Judicial intervention in international arbitration awards

The decision in Sew Infrastructure Ltd v Ethiopian Roads Authority, ICC Case No. 23274/PTA, Case No. 21/14563 (9 January 2024) by the Paris Court of Appeal reinforces the pro-arbitration stance of French courts and highlights the strict limits on judicial intervention in international arbitration awards. The case arose from a dispute concerning road development and maintenance, where the final ICC arbitration award ordered Sew Infrastructure Ltd to pay sums, including interest and arbitration costs, to the Ethiopian Roads Authority (ERA). Sew’s subsequent attempts to annul both the final award and an additional award correcting procedural matters were dismissed by the Paris Court of Appeal.

A central issue in the case was the scope of judicial review in arbitration-related matters. Sew’s appeal for annulment relied on five legal arguments: the arbitral tribunal’s alleged mis-assessment of jurisdiction, irregularities in its constitution, failure to comply with its mandate, violation of adversarial principles, and breach of international public policy. The court’s rejection of all these grounds underscores the high threshold required to annul an arbitration award under French law, which is one of the most arbitration-friendly legal frameworks globally. French courts generally support the finality of arbitral awards, intervening only in cases of serious procedural violations, excess of jurisdiction, or breaches of fundamental legal principles.

The Paris Court of Appeal’s decision also reflects a strong commitment to the integrity of arbitration proceedings. It is particularly notable that the court found no violation of international public policy, an argument that parties often invoke in annulment proceedings as a last resort. The ruling suggests that the tribunal’s decision-making process and final award were in line with international arbitration standards, including fairness, impartiality, and adherence to procedural due process. Additionally, the court’s acceptance of the joinder of both annulment proceedings, despite ERA’s initial objection to Sew’s claims, demonstrates a pragmatic approach to procedural efficiency while maintaining strict scrutiny of annulment grounds.

This case further highlights the challenges faced by parties seeking to annul arbitration awards in France. It sends a clear message that dissatisfaction with an arbitral tribunal’s legal or factual determinations does not, in itself, justify judicial intervention. By dismissing all of Sew’s arguments, the Paris Court of Appeal reaffirmed its position that arbitration awards should be upheld unless there are compelling legal reasons for annulment. This ruling serves as an important precedent for international construction disputes, particularly those governed by the FIDIC dispute resolution framework, reinforcing the binding nature of contractual dispute resolution mechanisms.

In conclusion, the Sew Infrastructure Ltd v Ethiopian Roads Authority case exemplifies the French courts’ deference to arbitral decisions and their reluctance to interfere unless serious procedural violations occur. The ruling strengthens the enforceability of ICC arbitration awards and promotes legal certainty in international infrastructure projects, making it clear that challenges to arbitral awards must meet rigorous legal standards to succeed.