Reference: Cass. civ. 15 May 2024, no. 23-11.012
This case concerns an arbitration initiated in 2013 by Hydro Construction (“Hydro”) against Vergnet. On 6 May 2014, the parties agreed to suspend the arbitration proceedings and submit their dispute to an adjudicator, who issued a non-binding decision in favour of Hydro and ordered Vergnet to pay €1.68 million.
On 30 August 2017, following the opening of insolvency proceedings against Vergnet, Hydro declared its claim against Vergnet. The proceedings related to this declaration were stayed pending the decision of the competent court. In parallel, the arbitration proceedings were resumed and resulted in an award by a sole arbitrator dated 27 July 2020, which confirmed Hydro’s claim and ordered Vergnet to pay a principal amount of approximately USD 1 million.
Hydro then applied for an order of exequatur “limited to the recognition of the claim arising from the arbitral award and the issuance of a document bearing this recognition”. On 15 January 2021, the Paris Court of First Instance granted the enforcement order (Paris Court of First Instance, 15 January 2021, RG 21/00071) and Vergnet appealed against this decision.
In a judgement dated 28 June 2022, the Paris Court of Appeal overturned this order on the grounds that the recognition of the award was contrary to French international public policy (Paris Court of Appeal, Pôle 5, Ch. 16, 28 June 2022, no. 21/03765). The appeal judge held that the incorporation, even if limited to the recognition, into the French legal system of an arbitral award ordering the payment of sums arising prior to the judgment opening the insolvency proceedings was contrary to the principle of the stay or suspension of individual proceedings, which intends at guaranteeing the collective and egalitarian nature of collective proceedings.
In its judgement of 15 May 2024, the Cour de cassation annulled and set aside the judgement of the Paris Court of Appeal in its entirety. The Court of Cassation recalled that the principle of the stay or suspension of individual proceedings prohibits, as a matter of international public policy, the enforcement of an award condemning the debtor. However, since the request for exequatur sought only the recognition of the amount of the claim established by the award in order to obtain the recognition of a right to a claim in the collective proceedings, the Court of Cassation held that the order declaring the award enforceable was not contrary to international public policy to the extent that it merely established the claim, and therefore should have been confirmed.
