The Supreme Court has upheld the validity and enforceability of a bilateral option clause which gave both parties the option to resolve their dispute by way of arbitration or through domestic courts. While this decision clarifies the French courts' position regarding bilateral option clauses, it raises concerns as to the validity of sole option clauses.
Reforms to French arbitration law determined that appellate review would no longer automatically stay execution of an award. A member of Parliament questioned this regime, which does not provide for an adversarial debate at the level of the application for an exequatur order, by posing a question to the minister of justice. The minister recently responded that exequatur proceedings are to remain ex parte – for now, at least.
When French arbitration law was reformed in 2011, one major innovation was to amend the position on the stay of enforcement of international arbitral awards pending the outcome of annulment proceedings or of an appeal against an order granting leave to enforce (exequatur). However, the courts' severity towards requests for a stay of execution has given rise to concerns about exequatur proceedings.
According to the French law on international arbitration, an action to set aside is available against international arbitral awards issued in France. Therefore, such an action may be instituted only against arbitral awards. The distinction between arbitral awards and other communications issued by tribunals can be unclear; however, a decision of the Supreme Court provides useful guidance.
The interaction between insolvency proceedings and arbitration is treated differently in different countries. The French legal position is clear: the supervening insolvency of a party does not render a dispute inarbitrable. In a recent decision the Paris Court of Appeal found that the International Court of Arbitration of the International Chamber of Commerce had committed an "excessive measure" justifying the annulment of an award.
In a recent case the Supreme Court reaffirmed the existence of an arbitral legal order, independent of any national legal order. It held that the arbitral proceedings in question were detached from the French judicial order, since the tribunal's seat was located in Sweden and proceedings were governed by the United Nations Commission on International Trade Law rules.
The courts previously applied a rather lenient test to waivers of immunity from execution. While French law required waivers to be specific and unequivocal, the courts allowed immunity to be waived implicitly. However, recently in three simultaneous decisions involving interim measures in pursuit of a foreign court judgment's enforcement, the Supreme Court applied a stricter test to waivers of sovereign immunity from execution.