FRANCE Trends and Developments Contributed by: Gustavo Laborde and Vinko Galiot, Laborde Law
December 2023. In June 2026, it annulled that award because that same amicus curiae brief was filed less than five months after that award was issued, with the cost decision still pending. By sharply criticising Rus - sia’s litigation conduct while supporting its procedural opponents, the amicus curiae brief gave rise to rea - sonable doubts as to his impartiality. The decisive dis - tinction lay not in the conduct itself, but in its timing. No shortcuts: MFN clauses and tribunal constitution A respondent State’s obstruction of the appointment process does not relax the French courts’ scrutiny of the tribunal’s constitution, as demonstrated by the annulment of the award in DS Construction v Libya. The case brought into sharp focus one of the most debated questions in investment arbitration: whether a most-favoured-nation (“MFN”) clause can be used to import more favourable dispute settlement provi - sions from another investment treaty. After Libya and the default appointing authority under the OIC Invest - ment Agreement failed to appoint a co-arbitrator, the claimant invoked the Agreement’s MFN clause and another Libyan investment treaty with a different default appointment mechanism to seize the PCA Secretary-General. The PCA Secretary-General desig - nated an appointing authority who, in turn, appointed an arbitrator on Libya’s behalf. The Paris Court, however, rejected that use of the MFN clause: the OIC Investment Agreement made no provision for such intervention where the treaty appointment mechanism had broken down and Libya had never consented to it. Nor could the breakdown of the treaty procedure justify departing from the agreed framework. Instead, French law already provided for a remedy in that situation: recourse to the juge d ’ appui to avoid a denial of justice, an avenue the claimant
The Gargour v Libya case bore a striking resemblance to DS Construction v Libya: the same treaty, the same State, the same MFN clause and again the appointing authority refusing to make an appointment, this time of the presiding arbitrator. The claimant had recourse to the PCA Secretary-General. The one notable differ - ence was the seat: Geneva instead of Paris. The Swiss Federal Tribunal found that the appointment mecha - nism in the OIC Investment Agreement left a material gap and accepted the use of the MFN clause to fill it. It acknowledged the Paris Court of Appeal’s decision in DS Construction but expressly declined to follow it. This means that the seat alone sealed the fate of each arbitration. In Geneva, the award was upheld; in Paris, it was annulled. It is a cautionary tale about the sig - nificance of the legal seat of arbitration, even between two elite arbitral seats. What produces a valid award in Geneva may lead to its annulment in Paris. The Maximalist Counterweight: Public Policy Under Article 1520 (5) If Article 1520 (1) reflects an increasingly minimal - ist conception of jurisdictional review, Article 1520 (5) represents its maximalist counterweight. When annulment is sought on grounds that the recognition or enforcement of the award would be contrary to international public policy, French courts exercise a degree of judicial scrutiny unmatched among leading arbitral jurisdictions. Lowering of the bar to find a public policy breach The substantive threshold for finding a breach of international public policy has evolved markedly. This threshold concerns the values and principles that French legal order will not tolerate being violated, even in an international context: from requiring a “fla - grant, effective and concrete” violation to a “manifest, effective and concrete” violation and, more recently, a “characterised breach.” Although such breaches frequently have their origin in criminal conduct, French courts require neither a crimi - nal conviction nor evidence to a criminal law standard. Rather, they require, as is the standard formulation, “a body of serious, precise and concordant indicia” sufficient to support the inference that enforcement would allow a party to benefit from serious illegality.
had failed to pursue. A tale of two seats
In 2025, faced with the same legal question, the Swiss Federal Tribunal (the Supreme Court) reached the polar opposite conclusion: it endorsed the use of the MFN clause to import an appointment mechanism from another investment treaty.
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