The Foreign Court’s Decision To Accept Jurisdiction After Having “Substantially Examined” the Arbitration Clause Is Contrary to International Public Policy

Paris Court of Appeal, Pôle 1 Chambre 1, 8 October 2013 n°12/18722 – S.A. Iberia Lineas Aereas de Espana v. S.A.R.L. Pan Atlantic

On 8 October 2013, the Paris Court of Appeal judged that a foreign decision is contrary to international public policy when the foreign State courts have decided they had jurisdiction after having « substantially examined » the arbitration clause inserted in the contract out of which the dispute arises.  Therefore, the Court reversed the first instance court’s judgement having granted the exequatur to such a decision.

In this case, the Lebanese courts set aside the arbitration clause provided for in a contract concluded between the companies Iberia Lineas and Pan Atlantic, on the grounds of a provision of Lebanese law.  They thus accepted jurisdiction to know of the dispute brought before them.

Two decisions were rendered and were granted exequatur in France at the request of Pan Atlantic.  Iberia Lineas then appealed the decision to grant the exequatur on several bases, among which the Lebanese courts’ lack of jurisdiction.

The Paris Court of Appeal reversed the tribunal of first instance’s judgement having granted the exequatur on the ground that « is contrary to international public policy and cannot be accepted in France, the Lebanese decision which, after a substantial examination, concluded to the inefficiency of the arbitration clause provided for by the contract (…) ».

It reminds in its judgement that the French judge of the exequatur:

  • Must, in the absence of an international convention, ensure:
  1. That the foreign judge has indirect jurisdiction;
  2. That the decision is in conformity with substantial and procedural public policy;
  3. Of the absence of fraud;
  • May only, under the kompetenz-kompetenz principle, accept jurisdiction in presence of a manifestly void or inapplicable arbitration clause since only the arbitrator has jurisdiction to assess its own jurisdiction.

It should be reminded that French courts constantly find that the foreign decision rendered by a tribunal lacking jurisdiction in violation of a clause conferring jurisdiction (choice of court or arbitration clause) may in principle not be enforced in France (Civ. 1ère, 3 May 1977, n°76-10.737).  Therefore, the Paris Court of Appeal confirms the previous decisions as regards indirect jurisdiction of the foreign judge.

However, it adds an interesting precision, to our knowledge unprecedented, by holding that the Lebanese decision is « contrary to international public policy ».  The foreign judge’s indirect jurisdiction would then pertain, of itself, to international public policy.

It should also be noted that in the instant case, there were no international conventions between France, place where enforcement of the decisions was sought, and Lebanon.  This precision seems important since, when such a convention exists, the Cour de cassation recently approved a decision to grant the exequatur to a foreign decision in application of an international cooperation agreement in judicial matters between France and Burkina Faso, when the courts of Burkina Faso had accepted jurisdiction in spite of the existence of an arbitration agreement applicable to the dispute (Civ 1ère, 28 March 2013, n°11-23.801 and 11-25.123).

The desision is available here.

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