Although the COVID-19 pandemic's full impact on the world economy remains unclear, a global surge in insolvency is expected in 2021 and 2022. A party's insolvency can affect pending and future arbitrations, which will generally depend on whether the insolvency occurs before, during or after the arbitration. However, early comprehension of certain basic factors might mitigate future risks ensuing from a counterparty's insolvency.
The Court of Cassation recently issued its decision in the ongoing Schooner saga, agreeing with the applicants that the Court of Appeal violated the Code of Civil Procedure (CCP) by preventing them from raising jurisdictional arguments in annulment proceedings. This appears to be the first time that the Court of Cassation has explicitly held that Article 1466 of the CCP does not prevent parties from raising new jurisdictional arguments at the annulment stage.
Under Article 1526 of the Code of Civil Procedure, if an award's enforcement is likely to severely harm the rights of one of the parties, such enforcement may be stayed or amended. This article clarifies the conditions which must be met for Article 1526 to apply and sets out the evolution of the courts' interpretation of the notion of severe harm to the rights of one of the parties.
The COVID-19 pandemic has undeniably disrupted the performance of contracts. Although the Paris Commercial Court has ruled the pandemic to be a force majeure event in a commercial contract, this characterisation may not be retained in all situations. This article provides helpful tips to keep in mind when analysing a contractual situation, in light of French law specificities that might be unknown to foreign companies or counsel involved in arbitration proceedings to which French law applies.
The First Civil Chamber of the Court of Cassation recently overruled a Paris Court of Appeal decision and determined that there was no basis for the argument that Antrix Corporation Ltd had not made certain procedural objections during arbitration and therefore could not raise them in enforcement proceedings. The decision raises interesting questions about the nature of the 'waiver' contemplated in the Code of Civil Procedure.