Since the 1980s, enforcement of arbitral awards in France has followed a two-tier process, where an ex parte application is followed by an adversarial appellate review. While the passage of Decree 2011-48, which reformed the French law on arbitration, did not change this process, it did modify one significant feature of the law, by determining that appellate review would no longer automatically stay execution of an award, as was previously the case.

On February 19 2013 Patrick Mennucci, a socialist member of the French Parliament, called into question the existing regime, which does not provide for an adversarial debate at the level of the application for an exequatur order. This was raised through a question posed to the minister of justice within the framework of weekly parliamentary sessions dedicated to questions and answers by members of Parliament to members of the government (for further details please see "Enforcement of international arbitration awards: latest developments").

On July 9 2013 the minister of justice answered as follows:

"International arbitration awards can only be executed if the tribunal de grande instance of the place of arbitration or, when the award was made abroad, the tribunal de grande instance of Paris, have granted leave to enforce the award (exequatur). Exequatur proceedings are ex parte and, pursuant to Article 1526 of the French Code of Civil Procedure, annulment proceedings against the award and appeals against the order granting leave to enforce do not stay execution. This is a major innovation, which was introduced by Decree No 2011-48 of January 13 2011 reforming the law of arbitration, precisely to avoid delaying tactics used by parties in bad faith, who after having accepted to submit their disputes to arbitration, tried to escape execution by filing an action against the award. It would not be a good thing to reconsider this modification, in particular given that the first president of the Court of Appeal ruling in expedited proceedings or, once the matter is referred to him, the judge assigned to the matter, may stay or set conditions for the execution of an award where execution could severely prejudice the rights of one of the parties. Moreover, in the framework of exequatur proceedings initiated by the most diligent party, Article 1514 of the French Code of Civil Procedure provides that the judge will ensure that execution of the award is not manifestly contrary to international public policy. The aforementioned provisions hence ensure that the right balance is struck between the need to ensure that international arbitral awards are efficient and the need to protect the rights of the parties. We therefore presently do not envisage to implement any change in this respect."

Moreover, Article 1526 of the Code of Civil Procedure provides that a senior judge may stop or subject the enforcement of an arbitral award to certain conditions where enforcement could severely prejudice the rights of one of the parties. Three appellate decisions (as discussed in "Enforcement of international arbitration awards: latest developments") seemed to set a particularly high standard for a losing party to obtain a stay of execution, as according to these decisions, it was insufficient for the losing party to demonstrate either that:

  • there existed a prima facie arguable case for setting aside the award or for succeeding in the appeal against the exequatur order; or
  • enforcement of the award would render it insolvent.

In an April 23 2013 decision(1) the Paris Court of Appeal shed some light as to when a senior judge is likely to subject the enforcement of an arbitral award to certain conditions. In this decision, the judge agreed to modify the conditions for the enforcement of an award pending the outcome of the appeal against the order granting leave to enforce. The judge held that the amount did not have to be paid to the winning party, but was rather to be put in escrow at the Caisse des Dépôts et Consignations instead. In this case, a party claimed that its debt under the award could be offset against the debt of the other party to the proceedings. The court accepted the applicant's motion on the ground that the losing party's:

"chances of obtaining the restitution of the amounts paid to a Czech company under an award rendered in Lausanne would be very uncertain, in particular given that the efficiency of the award outside of France will not be affected by decisions made by the French courts".

The court then held that "the existence of this obstacle and the amount at stake are likely to seriously harm [the losing party's] rights".

Judges must be trusted to strike the right balance, by taking into account both parties' interests, between the need to ensure that international arbitral awards are efficient and the need to protect the losing party's rights on two occasions:

  • when deciding whether to grant exequatur to an award; and
  • when the losing party requests that execution be stayed.

In this latter respect, in light of the above decision, the expectation is that judges will focus on the ability of the losing party to obtain restitution of the amounts paid to the winning party in the event that the award is annulled, rather than on the consequences of execution of the award (eg, insolvency) or on the chances of success of the annulment proceedings.