FRANCE Trends and Developments Contributed by: Gustavo Laborde and Vinko Galiot, Laborde Law
Article 12 of the treaty. If this is indeed the basis for the distinction, with no other explanation being offered, it is difficult to reconcile with ordinary principles of treaty interpretation. Oschadbank was not only the subject of contradictory decisions between the Paris Court of Appeal and the Cour de cassation but also gave rise to a divergence between France and other major jurisdictions. Dutch courts, for instance, classified Article 12 of the same treaty as jurisdictional and partially annulled the Naf- togaz v Russia award on that basis. English courts, meanwhile, have treated the legality requirement (another requirement French courts have relegated to the merits) as reviewable in enforcement proceedings. Accordingly, on the range of issues that may be reviewed in annulment proceedings, France stands alone for its narrow scope and minimalism. An ironic outcome under the logic of French Law The Cour de cassation’s 2025 decision in Agarwal v Uruguay illustrates both the logic and the limits of the French approach. In Agarwal, the starting point con - trasted with that in Oschadbank. The tribunal declined jurisdiction on the grounds that the investors did not hold a qualifying investment at the time of the alleged treaty breach. This is a widely accepted rule of inter - national investment law; however, it is not found in the treaty text. What happened next before French courts was remi - niscent of Oschadbank. First, the Paris Court of Appeal annulled the award, this time on the ground that the tribunal had wrongly declined jurisdiction by classify - ing this requirement as jurisdictional rather than sub - stantive. But then the Cour de cassation reversed the annulment because the Paris Court had impermissibly “reviewed the award on the merits” when it annulled the award over an issue “characterised as a substan - tive [merits] rule”. In this way, the Cour de cassation applied the French approach to reach its conclusion: the temporal require - ment in question had been classified as substantive, not jurisdictional and was therefore not a reviewable issue. French courts could not decide whether the tribunal wrongly declined jurisdiction on this ground.
Notably, French courts did not distinguish between conditions expressly written into the treaty (Oschad - bank) and conditions absent from the text of the trea - ty (Agarwal). If even an express treaty requirement defining the investments to which it applies may be classified as substantive, as Oschadbank held, the requirement absent from the treaty text in Agarwal could scarcely fare differently. It too was treated as substantive, despite its near-universal recognition in arbitral case law as jurisdictional. This illustrates the irony of French law on this point. Under French law, the tribunal’s decision to decline jurisdiction was incorrect because the grounds for dis - missal were substantive and not jurisdictional; howev - er, this same distinction meant the issue was beyond the scrutiny of French courts. The award ultimately stands not because it is right as a matter of French law, but because it is not subject to review. The irreducible core: a 19th century coda The Sulu litigation is a reminder that geopolitically charged disputes can have roots centuries old. In December 2025, the Paris Court of Appeal annulled a USD 14.92 billion award against Malaysia obtained by the alleged heirs to the Sultanate of Sulu under an 1878 lease of what is now Sabah, a territory whose sovereignty remains contested. Her Britannic Maj - esty’s Consul-General for Borneo, originally desig - nated as the adjudicator to settle disputes under that lease, had long since ceased to exist. The award was annulled on the ground that the disputes clause was no longer applicable because the designated adjudi - cator formed “an inseparable whole” with the parties’ consent to arbitrate. For all that French courts have removed from the jurisdictional domain, Sulu marks where the narrowing ends: at matters deemed indis - sociable from consent itself, even as its boundaries under French law become increasingly idiosyncratic. A Flawed Tribunal, Twice Over: Constitution and Impartiality Under Article 1520 (2) Recent decisions demonstrate that French courts enforce both limbs of the improper constitution ground under Article 1520 (2) with equal rigour: on the one hand, the regular constitution of the tribunal; on the other, the independence and impartiality of arbitrators.
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