ICC Articles

The Role of the Courts and Problems Related to the Execution of Conservatory and Provisional Measures: A French Perspective

Introduction
The principles governing the intervention of the national courts and their procedural application
1. A. Guiding principles for intervention by the national courts
2. B. Application by the "<italic>juge des référés</italic>" or by the judge enforcing the award
Practical applications of interim or conservatory measures in French substantive law
1. A. Intervention by the national courts prior to referral of the case to the arbitrators
2. B. Intervention of the national courts after the case has been referred to the arbitrators
Conclusion
Bibliography

A description of the role of the national courts in ordering conservatory and interim measures in the field of international arbitration and the position under French substantive law calls not only for a study of the respective functions of judges and arbitrators, their reciprocal relationship as well as the very principle of intervention - or even interference - by judges in the arbitral process, but also, of necessity, for a study of the limitations on that role.

First of all several aspects of such conservatory and interim measure¹ need to be underlined, in the light of judicial practice. The principle is ambiguous and at the same time covers a wide variety of situations. Such measures can be determining factors in the outcome of a case, and therefore constitute an element of procedural strategy. They require the reconciling of what may well be conflicting interests, needed for determining the principles of the national court's intervention and its limitations.

A. Ambiguity and diversity of conservatory or interim measures

Judicial practice, both under the general law and in international arbitration, clearly shows the wide-ranging diversity of measures and the ambiguity of the principle, in that the conservatory or even interim measures do not always reflect the true situation. This question has already been analysed and discussed in great depth so I do not wish to go into it again here.

It should however be emphasized that the interim nature of the measure can be frustrated if the measure corresponds de facto to an anticipation of the proceedings on the merits of the case (e.g.: le référé-provision - interim provision in urgent interlocutory proceedings; or investigatory measures displaying an aspect that seems too "inquisitorial"). The purely interim nature of the measure is also sometimes theoretical if the measure is irreversible, despite the fact that the detriment caused by a measure that is wrongly ordered may always be compensated by an award of damages. This type of situation may occur in cases where conservatory measures are ordered to prevent imminent loss or damage, and/or to safeguard a situation until the decision on the merits of the case. Examples of such measures are obligations to perform or injunctions preventing performance, payment and/or continuing an activity and other prohibitions.

The purely conservatory nature of the measure may also be called into question if its objective is not solely the "ascertainment" of a de facto situation but also involves investigatory measures, which are then likely to display the characteristics of a preparatory measure, thus running the risk of anticipating the powers of the arbitrators. In the face of such diversity and ambiguity, the national judge, in exercising his power of intervention, has to reconcile interests that may sometimes be conflicting.

B. Component part of procedural strategy in a dispute

Because such measures may have a decisive impact on the subsequent course of the procedure, they can form a tactical venture and be part of a procedural strategy planned by a party and its lawyers.

This is an aspect that should not be neglected and the national judge should bear it in mind and take it into consideration in his decision. Why is it a component part of procedural strategy? Because there are two aspects to this type of action: [Page73:]

- the first aspect corresponds to cases where the matter would quite naturally be referred to a national court. This would particularly apply to cases where urgency calls for immediate measures - where there is thus no possibility and no duty to wait for the constitution of the arbitral tribunal - or measures of a type that arbitrators are not empowered to order because they fall exclusively under the sovereign powers of the courts. This kind of procedure is legitimate. Intervention by a national court is necessary; it is fulfilling its task of cooperation and assistance to arbitration.

- the second aspect corresponds to cases referred to the courts on grounds that the terms of the petition do not always reveal, because they are secret and hidden. This is the case where the party is using a petition for conservatory and interim measures as a means for testing its opponent's capacities for resistance, for constraining him to disclose its legal argument and especially his evidence in the course of pre-arbitral litigation.

In judicial practice, it is noteworthy that application to the juge des référés (judge ruling in interlocutory proceedings in urgent cases), with this aim, prior to any process, is not unusual. It corresponds to a desire to use the procedure for gaining an advantage, for as it were putting pressure on the opponent and encouraging it to negotiate or even settle out of court. It seems to me that the national courts should not "get involved" in this type of procedural strategy particularly if the parties have agreed that their dispute is to be settled by arbitration, otherwise the judge will be completely distorting the role and function entrusted to him by law in the reform of arbitration law - the task of cooperation and conciliation.

C. Need to reconcile what may sometimes be conflicting interests whilst respecting fundamental principles

This is the last point that I wish to emphasize, but it is essential: there is a certain contradiction between allowing intervention by the national courts prior to the commencement of the arbitration, and the contractual wish of the parties to avoid the jurisdiction of those very courts by opting for arbitration as a means of settling their dispute.

It is by reconciling these two conflicting interests - the desire to escape a national court that would otherwise have jurisdiction, and the need for a national court to intervene when it is mandatory and when it is necessary - that the weight of the respective roles of the judge and the arbitrator can be and in fact are balanced in the aim of effectiveness and good administration of justice (be this national justice for the preservation of fundamental interests or arbitral justice for respecting a joint contractual will).

Accordingly, I intend to develop my remarks along two lines. In the first part I will try to highlight the basic principles that seem to my mind to govern the intervention of the national courts as well as its procedural application (I). In the second part, I will try to determine the most characteristic practical applications of French case law precedents, as an explanation and illustration of French substantive law (II) in the field of conservatory and interim measures in the area of international arbitration, for I do not intend to allude to foreign laws.

I. The principles governing the intervention of the national courts and their procedural application

First of all I intend to summarise the basic principles (A) before commenting on how to determine which judge has jurisdiction in France to order such conservatory and interim measures as well as the procedural rules followed before the national courts (B).

A. Guiding principles for intervention by the national courts

To my mind, the following three principles are essential:

- First principle: recognition by national courts that arbitration is a totally separate type of dispute settlement process.

- Second principle: the respect of the will of the parties, which is decisive, particularly in cases of international arbitration.

- Third principle: this is the principle of effectiveness and good administration of justice. [Page74:]

In a number of situations - often different - the judge's assistance is useful and above all necessary.

1) Recognition of international arbitration as a totally separate process for the settlement of disputes - role of the arbitrator - role of arbitration institutions

The recognition of arbitration as a specific method of dispute settlement seems to me to be fundamentally established in the French substantive law underlying the development of case law precedents over the past twenty or so years. Since the reform of the French arbitration law (Decree of 12 May 1981), the former mistrust of the national judge - who used to view the arbitrator as someone as it were "stealing" the dispute that he considered he alone had the duty and power to judge - has become for the most part outmoded.

Today, French law and French judges view arbitration as a normal dispute settlement method - especially in international cases - with advantages as well as disadvantages, which is up to the parties to evaluate and assess. It is no longer competition, but rather recognition that it is the order of the day. Today recognition is marked by cooperation and assistance from the national courts, by the simplification and limitation of the rights of appeal against arbitral awards and more particularly against arbitral awards rendered abroad or where international arbitration is involved, and lastly by the rules relating to recognition and enforcement in France without formalism and without excessive supervision.

Recognition of arbitration implies also recognition of the decision-making power conferred on arbitrators vested with the task of settling the dispute by the will of the parties, although the arbitral tribunal cannot be deemed to be a "court" and classed as such alongside the national courts (cf. Ch. Jarrosson, Arbitrage et Juridiction, op. cit). A judgment of the Paris Court of Appeal dated 4 May 1988 (Chambre Arbitrale de Paris et autre V. Rép. de Guinée) applied this in a dispute where the problem of intervention by the national court during an arbitration procedure arose, and where there were serious and real difficulties both between the parties themselves and between one of them and the arbitration centre. In quashing the judgment on first instance that had ordered termination of the arbitration agreements, the Court of Appeal passed judgment in the following terms:

But whereas, the court at first instance could not make use of a recourse that was not open to it by the parties to the case instigated before that court without compelling those parties, against their express common will, to revoke an appointment of common interest;

Whereas, in fact, on 26 September 1986, by the judgment that has not been appealed against, it was found that all the necessary conditions for the constitution and operation of the arbitral tribunal had been fulfilled and were recognised as being adequate by the national court with jurisdiction, so that the arbitration could follow its normal course;

Whereas, from that moment, the arbitrators - chosen by the parties or by the recognised body and not challenged - were, as from the acceptance of their task, fully vested with the power to decide the case;

Whereas the exercise of the prerogatives attaching to that power - which depend on a proper and autonomous validity - must be provided totally independently, as befits any judge, without any interference with the body that constituted the arbitral tribunal and which, accordingly was deprived of any power of action, and without any intervention from the national judge;

Whereas in particular, the national judge, having fulfilled his legal remit of technical assistance or cooperation, has the duty to allow the arbitrators to exhaust their own exclusive power to decide and, in conscience and on their own responsibility, lay down the conditions of an "equitable process", in accordance with general fundamental principles and, as necessary the provisions of article 6 of the Convention for the Safeguard of Human Rights and article 14 of the New York Pact relating to civil and political rights;

Whereas, once they had ascertained that the impartiality, neutrality and objectivity of the arbitrators nominated, constituted into an arbitral tribunal and validly appointed, had never been in doubt, the court at first instance was bound to remain totally excluded from a case that was henceforth under the auspices of other "judges".

Likewise, French substantive law recognises the jurisdiction and powers of an arbitration [Page75:] centre to organise the arbitration procedure, in accordance with the will of the parties and the centre's rules and to the exclusion of any interference in the arbitrators' decision-making powers.

2) Respect of the will of the parties

Second fundamental principle: the national courts take into consideration the respect of the will of the parties, whilst at the same time trying to ensure a certain safeguard of rights. The respect of the parties' wishes, both as regards their decision to escape the jurisdiction of the national courts, in relation to their decision to allow the application of all the rules of the specified arbitration institute (if one has been designated) and lastly respect of the parties' intentions as regards the method of appointing the arbitrators, the method of challenge, etc... How can this principle of respecting the will of the parties be accepted whilst at the same time allowing the national courts to intervene to order conservatory or interim measures?

French case law recently had an opportunity to define the scope of this principle of freedom. The Supreme Court (Cour de Cassation) has acknowledged that a national court does have power to order conservatory or interim measures, notwithstanding the arbitration clause, unless the parties have expressed an intention to the contrary; cf. Cour de Cassation, 1ère ch. civ. 6 March 1990, Rev. arb. 1990, p. 633 note H. Gaudemet-Tallon; for the application of the ICSID rules, cf. Cour de Cassation, 1ère ch. civ. 18 Nov. 1986 Rev. arb. 1987, p. 315 note G. Glécheux. It has also applied this principle when the rules of the arbitration centre chosen by the parties did not exclude this type of intervention by the national courts, in particular before the case has been referred to the arbitrators. This is the particular case of the ICC Rules (article 8.5) often referred to in French court decisions (cf. Cour d'Appel de Paris, 19 December 1982, Rev. arb. 1983, p. 181 and the note: Cour de Cassation, lère ch. civ. 14 March 1984 Rev. arb. 1985 p. 69 note G. Couchez; Cour d'Appel de Paris 1ère ch. A 14 May 1986, SIAPE v. IEC). It is possible to deduce from these precedents that a clause whereby the parties have waived or prohibited referral of the case to a national court for ordering conservatory or interim measures prior to the constitution of the arbitral tribunal would be legal and would generally be applied in France. This solution is established especially in matters of interim provision in interlocutory proceedings (référé provision) [cf. infra part II].

Can it be concluded from this that such an intention by the parties would always deprive the judge of the power of intervention, whatever the circumstances and situation? To my mind, it seems unlikely that a solution as extreme as this would be accepted. A state with an established legal system cannot in effect disregard a conflictual situation that has been irremediably jeopardised culminating in a genuine "denial of justice", provided there is a sufficient link giving it jurisdiction to take measures justified by urgency or risk.

One can easily imagine a situation where the arbitrators' ability to proceed might be blocked by serious de facto or de jure obstacles, such as problems resulting from a multiplication of court actions or inability to constitute the arbitral tribunal within a reasonable time, whether or not complicity by the party opposed to the conservatory measure is involved. The national court's refusal to order a measure that is proved to be well founded, may then result in depriving a party from fundamental safeguards and prevent the arbitral tribunal from continuing to provide each party with the conditions of an equitable process in accordance with general and fundamental principles. Reference to the principles set out in article 6 of the European Convention for the Safeguard of Human Rights might usefully be invoked by the French judge.

The condition for intervention by the national courts - exceptional in the face of the parties' contrary intention as expressed in the arbitration agreement - would no longer be that of urgency but would rather be that of the denial of justice deduced from the arbitrator's inability to intervene and the risk that would ensue thereto. The national judge, in his function of assistance and cooperation to arbitration, would then be carrying out a task designed to protect the fundamental safeguards of the general principles of law.

A decision by the President of the Paris Court of First Instance (Tribunal de Grande Instance de Paris) applied this principle, in a case involving difficulties in constituting an arbitral tribunal in an international dispute between a French party and a foreign party. Whilst [Page76:] refusing to appoint an arbitrator in place and instead of the party who had failed to do so, the national judge did not exclude the possibility of his doing so if it were proved that the French claimant would in that case have been the victim abroad of a genuine denial of justice deduced from the impossibility of having the arbitral tribunal constituted or obtaining justice (Tribunal de Grande Instance de Paris, ord. de référé 11 May 1987; Rev. arb. 1988, 699, note Ph. Fouchard and particularly his comments pages 708 to 710).

A recent judgment of the Supreme Court (1ère ch. civile 20 March 1989, I.... intern., Rev. arb. 1989, 494 note G. Couchez) may finally suggest a step in this direction. Whilst refusing a petition for an interim provision in interlocutory proceedings for lack of proof of urgency, with regard to the application of Article 31 of the Franco-Egyptian Convention on the enforcement of court judgments, the Supreme Court specified the conditions in which the judge might intervene in the following terms:

Whereas, if, for want of applying this provision, urgency were to justify the jurisdiction of the French courts to order conservatory or interim measures, in particular if the safety of individuals or the conservation of their goods is at risk...

The latter detail regarding the safety of individuals or risk, was not necessary for the decision, but it is interesting for subsequent consideration.

A midway course between the will of the parties and the intervention of the judge has been sought through the institution of the pre-arbitral referral procedure recently brought in by the ICC (cf. Arnaldez & Schäfer "Le règlement de référé pré-arbitral de la CCI" - Rev. arb. 1990 p. 83). If this procedure develops, the conditions for intervention and enforcement of the decisions of pre-arbitral referees called to take conservatory or interim measures will have to be defined in practice.

3) Principle of effectiveness and complementarity

The third basic principle is the intervention of the national courts for ensuring the effectiveness of the future arbitral procedure by ordering urgent measures for preparing the case or safeguarding the enforcement of the award.

But in the first case, it needs to be clearly underlined that in order to intervene, the French judge must first of all recognise that he has jurisdiction. Indeed, it seems obvious that in international cases, if the dispute has no relationship to France, no point of contact and no link of attachment, the French courts' right to intervene to order a conservatory measure that in no way concerns the French state must be excluded.

On the other hand, if there is such a link of attachment with France - deduced either from the place of execution of the measure (e.g. conservatory embargo or attachment of a vessel, an aircraft, or a bank account, etc.) or from the French nationality of one of the parties or its domicile in France - provided that the intervention is neither artificial or fraudulent, the international jurisdiction of the French courts may be recognised rationae loci (cf. B. Moreau note Rev. arb. 1983 p. 183); in the case of conservatory embargo of a vessel, cf. Cour d'Appel de Paris 18 February 1987 cf. infra Part II, A (b).

Very recently, the United Kingdom House of Lords, following the conclusions of Lord Mustill, applied this type of power for the national courts to order conservatory measures despite the fact that the place of arbitration was situated outside the country concerned (Judgment dated 21st January 1993 in Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd.).

Although the judge may intervene in this way, but he must not interfere in the subsequent arbitration procedure. He must only intervene in the spirit of aid and cooperation to the arbitration as he does in relation to difficulties which arise in constituting the arbitral tribunal. It is hence a complementary role, as was so well expressed by Professor Goldman in the works of the ICC 60th anniversary. Accordingly the national judge should be guided not by a spirit of competition but by a desire to provide "technical assistance" to the arbitration to enable the good administration of the arbitration procedure in the interest of the parties (cf. Ph. Fouchard, Rev. arb. 1985 p. 5 et seq.).

I shall now turn to some detailed points on the application of such conservatory measures in France. [Page77:]

B. Application by the "juge des référés" or by the judge enforcing the award

1) Determination which judge has jurisdiction: the President of the Court of First Instance

Under French law, such conservatory or interim measures fall within the jurisdiction of the President of the Court at First Instance, who in this case is deemed to be the most appropriate on the grounds of his skill, his experience and from the standpoint of the procedure to be applied, characterised by its simplicity and speed. The court intervenes mainly as juge des référés before the Court of First Instance ("Tribunal de Grande Instance" - TGI) or the Commercial Court, or as Juge de l'exécution (Enforcement judge) before the Court of First Instance since the reform of civil enforcement procedures, which came into application on lst January 1993 (Law of 9 July 1991 - Decree of 31 July 1992: cf. "Les Petites Affiches" n° 3, 1993; Gazette du Palais - Bulletin législatif n° 28).

The case is referred to the President of the court either by way of petition, which corresponds to a unilateral step, or by way of a referral ("par voie de référé"), a procedure that of necessity respects the rules of due process.

Referral on petition

In certain circumstances, conservatory measures have to be taken without the knowledge of the other party - e.g. the conservatory embargo of a vessel that is due to dock at a French port for several hours or days. In order to ensure that the rights of defence are respected, the measure ordered on petition may be "retracted", in other words cancelled, if the opponent demonstrates at a subsequent hearing (which then constitutes due process) that the measure was unfounded or that the judge was incorrectly or inadequately informed.

In practice in such cases, when the matter is extremely urgent, referral to the juge des référés may be at very short notice, for example the day after the order that unilaterally prescribed the conservatory measures.

In deciding what measure to take, the judge should be seeking to ensure effectiveness whilst respecting rights and safeguarding essential interests.

Referral under normal interlocutory referee procedure

If the conservatory measures sought do not call for any element of surprise, the matter will be referred to the national court by means of the interlocutory referee procedure, characterised by its rapidity, its simplicity before a single judge, who is always available in case of emergency, and with the possibility of having the case referred to three judges for cases deemed to be very complex.

It gives rise to an order that is contentious but basically interim in character; according to Professor Roger Perrot: "the aim of the judge in such proceedings is to remedy what is most urgent, whilst reserving the future".

2) Basic characteristics of the juge des référés

Under the general law, the juge des référés is the President of the Court of First Instance. However, in commercial cases, this power is attributed to the President of the Commercial Court. Although the interlocutory referee procedure was mainly intended for cases of urgency, it has gradually become generalised for dealing with any situation where the existence of a dispute justifies the ordering of measures of safeguard, returning things to their original condition, of an evidentiary nature or even measures of execution such as le référé-provision (interim provision).

The application for referee procedure is very simplified; it corresponds to a writ of summons served for a given date before the President of the court with no minimum time limit on the summons to appear. Only urgency and respect of the rights of the defence determine the time limit necessary for referral to the judge, and the defendant may be summoned "immediately" (article 485 para. 2 New Code of Civil procedure - NCPC) "if the case calls for speed".

The parties may appear in person since assistance or representation by an attorney is not obligatory. No particular form is laid down for the investigation and proceedings and the parties often present their case orally. This direct, immediate and personal contact between the judge and the parties - often assisted by their attorneys - encourages dialogue, comprehension of the situation and above all the search for efficient and effective measures [Page78:] whilst awaiting an agreement or a solution on the merits of the case. Immediate intervention by the judge also enables the parties to get together and may well avoid subsequent proceedings.

The interlocutory order (ordonnance de référé) is an interim decision which is contentious in its nature; it is rendered on the basis of a given situation that is liable to change; it does not have "res judicata authority" over the subsequent case. This means that another judge, to whom the case is referred for final decision, is not bound by the interlocutory decision or by the grounds for the order, which may be amended or even withdrawn if fresh circumstances arise (art. 488 para. 2 NCPC). Thus, arbitrators are not bound in law by conservatory measures ordered prior to the constitution of the arbitral tribunal. This constitution or even decisions taken by the arbitrators might be deemed to be fresh circumstances liable to bring about a change in the execution of conservatory measures previously ordered by the national judge.

But above all, the great strength of the referee procedure in France stems from the fact that the order is enforceable automatically even if it has not been prescribed by a judge and even if a recourse such as an appeal has been filed. This provisional enforcement of the decision may only be suspended on very exceptional grounds by the First President of the Court of Appeal. Such enforcement may even be ordered on penalty of a fine.

Although the circumstances sometimes call for great speed, two levels of court proceedings remain a fundamental principle of the procedure. It must be complied with in law and also in fact. This makes adaptation of the procedure mandatory, and the flexibility of the procedure allows for such adaptation. Court practice has shown that in a case of extreme urgency and if the measures ordered would have irreversible effects, the Court of Appeal may rehear the case very shortly afterwards. When faced with exceptional circumstances, the Paris Court of Appeal has on a number of occasions ruled on appeal within 24 or 48 hours of the order rendered by the President of the TGI to avoid depriving a party, de facto from two levels of court proceedings.

Having summarised all these principles and their procedural applications in French law, I now intend to examine the practical applications of the substantive law. In this connection, it is essential to point out that so far as conservatory or interim measures ordered by the national judge are concerned, the problem of interference between the national court and the arbitrator is similar in nature to the problem posed by the application of clauses attributing jurisdiction to a foreign court (cf. in particular article 24 of the Brussels Convention) or those deduced from rules relating to jurisdiction which prevent the French courts from having jurisdiction (cf. Vincent Delaporte: "Les mesures provisoires ou conservatoires en droit international privé"; trav. com. fr. de dr. int. priv., ed. CNRS 1987 p. 147; cf. likewise Cour de Cassation; 1ère ch. civ. 25 Nov. 1986 Bull. civ. I n° 277; Cour d'Appel de Chambéry, 26 December 1991, Sté Nordsport v. Sté Kastle).

II. Practical applications of interim or conservatory measures in French substantive law

When defining the national judge's area of intervention in cases of international arbitration, the following basic data must always be borne in mind:

- At the quantitative level intervention by the national court is relatively rare bearing in mind the significant number of arbitrations taking place in France, those where French procedural law has been chosen, or arbitrations involving an enforcement measure in France.

An analysis of all the published case law, cases reported by legal data banks - including jurisdata which has been indexing all the judgments of the Paris Court of Appeal for more than fifteen years - as well as unpublished cases, reveals that parties seldom resort to the national court for ordering interim or conservatory measures prior to the commencement of the arbitration or in the course of the arbitration procedure, instead they allow the arbitration to take its course in the normal way, unless there are circumstances giving rise to difficulties or emergency situations. This proves that the risk of deliberate interference - which is often criticized - is not a real risk;

- In international cases such intervention is based on urgency, situations of risk or cases that [Page79:] might constitute a denial of justice, that no state with an established legal system can either allow or accept if the situation in dispute is a matter that concerns that state as a result of a sufficiently close link of attachment, although it should not display "judicial imperialism".

- In the face of this need to seek a fair balance between the subsidiary nature of such intervention by the national court and the need to safeguard fundamental interests, the powers of the national courts will differ according to whether or not the arbitration is yet vested in the arbitrator. It is this situation that constitutes the dividing line between the various measures that the national judge may or may not decide to order in judicial practice.

Accordingly I intend to examine first of all intervention of the national courts prior to referral of the case to the arbitrators (A), and secondly intervention after such referral (B), however the second aspect will only be dealt with very briefly.

A. Intervention by the national courts prior to referral of the case to the arbitrators

In French substantive law, the actual powers of each decision-making body (whether a court or an arbitral tribunal) are not determined by the principle of "seisin" of the arbitrators, but rather by the notion of "constitution" of the arbitral tribunal. Indeed it is from the moment of the constitution of the arbitral tribunal - in other words from the date when either the sole arbitrator or the last arbitrator has accepted his task - that the arbitral tribunal is fully vested with its decision-making powers. However, certain rules of arbitration specify that "seisin" of the arbitrators takes place at a different time, for example on filing of the case, on payment of the advance etc...

The measures that may be taken by the national courts vary greatly. Indeed they can divided into different categories: conservatory, evidentiary or interim. In fact, a particular measure may very often have a conservatory function and an evidentiary function at one and the same time, while also being interim in nature as the judge if subsequently called to make a final ruling on the merits of the case will always have the power to confirm, modify or even cancel it.

For the purposes of this summary, I intend to study on the one hand conservatory measures as such, on the other hand measures relating to evidence, and lastly interim provision (référé provision) which corresponds to a more specific institution under French substantive law.

1) Measures that are mainly conservatory

Such measures basically have the following aims:

- to preserve a situation or assets

- to provide for guarantees and prepare for the enforcement of the award

a) Measures for preserving or reestablishing a situation or assets

If there is a dispute between several parties, circumstantial or factual situations may well arise which call for immediate measures to prevent an illicit situation, irreversible detrimental consequences or ones that are difficult to compensate once the judge is in a position to rule, from being perpetuated during the course of the proceedings. There are very many examples of this which take a variety of forms. Sometimes they involve putting a stop to manifestly illicit competition, prohibiting the use of a trademark or a trade name or practices constituting the infringement of copyright or trademarks. This is similarly the case where perishable goods have to be sold urgently provided the price is put on deposit. Another example is the need to stop work on a construction site if de facto or de jure circumstances so require.

Even if there is an international arbitration agreement, case law precedents have always recognised that the national courts have a power to order necessary measures ; however, they make intervention subject to a strict condition of urgency or a situation of risk. Such jurisdiction by the juge des référés is based on the provisions of article 809 para. 1 of the New Code of Civil Procedure, which is worded as follows:

The President [of the Court] may always, even when confronted by a serious dispute, prescribe conservatory measures or measures to return matters to their former state in referee proceedings [Page80:] when said measures are essential, either for preventing an imminent loss or for putting a stop to manifestly illicit disturbance.

These powers are also attributed to the President of the Commercial Court (article 873 NCPC). A number of cases illustrate this type of intervention:

- Paris Court of Appeal, 14th ch. A, 2 December 1987, Société Fragrances y. Ray International and SA COFCI. This case involved a dispute between two foreign companies relating to the termination of an exclusive distributorship agreement for Salvador Dali perfumes, delivered by a French company in the USA, for which the agreement stipulated a clause attributing jurisdiction to an American court by reference to the American Arbitration Association. The Paris Court of Appeal held that it had jurisdiction to rule on the request for delivery of the balance of an order placed with COFCI before the distributorship agreement had been terminated. The Court of Appeal held, on the one hand, that in this case the claim was not aimed at obtaining a ruling on the merits of the dispute a matter falling solely within the domain of the arbitrators - "but solely at obtaining, in view of the urgency and the alleged risk, a conservatory measure or a return to the original state of affairs", falling within the powers of the juge des référés. The Court considered, on the other hand, that the refusal to deliver the balance of the ordered goods constituted a "manifestly illicit disturbance" and it therefore ordered the party concerned to finish delivering the order on penalty of the payment of a daily fine. On the other hand it refused to order the performance of future deliveries of orders.

- In the context of a relatively complex commercial contract, the tenant of a business had suddenly stopped running it and vacated the premises. Notwithstanding the stipulation of an arbitration clause for the settlement of ail disputes, in view of the urgency of the matter and the established situation of risk, the owner was able to obtain from the juge des référés, authorisation to retake possession of the premises and to carry out all measures necessary for preservation of the business without waiting for the constitution of the arbitral tribunal and the settlement of the dispute. The intervention of the national judge was necessary here and complementary to that of the arbitrators.

- Paris Court of Appeal, lst Ch. A, 12 December 1990, Terex v. Bonexi and others. This appeal court judgment is particularly interesting in that it highlights the spirit in which the national judge has to intervene to preserve a situation while seeking a fair balance between the interests in dispute. In 1989, the American company "Terex" had concluded an agreement with the company Fruehauf for the assignment of all the assets and title deeds relating to the latter company's activity in the trailers sector. The assets included 36,000 shares in the French company SESR, and several shareholders, including Banexi, had the benefit of a contractual right of pre-emption over those shares. The right of pre-emption was not exercised in view of the purchase terms as presented by Terex. When certain factual information subsequently came to light that that may have suggested there might have been fraud on the part of Terex and Fruehauf jointly, aimed at preventing the exercise of the right of pre-emption, Banexi and the shareholders concerned referred the matter to the juge des référés to ask for the immediate judicial sequestration of the shares in dispute whilst awaiting the arbitration procedure which they declared they wished to bring before the ICC in the near future. On the basis of the facts brought to the knowledge of the Court of Appeal, this court ordered the sequestration, the urgency of which was manifest, and in addition ordered other measures intended to preserve the respective interests of the parties until the settlement of the dispute by the arbitrators; accordingly the Paris Court of Appeal:

- suspended Terex's exercise of a voting right in respect of the shares in dispute;

- decided that the sequestrator should be called to ail the general meetings and could exercise this voting right when important interests were in question;

- limited the measure in time in view of its exceptional nature, by appointing the sequestrator for one year, with a right to refer the matter back to the juge des référés depending on the circumstances.

Similarly, in this case, the Court of Appeal allowed Terex's counterclaim aimed at obtaining the suspension of a decision of SESR's Board of Directors to launch a subscription for new shares, in fact intended to frustrate Terex's rights indirectly by changing the terms of the majority. [Page81:]

The merit of this decision is that it clearly shows the "flexibility of the intervention of the juge des référés for providing the most appropriate interim solutions, in the face of a crisis conflictual situation, with the possibility of modifying them in the event that new circumstances arise. It also demonstrates the spirit of cooperation of the national court towards the arbitration, since the measures were ordered at the request of the party who wanted to commence the arbitration procedure with a view to enabling it to proceed in the best possible conditions, whilst at the same time reserving and conserving the rights and interests of each of the parties.

Other cases illustrate the limitation of intervention by the juge des référés by the notion of urgency, and particularly, the protection of all the parties provided by the two levels of court procedure.

In order to assess the urgency of the matter, the juge des référés has to take up a position on the date he makes his order in such a way so as to take into account the parties' legal situation on the date closest to his decision. For example, the Toulouse Court of Appeal (2nd Ch. 11 March 1991 Perez v. Sorba, jurisdata n° 040376) applied this principle. The Court first pointed out "that the existence of an arbitration clause intended to settle differences or disputes arising in the course of performance of the assignment of equity capital combined with a clause guaranteeing that the liabilities do not prevent the juge des référés having jurisdiction to order conservatory or interim measures whenever urgency so requires". It went on to reject the request for the appointment of a provisional ad hoc administrator to manage the company in the grips of serious internal conflicts by pointing out that prior to the referral of the matter to the juge des référés, the company had been put into liquidation by the court. The appointment of an ad hoc administrator was no longer urgent as it was unnecessary.

- The illicit nature of a particular type of behaviour or situation must be manifest, in other words its ascertainment must be deduced from the factual or legal details with sufficient evidence or incontestability for the juge des référés to be able to order interim measures for putting things back into their former position or a prohibition, in particular when an arbitration clause attributes jurisdiction to arbitrators for settling the dispute. The part played by the national judge is therefore an exceptional step. It has to be specially justified otherwise it will not respect the will of the parties.

In a recent decision dated 10 July 1992, the Paris Court of Appeal applied these principles in the course of one of the cases involving Euro Disneyland (Cour d'Appel de Paris 14ème de C. 10 July 1992 BNP v. Euro Disney SCA and others).

There have been many cases between Euro Disney and the public works enterprises and their sub-contractors involved in the construction of the Marne-la-Vallée theme park. In one of them, the Bobigny Commercial Court decided to order a sequestration measure against Euro Disney in the sum of more than FF 6 million that the BNP had paid it in execution of a first demand guarantee; the court had in addition prohibited the BNP from implementing the counter-guarantees. This court had held on the one hand that the arbitration clause did not prevent the juge des référés from intervening and that the de facto situation made such measures necessary in order to prevent any imminent loss.

The Paris Court of Appeal quashed this judgment, except with regard to the principle of the jurisdiction of the juge des référés. In the first place, notwithstanding the clauses in the contract stipulating that any dispute relating to the contract should be finally settled by way of arbitration and that "if the contractor considers that the call on the performance guarantee is not well founded, it will have the right to resort to arbitration", the Court decided that these contractual provisions "did not stand in the way of the jurisdiction of the national judge to order conservatory measures in referee proceedings in the event of manifestly illicit disturbance or imminent loss". But, on this latter point, the Court of Appeal, by a very detailed analysis of the contracts, the procedure and all the facts, held that Euro Disney had not called on the first demand guarantee either tardily or fraudulently; finding, as a consequence of this, that there was no a manifest situation of risk or illicitness, and therefore the Paris Court of Appeal cancelled the measures ordered by the court at the first instance.

This appeal court judgment demonstrates that the principle of two levels of court hearings is an essential safeguard for the parties, and particularly effective since in this case the [Page82:] Court of Appeal rendered its decision within three months of the Commercial Court judgment. In referee procedures, appeals are investigated and decided as soon as possible because they often involve urgency.

b) Measures for providing guarantees or preparatory to the enforcement of the arbitral award

Whether or not the arbitral tribunal has already been constituted, the situation often calls for one of the parties to take steps sufficiently early on so as to prevent its opponent from organising its insolvency and to guarantee immediate enforcement of the award to be rendered. This concern is particularly important in international cases, a field where the circulation and even the dissimulation of assets and funds is sometimes easy, while enforcement measures are particularly difficult if the debtor against whom the award is rendered wishes to take deliberate steps to avoid any compulsory enforcement.

It is therefore essential to render assets that are likely to disappear provisionally non disposable, since such assets may safeguard the enforcement of the arbitrators' decision. Such measures concern all cases of interim attachment orders, deposits and even sequestration measures, or any other guarantees that may be substituted for them such as bank guarantees.

The provisions of articles 48 et seq. of the French Code of Civil Procedure give the national judge the power to order such measures in cases where real estate is involved, "if the credit appears to be well founded in principle" and "in the event of urgency, if the recovery of the debt seems at risk...". The same applies in the case of personal property so far as the application of measures of non-disposal of a conservatory nature are concerned.

Even in the face of an arbitration clause, French case law grants full jurisdiction to the national courts to authorise such measures, whose execution in France is based on the "sovereignty" of the courts. Arbitrators have no power to order such measures, but have simply the power of jurisdictio. The power of the national judge will not encroach upon the arbitrators' jurisdiction, because the judge only rides in the light of an "apparent" situation on the basis of sufficiently serious evidence submitted to him at the end of proceedings that will take the form of a due process in the event of a dispute. He decides on a prima facie basis whether or not to order such conservatory or interim measures although their final execution will be subject to a decision of the arbitrators which alone has enforceable status.

This jurisdiction and these principles were reaffirmed in a judgment rendered on 20 Match 1989 by the first civil chamber of the Supreme Court (République Islamique v. Framatome, OEAI v. Eurodif, Rev. arb., 1989, 653 note Ph. Fouchard; Rev. trimes. dr. civil 1989 comment R. Perrot). Likewise, Cour d'Appel de Paris 18 February 1987, 14th ch. A, SA Armement Martin v. Reefser Shipping, which, confirming an order of the President of the Paris TGI, held that the existence of an arbitration agreement attributing jurisdiction to an arbitral tribunal in London did not prevent the French judge from ordering a conservatory embargo over a vessel calling at the port of Dieppe; the embargo retains "a conservatory character until the moment when it becomes a measure of execution, as a result of a judgment ratifying the order". In this case, which involved a French party, the Paris Court of Appeal found that the plaintiff company had adduced evidence proving a definite debt and that there was a risk in that the defendant company, Reefser Shipping, owned no assets in France. However, in order to establish a balance between the financial interests in question (embargo of a vessel in the face of a low value debt), by the same judgment the Court of Appeal authorised the substitution of a guarantee and lifted the embargo in exchange for the remittance of a letter of guarantee to cover the amount of the debt claimed.

This judgment shows once again both the effectiveness of measures that may be ordered by the national courts and the flexibility of their application.

2) Conservatory and interim measures relating to evidence

Before any process, the situation may call for urgent measures to conserve an item of evidence, or may justify research to establish that its allegation is well founded. Although all these measures are directed at one and the same end - the good administration of national or arbitral justice - the former are basically aimed at avoiding the deterioration of evidence, whilst the latter have a more "inquisitorial" [Page83:] aspect: these are measures relating to the production of evidence and hence, most often, investigatory measures of a "preparatory" nature, entrusted to a specialist appointed by the judge for his technical knowledge. Mainly, these are the findings of facts, consultation and expertise procedures - the latter being the main subject matter of argument and dispute.

Whether for ordering immediate measures in the light of urgency or measures not merely intended for conserving the material evidence but also needed to "enlighten" the judge on questions of fact (art. 232 N.C.P.C.), case law now acknowledges that the national judge may intervene in interlocutory referee proceedings or on petition. As the judgment rendered on 20 December 1982 by the 3rd Civil Chamber of the Supreme Court (Rev. arb. 1986, 233 comment Couchez) states:

... the existence of an arbitration agreement is not an obstacle to the power allotted to the juge des référés by article 145 NCPC to order, before the matter has been referred to the court with jurisdiction, investigatory measures ...

The legislative provisions applicable in this connection are articles 145 and 146 NCPC, as well as article 808 NCPC in the case of the Tribunal de Grande Instance. These are the three essential provisions:

- Article 145 NCPC:

If there is a valid reason for conserving or establishing prior to any process factual evidence that the solution of a dispute may depend on, legally admitted investigatory measures may be ordered at the request of any interested party, on petition or in referee proceedings.

- Article 808 NCPC:

In every case of urgency, the President of the Court may order in referee proceedings measures that do not come up against any serious challenge or which are evidence of the existence of a dispute.

On the ground of article 808 NCPC, the national judge may order any measures for the conservation of evidence that are essential on the ground of urgency. Examples of such measures are: constats (statements of fact or affidavits ) whether drawn up by a court bailiff or by an expert, sequestration orders, placing under seals, attachments of a conservatory nature and in particular seizure in counterfeit proceedings in cases involving industrial property or literary and artistic property.

But above all article 145 NCPC, which, as the main foundation of the judge's intervention, is applied to order investigatory measures prior to any referral to the arbitrators, such as a constat or an expertise procedure. In this case evidence of urgency is no longer a precondition for intervention by the national judge. (See 3e civ. 20 Dec. 1982, cited above. For a simple measure ordering a constat relating to equipment causing congestion on a building site preventing the start-up of works: Cour d'Appel de Paris, 18 January 1991, 14th ch. B, Euro Disney v. CGCE; Cour d'Appel de Paris, 30 July 1986; Rev. arb. 1989 113 comment J. Pellerin, regarding an expertise procedure relating to the constructability of a plot of land.)

But an order for an expertise procedure does not have to be accorded systematically if a simple constat would suffice for preserving the evidence adequately. The prescription of article 263 NCPC is formal and very clear in this connection: "There are no grounds for ordering an expertise procedure in cases where a constat or a consultation might be sufficient for enlightening the Judge", who has " sovereign power" for assessing the appropriateness of the expertise measure, provided he supports his decision by adequate grounds (Com. 11 December 1979, Bull. civ IV, p. 263).

In this spirit, if the parties have agreed to an arbitration clause and the arbitrators are not yet seized of the case, a very full and detailed request for expertise may (and sometimes should) be refused by the national judge if the order of a constat would be sufficient to suit the circumstances and the parties' legitimate expectations. True, the existence of the arbitration clause on its own, is not an adequate reason for refusing this type of investigatory measure, but it has to be taken into consideration very seriously in the examination of the request.

The Paris Court of Appeal, to my mind, correctly applied this rule and, above all, this spirit in one of the disputes relating to the construction of the Euro Disneyland theme park. This involved a dispute between Euro Disney and a number of general construction companies, which had had certain works carried out by a large number of subcontractors, who, in their turn were claiming payment for their works. Judicial expertise procedures had already been ordered in referee proceedings before the President of the [Page84:] Commercial Court for the purpose of determining the alleged disorders and the state of completion of the building sites (cf. infra). By a further action, the court expertise procedure had been "extended" and "made applicable" to a large number of sub-contractors, who had not been parties to the initial procedure. On appeal from this decision by Euro Disney, the Paris Court of Appeal in two judgments dated 22 May 1992 (14th ch. B n° 92/5759 and 5760 Euro Disney SCA v. SA Gabo, SA Eremco and others) quashed the order of the Commercial Court, pointing out, in its grounds:

- that the documents produced did not enable it to determine the sub-contractors concerned;

- that a measure ordering a constat that had not been challenged had already been ordered with a view to establishing the sub-contractors in question and drawing up a list of their claims;

- that the said measure ordering a constat appeared "to be a preliminary measure and possibly a preparatory measure to the implementation of an expertise procedure with regard to the sub-contractors;

- that accordingly the request for an expertise procedure was "premature" and could not be allowed "as things stood".

In the same decision, the Court of Appeal cancelled the complementary expertise procedure ordered by the court at first instance, holding that the new remit granted to the expert "prejudged the merits of the case" and that it "was incompatible with the existence of the arbitration clause"; in this case, the principal problem posed was expertise measures ordered, on the ground of article 145 NCPC, prior to any process and with no condition of urgency.

Academic lawyers - even more than the courts in practice - have been discussing and are divided on whether, particularly in international arbitration cases, an expertise measure which is not restricted solely to the relation of factual information and circumstances still has characteristics of a conservatory measure, and whether it may be legally ordered by the national courts although this prerogative ought to fall within the jurisdiction and powers of the arbitrators alone, if the common will of the parties is to be fully respected.

An expertise procedure is certainly much more serious than a simple constat, since the specialist appointed on the basis of his personal technical knowledge carries out investigations and, in order to "enlighten the judge" gives an opinion and conclusions which often determine the solution of the dispute. He may hear people with knowledge and collect opinions and comments from the parties. There can accordingly be no doubt that this type of measure involves an investigation of the case under the supervision of a judge, who in this case is the national judge. According to the very expressive wording used in a legal opinion produced by Euro Disney before the Paris Court of Appeal in the disputes referred to above: "The constat is limited to "material findings exclusive of any opinion on the de facto or de jure consequences which may result therefrom (article 249 NCPC)" and is intended to conserve "the memory of the facts with a view to a subsequent process", whereas the end purpose of an expertise procedure is not only to establish facts which run the risk of deteriorating, but also of "enlightening the Judge intellectually by providing him with an "opinion" on a technical question"; and accordingly, he does "intellectual work" which constitutes an "intellectual elaboration" and "the first steps towards a decision" which exceed the domain of conservatory measures."(Paris Court of Appeal, 14th B 22 May 1992 N° 92/2759).

Aside from such arguments of a legal nature, the parties, their lawyers and lastly by the arbitrators themselves consider that above all the choice of the expert and the determination of his terms of reference are essential questions, particularly in the case of international arbitration. The personality of the expert, his "profile" and his actual skills are so essential that his appointment is sometimes dependent on intuitu personae and the relationship of confidence that may exist between the "judge" - be this the national court or an arbitral tribunal - and the expert. The definition of the terms of reference ensures that the judge is well informed, and it implies getting to know about the de facto and de jure facts of the dispute, without however settling or prejudging it.

Are the arguments sufficiently convincing to supplant the jurisdiction of the juge des référés in the case of an expertise procedure? We think not, and French case law on this question is both firm and established: it makes no distinctions between tasks such as the constat and expertise procedure. With regard to a request for quashing a provisional order, the Paris Court of Appeal in a judgment dated 19 [Page85:] December 1982 (Rev. arb. 1983, 181 note B. Moreau) recalled this principle, expressing itself in the following remarkable terms:

Whereas generally, the existence of an arbitration agreement does not exclude the jurisdiction of the juge des référés so long as the power of the arbitrator to settle the merits of the dispute remains intact.

For its part, the Supreme Court in its judgment of 20 December 1982 (Rev. arb. 1986, 234) in similarly very general terms had acknowledged that the juge des référés had the power to order an expertise procedure whilst pointing out that the judgment of the Court of Appeal had not ruled on the impact of the alleged circumstances.

Lastly, recently, in a case where the jurisdiction of the national judge to order an expertise procedure was raised once again, at the level of principles, the Paris Court of Appeal reaffirmed the power of the juge des référés while clearly marking the limits of his intervention. The judgments in question were those rendered on 22 May and 3 July 1992 in the Euro Disney disputes. The grounds of the principles should be restated:

Whereas, however, the expertise procedure - an investigatory measure legally admissible within the meaning of article 145 of the New Code of Civil Procedure - is aimed at safeguarding a party's right to evidence in the face of a risk of deterioration and the technical opinion of the expert cannot be classed as the first steps towards a court decision since the said opinion is not binding on the national judge or on the arbitrators, accordingly the expertise procedure should be deemed to be a measure that is both conservatory and interim in its nature;

Whereas the existence of the arbitration clause is therefore not an obstacle to the power allotted to the juge des référés by article 145 of the New Code of Civil Procedure to order, before the matter has been referred to the relevant court or arbitrator, in accordance with the conditions specified by the said legislation, an expertise procedure, in that the task of the expert - who under the terms of article 238 of the same code, must never make an assessment of a legal nature is not such as to lead to the drawing of legal conclusions from the material findings that he makes; (Paris Court of Appeal, 3 July 1992, 44th Ch. B n° 92/11058).

In several cases, the Court of Appeal has found that the allotted task "did not involve the interpretation of the contract" for public works in question and accordingly "did not encroach upon the jurisdiction of the arbitral tribunal".

On the other hand, in several cases decided on 22 May 1992, the Court of Appeal cancelled part of the expert's terms of reference on two points which were a matter for assessment by the arbitrators alone, grounding its decision, on the one hand, on the fact that the question presumed that the admissibility of the claim and the fact that it was well founded had been resolved and, on the other hand, on a lack of legitimate interest. The ground for the decision is interesting:

Whereas since the expert's task which consisted of expressing "his opinion on the quality and importance of the buildings constructed by the general contractors in view of the technical and artistic complexity of the processes applied" cannot be deemed to respond to a legitimate interest within the meaning of article 145 of the NCPC (as the provisions of article 873 of the NCPC invoked were not applicable in this case) in that, by reason of its very formulation ("opinion") and the imprecision of its subject matter, it led to asking the expert to give a personal and general evaluation, or even an impression, which were bound to be very subjective; (Paris Court of Appeal, 14th B, 22 May 1992 n° 92/2759).

This position in French case law, which is also shared by many foreign laws, is at the same time legal, consistent and realistic. Above all it seeks effectiveness in the aim of the good administration of justice, whether arbitral or through the national courts. The expertise procedure ordered by the national judge leaves the "judicial" power of the arbitrators "intact", in other words their ability to settle the dispute, if the case is referred to them. The order in referee proceedings is of an interim nature and, from the standpoint of French law, does not have final res judicata authority. The expertise report is not binding on the arbitrators, who may disregard it or consider it as mere information. From the moment the case is referred to them, the arbitrators may order another expertise procedure or amend or extend the task laid down by the judge.

So far as the facts are concerned the expertise is preparatory to the hearing which may be essential for the parties, because the seisin of the judge on the merits of the case must never [Page86:] be inescapable. In any dispute, room must always be left for conciliation, mediation and out-of-court settlement. Yet, an expertise procedure, in addition to its function of conserving the evidence, may provide a means of informing the parties and give them an opportunity to measure more exactly the interest and risks of a process, whether arbitral or before the courts.

This preparatory function is often sought by one party before commencing the arbitration procedure since arbitration is a procedure that although it may be wanted, it is often burdensome, weighty and long and in certain cases disproportionate to the interests in question. The outcome of an expertise procedure may enable the likely risks to be assessed. But then, how can the desire for effectiveness be reconciled with the need to respect the arbitration procedure whilst leaving the arbitrators' power "intact" in accordance with the common will of the parties as expressed in the arbitration agreement?

It would seem that they can be reconciled if the function of complementarity of the national judge is clearly respected. This means that his intervention has to be justified by a legitimate interest implying an investigatory measure that is not only useful but immediately necessary, even if urgency is not essential. If the Judge finds an arbitration agreement invoked as an objection, before allowing a request for an expertise procedure, he should first of all check these conditions on detailed and explicit grounds and should not restrict himself to customary expressions, the so-called "stylistic clauses".

A judgment of the Paris Court of Appeal provides us with an example of this type of step (Paris, 20 February 1984, Rev. arb. 1986, p. 233, 2nd case). A party, who had acquired 3/4 of the capital of a company coupled with a guarantee of the liabilities, had shortly afterwards discovered that there were losses rendering the presentation of the company's accounting position suspect. In allowing the request for an expertise procedure relating to past commercial management, notwithstanding the arbitration clause, the Court of Appeal found that the company had a legitimate interest in establishing the evidence of the origin and root cause of these losses as well as evidence about the methods used for valuing the company shares with a view if necessary to implementing the guarantees in respect of the liabilities. The Court went on to point out the necessity of the investigations asked for, finding that the applicants for the expertise were not in possession of these items of evidence which in this case constituted relevant factors.

Lastly, the parties and their lawyers have to be vigilant with regard to the expert's terms of reference. In certain cases, rather than virtually systematically opposing the expertise measure, when such a measure is obviously necessary, the parties should instead cooperate and act in concert with the national court in the aim of jointly finding a suitable expert likely to gain the parties' support - or at least lack of opposition, and with a view to defining the most suitable terms of reference in the interest of all the parties.

3) Interim provision (référé provision)

Interim provision is another interim measure very specific to French law - that the juge des référés may order. Interim provision (référé provision) under article 809 para. 2 of the New Code of Civil Procedure is drafted in the following terms:

In cases where the existence of the obligation cannot be seriously disputed, he (the juge des référés) may award a provisional payment to the creditor or order the carrying out of an obligation, even if an obligation to perform is concerned.

This procedure enables a creditor, whose obligation is obvious, even if it is the subject of disputes or irrelevant discussions, to obtain immediate satisfaction in the form of an order against his debtor which may amount to the whole of the debt. This order, which is enforceable, is however an interim measure that may be called into question by the court ruling on the merits of the case if the matter is subsequently referred to it.

In French substantive law, interim provision has been considerably extended notably in cases of road traffic accidents and real estate construction. The slowness of certain civil procedures is also an explanation for its expansion.

In international arbitration, the practice of interim provision has aroused very lively criticism because such intervention by the national court in fact has the effect of supplanting [Page87:] the exclusive jurisdiction of the arbitrators and depriving the arbitration of any interest, with the creditor having an enforceable title that may correspond to the whole of its claim. On the other hand, its nature as an interim or conservatory measure has been disputed by certain learned authors who have stressed that the judge had to assess the merits of the right in order to class the obligation as not seriously disputable or as obvious (cf. 1ère ch. civ. 14 March 1984. Rev. arb. 1985, p. 69 note G. Couchez and more particularly p. 75). I am unable to share this point of view because the interim provision is by definition a temporary measure that may be modified by the arbitral tribunal. The fact that the judge examines the dispute before deciding whether or not to order a measure does not change the nature of that order.

So far as interim provision is concerned, French case law was been very hesitant and uncertain until the last few years. The substantive law now appears to be established following two Supreme Court judgments, one dated 20 March 1989 (Rev. arb. 1989, p. 499 note G. Couchez) and especially the one dated 6 March 1990 (Rev. arb. 1990, p. 635 note Hélène Gaudemet-Tallon).

The latter judgment, in principle, is expressed as follows:

But whereas in the absence of an intention to the contrary by parties resorting to international arbitration, the existence of an arbitration agreement - so long as the ad hoc tribunal has not been constituted and therefore cannot be actually seized of the dispute - does not exclude, in the case of an emergency (which had been ascertained in this case) jurisdiction as an exception by the juge des référés for granting an interim provision if the debt is not seriously in doubt.

It stems from this that the intervention of the national judge must be exceptional and there must be a precondition of proof of urgency. Lastly, and this must be underlined, the debt must not be the subject of serious dispute because both the principle and the amount of the obligation must be obvious. In international cases, such evidence will often be very difficult to establish, particularly if the law governing the merits of the case applicable to the dispute is a foreign law. This considerably limits the intervention of the national courts in cases of international arbitration - and rightly so.

Despite these strict conditions laid down by case law precedents, a significant number of academic writers remain opposed to interim provision. Furthermore, this solution by the Supreme Court seems to me to respond to a desire for effectiveness and the complementarity of the national judge towards arbitration. As Professor Normand notes:

Interim provision is first and foremost founded on the will to provide for immediate protection of the creditor and beyond this, to preach the morality of legal relationships by frustrating the calculations of parties who, despite the evidence of their debt, count on their opponents' reluctance to instigate proceedings and on the inherent slowness of any procedure to stave off a date that they must know to be inescapable. (Rev. trim. dr. civ., 1985, 210)

In the face of a wish to organise one's insolvency or imminent bankruptcy, the intervention of the national judge may be beneficial if the arbitral tribunal has not yet been constituted or adequate guarantees cannot be taken effectively.

On the other hand, in order to avoid any detriment being caused to the other party, the national court may make its provisional order subject to the supply of guarantees for ensuring a possible refund in the event of cancellation by the arbitral tribunal. The practice of the bank guarantee should be used more frequently, but parties often forget to ask the judge for one.

Despite all the sometimes pertinent objections made against this type of interim measure, the recent case law of the Supreme Court appears to me to achieve a fair balance between the conflicting interests and to express the function of the national court in the field of international arbitration when the case has not yet been referred to the arbitrators. On the other hand, after the constitution of the arbitral tribunal, its intervention is bound to be only subsidiary.

B. Intervention of the national courts after the case has been referred to the arbitrators

After the case has been referred to the arbitrators, and more specifically, in French substantive law, after the constitution of the arbitral tribunal, established precedents consider that [Page88:] there should be no interference or intervention by the national courts in the arbitration procedure (cf. infra Part I (a) ; Paris 4 May 1988 Chambre arbitrale de Paris v. Rép. de Guinée). This does not however exclude intervention by the court to order certain interim or conservatory measures, but its role is no longer solely complementary, it becomes subsidiary to the powers of the arbitrators. This type of intervention will be examined very briefly.

1) Powers of the arbitrators to take conservatory or interim measures

French arbitration law recognises that arbitrators have the power to take conservatory or interim measures in the course of the arbitration procedure, by interim awards or by orders. In practice, the measures most frequently ordered are those relating to expertise procedures or constats. Similarly, arbitrators may grant interim provisions as an accessory or otherwise to an expertise procedure decided in an interim award which most often settles the whole or part of the dispute or the liabilities incurred.

But, are the arbitrators able to prescribe measures involving compulsory execution or necessitating the assistance of the forces of public order such as measures of guarantee in respect of assets or obligations to perform? The question is delicate because the arbitrator is deprived of "sovereignty" even vis-à-vis the parties themselves; similarly he may not send orders to third parties.

These reasons alone do not seem to my mind to exclude, in principle, intervention of the arbitral tribunal that has already been constituted and hence the power of arbitrators in this domain, since it seems that it is essential to draw a clear distinction between those matters which derive from their own powers to decide or to order in their capacity as "judge" and those matters that derive from the voluntary or compulsory execution of the measure prescribed.

Yet in an international arbitration nothing should prevent the arbitrators from taking such measures if the procedural rules agreed by the parties, by the arbitration rules or by the arbitrators themselves do not prohibit this. It is then up to each country concerned to determine the conditions and the effects of recognition or enforcement of the measure ordered by the arbitrators.

In French law, the rules relating to the enforcement of arbitral awards are at one and the same Lime simplified, rapid and exempt of any formality. On the basis of a petition, enforcement is ordered by the juge de l'exécution (enforcement judge) who basically has to check that there is nothing contrary to international public policy, as well as the legal nature of the act which has to be an arbitral award (cf. Cass. civ. 2è, 17 June 1971 - JCP, 11, 16914 note Level). It is the application of articles 1476 to 1479 NCPC to which article 1500 NCP refers (art. 1500 NCPC). Therefore provided the arbitrator's decision is classed as an interim award, or even a non-final one (for example an interim provision or an expertise), its holder will obtain a title that can be compulsorily enforced by the forces of public order once that interim award is recognised or enforced.

If, on the other hand, the order prescribing conservatory measures cannot be classed as an "arbitral award" and accordingly cannot benefit from the said enforcement procedure, it is nonetheless not deprived of all legal effect in the country of enforcement and particularly, in France. This decision may then constitute a valid ground and justification for intervention by the national court to prescribe - with the assistance of the forces of public order - the same measures requested by the arbitrators and necessitated by the de facto and de jure situation. This applies notably to the possibility of executing attachment orders of a conservatory nature or the production of documents and other items of evidence.

In this latter case, the national court fulfills a subsidiary and complementary role to the arbitrators.

But in fact, arbitration practice has shown that for very varied and many reasons, the arbitrators are very reluctant to order, in the course of the arbitration and in the absence of any partial award on the merits, such conservatory or interim measures, apart from expertise procedures or sometimes interim provisions. This can be explained by the fact that application is made to the national courts to prescribe such measures during the arbitration, though certainly this is more exceptional.

2) Powers of the national courts to take interim or conservatory measures

In principle, the national courts must not interfere in the arbitration procedure or supplant the [Page89:] arbitrators. Their role must be exceptional, subsidiary and justified by very specific circumstances deduced from a situation of urgency, of risk or the risk of denial of justice. We shall examine successively cases when these principles have been applied.

- With regard to interim provision, once the case has been referred to the arbitral tribunal, the Supreme Court has held that the national courts have no jurisdiction to order a provision, even on an interim basis, even in the event of urgency and even if the obligation cannot be seriously disputed. This solution is now very firmly established in case law (cf. Cour de Cassation, 1ère ch. civ. 14 march 1984, Société Eurodif, Rev. arb. 1985, p. 69 note G. Couchez): "But whereas the request for a provisional payment brought before the juge des référés, when the arbitration procedure was in progress, could not be classed as an interim or conservatory measure specified in article 8.5 of the ICC Rules of Arbitration to which the parties had agreed to adhere ..." (2ème ch. civ. 20 March 1989, Gaz. Pal. 1990 p. 11 note S. Guinchard and T. Moussa; Rev. arb. 1989, p. 495 note G. Couchez)

- With regard to expertise, intervention by the national courts appears exceptional because in principle it is the duty of the arbitrators already dealing with the case to prescribe it. A measure of this kind may no longer be based on article 145 NCPC, once the matter has been referred to the court dealing with the merits, but rather on article 808 laying down conditions of urgency or risk. The Paris Court of Appeal recently applied this principle by refusing an application for an expertise procedure: "As the Court of Appeal cannot now order this type of measure by reason of the remittance of the file by the parties to the ICC in January and March 1991, the first phase of the procedure of referral to the arbitral tribunal." It however maintained the continuation of a measure of constat ordered previously on the grounds that the arbitral tribunal had not yet been appointed and that the matter was urgent (CA Paris 19th ch. A 12 November 1991, Société Campenon Bernard v. Euro Disneyland - unpublished). See however, Paris Tribunal de Grande instance, réf., 21 February 1986, Société Maeght v. Galeri Maeght, Rev. arb. 1986, p. 577 which, ordering an expertise procedure, raised reservations and criticisms of the opinion of academic writers.

- With regard to measures for returning matters to their original state, guarantees or production of evidence. In fact, the main part of the role of the national courts during arbitration is aimed at - in the event of urgency or risk - measures appropriate for preventing imminent loss or damage, for having manifestly illicit behaviour stopped that the arbitrators did not wish w prohibit or were unable to, and above ail ordering conservatory measures to guarantee the enforcement of the award, such as attachments.

This possibility has always been recognised in case law. It was once again upheld in a judgment by the 1st civil chamber of the Supreme Court on 20 March 1989, République d'Iran v. Framatome & Eurodif; Rev. trim, dr. civil 1989, p. 624 comment R. Perrot; Rev. arb. 1989, p. 653 note Ph. Fouchard (possibility of having a conservatory attachment exercised over sums of money on the grounds that "the assessment by the juge des référés of the "appearance" does not imply their examination on the merits, which is reserved to the arbitrators). For Professor Perrot, it is above all the prerogative of the national courts in this field, being a matter more of imperium Chan of "jurisdiction" that validates its prerogative for implementing measures of attachment.

It needs to be clearly underlined that the national judge may not order measures of execution but solely measures of a conservatory nature on the ground of article 808 NCPC (in the event of urgency) or article 48 of the Code of Civil Procedure (in the event of urgency, and if the recovery of the debt is at risk), cf. on this point the comments of Professor Fouchard op. cit., Rev. arb., 1989, p. 662 and the reference cited for the application of article 558 CPC.

As established case law stands at the Supreme Court, if the arbitration is in progress, the judge has to assess whether the claim does indeed have the required conservatory and interim characteristics: 1ère ch; civ. 28 1989 Eurodif v. Rép. d'Iran, Rev. arb., 1989, p. 664 and very critical note by Ph. Fouchard cited above. On this judgment's referral from the Supreme Court, the Versailles Court of Appeal on 6 March 1991 (jurisdata ref. D 45973) decided: "there are grounds for ordering the lifting of the attachment ordered by the President of the Court of First Instance despite an arbitral procedure in progress since there was neither urgency nor risk and the fact of authorising this attachment boiled down to granting the said court jurisdiction to assess certain points relating to the debt which fall within the jurisdiction of the arbitral tribunal". [Page90:]

Lastly, I must mention the role of the national court during the arbitration, in connection with the production of evidence held by one party or by third parties (cf. the analyses of Professor E. Gaillard in Jurisclasseur de DIP - arbitrage commercial international Fasc. 586-8-2; 1991, p. 22). Similarly, regarding the power of the juge des référés to order the return of documents, even after referral to the arbitrators (Cass. civ. 2è ch. 1 February 1989, Rev. arb. 1989, 494 note G. Couchez) or regarding specific matters encountered when the disputes involve financial instruments; cf. the analyses of Me de Boisséson in Le droit français de l'arbitrage, 1990, p. 763 et seq.

So far as intervention by the national courts in the course of the arbitration is concerned, it can be concluded that the question is dominated essentially by notions of urgency and risk. A further important question is denial of justice - a closely allied notion - which might usefully be invoked if the circumstances reveal a total paralysis of the arbitral tribunal and its powerlessness to fulfill its function, thus depriving a party of the fundamental right of obtaining "judgment" under fair conditions. A situation of this kind might make the intervention of the judge for provisional or conservatory reasons legitimate.

III. Conclusion

At the end of this study of French substantive law, three basic ideas emerge:

- In relation to interim or conservatory measures, the respective function of courts and arbitrators sanction the search for a balance between respecting the will of the parties, which would tend to supplant the courts, and their intervention to provide each party with the protection of its fundamental interests and the guarantee of a good administration of arbitral justice. This possibility of intervention, unless the parties have jointly expressed a contrary intention, is therefore not only useful but also necessary.

During the conference organised in January 1992 by the Comité Français de l'Arbitrage on future developments of this law in France (cf. Rev. arb. 1993, p. 1), all the participants unanimously recognised the importance and the essential nature of intervention by the national courts, which should simply be codified in the French arbitration legislation. However, a majority of the people consulted wished to exclude interim provision from the interim measures which could be ordered by the national judge.

- To ensure this balance in his own function, the national judge fulfills the task of cooperation and assistance to arbitration. This implies intervention that is complementary before the case has been referred to the arbitrators and subsidiary when the arbitral tribunal has been constituted. The aim of both complementarity and subsidiarity is to seek for the greatest possible effectiveness solely in the interest of the parties, in a spirit of assistance, but in compliance with fundamental principles that have to be protected by a state with an established legal system. Accordingly case law precedents most often specify as conditions of intervention by the judge, urgency, risk and legitimate interest, to which should be added the risk of denial of justice, even and perhaps especially in international cases.

- This cooperation by the state in arbitration and this balance between two powers, which must not compete but be complementary, is based on the value placed on it by both those involved in the decision making task and those who take part in the administration of justice: judges, arbitrators, arbitration institutions and the parties' lawyers.

Excessive intervention by the national courts or interference by either in the function of the other is a sign of malfunction in arbitral or national justice. It is then necessary to seek out the causes and appropriate remedies.

Mutual recognition of the role and function of each implies both skill and confidence.

Bibliography

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1
Cf. J.R. Marbeau-Gauvin, "Réflexions sur les mesures conservatoires", D.S. 1989 chron. p. 39 et seq.

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