Arbitration in Paris

Arbitration is a dispute resolution method that typically produces a final and binding outcome. Parties can pre-decide to impose a non-binding arbitration agreement. Regarded as an alternative to litigation, having a valid arbitration agreement should mean that state courts refuse to hear disputes covered by that agreement. Of course, there are occasional appeals in regard to the validity of the award and the procedural compliance of the arbitrator. The court then tries these matters.

If a confidentiality agreement was imposed, the risk of the case going to court may deter parties from proceeding in that direction. Simultaneously, this would provide a greater incentive to arbitrate in good faith. The negative publicity of two businesses disputing may impact the perception of their stakeholders.

Lawyers working in dispute resolution must advise clients to choose a resolution method (usually litigation or arbitration) that puts them in the most advantageous position in the event of a dispute. Both litigation and arbitration have their advantages and disadvantages, you can check out the differences in our recent article.

To understand how arbitration works, it is important to understand the meaning of the seat of arbitration. When the parties agree to arbitration, they must indicate the legal place or venue of the arbitration.

Typically, the parties indicate the city, such as London or Paris. The choice of venue gives the arbitration a "nationality", in this case English or French. This is important for a number of reasons: the legal framework, court involvement and enforcement. This can include determining which country's procedural law will apply to many practical aspects of arbitration, including any right of appeal, the availability of interim remedies, and the extent to which local courts support or supervise arbitration. The location also determines where the decision is issued, which can have a significant impact on the recognition and enforcement of the decision.

Paris and London have long been considered the "obvious" choice for many parties, however, the market for arbitration seats is changing. There is more choice, more competition, and a greater willingness to consider alternatives. Most likely, this is part of a long-term trend. But for many parties, Paris remains the clear choice — and likely will remain so for the foreseeable future, and for good reason.

Arbitral awards made in France can only be annulled for limited reasons set out in the French Code of Civil Procedure. In addition, courts are not allowed to review decisions on the merits, even if they are (presumably) annulled by a significant legal error.

In addition to being a cultural and economic center, Paris has long been associated with arbitration, not least because it is the seat of the court of the International Chamber of Commerce. As a result, it boasts a first-class legal marketplace with specialized international arbitration consultants, as well as the services and infrastructure needed to support the arbitration community and meet the practical requirements of parties seeking a hearing venue.