relating to past investments made in Libya.[8]
This decision was subsequently challenged by the State of Libya before the French Court of Cassation, which argued that the arbitral tribunal lacked jurisdiction ratione temporis, as the dispute originated prior to the BIT’s entry into force. Libya maintained that the initial projects from the 1980s were not covered by the protections afforded by the BIT.
In assessing the arbitral tribunal’s jurisdiction under the Libya-Turkey BIT, the Court noted that, within the realm of international investment protection, “a state’s consent to arbitration is based on a standing offer for arbitration, formulated in the treaty, and addressed to a defined category of investors for the resolution of investment disputes.”
On the basis of articles 1520, 1° and 1525 of the French Code of Civil Procedure, the Court of Cassation overturned the decision of the Paris Court of Appeal. It held that, in accordance with article 1(2)(b) of the BIT, financial claims – such as those arising from the settlement agreement of 9 December 2013 – qualify as investments only if they are linked to an actual investment, in this case, the works carried out in the 1980s. Furthermore, in accordance with article 8.4 of the BIT, only disputes arising directly out of investment activities fall within the scope of procedural protection. In the case at hand, the dispute related to the alleged non-performance of the settlement agreement was independent of the initial refusal by the Libyan State to pay for the works. Consequently, the dispute would not fall within the material scope of the BIT as it did not arise directly from the investment. The Court of Cassation concluded that the Court of Appeal breached the aforementioned provisions.[9]
The Court of Cassation finally added that pursuant to article 624 of the French Code of Civil Procedure, the annulment of the decision confirming the enforcement order issued on 21 January 2020, also entails the annulment of the part that rejected the application for enforcement of the judgment from the Tripoli Court dated 2 May 2019, as there exists a link between the two decisions.
B. 5. The Paris Court of Appeal confirmed that a procedural order, unlike arbitral awards, cannot be subjected to challenge
The Paris Court of Appeal has definitively affirmed the unequivocal nature of a procedural order issued by an arbitral tribunal. While procedural orders contain mere procedural decisions, awards constitute a tribunal’s final decision on a substantive issue, and as such, can be enforced and challenged.
An appeal was filed with the Paris Court of Appeal to annul a procedural order rendered on 10 March 2020 by a Paris-seated arbitral tribunal acting under the aegis of the Permanent Court of Arbitration. This arbitration was initiated by Mr. Akhmetov, a Ukrainian businessman, and his US registered company Investio, against the Russian Federation, based on the 1998 Russia-Ukraine BIT and subject to the UNCITRAL Arbitration rules.
During the constitution of the arbitral tribunal, Russia contested the appointment of the tribunal’s chair by the procedural framework fixed by the parties for his nomination. According to Russia, the procedure leading to the nomination of the chair of the arbitral tribunal was irregular.
The tribunal ruled on this challenge in Procedural Order No. 2 dated 10 March 2020 (“PO2“), stating the following: “the Tribunal rules that the Respondent’s objection to the regularity of the proceeding leading to the appointment of Professor Siegfried Elsing as the Presiding Arbitrator is unfounded, and that the Tribunal was properly constituted in accordance with the UNCITRAL Rules”.
In a partial award dated 16 August 2022, the tribunal confirmed its jurisdiction to hear the dispute. Subsequently, on 14 November 2022, the Russian Federation filed an action for annulment of that partial award on the grounds that the arbitral tribunal was not properly constituted (Article 1520, 2° of the French Code of Civil Procedure). Additionally, on 6 April 2023, it submitted a request for annulment against PO2.
The annulment request was rejected by the Paris Court of Appeal based on Article 1518 of the French Code of Civil Procedure, which permits challenges to arbitration awards made in France.
The Court held that only ‘genuine’ arbitration awards can be the subject of such challenges. These awards are defined as the acts of arbitrators that definitively resolve all or part of the dispute submitted to them, whether on the merits, on jurisdiction or on a procedural ground that leads to the termination of proceedings.[10]
The Court noted that PO2 addresses the Russian Federation’s challenge to the regularity of the appointment of the President of the Arbitral Tribunal. It found that this procedural order, which is limited to assessing the proper constitution of the tribunal under the UNCITRAL Arbitration Rules, does not address the substance of the dispute or terminate the proceedings. Furthermore, it does not rule on the tribunal’s jurisdiction. Accordingly, PO2 does not fall within the above definition of “genuine” arbitration awards per the Paris courts.
The Paris Court of Appeal concluded that the PO2 cannot be classified as an arbitration award eligible for annulment. Consequently, the annulment request against PO2 “should be declared inadmissible”.
B. 6. The Paris Court of Appeal and French Court of Cassation align on the absence of any violation of the principle of contradiction and of the international public order concerning documents submitted to an arbitral tribunal
This case involves a dispute between Lebanese nationals Messrs. Ayoub-Farid Michel Saab and Fadi Michel Saab (collectively referred to as the “Saabs“) and the Republic of Cyprus.
On 28 October 2014, the Saabs initiated an investment arbitration before an arbitral tribunal seated in Paris, constituted under the auspices of the ICC. This arbitration was based on the BIT signed in 2001 between the Republic of Lebanon and the Republic of Cyprus. The dispute arose from actions taken by the Republic of Cyprus, through the Central Bank of Cyprus (CBC), against the Cypriot branch of the Federal Bank of the Middle East (“FBME), in which the Saabs were the ultimate beneficial owners. These actions included the takeover of FBME and the freezing of its assets, following notices issued on 17 July 2014 by the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which designated FBME as a structure presenting proven money laundering risks.
On 10 September 2015, the arbitral tribunal issued a partial award confirming its jurisdiction. On 15 January 2019, the final award was rendered in Paris, dismissing the Saabs’ claims on the grounds that there had been no breach of the BIT.
Subsequently, the Saabs sought annulment of the award before the Paris Court of Appeal. One of their arguments was that the arbitral tribunal infringed the principle of contradiction. The Saabs contended that the tribunal drew conclusions from confidential documents that were excessively redacted and incomprehensible, related to communications between Cypriot and American authorities in 2011 and 2012. They claimed that these conclusions were based solely on statements made by Cyprus, without allowing them an opportunity to discuss the content of these documents.
The Saabs maintained that despite their protests, they could not access the confidential information and thus found the documents to be incomprehensible. They alleged that the tribunal used the secret content of these documents as a basis for its decision, which included conclusions drawn from separate American proceedings that were based on an “in camera” review, depriving them of adversarial examination.
In its decision dated 22 March 2022, the Paris Court of Appeal noted that the documents in question had been provided by the Republic of Cyprus to the Saabs according to a Procedural Order. These documents were largely redacted exchanges between the Cypriot and American authorities, and the Saabs themselves had produced these documents during the proceedings as exhibits referenced by numbers C 781 to C 803. The Court also pointed out that there was no evidence to suggest that the tribunal based its decision on evidence that was unknown to the parties. As such, according to the Paris Court of Appeal, there was no violation of the principle of contradiction.
Consequently, the Saabs’ request for annulment was rejected.[11]
The Saabs challenged the Paris Court of Appeal decision before the Court of Cassation, arguing that the Court of Appeal failed to verify whether their rights of defense and to a fair trial were infringed upon during arbitration, as they allegedly had not been able to examine or discuss the exchanges between the Republic of Cyprus and the United States in adversarial proceedings. They contended that the documents provided by the Republic of Cyprus were excessively redacted, which prevented meaningful examination. The Saabs claimed that the Court of Appeal did not legally justify its decision based on Article 1520, 5° of the Code of Civil Procedure.
The Court of Cassation recalled that it follows from article 1520, 5° of the Code of Civil Procedure that the judge hearing the annulment must determine whether the recognition or enforcement of the award is compatible with international public policy. In this respect, it is the judge’s responsibility to ensure that the production of evidence before him complies with the principle of contradiction and the principle of equality of arms.
It then observed that the Saabs themselves submitted the redacted exhibits that they criticized the tribunal for considering. The Court of Cassation further observed that the Paris Court of Appeal noted that the arbitral tribunal specified in paragraph 402 of the award that these documents would be part of the exhibits providing their content was comprehensible.
Accordingly, France’s highest court found that there was no indication in the award that the secret content of these documents was known to the arbitral tribunal without having been discussed by the parties. Furthermore, it concluded that there was no established evidence that the tribunal relied on information that the parties did not have access to when rendering its award.
In conclusion, the Court of Cassation determined that the massively redacted documents had not formed the basis of the award, and each document presented had been examined appropriately.[12]
[1] Tribunal de grande instance de Paris, 22 October 2015.
[2] Paris Court of Appeal, 27 March 2018, no. 16/03596.
[3] Court of Cassation, 6 November 2024, no. 22-16.580
[4] Tribunal de grande instance de Paris, 6 March 2017
[5] Paris Court of Appeal, 1 October 2024, no. 21/11112
[6] Paris Court of Appeal, 10 January 2023, no. 20/18330
[7] Court of Cassation 19 June 2024, no. 23-10.972
[8] Paris Court of Appeal, 14 March 2023, no. 21/06118
[9] Court of Cassation, 9 October 2024, no. 23-14.368
[10] Paris Court of Appeal 21 May 2024, no. 23/06872
[11] Paris Court of Appeal, 22 March 2022, no. 19/09863
[12] Court of Cassation, Civil Division 1, 9 October 2024, no. 22-19.229
