In Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait) [CA Paris, 23 June 2020, n°17/22943], the Paris Court of Appeal refused to set aside an arbitral award handed down by an ICC Tribunal seated in Paris, although the same award had been denied enforcement and recognition in England on the basis that the award was made against a non-party (our post on the English decision can be accessed here). The French court expressly rejected the argument that it was bound by the English decision.
This case is another illustration of the differences in approach between French and English courts with respect to (i) the identification of the law governing the arbitration clause and (ii) the extension of arbitration agreements to third parties.
Laurence Franc-Menget has published an article in the Revue de l’arbitrage, the journal of the Comité Français de l’arbitrage, discussing the Paris Court of Appeal’s decision on an application by Ukraine to annul an $112 million UNCITRAL award against it in favour of OAO Tatneft. The article, in French, considers the interpretation by the Court of the definition of emanation for the purpose of establishing jurisdiction of an investment arbitral tribunal. To read the full article, please click here.
This article was first published in the Revue de l’arbitrage, 2017, n°2, p. 500 et seq. Continue reading
The Paris Court of Appeal has upheld a challenge to an International Chamber of Commerce (ICC) investment treaty award (Cour D'Appel de Paris, Pole 1 – Chambre 1, 15 March 2016, n° 14/19164). This is the latest instalment in the long-standing dispute regarding an insurance claim for damage to a textiles factory during the civil unrest that followed the Madagascan coup of 2009.
The Paris Court of Appeal set aside the sole arbitrator's decision on the grounds that he decided the case based on arguments raised of his own initiative and on which the parties did not have the opportunity to comment (ignoring the adversarial principle applicable under French law). The appeal court also rejected an attempt by an interested third party to intervene in resisting the challenge to the award, on the basis that this would flout the contractual nature of arbitration.
This decision is a rare example of a successful challenge to an arbitral award in France. It provides a helpful reminder of the Court of Appeal's supervisory role over French-seated arbitrations and its ability to annul an award where the tribunal has exceeded the scope of its powers and duties (in particular, where the tribunal failed to comply with due process and based its conclusions on arguments not raised by the parties). The judgment also shines a light on the limitations of the ICC scrutiny process.
In Cass. Civ. 1re, 18 novembre 2015, n°14-26.482, the French Supreme Court considered an appeal from a Court of Appeal decision seeking an opinion from the CJEU on the applicability of European competition law in the context of proceedings to set aside an ICC award.
On 18 November 2015, the Cour de Cassation (French Supreme Court) held that an appeal against the lower court’s decision to seek a ruling from the Court of Justice of the European Union (CJEU) was inadmissible.
The applicant (Genentech) sought to set aside an International Chamber of Commerce (ICC) award ordering it to pay sales royalties due under a biotechnology licence. It did so on the basis that the award breached European competition law (and therefore international public policy). In a preliminary decision dated 23 September 2014, the Paris Court of Appeal stayed the proceedings and referred the question to the CJEU. The respondents appealed to the Supreme Court against the Court of Appeal's decision to seek a ruling from the CJEU.
In declaring the appeal to be inadmissible, the Supreme Court also found that the Court of Appeal had not carried out a review of the award under Article 1520 5° of the French Code of Civil Procedure, but had simply exercised its right, under Article 267 of the Treaty on the Functioning of the European Union, to refer a question on the "interpretation of the Treaties" to the CJEU.
This decision confirms that the French courts retain the right to refer questions on the interpretation of treaties to the CJEU, even when exercising their supervisory jurisdiction over international arbitrations seated in France. It will be interesting to see how the Court of Appeal deals with Genentech's application to have the award set aside, if the CJEU eventually rules that the award breaches European competition law. (Cass. Civ. 1re, 18 novembre 2015, n°14-26.482)
In Cass. Civ. 1re, 8 juillet 2015, n° 13-25.846, the Cour de cassation (French Supreme Court) considered an appeal against a Paris Court of Appeal judgment. The appeal concerned whether the enforcement of a foreign arbitral award, which involved a public procurement contract, fell within the jurisdiction of the ordinary (as opposed to administrative) courts. In a landmark decision, the French Supreme Court overturned a Paris Court of Appeal judgment and affirmed that the enforcement of a foreign award, which involved a public procurement contract, fell within the jurisdiction of the ordinary courts.