FRANCE Trends and Developments Contributed by: Gustavo Laborde and Vinko Galiot, Laborde Law
In the landmark case of Sorelec v Libya , the Paris Court annulled an ICC consent award embodying the parties’ settlement agreement to resolve a long-run - ning construction dispute. Such indicia (including the circumvention of mandatory approval procedures for the settlement, the concealment of its prior execution from the competent Libyan authority and its one-sided terms) were sufficient for the Paris Court to rule that the settlement agreement had been procured through corruption. No smoking gun was needed to annul the award: it rested entirely on circumstantial rather than direct evidence of corruption. Off the record The procedural architecture of the inquiry is no less distinctive. The annulment court is neither confined to the evidence before the tribunal nor bound by the tribunal’s factual findings, evidential assessments or legal characterisations. Nor is it confined to the par - ties’ case as presented in the arbitration: they may adduce evidence and present arguments before the annulment court that were never put to the tribunal. The otherwise strict waiver rule admits an equally significant exception. Article 1466 ordinarily bars an applicant from raising in annulment proceedings an irregularity it could have raised in the arbitration but did not: a party who sits on an objection loses it. Pub - lic policy, however, is the exception – with Sorelec v Libya being a stark example. No allegation of corrup - tion had been raised during the arbitration. Neverthe - less, having concluded that the settlement embodied in the consent award had been procured through cor - ruption, the Paris Court annulled the award. The high-water mark Belokon v Kyrgyzstan is emblematic of the distinctly French approach. The Paris Court annulled the award under Article 1520 (5) upon finding that the investment was tainted by money laundering. It did so notwith - standing the tribunal’s contrary findings and without direct evidence of wrongdoing, relying instead and again on “a body of serious, precise and concordant indicia.” These included irregularities in the tender for the bank’s acquisition, the investor’s close ties to the president’s son (who wielded considerable influence
over the Kyrgyz economy) and a fine imposed by Latvian authorities on another bank majority-owned by the investor for anti-money-laundering compli - ance failures. The tribunal either discounted or did not examine these circumstances at all. Transaction volumes so disproportionate to the size and structure of the Kyrgyz economy as to be “not explicable by orthodox banking practices” completed the picture. Notably, the French court identified no specific crimi - nal offence and traced no specific sum to any estab - lished crime. The convergence of those circumstantial indicia was enough. Had the arbitration been seated in almost any oth - er major arbitral jurisdiction, the award would likely have withstood scrutiny. In England, Switzerland or Hong Kong, the tribunal’s finding that Kyrgyzstan had not established the alleged wrongdoing would have remained undisturbed: the reviewing court could nei - ther reassess the same evidence nor ordinarily admit evidence that could have been adduced before the tribunal. What France afforded Kyrgyzstan was a fresh judicial determination of the very facts the tribunal had already decided to its detriment. This sets France apart as an arbitral seat. Outside France, an allegation of a public policy violation may open the award to limited scrutiny, but does not reo - pen the factual record for relitigation. A State that fails to allege or establish corruption before the tribunal is not afforded a new opportunity on annulment. No such constraint applies in France. For better or worse, France thus occupies a singular position among the major arbitral jurisdictions for the breadth and depth of its judicial review in all questions of inter - national public policy. Fine-tuning the contours of public policy review The recent decision in Averda v Gabon illustrates the outer limits of judicial scrutiny under Article 1520 (5). In October 2025, the Paris Court declined to annul an ICC award despite the tribunal’s own findings of corruption. The reason: the tribunal itself had already neutralised the economic consequences of the public policy violation, leaving Article 1520 (5) with no further remedial work to do.
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