Dentons’ Paris international arbitration team sets victorious precedent

The Paris international arbitration team, including partner Jean-Christophe Honlet and associate Annelise Lecompte, have set a victorious precedent for Dentons’ client Farmex Technologies in a dispute against the Republic of Armenia.

Farmex, at the time not represented by counsel, lost an international arbitration against the Republic of Armenia. It filed to annul the award before the Paris Court of Appeal, Paris being the place of arbitration.

Since a reform of 2011, applications for annulment of international arbitral awards in France no longer suspend enforcement of those awards. The law provides for an exception, however, ‘where enforcement could severely prejudice the rights of one of the parties’. In spite of several attempts by applicants, French courts had always refused to apply that exception so far, in keeping with the pro-enforcement stance of the 2011 reform.

The 3 April 2014 decision of the Paris Court of Appeal (CME) in Farmex v Armenia is the first time a French court has accepted applying that exception and accordingly stay the enforcement of an international arbitral award in France pending the decision on annulment. That decision also clarifies the extent to which a party can waive its right to apply for annulment of an international award in France, another novelty of the 2011 international arbitration reform in France. It is the first case on that question as well. In spite of some broad waiver language in the arbitration agreement, not expressly referencing the right to apply for annulment however, Dentons was able to persuade the court that no waiver of the right to file for annulment had taken place.

Farmex v Armenia has now established an important precedent on those two essential points for international arbitration practitioners in France.