In a ruling dated 3 October 2024, the Paris Court of Appeal ordered a stay of execution of an arbitration award, due to the risk of serious prejudice to the rights of the parties (article 1526 paragraph 2 of the French Civil Procedure Code).
The case involved an Italian construction company (Astaris) and the Georgian Road Authority. Following the termination of its contract for the construction of a freeway, Astaris initiated an arbitration proceeding, claiming the payment of termination indemnities and release of guarantees. Astaris was unsuccessful in its claims and appealed to the Paris Court of Appeal to set aside the arbitration award rendered.
During this appeal proceeding, Astaris applied to the pre-trial judge (Conseiller de la mise en état) for a stay of provisional execution of the award, the risk of serious prejudice to its rights arising both from the high amount of the debt, which would lead to its compulsory liquidation, and from the infringement of the principle of equality between its unsecured creditors.
The Court of Appeal noted that the sums at stake far exceeded the company’s financial capacity, and that enforcement of the award would be likely to jeopardize the equality of unsecured creditors.
These reasons are sufficient to justify a stay of execution against Astaris.
