Out-Law News 3 min. read
French ruling reaffirms requirements for staying enforcement of international arbitration award
26 Mar 2025, 4:41 pm
A recent ruling of the judge of the Paris Court of Appeal in charge of procedural matters highlights the stringent requirements under French law for staying the enforcement of international arbitration awards, an expert has said.
In a recent ruling, the judge reaffirmed the resilience of French arbitration law and its commitment to maintaining the efficiency of the arbitral process.
William Brillat-Capello, international commercial arbitration expert at Pinsent Masons, was commenting following the issuance of the decision, drawing attention to the intricacies of French arbitration law and its implications for international commercial disputes.
The case involved French company S.A.SU EOVA and Bahraini firm El Swedy Electric Power System Projects WLL. The dispute centred around an arbitral award issued on 30 May 2023, which was subsequently enforced by an order dated 7 March 2024. EOVA appealed the enforcement order and sought to stay the enforcement of the award as an interim measure pending the decision on the merits of the appeal.
EOVA presented two distinct legal avenues to its aim. Firstly, it introduced a request to the Paris Court of First Instance to declare the enforcement order a forged document and sought the initiation of criminal proceedings against El Swedy on the same grounds. It then sought to suspend the appeal against the enforcement order pending before the Paris Court of Appeal, while waiting for the outcome of these two parallel proceedings.
The judge dismissed this claim and emphasised his discretionary power in deciding whether a stay of proceedings would serve the interests of justice. He noted that EOVA had not demonstrated that criminal proceedings were pending against El Swedy. Furthermore, the civil proceedings aimed at proving the enforcement order was forged were based on alleged irregularities in the arbitral proceedings due to forged documents produced by El Swedy. The judge ruled that these allegations did not pertain to the enforcement order itself being forged.
The judge also stressed that ordering a stay of proceedings under these circumstances would undermine the Paris Court of Appeal's exclusive jurisdiction to rule on appeals against enforcement orders. Under French arbitration law, the only way to challenge an enforcement order of an international arbitral award is through an appeal before the Paris Court of Appeal, unless there is clear proof that the document itself was forged, in which case the appeal should be granted.
Brillat-Capello said: “The Court of Appeal is at liberty to decide on a stay of the proceedings, unless there is a clear and mandatory legal provision that applies. The court will exercise its right with caution, because French arbitration law aims at ensuring efficiency of the system.
EOVA also requested the court to stay any enforcement measures against the award, arguing that the provisional enforcement, while waiting for the outcome of the appeal against the enforcement order, would severely prejudice its rights. Since 2011, international awards that have received enforcement orders are provisionally enforceable in France, regardless of ongoing set-aside proceedings or appeals against the enforcement order. However, article 1526 of the French Code of Civil Procedureprovides an exception, allowing the President of the Paris Court of Appeal or the judge in charge of procedural matters to stop or adapt the enforcement if a party's rights would be severely prejudiced provides an exception, allowing the President of the Paris Court of Appeal or the judge in charge of procedural matters to stop or adapt the enforcement if a party's rights would be severely prejudiced.
In practice, however, stopping the enforcement of an award is rare and requires substantial proof of a truly irreparable harm. The party against which the award is enforced must demonstrate that enforcement would lead to bankruptcy or what it would be unable to recover funds if the award was later set aside or the enforcement order was annulled. In the present case, EOVA presented its financial accounts for 2022 and 2023, along with a certificate for its external account stating that it could not pay the amount ordered under the award. The judge found this evidence insufficient, holding it fell short of proving the kind of grave prejudice required under article 1526.
Brillat-Capello said: “This case confirms that companies involved in international arbitration must meticulously prepare their evidence when seeking to stay enforcement of arbitral awards in France, which will only be granted in exceptional circumstances, typically either because the enforcement would be impossible to compensate, either because it would bankrupt, or because the other party will dilapidate the monies.”
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