Law360:The French Supreme Court hasdismissed a US$14.9bn arbitration award brought against Malaysia by the heirs of the long-defunct Sultanate of Sulu over a soured land deal agreement, as the court said the arbitration award is not recognised under French law.

Arbitration analysis: The Paris Court of Appeal reaffirmed the narrow scope of annulment under Article 1518 of the French Code of Civil Procedure (FCPC), holding that only decisions which definitively determine the merits, jurisdiction, or terminate proceedings qualify as arbitral awards. Procedural orders refusing withdrawal and managing procedural timelines did not meet that threshold and were therefore not amenable to challenge. The court emphasised that admissibility is distinct from the merits of annulment grounds, rendering arguments based on excess of mandate or public policy inoperative at this stage. The decision underscores the tribunal’s control over proceedings and limits tactical attempts to disrupt arbitration through premature court intervention. Produced in partnership with Claire Pauly and Thomas Dauvillier of Jones Day.

Arbitration analysis: On 12 June 2025, the French Court of Cassation held that a foreign State’s declaration that assets were used for diplomatic purposes created a presumption pursuant to which said assets enjoyed immunity from execution. According to the court, such presumption could be rebutted by the judgment creditor if the latter could submit a form issued by the French Ministry of Foreign Affairs confirming that the assets in question (i) had not been declared by the foreign State as used for the purposes of its diplomatic mission or (ii) had been declared by the foreign State but subsequently rejected by the French Ministry of Foreign Affairs. The court also carved out an exception to the evidentiary test it had laid down: pursuant to the principle of the unicity of the legal status of immoveable property (Principe d’unicité du statut du bien immobilier), the court ruled that, even if the conditions (i) and (ii) were unsatisfied, a foreign State could still claim diplomatic immunity from execution over its immoveable property if that property had benefited from tax exemptions which would normally benefit diplomatic properties in accordance with the 1961 Vienna Convention. Written by Marie-Laure Cartier and Alexandre Meyniel, partners at Cartier Meyniel AARPI.

The online form to allow adults and families in France to express interest in being transferred to the UK has gone online. The form excludes people without a valid identity document confirming nationality and it excludes unaccompanied children from applying. Both exclusions are controversial due to the barriers many refugees face in obtaining official identity documents and due to the undesirability of leaving children to make dangerous journeys to join relatives in the UK. It may be that the exclusions will be revisited during the course of the 'pilot' transfer agreement. Arrivals by small-boat from France who meet the returns criteria face detention and removal back to France, following the ratification of the agreement earlier this week.

Arbitration analysis: In a decision dated 25 March 2025, the Paris Court of Appeal ruled on the conditions under which annulment proceedings against an arbitral award may be stayed in light of a pending or anticipated assessment by the European Commission regarding the compatibility of said award with EU state aid rules. The ruling clarifies the burden of proof borne by parties invoking EU law-based objections to enforcement of arbitral awards. Written by Flore Poloni, partner & Kimberley Bazelais, associate at Signature Litigation.

Arbitration analysis: In this case, the French Court of Appeal, deciding on a referral from the French Court of Cassation, rejected the appellant’s objection that the arbitral tribunal was invalidly constituted and lacked jurisdiction. The Court of Appeal first held that the appellant did not waive its argument concerning the appropriateness of the constitution of the arbitral tribunal which had been raised before the International Court of Arbitration of the International Chamber of Commerce (ICC Court). For the French Court of Appeal, a party’s waiver (as far as Article 1466 of the French Code of Civil Procedure (CPC) is concerned) must be unequivocal. On the merits, however, the Court of Appeal rejected the application against the order that granted exequatur of the arbitral award, confirming that the ICC International Court of Arbitration (ICC Court) had the power to appoint the three-member arbitral tribunal pursuant to the parties’ arbitration agreement. In the Court of Appeal’s view, the interpretation of arbitration clauses must be guided by a principle of coherence and usefulness and favour an interpretation that gives effect to the clause. Therefore, the action to refuse exequatur was dismissed. Written by William Kirtley, partner, and Isabela Monnerat Mendes, associate, at Aceris Law.

Arbitration analysis: In a decision dated 21 January 2026, the Court of Cassation upheld the annulment of an arbitral award on the ground of lack of independence under article 1520 2°, CPC. The court confirmed that the assessment of independence is objective and may take into account direct or indirect economic links between an arbitrator’s law firm and a third party holding a stake in the outcome of the arbitration. The decision is notable for expressly stating that relevant links may be ‘fussent-ils indirects’ (‘even if indirect’), thereby clarifying that reasonable doubt may arise even in the absence of a direct personal relationship between the arbitrator and a party. Written by Anna Guillard Sazhko, International Arbitration Counsel and Arbitrator.

Arbitration analysis: On 4 June 2024, the Paris Court of Appeal ruled that compliance with FIDIC clauses on mandatory and prior settlement of disputes is a question of admissibility and not jurisdiction. Consequently, arguments related to non-compliance with these clauses fall outside of the scope of review of the annulment judge.

Law360: The Paris Court of Appeal annulled an International Chamber of Commerce (ICC) €452m ($US 536m) award issued to French electronic component distributor Sorelec following a dispute stemming from a school construction contract, saying that the award was based on a corruptly procured settlement.

Arbitration analysis: The Paris Court of Appeals set aside an arbitral award that had granted the Maltese construction company Webcor ITP (Webcor) and its Gabonese subsidiary Grand Marché de Libreville (GML), more than $US 100m in damages on the ground of the violation of international public policy as it held, based on the evidence discovered only after the award has been rendered, that the underlying contracts were obtained through corruption. The court found that while negotiating the contracts, a former mayor of Libreville was offered a luxurious honeymoon by the construction companies, which together with the accompanying circumstances led it to consider that there were ‘serious, precise and consistent indications’ of corruption. With this decision, the court confirmed that an award giving effect to corrupt practices cannot be granted recognition and/or enforcement in France as it violates international public order. The court also reminded that a mere violation of a mandatory provision of foreign law cannot per se justify annulment of an award in France. Written by Marie Danis, partner, and Karol Bucki, associate, at August Debouzy.

Case analysis: the French Cour de cassation confirmed the Paris Court of Appeal’s finding that, in the absence of a prior failed attempt to initiate proceedings for lack of the necessary financial resources, a party’s impecuniosity does not in itself render the arbitration agreement manifestly inapplicable. Written by Marie-Laure Cartier and Alexandre Meyniel, Avocats au Barreau de Paris at Cartier Meyniel Schneller.

Loan market and developments Please provide a brief overview of the current state of the loan markets in your jurisdiction and any significant recent market developments. The main funding source for small and medium-sized companies (Petites et Moyennes Entreprises) and for mid-cap companies (Entreprises de Tailles Intermédiaires) are still bank credit facilities. However, it should be noted that those companies try to diversify funding sources so as not to be too dependent on bank financing and to find funding sources with larger maturity periods. Companies are using more and more corporate bonds as a funding source notably with the unirate loan financing which is a single tranche of financing combining senior and mezzanine debt in a single line of credit subscribed in a private fund. The main difficulty related to this diversification of funding sources is the French banking monopoly rules as stated below. Please provide a brief overview of forthcoming changes to the law or other matters that may affect the loan markets or the responses to the questions