French Supreme Court, First Civil Chamber, 9 July 2014, No. 13-13.598
A decision from the French Supreme Court dated 9 July 2014 held that if a contract between two attorneys contains an arbitration clause, this clause takes precedence over the arbitration of the Bâtonnier (i.e., the President of the Bar).
Mr. X. joined the English law firm “The Partnership Thomas Cooper”, as partner, in Paris. The statutes of the law firm contained an arbitration clause which provided for arbitration seated in London.
A dispute about his remuneration having arisen between Mr. X. and his firm, Mr. X. requested the dispute be referred to the arbitration of the Bâtonnier of the Paris Bar whereas the law firm had initiated an arbitral procedure in London.
The arbitrator designated by the Bâtonnier of the Paris Bar rendered an award in which he declined jurisdiction. Mr. X. referred the case to the Paris Court of appeal, seeking the annulment of this award. The Court of Appeal’s decision having confirmed the award, Mr. X. referred this decision to the French Supreme Court.
According to Mr. X:
- The arbitration clause provided that Thomas Cooper was able to appoint one of its own partners as arbitrator. Should a dispute arise, the accountants of the law firm were to appoint the arbitrator. This implies a lack of independence and impartiality of the arbitrator, and a violation of the principle of equal treatment of the parties. Accordingly, the arbitration clause, which violated international public policy, had to be annulled.
- The Paris Court of Appeal wrongly decided that the Bâtonnier of Paris lacked jurisdiction on the ground that Thomas Cooper was not registered with the Paris Bar. Indeed, the firm’s activity was under the rules of the Paris Bar and the firm’s registration had been deliberately delayed in order to escape the Bâtonnier’s jurisdiction. Therefore, the Paris Court of Appeal violated the law of 31 December of 1971, according to which any dispute between attorneys falls within the Bâtonnier’s jurisdiction.
The Paris Court of Appeal’s decision raised two questions:
- Whether an arbitration clause in which the provisions on the appointment of the arbitrator(s) violate the principles of independence and impartiality of the arbitrator, and the principle of equal treatment of the parties, is to be cancelled as a whole; and
- Whether an arbitration clause may preclude the jurisdiction of the Bâtonnier in case of dispute between two attorneys.
In its present decision, the Supreme Court first makes a distinction between proceedings for appointing the arbitrators and the validity of the arbitration agreement. On this basis, it decided that irregularities in the provisions on the appointment of arbitrators do not influence the validity of the arbitration clause itself.
Second, the Supreme Court decided that an arbitration clause concluded between two attorneys precludes the jurisdiction of the Bâtonnier.
The French Courts’ position on the validity of arbitration clauses is not surprising. Indeed, French case law recognizes the validity of the arbitration clause as long as it is not manifestly void or inapplicable.
The judges’ position is more innovative as regards the second issue: indeed, this decision clearly relegates the Bâtonnier’s jurisdiction to a subsidiary level as compared to conventional arbitration. In order to understand this position, its context should be reminded: the solution is different for disputes between two attorneys and an attorney and his client.
Initially, it seems that the Supreme Court decided, in 1988, that conventional arbitration was possible concerning disputes between two attorneys of the same bar (French Supreme Court, Second Civil Chamber, No. 86-19.492, 27 April 1988). However, in 2010 and 2012, The French Conseil National des Barreaux (“CNB” – i.e., the Bars’ National Council) advised in two opinions (Avis déontologiques n°2010/032 and n°2012/022) that, should a dispute between two attorneys of the same Bar arise, the arbitration of the Bâtonnier was “compulsory” and “exclusive”.
Furthermore, the Supreme Court decided in a decision of 13 September 2012 (French Supreme Court, Second Civil Chamber, No. 10-21.144) that in a dispute between an attorney and his client, conventional arbitration was excluded to the benefit of the Bâtonnier’s jurisdiction.
Nevertheless, the Paris Bar adopted on 4 December 2012 revised internal rules for the Paris Bar, which point out that the Professional Dispute Resolution Center (Centre de Règlement des Litiges Professionnels – “the Center”) are to administrate the arbitration of the Bâtonnier as regards disputes between attorneys of the Paris Bar “in the absence of a valid arbitration agreement” (Règlement Intérieur du barreau de Paris, Annex XIX).
Therefore, the 9 July 2014 decision expressly clarifies that in accordance with the revised internal rules of the Paris Bar, a valid arbitration agreement takes precedence over the Bâtonnier’s jurisdiction in case of a dispute between attorneys.