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Arbitration is the most commonly used method of settling commercial disputes in international business relations. If you have decided to resolve a business conflict in France, then you will not be disappointed with the choice of jurisdiction. France is a very advanced country that has developed a solid legal system in favor of arbitration, especially in the case of international litigation. Also, the state is a party to many international and European conventions, a signatory of more than 100 bilateral investment treaties, of which 96 are active. 

Legal landscape

International arbitration does not belong to the system of administrative, judicial and other state bodies. However, the decisions made by the Paris Court of Appeal and the French High Court are of paramount importance.

If you are planning to start arbitration in relation to foreign commercial interests in France, this type of arbitration is international in nature. Arbitration is considered international if an economic transaction involves a transnational flow of capital, services or assets.

If you are interested in the settlement of commercial disputes in France through arbitration, please note that French law is not based on the European Model Law, especially with regard to international arbitration. However, the Paris Bar Association is an observer at UNCITRAL.

Arbitration institutions

France’s most famous universal arbitration institution is the International Chamber of Commerce which enjoys a high reputation in the world. In order to improve the efficiency of arbitration proceedings, many arbitration institutions in France have introduced simplified and expedited mechanisms for resolving small disputes.

They may provide not only a simpler procedure for the formation of the arbitral tribunal, but also more flexible procedural rules for resolving disputes (for example, holding one oral hearing of the case; shorter procedural timeframes for filing a response to claim, counterclaim, evidence, arbitration award, etc.).

A wide range of cases, including investment disputes, IP disputes and many other specific cases are handled here. However, in some cases, it is advisable to contact specialized agencies such as the Insurance Arbitration Center located in Paris.

You can find out more details on how to choose the most appropriate institution during a personal consultation on dispute resolution by arbitration in France with our experienced legal professionals.

What disputes can be arbitrated in France

Business relationship, and cross-border all the more, is special, and therefore, the strict imperative and regulated procedures proposed in state courts are often not suitable for their preservation. Arbitration clauses allow the parties to jointly find and settle those forms of behavior and protection in the event of disputes that will contribute to the stability of the business relationship and a specific contract in the future.

Disputes concerning government structures have not previously been considered in arbitration. However, recently, this rule has been relaxed. 

Arbitrators

When concluding cross-border contracts and intending to consider future potential disputes in international commercial arbitration, the parties have greater freedom of expression on many important issues. 

The disputing parties are directly involved in the creation of the arbitration board. This means that both the plaintiff and the defendant choose and appoint one arbitrator to the panel of three arbitrators, and these two arbitrators, by common agreement, choose the third arbitrator - the chairman. For each of the parties defending their rights in court, it is important not only the professional competence of the person making the decisions but his ethics, too.

When you decide to settle commercial disputes in France through arbitration, you should keep in mind a clear rule: acting judges cannot be involved as arbitrators.

Third-party funding for arbitration claims is allowed in France. There is no general rule requiring parties to disclose a third-party funding agreement. 

Faster than litigation

Recently, with regard to the new challenges connected with the pandemic, a law has been adopted to develop online arbitration in France.

The disputing parties can expect that within 6 months from the date of the creation of the arbitration panel, the final decision will be made in their dispute. In rare cases, when especially important reasons arise, this term can be extended. 

NOTE: You need to be prepared for relatively large amounts of legal costs, but often the time and nerves (and ultimately the same legal costs) spent on litigation can cost you much more.

Legal assistance

Resolving disputes that may arise as a result of the failure of businesses to meet contractual obligations due to the pandemic is the next big issue in the business and legal communities worldwide.

Thus, if you are having a business dispute in France and need legal assistance in settling commercial disputes, please contact our experts. IQ Decision UK legal advisors provide comprehensive advice on the arbitration regulation in France, and conduct a legal assessment of potential risks in arbitration proceedings in France, including in the current crisis.