Decision of the French Court of Cassation, Pole 01 - Civil Chamber 01, February 1, 2023, No. 21-25.024.

🔊 The judgment of the French Court of Cassation dated February 1, 2023 (n°21-25.024), related to a case in which the contract contained a multi-tiered dispute resolution clause providing for mediation and, in case of failure to settle, for arbitration. However, the claimants referred the matter to the arbitral tribunal without complying with the mediation prerequisite. In a partial award dated September 10, 2018, the arbitral tribunal declared that it had jurisdiction to decide on all the claims brought before it, while (i) noting that the dispute fell within the scope of the mediation clause and (ii) inviting the parties to initiate a mediation procedure in parallel to the arbitration procedure.

On November 23, 2021 (No. 18/22099), annulment proceedings were initiated before the Paris Court of Appeal based on the lack of jurisdiction of the arbitral tribunal due to the failure to comply with the pre-arbitration mediation clause.

❓ Does the non-compliance with a pre-arbitration mediation clause fall within the purview of the French annulment judge to control whether an arbitral tribunal wrongly upheld or declined jurisdiction?

❌ The previous answer provided by French case law was “No”. Indeed, French judges considered that the defense based on a breach of a mandatory pre-arbitration mediation clause did not constitute an objection to the jurisdiction of an arbitral tribunal, but was a matter of inadmissibility of the claim, and therefore was not subject to the control of jurisdiction exercised by the annulment judge. As a consequence, it was not considered as a relevant ground justifying the annulment of an arbitral award (CA Paris June 28, 2016 - No. 15/03504, January 29, 2019- No. 16/20822, May 25, 2021- No. 18/27648).

🤔 However, in the case at stake, the Court of Appeal, in a decision of November 23, 2021, answered surprisingly “Yes”: it held that the non-compliance with the pre-arbitration mediation clause was “not, in this case, a matter of inadmissibility falling within the assessment of the Court of Appeal but constituted a factual circumstance of the case that had to be taken into account to assess the violation of Article 1492, 1°, of the French Code of Civil Procedure”.

❌ Ultimately, the answer remains “No” for the Court of Cassation. In its judgment of February 1, 2023 (21-25.024), it indeed confirmed in a brief recital that “the failure to comply with a mediation clause is a question of admissibility and not of jurisdiction and thus, the Court of Appeal violated the aforementioned text”.