Decision of the Court of Cassation, First Civil Chamber, 6 November 2024, Appeal no. 22-16.580, 22-19.327 and 23-15.649

In a decision handed down on 6 November 2024, the French Supreme Court ruled on a series of appeals concerning the enforcement in France of an arbitration award arising from a commercial dispute between Antrix Corporation Limited and Devas Multimedia Private Limited. The case raised issues relating to the intervention of a liquidator appointed by a foreign court in proceedings in France.

Background to the dispute

In 2005, Antrix (an Indian company) and Devas Multimedia entered into a commercial contract containing an arbitration clause, designating New Delhi as the seat of arbitration and providing for the application of ICC or UNCITRAL rules. Following a dispute, Devas filed a request for arbitration with the International Chamber of Commerce (ICC), which Antrix contested, citing a lack of formal agreement on the choice of applicable rules.

In a 2015 award, the arbitral tribunal, sitting in New Delhi, accepted jurisdiction and ordered Antrix to pay damages to Devas. Devas then initiated proceedings in France to enforce the award.

In the meantime, however, Devas had been placed in compulsory liquidation by an Indian judgment of 2021, appointing a liquidator, Mr [P]. Mr [P] applied to intervene voluntarily in the French proceedings, which led to several appeals being examined jointly by the Cour de cassation.

The main issues

1 – The intervention of the liquidator appointed by a foreign judgment

The liquidator, acting under an Indian court order, invoked his right to represent Devas in the French proceedings.

The Court’s decision:

The Cour de cassation recalls that recognition in France of a foreign judgment requires an exequatur procedure. In the absence of such recognition, the company’s legal representatives cannot be divested of their power of representation. Accordingly, the foreign liquidator was not entitled to intervene in the French proceedings.

2 – Interpretation of the arbitration clause

Antrix challenged the legality of the constitution of the arbitral tribunal, arguing that the clause did not allow direct recourse to institutional arbitration under the aegis of the ICC.

The Court’s decision:

The Court upheld the interpretation of the Court of Appeal, which had adopted a pragmatic reading of the arbitration clause. In its view, the parties’ common desire to opt for arbitration, whether ad hoc or institutional, justified Devas’s ability to refer the matter directly to the ICC.

’ 12. After stating that it was up to the Court to interpret the clause, guided by a principle of coherence and utility, and to favour an interpretation that gives effect to the clause, the purpose of which is to tend towards the effective establishment of arbitration, In order to prevent a party from evading its undertakings and calling into question its consent to arbitration, the Court of Appeal held that paragraph c) of the clause, according to which ‘[t]he arbitration proceedings shall be conducted in accordance with the rules and procedures of the I. C. C.’, ‘shall be interpreted as meaning that the arbitration proceedings shall be conducted in accordance with the rules and procedures of the I. C. C.’. C.I. (International Chamber of Commerce) or UNCITRAL‘ manifested the parties’ common intention to submit their dispute either to an institutional arbitration governed by the ICC Rules or to an ad hoc arbitration, since the reference to ‘rules and procedures’ was not confined solely to the terms and conditions governing the conduct of the arbitration once the arbitrators had been appointed, and since the parties had, at the time the clause was entered into, that this non-restrictive reading of the clause, which had consequences for the manner in which the arbitrators were appointed, was such as to give it full effect, and that, finally, the clause relating to the apportionment of the costs of the arbitration was not incompatible with this interpretation.

13. In the light of these findings and assessments made in the exercise of its sovereign power to interpret the arbitration clause, which was made necessary by its imprecision, without any distortion, the Court of Appeal rejected the plea that the arbitral tribunal had not been properly constituted, given that Devas had been able to choose to have recourse to institutional arbitration, which entailed the appointment of the arbitral tribunal in accordance with Article 8 of the ICC Rules, without having to carry out the inapplicable search referred to in the last part of the plea, thereby lawfully justifying its decision. « 

This interpretation, guided by a principle of consistency and effectiveness, prevents a party from evading its commitments. The judge gives priority to an interpretation of the clause that gives it the effect of a contractual clause.

The judge must be pragmatic and interpret the contract to give it full effect without distorting the common will of the parties.

This ruling is a reminder of the usefulness of ensuring that contractual clauses are clearly and precisely drafted to avoid disputes that may arise during their performance.

Conclusion

With this ruling, the Cour de cassation reaffirms two essential principles:

• The inadmissibility of an intervention based on a foreign court decision without exequatur.
• A pragmatic interpretation of arbitration clauses to guarantee the effectiveness of arbitral justice. The French judge thus confirms the enforceability of the arbitral award made in India.