One of the last pieces of legislation adopted by Parliament before the dissolution of the National Assembly on 9 June 2024 is Act 2025-537, enacted on 13 June 2024, which aims at increasing the financing of businesses and the attractiveness of France, known as the "Attractiveness" Act.

Article 25 of the Act, which can be described as a "cavalier législatif" given the number and variety of the subjects dealt with, which principally concern company law, stock exchange law and financial law, creates a new provision in the Code of Judicial Organisation: article L.311-16-1.

This provision states as follows:

"The Paris Court of Appeal, which includes an international commercial chamber, hears:

1° Appeals to set aside international arbitration awards, in the cases and under the conditions provided for in the Code of Civil Procedure;

2° Appeals against a decision ruling on an application for recognition or enforcement of an international arbitration award, in the cases and under the conditions provided for by the same Code."

Article 29 of the Attractiveness Act provides for different dates of entry into force of its provisions. With respect to article 25, it provides that this provision will come into force "on a date to be set by decree of the Conseil d'Etat, and no later than the first day of the twelfth month following the enactment of this law [i.e. no later than 1 June 2025]. It shall apply only to appeals lodged after its entry into force."

Unification of territorial jurisdiction before the international chamber of the Paris Court of Appeal

The Act of 13 June 2024 was introduced as a private member's bill, drafter by members of the National Assembly (rather than by the Government), and was therefore not submitted to the Conseil d'Etat for analysis prior to parliamentary discussion. This bill, registered with the Presidency of the National Assembly on 12 March 2024, was also subject to an accelerated procedure. While the accelerated procedure did not prevent some of its provisions from being actively discussed during its examination by each of the National Assembly and the Senate and the Commission Mixte Paritaire, a joint committee of both assemblies, a review of the parliamentary debate shows that this was not the case for the provision elating to arbitration, which eventually became article 25 of the Act.

The only proposed amendment discussed by the Assembly aimed at not reserving jurisdiction solely to the international chamber of the Paris Court of Appeal by suggesting that each court of appeal should host such an international chamber. The rapporteur issued an unfavourable opinion, pointing out in particular that out of the 487 international arbitration-related cases handled between 2019 and 2022, 404 had been handled in Paris, i.e. 83%, and that centralising litigation would increase legal certainty and economic attractiveness by providing France with a centre of expertise and knowledge. This amendment was not adopted when put to the vote, and the adopted text remained identical to the original proposal.^[1]

It should also be noted tat the explanatory memorandum to the draft law stated that the purpose of article 11, which became Article 25 of the Attractiveness Act, was to provide for "the specialisation of the Paris Court of Appeal in appeals relating to international arbitration, in order to strengthen the position of Paris as a centre of excelence and enhance its attractiveness. The selection of the Paris Court of Appeal is linked in particular to the specific nature of its international commercial chamber. The international commercial chamber of the Paris Court of Appeal will thus be given responsiblity for handling recourses for international arbitration matters within the Court of Appeal."

While the proposed provision, eventually adopted, gives a legislative existence to the international chamber of the Paris Court of Appeal, the clear aim of this explanatory memorandum was to unify the handling of recourses lodged in France in international arbitration matters before this specialised chamber of the Court of Appeal.

Such a unification of territorial jurisdiction before the Paris Court of Appeal is not unknown under French procedural law. It exists, for example, for appeals against decisions of the Autorité de la concurrence (C. Comm., L.464-7 and L.464-8) or certain decisions of the Autorité des Marchés Financiers (C. mon. Fin., art. L.621-30).

The adoption of this provision, which create a new article L.311-16-1 in the Code of Judicial Organisation, does not constitute a revolution in that is enshrines a situation that already existed for the vast majority of appeals in international arbitration-related matters. At the very most, it contributes to the effort to make French law clearer and more effective, in the vein of what was already undertaken by the 2011 reform of French arbitration law.

Challenges against international arbitration awards, or against decisions ruling on applications for recognition of enforcement of such awards, will therefore have to be lodged with the international chamber of the Paris Court of Appeal as from the entry into force of this text, i.e. as it stands and unless otherwise decided by the Conseil d'Etat, as from 1 June 2025.

However, the wording of this provision has raised another question as to its scope.

Arbitration awards involving French public bodies or administrative contracts governed by French law

The text proposed and adopted covers appeals against "awards made in international arbitration" or decisions ruling on an application for recognition or enforcement of such awards.

French arbitration law mainly takes an economic view of the criterion of internationality, classifying arbitration as international if it "involves the interests of international trade"^[2]. According to case law, the domestic or international nature of arbitration does not depend on the law applicable to the substance or to the proceedings, the parties' will, nor their nationality, but on the nature of the economic transaction giving rise to the dispute.

Consequently, the fact that one of the parties involved in the dispute is a public entity or that a domestic administrative law governs the contract that is the subject of the dispute does not, in theory, affect the domestic or international classification of the arbitration that may result. Therefore, and given its wording, the unification rule instituted by article 25 of the 13 June 2024 Act could be considered applicable to any international award, irrespective of its subject matter or the legal nature of the parties involved.

The truth is that such an interpretation would be compatible with the view long held by French judicial case law that the prohibition for a state or public entity to agree to arbitrate "is limited to contracts governed by domestic law and does not apply to agreements of an international nature"^[3] and does not apply to contracts "entered into for the purposes and under conditions consistent with commercial usages"^[4].

More recently, however, the French administrative courts and the Tribunal des conflits have adopted a different approach, requiring that challenges against arbitration awards involving a public entity or an administrative contract be submitted to the administrative courts. One cannot help but note that this requirement, an expression of French dualism, has only arisen in disputes where the public entity was "French" or the administrative contract in question was governed by French administrative law or concerned public assets located in France. This leads to an asymmetry, which is regrettable, at least in terms of clarity, depending on the "nationality" of the public entity involved or the contract at stake.

Having said that, it is likely, particularly in the light of the explanatory memorandum to the draft law and the brief debates on this provision, that its promoters, like the Parliament as a whole, did not consider the dichotomy of control regimes existing in France today.

One might also question whether an amendment to the Code of Judicial Organisation alone is the right vehicle for resolving such an issue, which affects both types of court.

The first comments published after the enactment of the Law of 13 June 2024^[5] clearly illustrate this: observers agree that the question of the rules governing recourses against arbitration awards, even "international" awards, involving French public bodies or administrative contracts governed by French law has not been resolved by this text.

One of them^[6] notes, however, that the recent strengthening of the review of arbitration awards' compliance with public policy by civil and commercial courts may have created the conditions for a more complete unification.

This would undoubtedly be desirable to enhance the certainty of French arbitration law and the attractiveness of the Paris marketplace.