Annulment of arbitral awards under French arbitration law

The ruling in The Roads Department of Regional Development and Infrastructure Georgia v Todini Construzioni Generali SpA, ICC Case No. 24851/MHM/HBH - Judgment Case No. 22/14963 (4 June 2024) by the Paris Court of Appeal underscores the stringent legal standards for annulment of arbitral awards under French arbitration law. The case arose from a dispute over the termination of a road construction contract in Georgia, where Todini sought to annul the ICC arbitral award on four grounds: (1) lack of jurisdiction, (2) failure of the tribunal to comply with its mandate, (3) breach of adversarial proceedings, and (4) conflict with international public policy. The Paris Court of Appeal ultimately dismissed the appeal, reinforcing France’s pro-arbitration stance and its reluctance to interfere with arbitral decisions absent significant legal violations.

A pivotal issue in the case was the distinction between jurisdiction and admissibility. Todini argued that the arbitration was improperly initiated because the Roads Department referred the dispute to arbitration before the Dispute Board (DB) had issued its determination, allegedly violating the contractual dispute resolution procedure. However, the court held that this was a question of admissibility rather than jurisdiction. This distinction is crucial in arbitration: jurisdictional objections challenge the tribunal’s authority to hear the case at all, while admissibility objections concern whether the claims were properly brought before the tribunal. By ruling that overlapping proceedings did not deprive the arbitral tribunal of its jurisdiction, the court upheld the tribunal’s authority and reinforced the binding nature of contractual dispute resolution mechanisms.

The second, third, and fourth grounds for annulment—failure to comply with the tribunal’s mission, breach of adversarial principles, and conflict with international public policy—were summarily rejected due to lack of factual basis. This indicates that Todini failed to demonstrate any serious procedural irregularity that would justify setting aside the award. French courts generally uphold arbitral awards unless there is clear evidence of procedural violations or violations of fundamental legal principles, and this case reaffirmed that standard. The court’s decision to dismiss the appeal with costs further emphasizes the high burden of proof on parties seeking to annul an arbitral award.

This case also highlights the Paris Court of Appeal’s consistent deference to arbitration, particularly in disputes governed by FIDIC-based dispute resolution mechanisms (Sub-Clauses 20.2–20.6). The judgment reinforces the principle that contracting parties must adhere to pre-arbitration dispute resolution processes but cannot use minor procedural deviations as a basis for annulment. The ruling is significant for the international construction and infrastructure sectors, as it discourages attempts to use annulment proceedings as a strategy to delay enforcement of arbitral awards.

In conclusion, The Roads Department of Georgia v Todini Construzioni Generali SpA reinforces the finality and enforceability of arbitral awards under French law. By rejecting the jurisdictional challenge and dismissing all other grounds, the Paris Court of Appeal reaffirmed that procedural objections must be raised in a timely manner and that annulment is not an avenue for relitigating the merits of a dispute. This case serves as a strong precedent for future disputes, emphasizing that courts will not interfere with arbitral awards unless there is a demonstrable violation of legal principles or due process.