FRANCE Trends and Developments Contributed by: Gustavo Laborde and Vinko Galiot, Laborde Law
The Paris Court found that the waste management contracts themselves had not been procured through corruption; only limited transactions during their per - formance were tainted. By reducing the outstanding balance of unpaid invoices by 35% to account for the “overbilling of cleaning services, facilitated by acts of corruption,” the tribunal “ensured that Averda Gabon cannot benefit from acts of corruption and that only services actually performed are paid for.” Hence, as enforcing the award would not allow the claimant to profit from corruption, the award was upheld. This demonstrates that Article 1520 (5) is not a blunt instrument that always requires refusal of enforcement when some effects of corruption are present but have already been discounted. Instead, it operates in a way that is calibrated to the specific circumstances and remains deferential, particularly when the tribunal has already achieved the public policy objective that would otherwise fall to the courts to secure. The bottom line is that French courts will not give effect to corruption. Once this is no longer an issue, because the tribunal already achieved that objective, the rationale for annulment on public policy grounds falls away. No Seat Required: The Universal Jurisdiction of the Juge d’appui One other remarkable feature sets France apart from other jurisdictions. Under Article 1505 (4), the French juge d ’ appui (ordinarily the President of the Tribunal Judiciaire of Paris) may act as appointing authority where a party is exposed to a risk of denial of justice. That power may be exercised irrespective of the seat of arbitration or any connection with France, including where a respondent State attempts to frustrate the constitution of the tribunal. The foundations of Article 1505 (4) were laid in National Iranian Oil Company (NIOC) v Israel. In that politically charged dispute, the respondent refused to appoint an arbitrator, jeopardising the constitution of the tribunal under an arbitration agreement that des - ignated no seat. The claimant sought the assistance of the French courts notwithstanding the absence of any meaningful connection with France. The Cour de
cassation upheld the jurisdiction of the French courts, holding that the practical impossibility of accessing arbitration constituted a denial of justice. Although it formally required a French nexus, the Court found one in what it itself described as a “tenuous” connection: the designation of the ICC President in Paris as the fallback authority for appointing the presiding arbitra - tor in the event of deadlock between the arbitrators. The 2011 reform of French arbitration law codified the judge-made remedy recognised in NIOC and expand - ed its reach by dispensing entirely with any require - ment of a nexus to France. Article 1505 (4) now con - fers universal jurisdiction: a party confronting the risk of a denial of justice may seize French courts regard - less of the seat of arbitration, the governing law, the place of performance or any connection with France. That includes arbitrations seated abroad as well as those in which the seat is yet to be designated, as is often the case in investment arbitration, where the seat is ordinarily designated only after the tribunal is constituted. The annulment of the DS Construction award high - lights the practical significance of Article 1505 (4), although it also serves as a cautionary tale. Faced with a separate claim under the same OIC Invest - ment Agreement, Libya again refused to appoint an arbitrator. The saga appeared to repeat itself. Only this time the claimant seized the French juge d’appui pursuant to Article 1505 (4). This has been enough to prompt Libya to act, as it appointed its arbitrator shortly thereafter. This episode confirms how France remains at the forefront of both international arbitra- tion and individual rights, ensuring investors have access to justice. Concluding Remarks The evolution of French investment arbitration case law over the last several years reveals a distinctive recalibration. As French courts progressively narrow the scope of judicial review of jurisdictional issues, they have remained exacting in safeguarding the integrity of the arbitral process, have become increas - ingly interventionist in policing international public pol - icy and remain universally available to assist arbitra - tions that would otherwise have stalled altogether. The resulting case law (“jurisprudence”) is neither entirely
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