France: Arbitration

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This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in France including arbitration agreements, tribunals, proceedings as well as costs, awards and the hot topics concerning this country at present.

This Q&A is part of the global guide to Arbitration.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/

  1. What legislation applies to arbitration in your country? Are there any mandatory laws?

    Since Decree No. 2011-48 of 13 January 2011, the main provisions applicable to arbitration in France are set out in Book IV of the Code of Civil Procedure (CCP) (Articles 1442 to 1527). A few provisions on arbitrability issues can also be found in the French Civil Code (Articles 2059 to 2061). The decisions of the Court of Cassation and of the Paris Court of Appeal are also very important in interpreting the codes and specifying their content because, although there is no doctrine of precedent as such under French law, lower courts generally rely on decisions of higher courts.

    French law makes a clear distinction between domestic and international arbitration, although some provisions of the CCP apply to both. Arbitration is deemed “international” when international trade interests are at stake (Article 1504, CCP). This criterion is economic rather than legal and therefore means that the following are irrelevant to determining whether the arbitration is international:

    • The nationality of the parties.
    • The law applicable to the merits or to the procedure.
    • The location of the seat.

    What matters is that the underlying economic transaction operates a transfer of goods, services or funds across national borders (Paris Court of Appeal, 5 Apr 1990, 1992 Rev Arb 110).

    Some of the provisions applicable to domestic arbitration are also applicable to international arbitration (Article 1506, CCP). However, the French legislature has developed two separate regimes, with a number of more liberal principles applicable only to international arbitration.
    Only a few mandatory legislative provisions are applicable to arbitration in France, which is very favourable to party autonomy.

    Certain provisions guaranteeing the fairness of the arbitration proceedings cannot be derogated from by the parties or disregarded by the arbitral tribunal. More specifically, the tribunal must always ensure that the principles of equal treatment of the parties and due process are respected (Article 1510, CCP). In addition, arbitrators cannot base their decision on facts or legal rules that were not debated by the parties (Court of Cassation, First Civil Chamber, 29 June 2011, No. 10-23.321).

    Moreover, an arbitration award must not violate French international public policy. Such violations can lead to the award being set aside. In this regard, the French courts had ruled that the enforcement of an arbitration award can be denied only if giving effect to the award would result in a "flagrant, effective and concrete" violation of international public policy (Paris Court of Appeal, 18 Nov 2004, No. 2002/19606, Thalès; Court of Cassation, First Civil Chamber, 4 June 2008, No. 06-15.320, Cytec). However, certain commentators have criticised this somewhat minimalist approach, advocating a less deferential review. Recent decisions by the Paris Court of Appeal have referred only to an “effective and concrete” violation, suggesting that the French courts may become more willing to carry out a deeper review of the underlying award (Paris Court of Appeal, 4 March 2014, No. 12/17681, Gulf Leaders; 14 October 2014, No. 13/03410, Commisimpex). However, it remains to be seen whether this standard will be limited to cases where allegations of corruption are made and whether the Court of Cassation will approve it.

  2. Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?

    France is a signatory of the New York Convention, which entered into force in France on 24 September 1959. France has made a reciprocity reservation, but the provisions applicable to the recognition and enforcement of foreign awards are applicable to all awards rendered in foreign countries, regardless of whether they are signatories of the New York Convention or not. In practice, the New York Convention is rarely applied in France, as French arbitration rules on recognition and enforcement are generally more favourable than the New York Convention (for example, on the requirement of a writing).

  3. What other arbitration-related treaties and conventions is your country a party to?

    France is a party to the Geneva (European) Convention on International Commercial Arbitration of 1961 and the Washington Convention of 1965 creating the International Centre for Settlement of Investment Disputes (ICSID). Additionally, France has entered into bilateral treaties on the protection of investments with more than 100 States.

  4. Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?

    French law on arbitration is not based on the UNCITRAL Model Law. However, French law provisions applicable in international arbitration are no less favourable and are even substantially more liberal than the UNCITRAL Model Law in some respects – for example, with regard to the recognition and enforcement of arbitral awards made abroad or in international arbitration.

  5. Are there any impending plans to reform the arbitration laws in your country?

    Decree No. 2011-48 of 13 January 2011 made some significant changes to French arbitration law. The Decree codified some well-established jurisprudence and developed some new principles. It is therefore unlikely that there will be any further extensive changes made to arbitration law in the near future. However, the French courts are often one step ahead of the legislator when it comes to developing French arbitration law.

  6. What arbitral institutions (if any) exist in your country?

    The International Chamber of Commerce (ICC) is the most well-known arbitral institution in France and, arguably, in the world.

    Other prominent Paris-based arbitration institutions include the:
    • French Arbitration Association (Association française d'arbitrage).
    • Paris Centre for Mediation and Arbitration (Centre de médiation et d'arbitrage de Paris).
    • International Arbitration Chamber of Paris (Chambre arbitrale internationale de Paris).

    There are also specialized arbitration centers for shipping and insurance disputes, such as the:
    • Paris Maritime Arbitration Chamber (Chambre arbitrale maritime de Paris).
    • French Reinsurance and Insurance Arbitration Centre (Centre français d'arbitrage de réassurance et d'assurance).

  7. What are the validity requirements for an arbitration agreement under the laws of your country?

    In domestic arbitration, an arbitration agreement must be in writing to be valid (Article 1443, CCP).

    In international arbitration, French law does not impose any formal requirements, and the arbitration agreement does not need to be in writing or in any specific form (Article 1507, CCP). However, it is easier to prove the existence of an arbitration agreement where there is a writing.

    For both domestic and international arbitration, there are no substantive requirements, apart from the requirement that the underlying dispute be arbitrable (see Question 11).

  8. Are arbitration clauses considered separable from the main contract?

    French law recognizes the principle of the autonomy or separability of arbitration agreements (Article 1447, CCP).

    The nullity of the main contract thus does not affect the validity of the arbitration agreement, and an arbitral tribunal has jurisdiction to rule on allegations made by a party as to the nullity of the main contract, if that contract contains a valid, or at least not manifestly void, arbitration clause.

    In order to assess the validity of an international arbitration agreement, the French courts do not refer to the law applicable to the main contract (or to any national law). Instead the courts have established a “substantive” rule of international arbitration (règle matérielle) and look only to the parties’ consent to arbitrate their disputes as a factual matter (see Court of Cassation, First Civil Chamber, 20 December 1993, No. 91-16.828, Dalico). There is a presumption of validity, and a party challenging an arbitration agreement bears the burden of proving its nullity (see Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430, Zanzi).

  9. Can claims under more than one contract be brought in the one arbitral proceeding? Can an arbitral tribunal with its seat in your country consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

    French law does not preclude the parties from bringing claims arising out of more than one contract in one arbitral proceeding. In defining arbitration agreements, Article 1442 CCP provides that an arbitration clause is an agreement by which the parties to one or more contracts undertake to submit to arbitration disputes that may arise in relation to the contract(s). Although Article 1442 CCP is not applicable in international arbitration, pursuant to Article 1506 CCP, many scholars are of the opinion that the definition that Article 1442 CCP provides for the arbitration clause also applies in international arbitration. Therefore, French law allows the parties to bring claims arising out of more than one contract in one arbitral proceeding, on the condition that they consent.

    In addition, nothing under French law precludes the consolidation of separate arbitral proceedings. It has been established, however, that the consolidation cannot take place without the explicit or implicit consent of the parties. Unless the consent is explicit, it is highly likely that arbitral tribunals will agree to consolidate arbitral proceedings only if the claims in question arose out of related contracts and the arbitration agreements in question are well-matched in terms of the applicable procedures. (See Eurodif Case Paris, 21 February 2002, Rev Arb 2002.955). In the absence of explicit or implicit consent of the parties, tribunals are usually more inclined to reject consolidation. Arbitral tribunals consider that the intention of the parties was not to consolidate arbitral proceedings when the arbitration agreements are not well-matched. French courts have also confirmed awards that were rendered in consolidated arbitrations. (see Paris Court of Appeal, 22 October 2009, Case No. 08/13030; 5 November 2009, Case No. 08/12816; 17 December 2009, Case No. 08/15208).

  10. How is the law applicable to the substance determined?

    French law provides that, in domestic arbitration, the arbitral tribunal has to decide disputes in accordance with the law, unless the parties have empowered it to rule as amiable compositeur (Article 1478, CCP). The principle of party autonomy is recognized under French law, and arbitral tribunals should abide by the provisions agreed upon by the parties, even if they do not accord with French law, unless they infringe upon mandatory rules or rules of public policy in France. Where no law is chosen, normal conflicts of law rules are generally applied.

    In international arbitration, French law provides that arbitrators have to decide the dispute in accordance with the rules of law chosen by the parties. If the parties have not chosen the applicable law in relation to a particular issue, arbitrators have the right to choose whatever rules of law they consider appropriate, regardless of conflict of laws rules. In any event, arbitrators have to take trade usages into account (Article 1511, CCP).

    If the parties empower the arbitral tribunal to rule as amiable compositeur, then it has to rule as such (Article 1512, CCP).

  11. Are any types of dispute considered non-arbitrable? What is the approach used in determining whether or not a dispute is arbitrable?

    A limited number of types of disputes may not be resolved via arbitration. Parties are, however, free to arbitrate anti-trust and intellectual property disputes, for example. Those disputes that cannot be resolved through arbitration include those relating to:

    • Civil status and capacity of natural persons.
    • Divorce and judicial separation of spouses.

    In addition, disputes involving certain categories of public authorities and entities cannot be arbitrated.

    In principle, certain types of consumer and employment disputes also cannot be resolved through arbitration.

    However, the Court of Cassation has held that this provision does not apply in the same way to international arbitration (Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430, Zanzi). For example, in the case of an international employment contract containing an arbitration clause, the French courts considered the arbitration clause not to be null and void but that the employee was nevertheless not prevented from initiating a claim before the French Employment Courts (as would normally be the case with a valid arbitration clause) (Court of Cassation, Social Chamber, 16 February 1999, No. 96-40.643).

  12. In your country, are there any restrictions in the appointment of arbitrators?

    In both domestic and international arbitration, the parties are free to determine the number of arbitrators, directly or by reference to arbitration rules (Articles 1444 and 1508, CCP).
    However, in domestic arbitration, the number of arbitrators cannot be an even number, so that, if the arbitration agreement provides for an even number of arbitrators, an additional arbitrator must be appointed (Article 1451, CCP). There is no corresponding rule for international arbitration.

    The CCP does not provide for a default number of arbitrators in the absence of an agreement.

    French law imposes few requirements on arbitrators, none of which relate to the arbitrators’ nationality or professional qualifications.

    Specifically, the CCP provides that only natural persons having full capacity can act as arbitrators in domestic arbitration proceedings.

    Legal persons, if designated in the arbitration agreement, can only administer the arbitration (Article 1450, CCP). This provision does not apply to international arbitration.

  13. Are there any default requirements as to the selection of a tribunal?

    French law contains few default requirements that are applicable in case the parties do not agree otherwise. For example, Article 1452 CCP provides that, if the parties do not agreed on the procedure for appointing the arbitrator(s):

    (1) Where there is to be a sole arbitrator and if the parties fail to agree on the arbitrator, he or she shall be appointed by the person responsible for administering the arbitration or, where there is no such person, by the judge acting in support of the arbitration. In France, the judge acting in support of the arbitration is called the juge d’appui.

    (2) Where there are to be three arbitrators, each party shall appoint an arbitrator, and the two arbitrators so appointed shall appoint a third arbitrator. If a party fails to appoint an arbitrator within one month following receipt of a request to that effect by the other party, or, if the two arbitrators fail to agree on the third arbitrator within one month of having accepted their mandate, the person responsible for administering the arbitration or, where there is no such person, the juge d’appui shall appoint the third arbitrator.

    Similarly, Article 1453 provides that, if there are more than two parties to the dispute and they fail to agree on the procedure for constituting the arbitral tribunal, the person responsible for administering the arbitration or, where there is no such person, the juge d’appui shall appoint the arbitrator(s).

  14. Can the local courts intervene in the selection of arbitrators? If so, how?

    The French juge d’appui can be asked to appoint one or several arbitrators where the parties cannot agree on their appointment and where the arbitration is not administered by any institution.

    In domestic arbitration, the support judge is the President of the Tribunal de grande instance (or of the Commercial Court, if the arbitration agreement so provides) (Article 1459, CCP). Article 1459 CCP lays down the rules to determine which Tribunal de grande instance has territorial jurisdiction – typically (in the absence of specific agreement of the parties), the Tribunal de grande instance of the seat of arbitration.

    In international arbitration (unless the arbitration agreement provides otherwise), the juge d’appui is the President of the Paris Tribunal de grande instance, if one of the following conditions is met:

    • The arbitration takes place in France.
    • The parties have agreed that French procedural law will apply to the arbitration.
    • The parties have expressly granted jurisdiction to the French courts over disputes relating to the arbitral procedure.
    • One of the parties is at risk of a denial of justice.

  15. Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for such challenge?

    If a party becomes aware of a problematic situation, that party must challenge the arbitrator during the arbitration proceedings by following the procedure and time limits set out in the applicable arbitration or procedural rules (rather than waiting until the setting-aside stage). If the party waits until the setting aside stage to challenge the arbitrator, the French courts will consider that the party waived its right to challenge the award on the basis of a lack of independence and impartiality of the arbitrator (see Court of Cassation, First Civil Chamber, 25 June 2014, No. 11-26.529, Tecnimont).

    An arbitrator can be challenged on any of the following grounds, which apply to both domestic and international arbitration:

    • Any circumstance that can affect his or her independence or impartiality (Article 1456, CCP).
    • Legal incapacity, refusal to act or resignation (Article 1457, CCP).
    • Unanimous consent of the parties (Article 1458, CCP).
    If the parties cannot agree on the removal of an arbitrator, the issue is resolved by the person in charge of administering the arbitration or, where there is no such person, by the juge d’appui (Articles 1456 and 1458, CCP). The time limit to file an application before the juge d’appui is one month following the disclosure or the discovery of the fact at issue.

    An arbitrator can be challenged on any of the following grounds, which apply to both domestic and international arbitration:

    • Any circumstance that can affect his or her independence or impartiality (Article 1456, CCP).
    • Legal incapacity, refusal to act or resignation (Article 1457, CCP).
    • Unanimous consent of the parties (Article 1458, CCP).

    If the parties cannot agree on the removal of an arbitrator, the issue is resolved by the person in charge of administering the arbitration or, where there is no such person, by the juge d’appui (Articles 1456 and 1458, CCP). The time limit to file an application before the juge d’appui is one month following the disclosure or the discovery of the fact at issue.

  16. Are arbitrators immune from liability?

    Nothing under French law provides that arbitrators are immune from liability. French courts, however, have established that arbitrators are generally immune from liability for rendering incorrect decisions. That immunity is, however, not absolute. Arbitrators may be found liable for gross negligence, wilful misconduct, denial of justice or fraud (see Court of Cassation, First Civil Chamber, 16 December 1997, No. 96-10703; Paris Tribunal de grande instance, 16 September 2009, Case No. 06/10155; Court of Cassation, First Civil Chamber, 15 January 2014, No. 11-17196).

  17. Is the principle of competence-competence recognised in your country? What is the approach of local courts towards a party commencing arbitration in apparent breach of an arbitration agreement?

    In France, the principle of competence-competence is widely recognized and applied (Article 1448, CCP). Application of the principle means that:

    • In the first instance, the arbitral tribunal has jurisdiction to rule on its own jurisdiction.
    • A French court must decline jurisdiction in the presence of an arbitration agreement and let the arbitral tribunal decide.

    However, this principle does not mean that national courts can never have a say on the jurisdiction of an arbitral tribunal. Before the constitution of the tribunal, a court can accept jurisdiction if the arbitration agreement is manifestly void or manifestly not applicable. The threshold for this test is very high, and French judges decide the issue on a prima facie basis (see Court of Cassation, First Civil Chamber, 7 June 2006, No. 03-12.034). Any ambiguity is resolved in favour of the tribunal’s power to decide the issue.

    The French courts can also review the issue of the tribunal’s jurisdiction at the setting-aside stage. In such a case, the court will review the issue de novo and in its review will not be bound by the factual and legal findings of the tribunal.

  18. How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods of which the parties should be aware?

    There are no default rules governing the commencement of arbitral proceedings in France. Parties must follow the procedure set out in their arbitration agreement, in particular if they have subscribed to institutional rules that prescribe necessary steps for commencing proceedings. Otherwise, arbitral proceedings are usually initiated by unequivocal service of a notice of arbitration on the other party.

    Limitation periods are normally regarded as substantive rather than procedural. Substantive rules are those applicable to the merits of a dispute, whereas procedural rules regulate the conduct of the proceedings. Therefore, the law applicable to the underlying dispute or claim will also be applicable to the relevant statute of limitation.

    When French law is applicable to the merits of a dispute, a general five-year limitation period applies to contractual and tortious matters, with a few exceptions, such as for some construction contracts (see Article 2224, Civil Code). In general, this period commences from when the parties become aware (or should have been aware) of the event giving rise to the dispute. Commencing arbitration proceedings normally interrupts the limitation period (see Article 2241, Civil Code; Court of Cassation, Second Civil Chamber, 11 December 1985, No. 84-14.209).

  19. What is the applicable law (and prevailing practice) where a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings?

    The person responsible for administering the arbitration or, if there is no such person, the juge d’appui will nominate the arbitrator in lieu of the respondent (see Question 13 and 14). Then arbitral proceedings shall proceed notwithstanding whether respondent participated or not in the arbitration. An award shall be rendered. In this regard, French courts have held that an award that was rendered against a respondent that wilfully did not participate in the arbitration despite the fact that it was notified of the various stages of the proceedings and had the chance to participate in the proceedings shall not be set aside.

    Non-signatories can be compelled to arbitrate disputes relating to the contract in question in different situations where it can be deduced from the facts of the case or the behaviour of the non-signatory that the non-signatory consented to be bound by the arbitration agreement. In French law, the analysis can take into account both:

    • The non-signatory’s actual (express or tacit) consent.
    • Behaviour that can be “deemed” to constitute consent (such as extensive participation in performance of the contract containing the arbitration clause, in certain circumstances).

    French courts are more likely to compel a non-signatory to arbitrate in the context of international arbitration than in that of domestic arbitration. For example, in the case of a group of companies, where the parent company of the signatory was actively involved in the negotiation and performance of the contract, it was held that the parent was bound by the arbitration clause contained in the contract (Paris Court of Appeal, 21 October 1983, 1984 Rev Arb 98).

    In addition, in the case of a group of contracts, where only one of the contracts contains an arbitration agreement, the French courts have considered that a party to a related contract or sub-contract that does not contain an arbitration agreement can be compelled to arbitrate its disputes when it was involved in the performance of the contract containing the arbitration agreement (Paris Court of Appeal, 7 December 1994, 1996 Rev Arb 245, Jaguar; for chains of contract, see Court of Cassation, First Civil Chamber, 27 March 2007, No. 04-20.842, ABS).

    French courts have also accepted that an arbitration clause signed by a private party and a state-owned company can be extended to a state that did not sign the arbitration clause in certain circumstances (Paris Court of Appeal, 17 February 2011, 2011 Rev Arb 286).

  20. In what instances can third parties or non-signatories be bound by an arbitration agreement or award (e.g. by joinder)?

    Under general principles of French contract law, agreements bind only the contracting parties (Article 1165, Civil Code). The same rule applies to arbitration agreements, which are normally not binding on non-signatories.

    However, in some instances, the French courts consider that it is possible for third parties, in some circumstances, to be bound by an arbitration clause that they have not signed. This may occur, for example, in the context of a group of companies or interconnected contracts (see Question 19).

    The existence of a group of companies is, however, not sufficient in and of itself to extend an arbitration agreement to third parties (and in fact, most arbitral tribunals refuse to extend an arbitration clause solely on this basis). It is merely a circumstance that may favour such an extension, which requires interpreting a party’s behaviour to infer its consent to be bound by the arbitration agreement. Accordingly, this doctrine is very fact-dependent, and French courts take into account a variety of elements, particularly the third party’s participation in the negotiation, conclusion, performance and termination of the contract.

    The CCP provides no specific rules in relation to the joinder of third parties. In any event, the third party must have given its consent (or be deemed to have given its consent) to be joined to the proceedings.

    A third party (even where it was not a party to the arbitration) may also be liable for an arbitration award under the corporate veil piercing and agency doctrines. For example, an award rendered against a State can be enforced against a State-owned company, if the party seeking enforcement of the award can prove that the company is in fact the alter ego (émanation) of that State (see Paris Court of Appeal, 3 July 2003, No. 2002/03185, Société Nationale des Pétroles du Congo). Similarly, an award rendered against a subsidiary would be enforceable against its parent company if the conditions for piercing the corporate veil under French law are met.

  21. What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?

    Until the arbitral tribunal is constituted, the French courts have the power to order any measures relating to the taking of evidence as well as other provisional or conservatory measures (Article 1449, CCP). The French courts will decline to use these powers only if the parties expressly excluded recourse to these measures or if they are otherwise forbidden in the applicable arbitral rules.

    A party seeking a measure to preserve or establish evidence must apply to the President of the Tribunal de grande instance or of the Commercial Court (Tribunal de Commerce), who will rule on the application through expedited proceedings (sur requête or en référé). If the matter is urgent, other provisional or conservatory measures can also be applied for and ordered through expedited proceedings (Article 1449, CCP).

    Once the arbitral tribunal is constituted, the power to order conservatory or interim measures shifts to the arbitral tribunal. The arbitral tribunal can order any type of provisional or preliminary measures that it deems appropriate. It can also sanction noncompliance by, for example, making its orders subject to penalties. Under the previous legal framework, the parties could still ask the French courts to order urgent interim measures. By contrast, the 2011 Decree seems to reserve this jurisdiction to the arbitral tribunal. However, the French courts retain exclusive jurisdiction to order conservatory attachments or judicial security, as well as to ensure satisfaction of a future award (Article 1468, CCP). In addition, recourse to the support judge may be necessary to force execution of any measure ordered by the arbitral tribunal that is not voluntarily complied with.

  22. Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?

    In general, arbitral tribunals have the right to undertake all necessary steps concerning evidentiary matters. Accordingly, the tribunal can call upon any person to provide testimony and enjoin a party to produce any item of evidence it possesses (Article 1467, CCP). In addition, unless otherwise stipulated, the arbitral tribunal shall have the power to rule on a request for verification of handwriting or a claim of forgery in accordance with Articles 287 through 294 and Article 299 (Article 1470, CCP).

    Under French law, local courts may also play a role in the obtaining of evidence where the arbitral tribunal has not yet been constituted. According to Article 1449 CCP, an application shall be made to the President of the Tribunal de grande instance or of the Tribunal de commerce, who shall rule on the measures relating to the taking of evidence in accordance with the provisions of Article 145.

    Moreover, according to Article 1469(1) CCP, if one of the parties to arbitral proceedings intends to rely on an official (acte authentique) or private (acte sous seing privé) document to which it was not a party, or on evidence held by a third party, it may, upon leave of the arbitral tribunal, have that third party summoned before the President of the Tribunal de grande instance for the purpose of obtaining a copy thereof (expédition) or the production of the official document or piece of evidence.

  23. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?

    Apart from a resolution that was adopted by the Paris Bar on 26 February 2008 allowing counsel to prepare witnesses before oral examination in international arbitration, French law does not provide specific ethical codes or standards that apply to counsel and arbitrators. Accordingly, counsel and arbitrators should respect the general ethical codes and other professional standards as provided by the French Bar or by the ethical codes and professional standards as provided in their local bars or jurisdictions.

  24. How are the costs of arbitration proceedings estimated and allocated?

    In France, parties can, as a general matter, use whatever legal fee structures they deem appropriate (such as flat fees or an hourly rate). However, French lawyers cannot be paid solely on a contingency fee basis. Success fees are permitted but can be paid only in addition to a fixed or hourly fee arrangement. It has, however, been recognised that, in the context of international arbitration, such arrangements with lawyers whose home bar rules allow for them is not contrary to international public policy in France. (Paris Court of Appeal, 10 July 1992, 1992 Rev Arb 609).

    There are no specific provisions under French law for the arbitrators’ fees. They are usually fixed in agreement with the arbitrators or by the arbitral institution.
    There are also no specific rules on the manner in which the tribunal should calculate costs and fees, which typically include the fees and expenses of the arbitrators and the parties’ reasonable legal and other costs, such as travel expenses for hearings. Costs and fees can also include the administrative expenses of the arbitral institution and/or the fees and expenses of any experts appointed by the tribunal.

    Moreover, there are no specific provisions regulating the allocation of costs between or among the parties (in particular, the unsuccessful party is not under a legal obligation to pay the successful party’s costs and fees). Subject to any agreement of the parties, the arbitral tribunal has wide discretion to determine the allocation of costs between or among the parties.

  25. Can interest be included on the principal claim and costs incurred?

    The question of whether interest should be applied on the principal claim and costs incurred is normally regarded as a substantive rather than procedural question. Under French law, nothing precludes including interest on any monetary claim. Generally, in France, the interest rate is fixed annually by statute and should be respected unless the parties agree to apply a different rate.

  26. Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?

    Besides the respect for the mandatory laws there are no any other limits, mostly when arbitrators decide ex aequo et bono or taking in due consideration the balance of interests at hand. State courts can enforce all arbitration awards.

  27. What legal requirements are there in your country for the recognition of an award?

    There are two conditions for the recognition of an award in France:

    • The existence of the award must be proven by producing the award and the arbitration agreement (original or duly authenticated copies). This requirement applies to both domestic (Articles 1487 and 1488, CCP) and international arbitration (Articles 1514 and 1515, CCP). For awards that are not in French, the parties must produce translations of the award and the arbitration agreement. The court can request a translation by an official translator (Article 1515, CCP).
    • The recognition of the award must not be manifestly contrary to French public policy (Article 1488, CCP for domestic arbitration) or French international public policy (Article 1514, CCP for international arbitration).
  28. Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?

    Provisions on challenges to arbitral awards differ substantially depending on whether the arbitration is domestic or international.

    Awards in domestic arbitration are generally subject to actions to set aside (recours en annulation). However, the parties can provide for a right to appeal the award, which leads to broader judicial review (Article 1489, CCP). In contrast, awards in international arbitration are subject only to actions to set aside and cannot be appealed (Article 1518, CCP).

    Parties to an international arbitration can waive their right to bring an action to set aside an award (Article 1522, CCP). However, the right to bring an action to set aside an award in domestic arbitration is mandatory – that is, the right cannot be renounced – unless the parties have provided for a right to appeal (Article 1491, CCP). Where the right to set aside has been waived in international arbitration, the parties still retain their right to appeal an enforcement order (Article 1522, CCP).

    Another difference relates to the effect on the enforcement of an award of an action to set aside or a challenge to an enforcement order. In domestic arbitration, enforcement of an award is stayed upon the filing of an appeal or action to set aside, or until the time limit for such an appeal or application has expired, unless the award states that it is provisionally enforceable (Article 1496, CCP). By contrast, Article 1526 of the CCP provides that, in international arbitration, “[n]either an action to set aside an award nor an appeal against an enforcement order shall suspend enforcement of an award”. As a result, an award is immediately enforceable even if it has been challenged, except where the Court of Appeal suspends or adjusts the enforcement to preserve the rights of one of the parties.

    For domestic arbitration, the recognition or enforcement of the award must not be contrary to French public policy, and the award can also be set aside if (Article 1492, CCP):

    • There are no stated reasons for the award.
    • There is no mention of the date of the award.
    • There is no indication of the name or signature of the arbitrators.
    • The award was not rendered by a majority.

    The following are the five possible grounds for setting aside an international award (Article 1520, CCP):

    • The arbitral tribunal wrongly upheld or declined jurisdiction.
    • The arbitral tribunal was not properly constituted.
    • The arbitral tribunal ruled without complying with the mandate conferred upon it.
    • Due process was violated.
    • Recognition or enforcement of the award would be contrary to French international public policy.

    In principle, when the place of arbitration is in France, a party can challenge an award before the Court of Appeal of the place where the award was made (Article 1519, CCP).

  29. Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?

    In domestic arbitration, an award can be appealed only if the parties have so agreed (Article 1489, CCP). Where the parties have agreed that appeal is permissible, the parties cannot initiate setting aside proceedings (Article 1491, CCP).

    In international arbitration, awards can never be appealed. International arbitration can therefore be subject only to setting aside proceedings (Article 1518, CCP). While an appeal permits a fresh review of the merits of a case, setting aside proceedings permit only the setting aside of an award, on narrowly defined grounds. In the latter case, no review of the merits is in principle permitted.

  30. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

    French law recognises state or sovereign immunity as a defence to enforcement, unless such immunity has been waived. The Court of Cassation has adopted different approaches to determining whether there has been waiver. In 2000, the Court of Cassation established that the State, by agreeing to an ICC arbitration, agrees to execute an award and that, consequently, such an agreement should be considered a waiver by the State of sovereign immunity. (Court of Cassation, First Civil Chamber, 6 July 2000 (Bull. No. 207)). In 2013, the Court of Cassation held that the waiver can be recognized only if the waived assets were specifically and expressly presented in the contract (Court of Cassation, First Civil Chamber, 28 March 2013, Case 11-13.323). In 2015, the Court of Cassation changed its position and required that the waiver be express, without requiring other conditions (Court of Cassation, First Civil Chamber, 13 May 2015, Case 13-17.751).

  31. Are there rules or restrictions on third-party funders in your country?

    In France, there are no provisions that preclude third-party funders. The issue of whether or not third-party funding agreements are valid under French law was raised before the French courts in Société Foris A.G. v S.A. Veolia Proprieté. In this case, the Tribunal de grande instance enforced a third-party funding agreement (See Société Foris A.G. v S.A. Veolia Proprieté (anciennement dénommée S.A. Onyx), RG No. 05/01038, Court of Appeal of Versailles, 12e Ch. Sect. 2, June 1, 2006).

  32. Is there a concept in your country providing for class-action or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

    Although class actions were introduced in 2014 in France, they were limited to consumer cases. Although many discussions have taken place in this regard, class arbitration or group arbitration is not recognized in France for several reasons, among which is the non-arbitrability of consumer disputes under French law.

  33. Is diversity in the choice of arbitrators (e.g. gender, age, origin) actively promoted in your country? If so, how?

    Earlier this year, the ICC joined a range of institutions and prominent members of the international dispute resolution community in signing an Equal Representation in Arbitration Pledge, calling for more women to be appointed as arbitrators in international arbitration.

  34. Is emergency arbitrator relief available in your country? Is this actively used?

    French law does not address emergency arbitrators. Where institutional rules provide for the possibility to appoint an emergency arbitrator, those provisions are upheld in France as a matter of contract (Paris Court of Appeal, 29 April 2003, 2003 Rev Arb 1296). For example, the ICC Rules recognise the possibility to appoint an emergency arbitrator. According to the relevant articles in relation thereto, a party can seek urgent interim or conservatory measures prior to the transmission of the file to the arbitral tribunal (see Article 29 and Appendix V of the ICC Rules).

  35. Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?

    The ICC announced earlier this year that new policies to foster transparency are to be adopted. More specifically, the ICC declared that, as of 1 January 2016, the International Court of Arbitration will publish the names of the arbitrators and their nationality, if the appointment was made by the ICC Court or by the parties, whether each arbitrator is the president, a sole arbitrator or party-appointed arbitrator.

    In addition, on 8 October 2015, the ICC Court agreed for the first time – on the condition that all parties to an arbitration agree and that the request is made before a decision is reached – to provide the parties with its reasons in respect of:

    • Challenges to an arbitrator under Article 14 of the ICC Rules.
    • Decisions to initiate replacement proceedings and subsequently to replace an arbitrator on the ICC Court’s own motion under Article 15(2) of the ICC Rules.
    • Decisions on consolidation of arbitration proceedings under Article 10 of the ICC Rules and prima facie decisions on jurisdiction under Article 6(4) of the ICC Rules.
  36. Are efforts being made by arbitration institutions or local courts to impose strict deadlines for the rendering of awards?

    Among the grounds for setting aside an international or domestic award is when the arbitral tribunal rules without complying with its mandate, which includes inter alia the situation where the tribunal renders an award after the expiry of an agreed deadline.

    On another note, the ICC announced earlier this year that tribunals are expected to submit draft awards within three months after the last substantive hearing concerning matters to be decided in an award or, if later, the filing of the last written submissions (excluding cost submissions). This timeframe will be set at two months for cases heard by sole arbitrators.

    If a draft award is submitted beyond that timeframe, the ICC Court – unless satisfied that the delay is justified by factors beyond the arbitrators’ control or by exceptional circumstances – may lower the arbitrators’ fees as follows:

    • For draft awards submitted for scrutiny up to seven months after the last substantive hearing or written submissions, whichever is later, the fees that the ICC Court would otherwise have considered fixing are reduced by 5 to 10%.
    • For draft awards submitted up to 10 months after the last substantive hearing or written submissions, the fees that the ICC Court would otherwise have considered fixing are reduced by 10 to 20%.
    • For draft awards submitted for scrutiny more than 10 months after the last substantive hearing or written submissions, the fees that the ICC Court would otherwise have considered fixing are reduced by 20% or more.
  37. Have steps been taken in your country to publish reasoned decisions on arbitrator challenges and provide more insight into the drivers behind arbitrator selection by institutions?

    If the decision on arbitrator challenges was undertaken by the juge d’appui, the decision shall be normally published. However, if there is a person in charge of administering the arbitration ie an institution, the issue of publishing reasoned decisions on arbitrator challenges shall be determined in light of the institution’s applicable policies in that respect.
    For example, as of 8 October 2015, the ICC adopted new policies according to which the parties to an arbitration may request to receive a reasoned decision on an arbitrator challenge.

  38. Are there arbitral laws or arbitration institutional rules in your country providing for simplified procedures for claims under a certain value?

    Under French law, there are no simplified procedures for claims under a certain value. The International Arbitration Chamber of Paris, however, has recently amended its Rules so as to provide for simplified procedures for claims under a certain value (see Annex I and Annex II of the International Arbitration Chamber of Paris Rules of 2015). It might also be noted that the Centre for Mediation and Arbitration of Paris provides for a fast-track procedure but this is regardless of the amount of the claims.