1 . Key considerations in deciding whether to arbitrate in this jurisdiction
Paris is considered a legally secure and user-friendly seat for international arbitration, and French arbitration law is regarded as a model for many other jurisdictions.
Some of the advantages are:
- recognition by local courts of the competence-competence principle (negative effect), giving absolute priority to the arbitral tribunal to rule on its jurisdiction in the presence of an arbitration agreement, unless the latter is manifestly null and void or inapplicable;
- little court interference and importance given to party autonomy;
- experienced domestic courts to assist the parties with the constitution of the arbitral tribunal if need be; and
- effective and swift recognition and enforcement of arbitral awards.
1.2. Disadvantages and common pitfalls
For parties who did not prevail in arbitral proceedings, the main disadvantages are that:
- French courts will not review the merits of the award at the enforcement stage;
- French courts accept to enforce awards that have been set aside at the seat of the arbitration; and
- an appeal against the enforcement order as well as an action to set aside arbitral awards do not stay the enforcement, save where the applicant shows that enforcement will severely prejudice its rights.
1.3. Other distinctive features
Should French courts’ involvement be required (e.g., interim or conservatory measures or annulment of arbitral award), French courts are faster and less expensive than most other state courts.
2 . Principal laws and institutions relating to international arbitration in this jurisdiction
2.1. Legal framework
France is a contracting party to different multilateral conventions, including:
- the New York Convention of 1958;
- the European Convention of 1961;
- the Washington Convention of 1965; and
- the Energy Charter Treaty of 1994 (although France notified its withdrawal from it, which will become effective on 8 December 2023).
France is also a contracting party to numerous bilateral investment treaties (BITs) with other countries, although France signed the EU Agreement for the Termination of BITs between the Member States in 2020 following the EU Court of Justice’s decision in Case No. C-284/16 Slowakische Republic v. Achmea BV.
French arbitration law is set out: (i) under Articles 2059 to 2061 of the French Civil Code (CC); and (ii) under Articles 1442 to 1527 of the French Code of Civil Procedure (CCP).
French arbitration law is more favourable than the UNCITRAL Model Law on International Commercial Arbitration, notably because the grounds for refusing the recognition or enforcement of an award are more limited (Article 1514 of the CCP) and it is possible to waive a party’s right to set aside an award.
Specialised international chambers were created in 2018 at the Paris Commercial Court and the Paris Court of Appeal. The International Chamber of the Paris Court of Appeal (ICCP-CA) deals expeditiously with all proceedings relating to international arbitration.
2.2. What qualifies as international arbitration?
Under Article 1504 of the CCP, “[a]rbitration is international when it involves the interests of international trade.” Arbitration is considered international wherever it concerns a transaction that occurs economically in several States. French courts have interpreted this provision from an economic standpoint exclusively, regardless of other criteria, including the nationality of the parties, the seat of the arbitration, the applicable law, or the parties’ intention.
2.3. Main local international arbitration institutions
The main international arbitration institution in France is the International Court of Arbitration of the International Chamber of Commerce (ICC), which is considered the leading arbitration institution internationally.
France is also home to the Centre de Médiation et d’Arbitrage de la Chambre de Commerce et d’Industrie de Paris (CMAP), the Association Française d’Arbitrage (AFA) and the Chambre Arbitrale Internationale de Paris (CAIP).
3 . Arbitration agreements
3.1. Requirements as to content and form
International arbitration agreements are not subject to any substantive or formal requirements and do not have to be in writing, other than for evidentiary reasons.
Conversely, domestic arbitration agreements must be made in writing either in the main agreement in which it is contained or by reference. Agreements to arbitrate may also be drawn up once a dispute has already arisen, in which case, the subject-matter of the dispute must be specified.
3.2. Validity of arbitration agreements
The arbitration agreement is separable from the main contract in which it is contained directly or by reference. As a result, the arbitration agreement remains valid notwithstanding the inefficiency, nullity or termination of the underlying contract.
The existence, validity and effectiveness of an international arbitration agreement is assessed on the basis of the common intention of the parties, subject only to French mandatory rules and international public policy. Consequently, the sole mention of “arbitration” in an international agreement is sufficient to consider that the arbitration agreement is valid.
The validity of domestic arbitration agreements is subject to the capacity of the parties to arbitrate as well as their free and informed consent when executing the arbitration agreement, although arbitration agreements may be enforceable against non-signatory third parties. Moreover, a domestic arbitration agreement cannot be enforced against a non-professional party if such party objects. Consequently, an arbitration agreement entered into with or between non-professionals is valid but not opposable against the objecting non-professional contracting party.
3.3. Special formalities
In domestic arbitration, the French State or public bodies or administrations may only enter into arbitration agreements if a specific decree allows it.
This rule does not apply to French state-owned companies, nor does it apply to international arbitration, for which no specific formalities are required to conclude an arbitration agreement with the State or its entities.
3.4. Governing law
Pursuant to a substantive rule of international arbitration law, the existence, validity and effectiveness of an international arbitration agreement is assessed based on the common intention of the parties, subject only to French mandatory rules and international public policy. In such assessment, it is not necessary to refer to a domestic law (that of the seat or the law applicable to the underlying agreement for instance), unless the parties have expressly subjected the validity and the effects of the arbitration agreement itself to such a law.
4 . Arbitrability
4.1. Applicable restrictions
In international arbitration, certain subject-matters remain not arbitrable, such as:
- matters involving certain extra-patrimonial rights, such as personal status, capacity, marriage, divorce;
- criminal sanctions;
- matters involving certain intellectual property rights (e.g., granting or annulment of patents);
- tax liability; anda
- certain aspects of competition law, e.g., issuance of administrative sanctions and fines.
In domestic arbitration, the above subject-matters are also not arbitrable, along with disputes concerning public bodies or administrations (except for some of their industrial or commercial activities, if authorised by decree) and subject matters which have a public policy nature.
5 . Enforcing arbitration agreements
5.1. Stay of proceedings
Parties or the arbitral tribunal may decide to stay the arbitral proceedings for a time or until the occurrence of an event that they determine. The arbitral tribunal may subsequently revoke the stay or shorten its duration depending on the circumstances.
Arbitral proceedings are automatically stayed if: (i) a party is put into insolvency proceedings (until the insolvency practitioner is joined to the proceedings); and (ii) the replacement of an arbitrator is required (due to the arbitrator’s incapacity, resignation, successful challenge, removal, or passing).
5.2. Anti-suit injunctions
State courts have jurisdiction to order interim relief before the arbitral tribunal is constituted. However, French courts do not order anti-suit injunctions to restrain a party from commencing or continuing legal proceedings in breach of an arbitration agreement, nor are anti-suit injunctions admitted in the French legal order.
Conversely, arbitral tribunals seated in France have broad powers to order interim relief including anti-suit injunctions.
6 . Arbitral Tribunal
6.1. Restrictions on the parties’ freedom to choose arbitrators
Parties cannot appoint active French judges as arbitrators. Apart from that, French law does not impose any restriction on the parties’ freedom to choose arbitrators in international arbitration.
In domestic arbitration, the number of arbitrators must be odd, and arbitrators must be natural persons.
6.2. Requirement of arbitrator independence and impartiality
Under French arbitration law, arbitrators are required to be independent and impartial. Therefore, arbitrators must disclose any fact or circumstance which may give rise to reasonable doubts in the mind of the parties as to their independence or impartiality prior to accepting their appointment and throughout the arbitral proceedings.
This requirement is construed extensively by French courts, although arbitrators are not required to disclose facts or circumstances which are notorious or publicly accessible.
An incomplete or inaccurate disclosure by an arbitrator could lead to the challenge of the arbitrator or the setting aside of the award if the undisclosed fact or circumstance is considered as giving rise to reasonable doubts in the mind of the parties as to the independence or impartiality of the arbitrator.
6.3. Mandatory rules applicable to the appointment process
The appointment process must comply with the principle of equality between the parties, particularly in the context of multi-party arbitrations.
6.4. Appointment mechanism in the absence of party agreement or applicable institutional rules
The French supporting judge (juge d’appui), i.e., the president of the First Instance Court (Tribunal judiciaire) of the seat of the arbitration, appoints the arbitrator(s), if:
- the parties fail to appoint the sole arbitrator;
- a party fails to appoint a co-arbitrator within one month from the other party’s request;
- the co-arbitrators fail to appoint a president within one month from their appointment; or
- the parties fail to agree on an appointing mechanism in multi-party arbitrations.
Unless otherwise agreed by the parties, any other dispute relating to the constitution of the arbitral tribunal is resolved by the supporting judge, who has jurisdiction as long as:
- the arbitration takes place in France; or
- the parties have agreed to submit the arbitration to French procedural law; or
- the parties have expressly granted jurisdiction to French courts over disputes relating to the arbitral proceedings; or
- there is a risk of denial of justice for one of the parties.
6.5. Mandatory rules applicable to the replacement process
For international arbitration, there are no mandatory rules applicable to the replacement process. In practice, absent any agreement of the parties either directly or by reference to rules of an arbitral institution, the supporting judge will resolve the issue.
For domestic arbitration, the new arbitrator shall be appointed in accordance with the terms agreed between the parties or, failing that, in accordance with the terms on which the replaced arbitrator was appointed.
6.6. Mandatory disclosure obligations
See Section 6.2 above.
6.7. Grounds for challenge
Arbitrators can be challenged for lack of: (i) independence or impartiality; or (ii) specific features agreed by the parties.
6.8. Mandatory rules governing the challenge of arbitrators
Absent any agreement by the parties to the contrary, parties are required to challenge the arbitrator(s) within one month from the disputed disclosure or discovery of the relevant fact or circumstance before the supporting judge.
An arbitrator can be removed by unanimous decision of the parties. Absent a unanimous decision, parties may request the removal within one month from the disputed disclosure or discovery of the relevant fact before the supporting judge.
6.10. Liability and immunity of arbitrators
Arbitrators may not be held liable for the content of their orders or awards (including factual or legal errors, error of judgement, etc.). However, they may be held liable in the event of wilful misconduct amounting to fraud, gross negligence, or denial of justice, or if they do not comply with their disclosure obligations and the award is set aside as a result.
7 . Assistance by the State courts
7.1. Interim measures
Overview of interim measures
Until the arbitral tribunal is constituted (but not after), French courts have jurisdiction to order interim relief, including: (i) investigative measures; and (ii) conservatory or provisional measures, if urgency is established by the applicant.
However, at any given time, including after the arbitral tribunal is constituted, state courts have exclusive jurisdiction to order conservatory attachments and judicial securities.
Relevance of availability of emergency arbitrator mechanism
French courts may order interim relief expeditiously. Therefore, the relevance of an emergency arbitrator mechanism is relative in France.
7.2. Taking of evidence
French courts may assist parties with the taking of evidence:
- before the arbitral tribunal is constituted, by ordering investigative or evidentiary measures (which can be requested on an ex parte basis), such as pre-litigation document production orders, appointment of a judicial expert, hearing of a witness; or
- after the arbitral tribunal is constituted and upon the invitation of the latter, by ordering, subject to penalty, a third-party to produce documentary evidence in its possession in aid of arbitration.
7.3. Appointment or challenge of arbitrators
The supporting judge may be required to assist the parties with the appointment or the challenge of an arbitrator, in the absence of an agreement between the parties (see Sections 6.4 and 6.8 above).
7.4. Other available assistance
French arbitration law grants jurisdiction to the supporting judge to assist parties if a party is at risk of a denial of justice (e.g., appointment of an arbitrator, extension of time limits etc.).
8 . General procedural (minimum) requirements
In domestic arbitration, the guiding principles of trial (principes directeurs du procès) must be complied with.
In international arbitration, the minimum requirements are compliance with the principles of due process, equality between the parties, celerity and loyalty.
Arbitral proceedings as well as the resulting arbitral award are valid notwithstanding a party’s default, as long as due process is followed (i.e., the defaulting party is informed of the existence of the proceedings and allowed to participate).
Regarding hearings, a hearing on the merits is not mandatory as long as the abovementioned mandatory principles are complied with. Hearings may be held anywhere, in-person or virtually, unless otherwise agreed in the arbitration agreement.
9 . Confidentiality
In international arbitration, arbitral proceedings are not confidential unless the parties agree thereto, or the arbitral tribunal orders otherwise.
Conversely, in domestic arbitration, arbitral proceedings are confidential unless the parties agree otherwise, and subject to applicable legal requirements (e.g., mandatory accounting, tax or financial reporting obligations).
In both domestic and international arbitration, the arbitral tribunal’s deliberations are confidential.
10 . Awards
French case law defines awards as “acts of arbitrators that resolve, in a final and definitive manner, all or a part of the dispute, on the merits, on jurisdiction or on a matter of procedure”.
10.1. Requirements as to content and form
Arbitral awards must be made in writing and signed by all arbitrators, or at least a majority of the arbitral tribunal. In the latter case, refusal to sign the award should be mentioned thereto.
In domestic arbitration, awards are null and void if they do not state any one of the following:
- the parties’ full names and address (both for natural or legal persons);
- if applicable, the name of the parties’ counsel or representatives in the arbitral proceedings;
- the names of the arbitrators;
- the date of the award; and
- the place where the award is rendered.
The award shall also succinctly set out the respective claims of the parties and their arguments, and the reasoning on which it is based.
10.2. Time limit
In international arbitration, there is no statutory time-limit for rendering an award.
In domestic arbitration, the arbitral tribunal must render the award within six months from its constitution (i.e., when the last or the sole arbitrator accepts its remit) unless another time-limit is specified in the arbitration agreement.
The time-limit may be extended by agreement of the parties or, absent such agreement, by decision of the supporting judge.
If the award is rendered after the expiry of the fixed time-limit, the award may be challenged, unless it is shown that the challenging party took part in the arbitral proceedings without contention or disapproval.
Arbitrators may – at their discretion and in the absence of limits expressly imposed by the parties – award any remedy that would be available under contract and/or tort law – such as, notably, declaratory relief, damages, injunctions, specific performance, penalties or costs and interests – except for remedies or relief that would be contrary to international public policy, such as excessive punitive damages.
11 . Post-award proceedings
11.1. Interpretation and correction of awards
Within three months from the notification of an award, a party may apply to the arbitral tribunal to interpret the award, correct material errors and omissions, or complete the award. Unless agreed otherwise, the arbitral tribunal must render the corrected award within three months from the application.
11.2. Challenge of an award
Actions to set aside an award are only available for awards made in France, and must be lodged before the court of appeal where the award was made within one month from the award’s notification.
In international arbitration, an award may only be set aside where:
- the arbitral tribunal wrongly upheld or declined jurisdiction;
- the arbitral tribunal was improperly constituted;
- the arbitral tribunal ruled without complying with the mandate conferred upon it;
- due process was violated; or
- recognition or enforcement of the award is contrary to international public policy.
In domestic arbitration, the fifth ground for annulment is worded differently and provides that an award may be set aside if the award itself is contrary to public policy. Additionally, and only in domestic arbitration, a sixth ground for annulment exists: the award may be set aside if it fails to state the reasons upon which it is based, the date on which it was made, the name(s) or signature(s) of the arbitrator(s) having made the award or if it was not made by majority decision.
For international arbitration, there is no review available of the merits of an award. For domestic arbitration, the parties may agree that an appeal of the award is possible.
11.3. Recognition and enforcement proceedings
The application to seek recognition and enforcement of an arbitral award (exequatur) is made on an ex parte basis before the first instance civil court (tribunal judiciaire) where the award was made. For foreign awards, the Paris court has jurisdiction. There is no statutory time-limit for such application.
Exequatur is granted if:
- the applicant establishes the existence of the award, which is done by submitting originals or authenticated copies of the award and the arbitration agreement, along with a French translation if necessary; and
- the recognition and enforcement of the arbitral award is not prima facie contrary to international public policy (or the award itself is not contrary to public policy in domestic arbitration).
An appeal against the order granting or refusing exequatur is available for international awards rendered abroad.
When the award is rendered in France, an appeal against the order refusing exequatur is always available. Conversely, an appeal against the order granting exequatur is only available when the parties have expressly waived their right to lodge an action to set aside the arbitral award. This waiver is general and concerns the action to set aside an award itself – and therefore applies to all grounds for annulment.
The appeal may be lodged within a month from notification of the order and on the same grounds as the ones applicable for the annulment of international awards rendered in France (see Section 11.2 above).
11.4. Cost of enforcement
The costs to apply for an exequatur in France are nominal. Enforcement costs will vary depending on the nature of the debtor’s assets, the enforcement measures, the debtor’s endeavours to resist enforcement, and whether enforcement raises issues of sovereign immunity.
11.5. Enforcement of orders of emergency arbitrators
There is no statutory provision or specific mechanisms under French law regarding the enforcement of orders of emergency arbitrators. Although French courts could decide that an emergency order from the arbitral tribunal shall in fact be characterised as an award, thereby being eligible for exequatur, French courts would only do so if they considered that the emergency order has ruled on the dispute in a final and definitive manner.
12 . Enforcement of foreign awards
12.1. Process for enforcing New York Convention awards
France applies the New York Convention on the basis of reciprocity. Nonetheless, French arbitration law being more liberal than the New York Convention, the process for enforcing awards (as described in Section 11.3 above) is the same for all international awards, regardless of whether they have been made in France or abroad, in a contracting State or not.
12.2. Grounds for resisting enforcement of New York Convention awards
The grounds for resisting enforcement of foreign New York Convention awards are the same as that for the annulment of international awards rendered in France (see Section 11.2 above), through an appeal against the order granting exequatur (see Section 11.3 above).
Enforcement of awards is generally successful in France as French courts only control the five grounds listed in Section 11.2 above. Nonetheless, recent case law has shown that French courts proceed with a de novo review of facts and arguments, without regard for the arbitral tribunal’s findings, when assessing the jurisdiction of the arbitral tribunal or allegations of violation of issues of international public policy (e.g., corruption or money laundering allegations).
12.3. Enforcing Non-Convention awards
See Section 12.1 above.
13 . Professional and ethical rules
13.1. Applicable to counsel
French counsel or counsel based in France are subject to the professional and ethical rules of the national bar association, as well as any rules of their regional bar and the Code of Conduct of European Lawyers. The Paris Bar provides for ethical rules specifically applicable to international arbitration, such as ethical rules in relation to preparation of witnesses or recourse to third-party funding.
13.2. Applicable to arbitrators
As for counsel, arbitrators may be subject to professional and ethical rules if they are members of the national bar association.
14 . Third-party funding
14.1. Applicable regulatory requirements
Third-party funding of arbitral proceedings is permitted in France.
The Paris Bar Council has developed ethical rules in this regard, including the following:
- counsel may not directly interact with third-party funders to protect attorney-client privilege;
- counsel may not get paid directly by third-party funders; and
- counsel should encourage parties to disclose to the arbitral tribunal if third-party funders are involved in proceedings, to avoid conflicts of interest.
14.2. Overview of the third-party funding market in this jurisdiction
Some important third-party funders in France include:
- Profile Investment;
- Fortress Investment Group;
- Burford; and
- Omni Bridgeway.
15 . Trends and recent developments
Amongst the recent developments in French arbitration law, two aspects of the control of arbitral awards by French courts must be distinguished, because they are the subject of opposing views in French case law, which are particularly visible in the field of investment arbitration. Regarding the scope of control, the trend is to restrict the powers of French courts; however, as far as the depth of control is concerned, the tendency is to extend its powers.
Starting with the depth of the control, historically, the annulment judge reviewed the decision of the arbitral tribunal on its jurisdiction by seeking all the elements of law or fact, making it possible to assess the scope of the arbitration agreement. Historically, French courts performed a de novo thorough review of the arbitral tribunal’s decision on its jurisdiction. French courts have recently extended this in-depth level of control to violations of international public policy, especially when allegations of corruption or money laundering are being made. In these cases, such control may involve the examination of new arguments, new evidence regardless of the tribunal’s findings, and whether such arguments/evidence were submitted to the tribunal. We can thus see a movement in favour of greater intervention by French courts in the control of jurisdiction of arbitral tribunal and violation of international public policy.
Regarding the scope of the control of decisions of the arbitral tribunal on jurisdiction, recent case law clarifies a number of elements:
- first, the control on jurisdiction may concern only the notions of investments and investors (ratione materiae and ratione personae);
- second, these notions of investments and investors are those being defined or delimited by the treaty provision containing the arbitration agreement, and that defining the scope of the investment treaty, to the exclusion of any other; and
- third, within these two stipulations, certain criteria, including those relating to the legality of the investment or the scope ratione temporis of the treaty, are relevant to the substance and are thus excluded from the jurisdictional control.