The New French Arbitration Law: Innovation & Consolidation

Article excerpt

France has adopted a very progressive new arbitration law. Not only does it codify 30 years of favorable case law on arbitration, it is a major modernization of the law.

2011 is a momentous year for international arbitration in France. Thirty years after the two decrees of 1980 and 1981, on Jan. 13, 2011, the French Govern ment adopted a new decree (Décret 2011-48), codified as Articles 1442 to 1527 of the French Code of Civil Procedure. The new law constitutes a major modernization of French arbitration law, consistent with its highly favorable case law on arbitration.

A group of arbitration practitioners, members of the Comité Français de l'Arbitrage,1 paved the way by preparing a first draft of the new statute between 2001 and 2006, which was submitted to the French Ministry of Justice and used as the basis to establish the new law.2

As a consequence of these efforts, there is today a strong political desire in France to provide foreign practitioners with easy access to French arbitration law and thereby attract international arbitrations.3

The underlying principle of the new law is the recognition of an international arbitral legal order, autonomous from state laws and courts.

Along this line, the new law maintains the French principle of dualism by separating domestic and international arbitration. This choice stems from the idea that international arbitration is a "special kind of arbitration"4 that deserves a separate and more liberal regime. One manifestation of this du al ism is in Article 1507, which states that "[a]n arbitration agree ment shall not be subject to any requirements as to its form," but when it comes to domestic arbitration, Article 1443 provides that "[i]n order to be valid, an arbitration agreement shall be in writing...."5

Another manifestation of the dualist approach is in Article 1464-4, which establishes a duty of confidentiality during domestic arbitration proceedings ("subject to legal requirements, and unless otherwise agreed by the parties, arbitral proceedings shall be confidential"), while no such rule exists in international arbitration.6 The ab - sence of a confidentiality rule in international arbitration is due to the need for transparency in investor-State disputes. As a consequence, parties willing to keep international arbitral proceedings confidential will need to make an express provision to that effect.

Efficiency of the Arbitral Proceedings

General Principles

Compétence-Compétence. After having codified the fundamental principle of the independence of the arbitration clause7 (Article 1447), the new law explicitly affirms the principle of compétence-compétence that has been long established by case law. Accordingly, Article 1465 provides that "[t]he ar - bitral tribunal has exclusive jurisdiction to rule on objections to its jurisdiction," while Article 1448 makes it clear that, as a consequence of the principle of compétence-compétence, courts are deprived of any jurisdiction to that effect unless the arbitration agreement is manifestly void or inapplicable: "When a dispute subject to an arbitration agreement is brought before a court, such court shall decline jurisdiction, except if an arbitral tribunal has not yet been seized of the dispute and if the arbitration agree ment is man ifestly void or manifestly not applicable...."8

Duties of Diligence and Good Faith. A novel provision in the new law imposes duties of diligence and good faith on both parties and arbitrators. Article 1464 provides that "[b]oth parties and arbitrators shall act diligently and in good faith in the conduct of the proceedings...." This is an interesting legislative attempt to introduce rules of ethics in international arbitration.9

The new law does not provide any sanctions for a breach of these ethical obligations. There - fore, it is difficult to anticipate how this rule will be applied in practice, especially in the case of dilatory tactics by the parties. …