France’s international court for dispute resolution

Andrew Tetley, partner at Reed Smith LLP, explains how France’s international court-offering is part of its plans to render Paris an attractive location for international dispute resolution.

What are the new international chambers and why are they being created?

For some time, the Paris legal community has entertained the idea of a court dedicated to the resolution of international disputes. The Paris Commercial Court has had an international chamber since 2010, but this has received little fanfare.

However, the notion of international dispute resolution in Paris obtained renewed attention in 2017, with the expectation of concrete developments in 2018. The appearance of competing offerings in the Netherlands, Germany, Singapore and Dubai, together with the prospect of Brexit, has prompted renewed focus in this area from French political circles.

After soliciting a report on the matter, which was completed in 2017, the French Ministry of Justice recently gave the green light to an ambitious system of international chambers at the level of both the Paris Commercial Court and the Paris Appeal Court.

On 7 February 2018 agreement protocols for the creation of a specialist Chamber were signed by the Court of Appeal, the Commercial Court and the Paris Bar.   The new chamber is due to become operational in March 2018.

What rules will apply in the chambers?

The rules represent a significant departure from both the letter and the spirit of dispute resolution rules applicable to traditional French court proceedings.

There is a clear wish to embrace good international practice, with restrained borrowing from procedures and practices found in common law jurisdictions. For example, the draft rules envisage limited discovery, as well as the examination and cross-examination of witnesses, including expert witnesses. They also envisage that procedural timetabling will be imposed, leading to fast-track resolution, in contrast to the ordinary French commercial court process where the exchange of submissions is not typically timetabled.

As regards court costs, these should remain in line with the costs in ordinary cases, ie low—at least in the initial stages. Attitudes to awarding lawyers’ fees to the winning party may be more generous, in line with accepted international practice.

Are there significant issues in the rules which UK legal practitioners should be aware of?

The first point of interest for UK legal practitioners is that the intention is for the international chambers to operate in English. It will therefore be possible to present evidence in the English language. However, the use of English will be subject to certain limits. This is essentially due to an old law dating from 1539, the Ordinance of Villers-Cotterêts. Article 110 of the Ordinance of Villers-Cotterêts requires use of the French language for court proceedings. There is also Article 2 of the French Constitution, which affirms that the language of the French Republic is French. Together, these legislative provisions present hurdles to offering an entirely English language experience in the Paris international chambers.

There is discussion, too, of attracting foreign judges, in Singapore fashion. However, for the time being, the court will comprise French judges rendering decisions in French, with English translations, even if in all other aspects it may be possible to allow for English language to operate, where disputing parties agree.

Will Brexit help or hinder the emergence of the Paris international chambers?

The prospect of Brexit has provided the French with an incentive to move forward and establish international chambers in Paris, and promote this offering to the international community, faster than might otherwise have been the case.

With Brexit approaching, there is the prospect of London becoming less attractive for international disputes, due to both the uncertainty around the enforceability of UK judgments going forward and parallel initiatives to attract EU business away from London.

There are also some hard lines being drawn. To take one example from the area of financial services, Article 46(6) of the Markets in Financial Instruments Regulation (EU) No 648/2012 (MiFIR) requires that dispute resolution (be it before a court or by arbitration) be offered within an EU Member State. After Brexit, the London High Court will no longer qualify as an EU court, whereas the Paris-based international chambers will, of course, qualify.

Paris has already managed to win the bid to host the relocated European Banking Authority. France is also no doubt looking to attract some of the London High Court work that will likely leave London following Brexit. The international chambers may become an important part of the legal infrastructure to make Paris an attractive place for business.