The French Court of Cassation confirms the effectiveness of arbitration agreements and jurisdiction of arbitral tribunals where a party is subject to insolvency proceedings (Vacama v La Tagliatella)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Arbitration analysis: The French Court of Cassation helpfully confirms the continued effectiveness of arbitration agreements and jurisdiction of arbitral tribunals where a party is subject to insolvency proceedings. Under French law, a party subject to insolvency proceedings can decide whether to proceed with an ongoing contract or not when its co-contractor invites it to do so. Yet, as the court clarified, the party subject to insolvency proceedings cannot take advantage of this possibility to get out of an arbitration agreement included in an ongoing contract. Disputes arising out of ongoing contracts, where one of the parties is subject to insolvency proceedings, should therefore be brought before arbitral tribunals, not national courts. Written by Angélica André, counsel at White & Case LLP, Paris.