A noteworthy ruling by the Paris Court of Appeal on September 10, 2024 clarifies the scope of an transfer with regard to the assignee’s rights to request the annulment of an award or to appeal against the exequatur order.
The facts were as follows.
In the case at hand, following the termination of a concession contract between the Indian company Devas and the Indian state-owned company Antrix, the former initiated ICC arbitration proceedings against the latter. At the end of this procedure, an award was rendered in favor of Devas; the exequatur was obtained in France.
At the same time, the shareholders of Devas, of Mauritian nationality, initiated arbitration proceedings against the Republic of India, based on the Bilateral Investment Treaty between India and Mauritius. The proceedings resulted in two awards in favor of the Devas shareholders, which were also declared enforceable in France.
Once exequatur had been obtained, the Devas shareholders transferred their rights in the awards, by way ofassignment agreements under English law, to American companies. The latter intervened voluntarily in the appeal proceedings against theexequatur orders.
The Paris Court of Appeal overturned the order of the Conseiller de mise en état declaring the intervention of the assignees admissible.
On the one hand, concerning the intervention of third parties in the appeal against the award, the Paris Court of Appeal recalled the strict rules governing intervention under French civil procedural law. It notes that the voluntary intervention of third parties is not permitted “either in actions for annulment of the arbitral award, or in appeals against the exequatur order, unless expressly agreed by the parties, which can only result from the parties’ agreement”.
On the other hand, with regard to the succession of third parties to the rights of a party to the award, the Paris Court of Appeal considers that assignment agreements under English law constitute assignments of claims. Thus, it found that the assignees were personally seeking confirmation of an exequatur order in application of a law that would be their own by virtue of the assignment, and this in the presence of the assignors to the proceedings. Thus, it concludes that the assignees, even if they had an interest in enforcing the award in order to recover the claim, cannot invoke for their benefit a transfer of the right to bring an action for annulment of the award, nor of the right to appeal against the exequatur order, since “these rights [are] strictly attached to the status of party to the arbitration, which belongs only to the parties to the award or to third parties conventionally admitted as parties”.
Only the parties to the arbitration are therefore entitled to appeal against the award or theexequatur order. The ruling has been roundly criticized in academic circles.
CA Paris, Pôle 5 chambre 16, 10 septembre 2024, n° 24/00152.
