“Terms of Reference and French Annulment Proceedings”, Vol. 20 Journal of International Arbitration (December 2003)


The requirement in Article 1502(3) of the New Code of Civil Procedure, that arbitrators fulfill their mission, has been a matter of some concern for international arbitrators in the past. The elimination of contradiction in reasoning as one of the grounds for such review has effected a basic change in the extent to which the French courts will review arbitration awards. However, having reduced scrutiny of the contents, it is appropriate to focus on ensuring that the tribunal provides not only a final award but, to the extent possible, an outline of the issues that the parties and the tribunal agreed should be dealt with in the award. The terms of reference can provide assistance in this regard, especially if they are updated. As regards issues of infra petita, the terms of reference, and any update, provide the parties with an opportunity to set out the issues to be decided. If the parties decline to do so, they presumably waive their right to object. As regard ultra petita, it is difficult for a party to object to a tribunal deciding an issue mentioned in the list of issues in the terms of reference, if in fact the party has signed the terms of reference. With an update to the terms of reference, although not signed by the parties, the waiver principle under Article 33 of the ICC Rules should be applicable. Finally, with regard to the reasoning in the award, the French courts have indicated clearly that they do not wish to review the merits or the quality of the reasoning. French courts simply wish to ensure that the tribunal provides reasons for its decisions regarding the issues in dispute. Once again, the terms of reference as updated should be an outline for the court as to what the tribunal was supposed to decide and what it did decide. The French courts have sought to limit themselves to ensuring that the framework for the arbitration has been respected within the limits of public policy and the Paris Court of Appeal appears to be limiting annulment of awards on the grounds of infra petita. Therefore, it is even more important for arbitral tribunals to ensure that they demonstrate in the key documents that will be part of any judicial proceedings, that the arbitral tribunal understood and respected this framework throughout the arbitral process and adapted the arbitration to the issues in dispute.