INTERNATIONAL ARBITRATION NEW FRENCH INTERNATIONAL ARBITRATION LAW TO COME INTO FORCE ON MAY 1, 2011 Yvan Guillotte April 2011 France has recently adopted a modernized legal framework (Decree n 2011-48 dated January 13, 2011) granting parties to arbitration proceedings greater freedom while guaranteeing legal certainty. The success of international arbitration à la française lies in part in the efficiency of proceedings and the limited recourses available against arbitral awards. This legal reform contributes to reinforce the position of Paris as a seat of choice for international arbitration. France, and in particular Paris, is indeed considered as a seat of choice for international arbitration and the International Court of Arbitration s presence there since 1923 is certainly not coincidental. Yet, because of the increasingly competitive international arbitration market lead by common law jurisdictions, France had no other choice but to modernize its legal framework to retain its attractiveness. The previous legal framework created by two decrees dated May 14, 1980 and May 12, 1981 had become a case law system difficult to grasp, especially for foreign entities 1. The objective was thus to set up a clarified and pragmatic framework. Yet, amending the existing system was a tricky challenge since any faux pas would have driven all major players on the international business scene out of French arbitral tribunals. Consequently, this reform of the French arbitration law - and more specifically of the French international arbitration law - was long-awaited by specialists around the world. The new framework received unanimous praise. 1 Thomas Clay, Dean of the Faculty of Law of the University of Versailles 1
This brand new set of rules in French international arbitration together with the International Chamber of Commerce s recent decision to keep it headquarters in Paris 2 should consolidate the widespread interest in France s international arbitration and reinforce the position of Paris as a seat of choice for international arbitration. Below is a brief overview of the major provisions to enter into force on May 1, 2011: - On a formal standpoint, a number of new provisions of the French Code of Civil Procedure (hereinafter FCCP ) are specifically devoted to international arbitration. However, Article 1506 of the FCCP lists the provisions applicable to domestic arbitration that now extend to international arbitration, unless otherwise agreed upon by the parties. - The old definition of international arbitration in Article 1492 of the FCCP is replaced by a new definition provided for under Article 1504 of the FCCP: An arbitration is international when international trade interests are at stake. - The long-standing tenet that the arbitration agreement is independent of the contract to which it relates is reinforced (Articles 1506 and 1447 of the FCCP). - The arbitration agreement is not subject to any requirements as to its form (Article 1507 of the FCCP). - Arbitration proceedings are simplified (appointment of arbitrators, determination of the applicable procedure). - The arbitral tribunal must ensure that the parties are treated equally and uphold the principle of due process (Article 1510 of the FCCP). 2 After having considered a move to Geneva, the ICC announced on February 8, 2011, that it would shortly move in to avenue Président Wilson where the Western European Union, to be dissolved in June 2011, currently holds its office. 2
- The arbitral tribunal s powers are broadened as it can order the parties, under conditions it determines and where necessary with penalties, to take any conservatory or provisional measures it deems appropriate, save only conservatory attachments and judicial securities (Articles 1506 and 1468 of the FCPP). - The powers granted to the chairman of the arbitral tribunal are reinforced as, failing a majority decision, he will rule alone (Article 1513 of the FCCP). - The role of the President of the Tribunal de Grande Instance (First Instance Court) as supporting judge is confirmed and broadened. He is made competent to resolve difficulties in the event the parties have expressly granted jurisdiction to French courts over disputes relating to the arbitration proceedings or if one of the parties is exposed to a risk of a denial of justice (a codification of the Cour de Cassation s NIOC decision 3 ) (Article 1505 of the FCCP). - Enforcement of awards and exequatur proceedings are simplified. The enforcement order can simply be affixed to a duly authenticated copy of the arbitral award. Furthermore, translation requirements are lessened as documents can be translated by a translator whose name appears on a list of court experts or any translator accredited by the administrative or judicial authorities of another Member State of the European Union, a Contracting Party to the European Economic Area or the Swiss Confederation (Article 1515 of the FCCP). - The only means of recourse against an arbitration award rendered in France in an international arbitration is an action to set aside that can only be brought if arbitral tribunal wrongly upheld or declined jurisdiction, if it was not properly constituted, if it ruled without complying with the mandate conferred upon it, if due process was violated or if recognition or enforcement of the award is contrary to international public policy (Article 1520 of the FCCP). 3 Decision of the French Supreme court: Cass. 1 st civ., February 1 st, 2005, Bull. civ. I, n 53 3
- By way of specific agreement the parties may, at any time, expressly waive their right to bring an action to set aside. In this event, the parties can nonetheless retain their right to appeal an enforcement order on one of the grounds to set aside (Articles 1522 and 1520 of the FCCP). - An order denying recognition or enforcement of an international arbitral award made in France may be appealed (Articles 1523 o the FCCP). - No recourse may be had against an order granting the enforcement of an award, unless the parties have waived their right to bring an action to set aside (Article 1524 of the FCCP). - Recourses against arbitral awards no longer suspend immediate enforcement of the award (Article 1526 of the FCCP). 4
Click here to consult the e-newsletter You can also copy this link: http://79.141.9.44/newsletter/index.php5?id_lettre=5250 Articles published in Soulier s April 2011 e-newsletter Competition & Antitrust: Seizures of electronic data: the Cour de cassation indirectly validates the investigation methods applied by the French Competition Authority by Sarah Temple-Boyer Antitrust Infringements: Acquisition of subsidiaries and group liability in respect of antitrust infringements by Laure Marolleau International Arbitration: New French international arbitration law to come into force on May 1, 2011 by Yvan Guillotte International Perspective: Korea Passes Major Amendments to Company Law contribution authored by Bae, Kim & Lee LLC Soulier s e-newsletters are available on our website www.soulier-avocats.com E-mail info@soulieravocats.com 5