French arbitration law evolves ahead of 2025 reforms

While those reforms will be the big issue in the world of arbitration in France in 2025, the past 12 months have been punctuated by developments in French case law that provide lessons for businesses raising claims in arbitration.

These developments affect not only the evidence the parties can rely on, but also the forum in which disputes will be resolved. A recent case stemming from an arbitration has also spurred a referral to the EU’s highest court related to the enforcement of EU sanctions in the context of an arbitration.

In one case, the French Court of Cassation confirmed, in line with established case law, that parties will be considered to have waived their rights to claim irregularities in the operation of arbitration proceedings when seeking to annul arbitral awards unless they have raised those claims before the arbitral tribunal itself.

The case highlights that it is necessary for parties to arbitration proceedings to clearly state to the arbitral tribunal any irregularity they perceive, and to reserve their right to invoke it at a later stage.

Read more of our report on international arbitration in 2025

• International arbitration: regional, sectoral and industry developments reinforce dispute resolution status
• UAE: recent arbitration reforms while legacy DIFC-LCIA clause debate continues
• Saudi Arabia firmly on the map as key arbitration and dispute resolution hub
• New digital services and legal developments boost international arbitration usage in Qatar
• Egypt a ‘central hub’ for arbitration in the MENA region
• Investment disputes continue to drive international arbitration developments in Africa
• Southern African states form harmonised arbitration framework
• UK arbitration developments continue to enhance position as key dispute resolution jurisdiction
• French arbitration law evolves ahead of 2025 reforms
• Germany to become more attractive for international arbitration proceedings
• Singapore continues to rise as an international dispute resolution hub
• Continued improvements in international arbitration driven by new HKIAC rules and case law
• India continues work to modernise arbitration landscape
• Significant developments in Japan’s arbitration landscape
• South Korea strengthens international arbitration framework
• China continues to improve arbitration process efficiency and effectiveness
• Australian court rulings strengthen pro-arbitration stance and expand scope of arbitration
• Construction projects and contracts must consider sanctions risks
• New types of M&A disputes will drive up international arbitration cases
• Growing demand for expertise in cryptocurrency related arbitration in 2025
• Major changes crystallising in investor-state dispute settlement
• What the future holds for mediation in investor-state dispute settlement

Another ruling by the Court of Cassation confirmed that illicit evidence, or evidence that is obtained in breach of the principle of loyalty which governs the taking of evidence under French civil procedure rules, is no longer automatically inadmissible. According to this ruling, the Court of Appeal is responsible for assessing whether such evidence infringes, in practice, on the fairness of the procedure as a whole, then balancing whether the infringement caused by the production of the evidence is necessary to enable a party to exercise its right to produce evidence and, if so, whether the infringement is strictly proportionate to the aim pursued.

This ruling is important in the context of both arbitration and court proceedings where applications are filed to set aside arbitral decisions, as it will widen the scope of admissible evidence, in particular for claims which are difficult to prove – such as the existence of corruption or an illicit investment.

Arbitration is also at the core of a dispute between the two French supreme courts: the Council of State, which has jurisdiction over administrative law disputes, on the one hand, and the Court of Cassation, its private law counterpart, on the other.

The Council of State ruled that disputes involving a French public entity cannot be resolved through arbitration, contradicting a 60-year-old case law of the Court of Cassation. While the exact consequences of this decision are yet to be fully assessed, the French parliament adopted, on 13 June 2024, a law that grants the Paris Court of Appeal – and, by extension, the Court of Cassation as the supreme court above the Paris Court of Appeal – full jurisdiction over this type of disputes. However, it did not formally exclude the jurisdiction of the Council of State over such matters either.

This raises potential uncertainty for businesses over what the right forum is in France for resolving certain disputes. Typically, in the context of a construction contract, uncertainty may arise where the employer is a public entity and the works relate to the supply of a public service, such as gas or electricity. What the competent forum is for resolving such disputes could then depend on the nature of the dispute and the overall structure of the project.

For businesses, the risk of non-compliance with obligations continues to grow as Western sanctions regimes continue to expand and become ever more complex. The Court of Justice of the EU (CJEU) has been asked, by virtue of a referral from the Court of Cassation, to provide some clarity in relation to the scope of these sanctions.

The case has potentially far-reaching consequences for sanctions compliance. The CJEU has essentially been asked whether making payments to state-owned companies would be viewed as breaching sanctions obligations if persons designated as subject to sanctions are said to exert a controlling influence over those companies – even if the state-owned companies themselves are not subject to the sanction’s regime.

The underlying case has emerged from an ICC arbitration, in which some oil companies were ordered to pay damages to a Yemeni government ministry and a state-owned oil and gas company in relation to an oil project.