French arbitration law changes from 2011

Out-Law Guide | 12 Aug 2011 | 10:51 am | 2 min. read

This guide was last updated in August 2011.

Paris is often chosen as the seat of arbitration proceedings arising out of infrastructure and construction projects located both in France, and outside of France within French-speaking countries, for example in francophone African states. Disputes arising out of these projects may find quicker solutions as a result of the enactment of a new decree reforming French arbitration law, which came into force on 1 May 2011. This law applies to any arbitration proceedings having their seat in France.

Some key provisions of the changes were aimed at promoting the finality of international arbitration awards rendered in France. Those changes could prevent legal challenges whose aim is to delay the payment of an award. The examples below illustrate this:

  • parties can waive their right to challenge the award in international arbitration proceedings where the arbitral tribunal was formed after 1 May 2011. However, in order not to hinder the parties' right to an effective remedy, parties cannot waive their right to appeal a decision granting leave to enforce an international arbitral award in France;
  • a challenge against an award granted after 1 May 2011 or an appeal against a court decision granting leave to enforce an award granted after 1 May 2011 no longer has a suspensive effect, which prevents the enforcement of an award while court proceedings are ongoing. Under the previous rules, the suspensive effect of the challenge or the appeal prevented the enforcement of the award. French courts maintain a discretionary power to suspend the enforcement of an award where a challenge or appeal is raised if this is appropriate. This approach adopted by the reform of French arbitration law should prevent many challenges intended to delay the payment of an award;
  • the time limit for challenging an award has been clarified and reduced. An award granted in France after 1 May 2011 may only be challenged before the Paris Court of Appeal within one month from the notification of the award (three months in cases where the party being challenged is resident or has its registered office abroad). Under the previous rules, an award could be challenged within one month from the date of the notification of the decision granting leave to enforce the award in France. The limitation period would not have started to run if a party had not applied for leave to enforce the award in France.

The changes to the law demonstrate France's clear intention to promote the development of Paris as a centre for the resolution of international disputes.

The last time major changes were brought into French arbitration law was in the early 1980s. The decrees enacted in 1980 and 1981 were a milestone in the history of French arbitration law and the country's arbitration-friendly tradition. The 2011 law updated, consolidated, clarified and complemented the existing law and codified a variety of principles which emerged through case law over the past 30 years.