France: arbitration round-up 2010/2011 | Practical Law

France: arbitration round-up 2010/2011 | Practical Law

An article highlighting the key arbitration related developments in France in 2010/2011.

France: arbitration round-up 2010/2011

Practical Law UK Articles 6-504-7023 (Approx. 3 pages)

France: arbitration round-up 2010/2011

by PLC Arbitration
Published on 02 Feb 2011France
An article highlighting the key arbitration related developments in France in 2010/2011.

Top developments of 2010

Tecnimont SPA v J&P Avax SA

On 4 November 2010, the French Supreme Court reversed a Paris Court of Appeal decision setting aside a partial ICC award on the ground that the tribunal had not been properly constituted (see Legal update, French Supreme Court reverses Court of Appeal decision to annul ICC award). The Court of Appeal found that the chairman had failed to make full and accurate disclosures and allowed the application for annulment of the partial award. However, the Supreme Court noted that the respondent's application for annulment was based on facts known to it prior to the issue of the partial award (and which in fact had been raised in support of an unsuccessful challenge to the appointment that had been dismissed by the ICC). By relying on such matters, the Court of Appeal had, in effect, redefined the subject-matter of the dispute, and had thereby breached Article 4 of the French Code of Civil Procedure.
The exceptional circumstances of this case are noteworthy, particularly as the arbitrator acknowledged his perceived lack of independence after the delivery of the partial award, and following the unsuccessful challenge to his appointment before the ICC Court. Of greater interest, though, is the Supreme Court's readiness to overturn the Court of Appeal's decision to annul the award, despite the chairman's resignation and acknowledgement of a perceived lack of independence. The application for annulment has been referred to the Court of Appeal of Reims.

Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger

In March 2010, the Tribunal de Grande Instance (the Paris court of first instance) rejected an application for an anti-arbitration injunction, ruling that once an arbitral tribunal is formed, only the arbitrators have the power to deal with their own jurisdiction (see Legal update, Rejection of anti-arbitration injunctions by French courts). In this case, the respondent initiated ICC arbitration proceedings in Paris. The tribunal first rendered a partial award rejecting the claimant's challenge to the tribunal's jurisdiction. The claimant challenged the partial award on jurisdiction before the Paris Court of Appeal and, accordingly, made an application before the arbitral tribunal to stay the arbitration proceedings. After the arbitral tribunal rejected this application, the claimant initiated summary proceedings before the Tribunal de Grande Instance, requesting an injunction enjoining the arbitrators from continuing the arbitration until the Court of Appeal rendered its decision. The Tribunal de Grande Instance found that, once the arbitral tribunal is formed, only the arbitrators have the power to deal with their own jurisdiction. It held that, because jurisdictional issues fall outside the French state courts' jurisdiction, it could not order the arbitrators to stay the proceedings. This decision is another demonstration of the French courts' favourable predisposition towards arbitration and follows two other recent French cases - SA Elf Aquitaine and Total v Mattei, Lai. Kamara and Reiner and In Zone Brands.

Anticipated Developments of 2011

The new French arbitration law

On 13 January 2011, France published a decree which reforms current French arbitration law in relation to both domestic and international arbitration. The Decree includes new provisions, incorporates a significant number of contributions from French case law over the last thirty years, and clarifies and simplifies provisions that were open to interpretation (see Legal update, The new French international arbitration law). The new law will enter into force on 1 May 2011.

International Chamber of Commerce (ICC)

The ICC Commission Task Force is continuing its review of the ICC Rules of Arbitration. The Task Force was formed in October 2008 to ensure that the rules continue to meet the needs of users and to take into account any developments in the fields of arbitration and information technology since the current rules came into force in 1998. The new rules are expected to be launched in 2011. In March 2009, a further ICC Task Force on arbitration involving states or state entities was tasked with reviewing the ICC rules and procedures and their use in disputes involving a state party, in particular in investment treaty arbitration (see Article, Investment treaty arbitration: round-up 2010/2011).
The location of the ICC Court in Paris has also been under discussion following a proposal from the French government regarding its relocation. Confirmation of its location going forward is expected in 2011.