The Law Applicable to the International Arbitration Clause - Chapter Summary in English

Sulamérica and Arsanovia v. French law¹

1. The brief presentation that follows looks again at the very well-known ways in which French international arbitration law treats the law applicable to the arbitration clause, not with the aim of re-examining them or reviving the doctrinal debates they have generated,² but rather, in line with the perspective of this study day that is firmly focused on comparative law, with the precise aim of comparing them with the approaches upheld by the English courts in the Sulamérica³ and Arsanovia⁴ cases. Those cases have been analyzed in depth in earlier addresses, especially that of Prof. Julian Lew, which will therefore serve as our starting point.

2. There is, however, a need to specify the angle chosen for the comparison, because, at first sight, comparing the French and English methods of determining the law applicable to an international arbitration clause might appear to be a vain exercise: that comparison could be summed up in one line, as the approaches of the two legal systems are diametrically opposed. In practice, while the English courts deploy conflict-based reasoning that could be described as the classic approach to contractual issues, the French courts, as is well known, have for many years opted for the method of using substantive rules of private international law, applying the principle of autonomy of the international arbitration clause. This choice of methodology, already implemented in the Gosset⁵ and Galakis⁶ judgments, and the seeds of which were already present in a general sense in the Hecht⁷ judgment, was expressly and definitively laid down in the Dalico judgment in 1993.⁸ It has never been negated since then, despite the criticisms levelled at it by part of the French academic community, as well as abroad. The French system can be summed up very simply: before a French court, an arbitration clause is not subject to conflict-based reasoning or to any conflict of laws rule, irrespective of the role played by the French court: as the court reviewing the award, juge d'appui (court of assistance), court of emergency referral or court seized of the merits in spite of the arbitration clause. The arbitration clause will be governed by a body of French substantive rules that are directly applicable, the content of which is intended to meet the needs and interests of international trade and resolutely geared to making the arbitration clause effective.

3. The comparison should first be approached pragmatically, then, following the stages in the reasoning of English law in order to establish in what respect, and to what extent in practice, French courts follow a different reasoning, as well as to measure the practical consequences of the divergence between the methods (I). It emerges that the French method offers many practical advantages and, in the end, only a few disadvantages, which are moreover somewhat theoretical (II).

1 This is an English summary of the French written version of an address given to the ICC Institute of World Business Law Conference on 23 May 2014.

2 The spirit, justifications and main terms of these approaches can already be found in the work by P. Fouchard, B. Goldman and E. Gaillard, Traité de l'arbitrage commercial international, Litec, 1996, para. 420 et seq. See the contemporary analysis and critique by C. Seraglini and J. Ortscheidt, Droit de l'arbitrage interne et international, Monchrestien, 2013, para. 575 et seq.

3 Sulamérica Cia Nacional De Seguros SA & Ors v. Enesa Engenheria SA & Ors [2012] EWCA Civ 638.

4 Arsanovia Ltd & Ors v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm).

5 Cass. civ. 1re, 7 May 1963, Gosset, D., 1963.543, note J. Robert; JCP, 1963 II 13405, note B. Goldman; Rev. crit. DIP, 1963.615, note H. Motulsky; JDI, 1964.82, note J-D. Bredin.

6 Cass. civ. 1re, 2 May 1966, Galakis, D., 1966.575, note J. Robert; JDI, 1966.648, note P. Level; Rev. crit. DIP, 1967.553, note B. Goldman.

7 Cass. civ. 1re, 4 July 1972, Hecht, JDI, 1972.843, note B. Oppetit; Rev. crit. DIP, 1974.89, note P. Level; Rev. arb., 1974.89, and article P. Francescakis, id., p. 67.

8 Cass. civ. 1re, 20 December 1993, Dalico, Rev. arb., 1994.116, note H. Gaudemet- Tallon; JDI, 1994.432, note E. Gaillard; ibid.663, note E. Loquin; Rev. crit. DIP, 1994.663, note P. Mayer.