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The French Cour de cassation (Supreme Court) gets Kabab-Ji right by affirming the Cour d’appel de Paris

8. Ayant souverainement retenu que le choix du droit anglais comme loi régissant les contrats, ainsi que la stipulation selon laquelle il était interdit aux arbitres d’appliquer des règles qui contrediraient les contrats, ne suffisaient pas à établir la commune volonté des parties de soumettre l’efficacité de la convention d’arbitrage au droit anglais, par dérogation aux règles matérielles du siège de l’arbitrage expressément désigné par les contrats, et que la société KFG ne rapportait la preuve d’aucune circonstance de nature à établir de manière non équivoque la volonté commune des parties de désigner le droit anglais comme régissant l’efficacité, le transfert ou l’extension de la clause compromissoire, la cour d’appel a, sans dénaturation, légalement justifié sa décision d’apprécier l’existence et l’efficacité de la convention d’arbitrage, non pas au regard du droit anglais, mais au regard des règles matérielles du droit français en matière d’arbitrage international.

“Having concluded, as it was entitled, that the choice of English law as the law governing the contracts as well as the stipulation according to which it was forbidden to the arbitrators to apply rules which would contradict the contracts, did not suffice to establish to common wish of the parties to submit the effectiveness of the arbitration agreement to English law by virtue of a derogation to the material rules of the seat of arbitration expressly designated by the contracts and that KFG had not produced any evidence of any circumstances tending to establish in an unequivocal way the common wish of the parties to designate English law as governing the effect, transfer or extension of the arbitration clause, the Court of Appeal has, without distortion, justified in law its decision to interpret the existence and effect of the arbitration agreement, not  as regards English law but the substantive rules of French international arbitration law.”[1]

[1] Translation by the author.

The obligation to expressly contract out of the application of the law of the seat to the arbitration clause makes much more sense than the English Supreme Court approach of reading the contract in an open-handed way. The parties do not expect to have an arbitration in any sense governed by any law other than that of a chosen seat of arbitration.

https://www.courdecassation.fr/decision/6333e9bde5004d05dab7c04c

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