Is there a process for challenging awards seated in France in the courts of this jurisdiction?

This is the fourth article in a series focusing on the process and procedure for challenging arbitral awards within various national jurisdictions within Europe, as prepared by Clyde & Co’s European international arbitration team. This piece is on the procedure in France and is written by associate Remi Sassine, from Clyde & Co’s Paris Office.

An award rendered in France in an international arbitration may only be challenged by applying to have it set aside (art. 1518 of the French Code of Civil Procedure (the “CCP”)). It may not be subject to appeal, even if the parties have otherwise agreed. Applications to have the award set aside are limited to five grounds:

1. the arbitral tribunal wrongly upheld or declined jurisdiction;
2. the arbitral tribunal was irregularly constituted;
3. the arbitral tribunal ruled without complying with the mandate conferred on it;
4. the due process principle was violated; and
5. the recognition or enforcement of the award breaches international public policy (art. 1520 CCP).
    

What is the legal form of the process? Are there limits on the grounds of challenge and what are they?

The requesting party must apply to set aside the award within one month of its notification (art. 1519 CPC) before the relevant Court Registry. Where the requesting party resides abroad, this timescale is extended by two months (arts. 1527 and 643 CCP). The application must indicate the lawyer who has been instructed; the reference number of the award being challenged; the court before which the setting aside is sought; the object of the request; and the parties’ details. It must also be accompanied by a copy of the award itself (art. 901 CPC).

The action for setting aside an award is brought before the Court of Appeal that has territorial jurisdiction over the place where the award was rendered (art. 1519 CPC). Regarding international awards, the application to set aside will generally be brought before the international commercial chamber of the Paris Court of Appeal (established on 7 February 2018). Before this chamber, the parties may use the English language for exhibits and, if need be, oral arguments.  
 

Does the challenge involve a rehearing of some or all of the merits?

French Courts are prevented from reviewing the merits of the dispute and thereby from making an assessment on the legal and factual reasoning of the award.

However, the scope of the court’s review varies depending on the ground relied upon. Under articles 1520-1 (jurisdiction) and 1520-5 (international public policy), the powers of French courts have significantly evolved and are now quite extensive. In relation to the international public policy ground, and specifically as it pertains to allegations of corruption, the scope of review exercised by the Court has transitioned from a minimalistic approach to an in-depth review. French Courts now even go as far as examining new arguments and evidence that were not raised before the arbitral tribunal, thus highlighting the significance given to the fight against corruption.
 

Roughly what is the timescale to complete the process? Is the challenge itself appealable?

Once the application to set aside the award has been filed, the requesting party has three months to file its submissions (art. 908 CCP). Where the requesting party resides abroad, this timescale is increased by two months (art. 911-2 CCP). Starting from the date the submissions are filed, the respondent has three months to respond (art. 909 CCP). Similarly, where the respondent resides abroad, this deadline is extended by a further two months (art. 911-2 CCP). After the first exchange of submissions, a pretrial judge will generally set a date for a case management hearing to determine whether the parties wish to agree on a procedural timetable and to proceed with the standard protocol of the specific chamber.

Overall, proceedings to set aside an award take typically between 18 to 30 months.

The judgment rendered by the Court of Appeal can be appealed before the French Supreme Court (the “Cour de cassation”) within two months of service of the judgment (art. 612 CPC). The Cour de cassation solely rules on the law and never on the facts. It can either uphold the decision or quash it in whole or in part. In the latter case, the Cour de cassation will remit the case to another court of appeal which will rule on the case again.
 

Roughly what proportion of challenges are successful?

Successful challenges to arbitral awards before French courts used to be scarce. However, they have increased over the years. Between 1981 and 1990, approximately 16% of challenges were successful, whereas, since 2016, approximately 25% of challenges have been successful, underlying the evolution of French courts’ scope of review of international awards.
 

Are there any other points of interest that you would like to highlight in relation to challenges in the jurisdiction in which you operate?

New fields have emerged and are now considered as part of international public policy. Recently, the Paris Court of Appeal has held that some international sanctions, namely European embargo measures, should be considered part of the French conception of international public policy (Paris Court of Appeal, AD Trade, 13 April 2021, n. 18/09809). It added that conformity with international public policy "is assessed at the time the court rules on the measure” and that "it is therefore necessary to take into account the evolution of the international situation [if the sanction is still enforced] and of the values commonly accepted by the international community in order to assess whether the incorporation of an award into the domestic legal order is in conformity with international public policy”.

In an even more recent decision, the Paris Court of Appeal firmly established that international sanctions – the European Union and United Nations sanctions – are part of French international public policy, but also propelled the fight against violations of human rights to the same heights, as it is protected by several international instruments (Paris Court of Appeal, 5 October 2021, n° 19/16601).

These decisions illustrate the desire by French courts to increasingly protect internationally accepted values, but also raise the question whether to include other fields within French international public policy, such as, for example, environmental related issues.