Arbitration analysis: In two identical decisions dated 10 September 2024, the Paris Court of Appeal (the Court) dismissed the applications of three US companies, to whom two arbitral awards had been assigned, to voluntarily join appeal proceedings against the two orders granting leave to enforce in France said arbitral awards rendered against the Republic of India. The court ruled that despite the two arbitral awards having been assigned to the three US companies, their voluntary joinder requests were inadmissible because neither the arbitration agreement nor Article 1527 of the French Code of Civil Procedure (FCCP), which governs annulment and enforcement proceedings of foreign arbitral awards in France, provided for the possibility for third parties assignees to join enforcement proceedings. These decisions have significant implications for third parties (such as third-party funders) seeking to monetise and enforce arbitral awards in France since the court clarified that third-party joinders of arbitral awards’ assignees are precluded in the context of annulment or enforcement proceedings, unless expressly agreed by the parties to the arbitration agreement. Written by Julie Spinelli, partner at Le 16 Law (with the assistance of Emma Ruby, associate at Le 16 Law).

Arbitration analysis: In a decision dated 23 May 2023, the Paris Court of Appeal (the Court) dismissed an application to set aside an ICC award rendered in favour of the Libyan National Oil Corporation (NOC) brought by Trasta Energy Ltd (Trasta) on the grounds that: (i) the arbitral tribunal was wrongfully constituted, (ii) the principles of due process and equality of arm were violated, and (iii) the recognition or enforcement of the award would be contrary to international public policy. The main takeaway of this decision stems from the Court’s reasoning regarding the independence of the presiding arbitrator whereas Trasta argued that the latter had failed to disclose that a member of her barristers’ chambers was representing Libya in a parallel court proceeding in a case that was heavily publicised. In dismissing the application, the Court applied an in-depth analysis of the criteria to take into consideration when assessing the admissibility and the merits of the duty to disclose. On the admissibility of the claim, in accordance with its recent case law, the Court held that the arbitrator’s duty to disclose is ongoing throughout the proceedings, whereas the parties’ obligation to research the independence of the arbitrator ends once the tribunal is constituted. As such, even though the information was notorious and accessible, it was the arbitrator’s duty to disclose said information and the claim was therefore admissible. On the merits of the claim, in accordance with the IBA Rules and more specifically the ICC Note to Parties on the conduct of arbitration under the ICC (the ICC Note), the Court sought to apply different standards of disclosure depending on whether the arbitrator is a member of a law firm or barristers’ chambers. Following the distinction set by the ICC Note, the Court held that the disputed circumstances did not fall within the scope of the arbitrator’s duty to disclose, pursuant to the ICC Note. Regarding the violation of the French international public policy, the Court took the opportunity to remind practitioners that a violation of the forum’s overriding mandatory provisions does not, in and of itself, constitute a valid ground for annulment unless it also violates French international public policy. Written by Julie Spinelli, partner at Le 16 Law (with the assistance of Anaïs Leray, intern at Le 16 Law).

Arbitration analysis: The Paris Court of Appeal has overturned the enforcement of a €280m award against Libya, ruling that the State had not been given a fair opportunity to defend itself, as the award was issued by default in Libya's absence. The case was brought before the Paris Court of Appeal by the State of Libya, appealing an enforcement order (ordonnance d’exequatur) dated 6 March, 2017, which had recognized an arbitral award in favor of the Tunisian company Siba Plast. However, the Court of Appeal overturned this decision, on the basis of a violation of the principle of adversarial proceedings. The court determined that Libya had not been properly notified of the arbitration proceedings and, as a result, the State was unable to present its case or exercise its legal rights. Consequently, the court overturned the enforcement order and ordered Siba Plast to pay legal costs to the State of Libya. Written by Raphaël Kaminsky, partner at Teynier Pic, and Josefina Pagani, intern at Teynier Pic.

Arbitration analysis: In a recent judgment, the Paris Court of Appeal (the Court) partially set aside an ICC award, finding that the arbitral tribunal had exceeded its powers by ruling on an issue that was beyond the scope of the Terms of Reference (ToR) and the claimants’ submissions (the Judgment). The Court examined the claims included in the ToR and the claimants’ submissions and concluded that one of the tribunal’s findings dealt with a claim that was not in fact made. The Court further declined to address the allegations of fraudulent acts and violations of applicable liquidation rules, as the relevant parts of the award were already covered by the set aside decision. Written by Ketevan Betaneli, senior knowledge lawyer at Freshfields Bruckhaus Deringer.

Arbitration analysis: In this decision, the Paris Court of Appeal (the Court) dismissed the Central Bank of Iraq (CBI)’s request to annul the arbitral award on multiple grounds. First, the court found that CBI’s claim that the recognition and enforcement of the award in France would violate French international public policy was inadmissible. It held that the allegations (such as fraud and misappropriation of public funds) pertained solely to private contractual disputes rather than actual matters of international public policy. Consequently, CBI was deemed to have waived its right to raise these irregularities by failing to do so in a timely manner during the arbitral proceedings. Second, the court dismissed CBI’s claim that the sole arbitrator would have violated due process and the principle of equality of arms. The court found that CBI had been given ample opportunity to participate in the proceedings but chose not to do so. It also found that the sole arbitrator had reasonably addressed CBI’s late request to reopen the proceedings, ensuring CBI had a fair chance to present its case. Third, the court dismissed CBI’s claim that the sole arbitrator would have failed to respect his remit. It concluded that the arbitrator was not required to address every argument raised by CBI, particularly since CBI did not submit a formal claim during the arbitration process. The sole arbitrator’s conduct was consistent with the agreed scope of the arbitration. Finally, the court rejected CBI’s ground for annulment based on the alleged lack of impartiality of the sole arbitrator. The court found that the arbitrator’s actions were neutral and objective throughout the proceedings, and that CBI’s claims of bias were unfounded. Therefore, the court dismissed all of CBI’s grounds for annulment. Written by Julie Spinelli, partner at Le 16 Law (with the assistance of Emma Ruby, associate at Le 16 Law).

Arbitration analysis: In a rather long, yet very didactic decision, the Paris Court of Appeal (the Court) dismissed the application to set aside an arbitral award brought by an applicant who raised no less than four of the five permitted grounds for annulment, in the hope that something would stick. Dealing with each of the grounds invoked for the annulment in turn, the Court dismissed the application, reiterating in passing some fundamental principles of French international arbitration law, such as (i) the definition of international arbitration; (ii) the prohibition for the annulment judge to proceed, in the context of annulment proceedings, with a judicial review of the award on the merits; (iii) the inadmissibility of an argument based on a procedural irregularity that the applicant failed to raise during the arbitration; (iv) the right for an arbitral tribunal adjudicating a case ex aequo et bono to apply the law if it conforms with equity; and (v) the definition of French international public policy. Moreover, the Court reasserted that the principles of good faith and effectiveness (effet utile) of arbitration agreements should govern the interpretation of unclear arbitration agreements to determine the parties’ common intention. Written by Julie Spinelli, partner at Le 16 Law (with the assistance of Carl Szymura and Emma Ruby, associates at Le 16 Law).

Arbitration analysis: The Paris Court of Appeal has upheld an International Chamber of Commerce (ICC) award that ordered the Albanian Road Authority (ARA) to comply with dispute board decisions in favour of a contractor for a road project. The court held that the arbitral tribunal had jurisdiction over the dispute, as the Albanian authorities’ failure to seek approval from the project’s financiers for amendments to the dispute resolution provisions in the construction contracts did not invalidate the parties’ consent to arbitration. Moreover, the tribunal’s decision to determine additional claims that had not been submitted to the dispute boards raised a question of admissibility, not jurisdiction, that fell outside the court’s powers in set-aside proceedings. Written by Gisèle Stephens-Chu, avocate à la cour and solicitor-advocate, Stephens Chu Dispute Resolution.

Arbitration analysis: The Paris Court of Appeal set aside a US$180m award in favour of a public works company owned by an Italian businessman, on the ground that to uphold the award would allow the company to benefit from the corruption of Gabonese public officials, in violation of the French concept of international public policy. The court refused to take into account the relevant public officials’ admissions of guilt, obtained in conditions that violated fundamental human rights. Nonetheless, it found indicia of corruption in the circumstances surrounding the conclusion and performance of the contracts, corroborated by evidence of criminal investigations in Switzerland that post-dated the award. In so doing, the court affirmed its power to conduct a de novo review of the evidence, and to consider fresh evidence, for the purposes of upholding international public policy and reached conclusions diametrically opposed to those of the arbitral tribunal. Written by Gisèle Stephens-Chu, avocate à la cour and solicitor-advocate, Stephens Chu Dispute Resolution.

Arbitration analysis: In its judgment dated 28 March 2023, the Paris Court of Appeal refused to annul an award that allegedly awarded damages suffered by a third party, namely a joint subsidiary of the parties to the arbitration. The court considered, on the one hand, that the objection raised by the applicant did not go to the arbitral tribunal’s jurisdiction, but instead related to the determination of damages and, thus, the merits of the case. On the other hand, the court rejected the applicant’s public policy objection based on the argument that the tribunal had awarded damages that were suffered by the joint subsidiary, since the award explicitly confirmed that the claimant was only seeking to recover its own damages, and sought to do so based on a methodology that had been jointly proposed in the arbitration by both parties’ experts. Written by John Adam, partner at Squire Patton Boggs.

Arbitration analysis: On 12 September 2023, the Paris Cour d’Appel (the ‘Paris Court of Appeals’) upheld a jurisdictional award against Vietnam in an arbitration initiated by a US-Vietnamese national and two US-incorporated companies under the US-Vietnam Trade Relations Agreement RTA (the ‘Treaty’). In its decision, the court found that the Treaty did not prohibit claims from investors holding the nationalities of both Treaty parties. Written by Diego Romero, associate at Latham & Watkins, Paris.

Arbitration analysis: The Paris Court of Appeal upheld exequatur of a DIAC award between two shareholders, rejecting challenges to jurisdiction, excess of mandate, adversarial fairness and international public policy. Although the company’s articles did not expressly extend the arbitration clause to inter-shareholder disputes, the appellant’s Answer invoking the clause and his signature of Terms of Reference confirming its application established consent; a generic reservation did not undo that agreement. The court also confirmed that a tribunal’s mission is defined principally by the parties’ claims, permitting an increased quantum where properly advanced. Practitioners should raise jurisdictional objections expressly and promptly and avoid procedural language capable of evidencing consent to arbitrate. Produced in partnership with Clément Fouchard of Reed Smith.

Arbitration analysis: The Paris Court of Appeal dismissed Interprom’s application to annul an arbitral award under Article 1520 5° of the French Code of Civil Procedure. Allegations that the award had been procured through procedural fraud or gave effect to fictitious or unlawful transactions did not justify reconsidering factual and evidential matters already determined by the tribunal. The judgment confirms that international public policy cannot be used as a vehicle for reviewing an award on the merits: applicants must identify a specific infringement of fundamental principles rather than repackage arguments advanced in the arbitration. The court also confirmed that annulment proceedings cannot accommodate damages claims for allegedly abusive arbitration, which must be pursued through other procedural avenues. Produced in partnership with Marie-Laure Cartier and Alexandre Meyniel, partners and Hugo Deloche, associate at Cartier Meyniel.