In French civil procedure, the Conseiller de la Mise en État (CME) is a magistrate of the Court of Appeal responsible for ensuring the proper conduct of the hearing. Once appointed, the CME has exclusive jurisdiction to rule on all procedural objections and “fin de non-recevoir” about the appeal itself, and to order all provisional or conservatory measures until its relinquishment.
The issue of the fin de non-recevoir before Courts of Appeal has been a source of uncertainty following the 2020 reform of French civil procedure. A decision by the Paris Court of Appeal has provided clarity on the issue of jurisdiction to rule on potential pleas of non-receivability, raised in the context of an appeal to set aside an arbitral award: do they fall within the jurisdiction of the court of appeal or the CME?
In this case, the dispute arose between the French company Le Moulin de la Courbe (buyer) and the German company Krücken (seller) regarding a contract for the purchase of buckwheat grain. The contract contained an arbitration clause designating the Chambre Arbitrale Internationale de Paris (CAIP), while also referring to the Einheitsbedingungen im deutschen Getreidehandel (EHB or “uniform conditions in the German grain trade“) as general clauses applicable to the contract, designating a special arbitral tribunal. Following a dispute arising from the contract, the buyer initiated arbitration proceedings before the CAIP. Krücken challenged the jurisdiction of the arbitral tribunal constituted under the auspices of the CAIP based on the EHB. However, the arbitral tribunal declared itself competent. Krücken then lodged an action for annulment of the award.
Before the Paris Court of Appeal, Le Moulin de la Courbe argued that “by first invoking the CAIP arbitration clause in the contract and then challenging its validity and application in the arbitration proceedings“[1], Krücken’s position constituted an estoppel. Estoppel is the prohibition of contradicting oneself to the detriment of others (e.g. to mislead the other party as to its intentions).
In fact, the contract, which clearly designates the CAIP as the arbitration institution, despite the reference to the EHB rules, was concluded with full knowledge of that by the parties, reflecting their acceptance of the CAIP’s jurisdiction. Consequently, the seller cannot, without contradicting itself to the detriment of the buyer, continue to argue before the Court of Appeal that the CAIP lacks of jurisdiction to settle the dispute submitted to arbitration. Invoking estoppel, Le Moulin de la Courbe sought to have the vendor’s action for annulment declared inadmissible.
Two procedural questions arose in this context: (i) whether estoppel (based on article 1466 of the French Code of Civil Procedure) can be considered as an objection? and (ii) if so, whether it falls within the jurisdiction of the CME or that of the Court of Appeal?
The CME referred this question to the French Cour de cassation, which provided an opinion dated March[2] 20, 2024. In this opinion, the high court considered that estoppel constitutes an objection to arbitration within the meaning of article 122 of the French Code of Civil Procedure. According to this article, “An estoppel is any plea that tends to have the adversary’s claim declared inadmissible, without examination of the merits, for lack of right to act, such as lack of standing, lack of interest, prescription, time limit or res judicata“. The CME followed the opinion and added, following the decision of the plenary assembly of the French Cour de cassation, in its decision of February 27, 2009 (no. 08-21.288), that “according to the principle of Estoppel, a party cannot take advantage of a position contrary to that which it has previously taken when this change occurs to the detriment of another party or a third party. It is commonly used in arbitration to deny a party the possibility of invoking and then rejecting the application of an arbitration clause, under penalty of inadmissibility“.
The sanction for estoppel is therefore inadmissibility, in addition to any potential “abuse or bad faith alleged on the merits“.
The CME has deduced that it must declare itself incompetent to hear this objection, as the estoppel “does not relate to the regularity of the appeal procedure applicable to the action for annulment, but to the merits of the action for annulment, and falls within the jurisdiction of the court“.
Therefore, the grounds for dismissal raised in the context of an action for annulment, including grounds for dismissal based on estoppel, are treated no differently from those raised in the context of an appeal:
- They concern the regularity of the appeal procedure (or of the action for annulment), the dispute will falls within the remit of the CME;
- They concern the merits of the action (or of the appeal), the dispute will fall within the Court of Appeal’s jurisdiction.
[1] CA de Paris, CME, 27 juin 2024, n° 23/02365, §19.
[2] Cour de cassation, 20 mars 2024, avis, n° 23-70.019 https://www.courdecassation.fr/decision/65fac9758c38b000080b2fdc
