In a recent decision, the Paris Court of First Instance endorsed its pro-arbitration stance, holding that French courts cannot interfere with arbitral proceedings.
Elf Neftegaz (a subsidiary of Elf Aquitaine) entered into a cooperation agreement with various Russian entities to research, explore and exploit hydrocarbons in Russia. The contract contained an ad hocarbitration clause with a seat in Paris.
After Elf Neftegaz was dissolved, a dispute arose between the parties to the agreement. The Russian entities applied to the President of the Commercial Court of Nanterre to appoint a representative of the dissolved company to represent it in the arbitration proceedings which they were about to initiate. This was done by court order and Mr Carboni was appointed as an ad hoc representative of Elf Neftegaz. When the Russian entities commenced proceedings, they appointed Mr Kamara as an arbitrator. Mr Carboni appointed Mr Mattei as an arbitrator for Elf Neftegaz. The co-arbitrators selected Mr Reiner as the chairman of the tribunal. Then, upon Elf Aquitaine and Total's requests, the order pursuant to which the ad hoc representative has been appointed was retracted. Since Mr Reiner had been designated by Mr Carboni who had been appointed by a withdrawn order, Elf Aquitaine and Total seized the Paris Court of First Instance of Paris, in an emergency summary proceeding, requesting the court (under Article 809 of the French Code of Civil Procedure) to enjoin the arbitrators not to pursue the arbitration proceedings.
The Paris Court of First Instance decided that arbitral proceedings are considered as pending from the moment the arbitral tribunal is constituted and that "notwithstanding the effect of the withdrawal of the order having designated the [party representative] and the irregular designation of two or three of the arbitrators, the question of the existence of this tribunal or of the regularity of its constitution falls exclusively within the jurisdiction of the arbitral tribunal, which excludes jurisdiction of the court seized in summary proceedings".
This case demonstrates that, when deciding to submit a dispute to ad hoc arbitration, parties should be particularly careful to detail the procedure for appointment of arbitrators and for any challenges to such appointments. It also shows the advantage of institutional arbitration which will deal clearly with these issues, thereby avoiding court.
From a broader perspective, this judgment is another example of the French Courts' strong reluctance to intervene in arbitration proceedings once a tribunal has been appointed, confirming the long established pro-arbitration tradition in France.
It follows in the wake of other decisions supporting the autonomy of the arbitral process. Recently, the same Court found that French judges can only grant orders pursuant to Article 809 to secure the enforcement of an arbitral award. In that case, the judges refused to issue an injunction restraining arbitrators from continuing the arbitration until the Court of Appeal had rendered a decision on jurisdiction. The Cour de Cassation has also held in an In Zone Brand case that – outside of the scope of application of international conventions or European Community law – anti-suit injunctions are not contrary to international public policy when their purpose is to enforce a jurisdiction clause.
Paris First Instance Court, 6 January 2010
Elf Aquitaine and Total v. Mattei, Lai. Kamara and Reiner