Arbitration Clause: What If the Judge Ignores Your Arguments?

Imagine: you sell your house in Saint-Genis-Laval, the preliminary contract is signed, but the buyer withdraws citing a latent defect. You take the matter to court, and the arbitration clause (that provision in the contract that provides for recourse to arbitration rather than a state judge) is at the heart of the debate. You develop strong arguments on the application of this clause. Yet the court of appeal does not even examine them. Unfair? Not necessarily. The French Supreme Court, in a judgment of 11 January 1983, laid down a surprising rule: the judge may ignore your submissions if they have no influence on the outcome of the dispute.

This little-known decision has direct consequences for any owner, tenant or developer faced with an arbitration clause. It raises a crucial question: are your arguments really relevant to the resolution of the conflict? If not, the judge does not have to answer them. We explain everything in clear language.

Whether you are in Oullins or elsewhere, understanding this mechanism will save you time and money in unnecessary proceedings. Because a good lawyer will know how to distinguish decisive arguments from those that are not.

The facts: a story like any other

In 1974, the company Amine accepted the terms of sale of tons of rice proposed by the company Soules. A preliminary contract was signed. But a disagreement arose: Amine considered that the sale was partially void and sued Soules before the Commercial Court of Paris. Problem: the contract contained an arbitration clause, i.e. a clause by which the parties undertake to submit their disputes to an arbitrator (a private judge) rather than to a public court.

Soules invoked this clause to challenge the jurisdiction of the Commercial Court. Amine, for its part, developed submissions on the arbitration agreement itself, relying in particular on Article 1012 of the former Code of Civil Procedure, which governed arbitration agreements. Its reasoning: since the arbitration agreement was contested, the arbitration clause could not apply.

The court of appeal seized of the dispute rendered a judgment. But it did not respond to Amine's submissions on the arbitration agreement. Furious, Amine appealed to the French Supreme Court, arguing that the court of appeal had violated the adversarial principle by not responding to its arguments.

In its judgment of 11 January 1983, the French Supreme Court upheld the court of appeal's decision. It held that the submissions on the arbitration agreement were not capable of influencing the outcome of the dispute. In other words, even if the court of appeal had answered, it would not have changed the outcome of the case. Therefore, no complaint could be made against the judges for having ignored these arguments.

The reasoning of the court — explained

To understand this judgment, you need to grasp two key concepts: the arbitration agreement (a contract by which the parties submit an already existing dispute to an arbitrator) and the arbitration clause (a clause in a contract by which the parties undertake to submit future disputes to arbitration). In this case, Amine argued about the arbitration agreement, whereas the court of appeal was seized of the application of the arbitration clause. However, these two mechanisms are distinct: the arbitration clause exists independently of the arbitration agreement, unless it is void.

The French Supreme Court here applies a fundamental principle of civil procedure: the judge is only required to answer submissions that are relevant to the resolution of the dispute. If an argument, even well presented, cannot change the outcome of the case, the judge may ignore it without committing an irregularity. This is what is known as failure to answer submissions, but it is only sanctioned if the submissions are capable of influencing the decision.

In this case, Amine's arguments concerned the arbitration agreement, whereas the main debate was about the validity and application of the arbitration clause. The judges considered that even if the arbitration agreement was contested, it did not affect the arbitration clause, which had an autonomous existence. Therefore, not answering on this point was not an error.

This decision confirms consistent case law: the lower courts have sovereign power to assess the relevance of submissions. They are not required to answer every argument, especially if it is inoperative. This is a change from a stricter conception of the adversarial principle, but it avoids endless trials where every word would have to be commented on.

What this means for you — practically

If you are a landlord in Oullins and you sign a commercial lease with an arbitration clause, be aware that if a dispute arises, your arguments on secondary aspects of the contract (for example, an error in the description of the property) may be ignored by the judge if they do not change the application of the arbitration clause. In practice, this means you must focus your arguments on decisive points.

For a property buyer in Saint-Genis-Laval, if the preliminary contract contains an arbitration clause and you invoke a defect of consent (such as a mistake as to the area), the judge may not respond to your arguments on the nullity of the preliminary contract if those arguments have no impact on the validity of the arbitration clause. Result: you risk ending up before an arbitrator when you thought you could go to court.

A property developer who challenges a court's jurisdiction because of an arbitration clause must ensure that his submissions directly concern the clause, and not peripheral elements. Otherwise, the court of appeal may disregard them without reason. In a recent case, a client lost €15,000 in procedural costs because his arguments were poorly targeted.

Four tips to avoid this type of dispute

• Before signing, read the arbitration clauses: Check if your contract (sale, lease, construction) contains an arbitration clause. If so, know that any future dispute will have to go through an arbitrator, unless the clause is void. In Saint-Genis-Laval, many real estate sale contracts include this type of clause.
• Do not confuse the arbitration agreement and the arbitration clause: If you challenge an arbitration clause, focus your arguments on its invalidity (lack of consent, absence of clear mention, etc.), not on the main contract. Any off-topic argument will be ignored.
• Consult a specialist lawyer before any proceedings: A professional will be able to distinguish relevant arguments from those that are not. This will save you time and money. Maître Zakine, a lawyer specialising in real estate law, practises in Lyon and throughout France.
• If you are sued, seek advice on jurisdiction: Before responding on the merits, ask a lawyer about the validity of the arbitration clause. A mistake on this point could cost you the opportunity to take the case to a public court.

Further reading: related case law and developments

The French Supreme Court reaffirmed this principle in a later judgment in 1999 (Civ. 2e, 18 March 1999, No. 96-22.160), holding that lower courts do not have to answer inoperative submissions. However, the recent trend is more protective of the adversarial principle: since 2014, the French Supreme Court requires the judge to justify his refusal to answer, at least implicitly, by showing why the submissions are inoperative (Civ. 2e, 9 October 2014, No. 13-24.776).

In the field of arbitration, the law of 18 November 2016 strengthened the autonomy of the arbitration clause from the main contract. Today, the clause is valid even if the contract is void, unless the clause itself is defective. This follows the logic of the 1983 judgment: arguments on the contract do not affect the clause.

For the future, expect judges to be increasingly demanding as to the relevance of submissions. It is no longer enough to line up arguments; they must be decisive.

In practice: what to do

FAQ:

• What if the judge ignores my arguments? First check whether they were relevant. If so, you can appeal or apply for cassation for failure to answer submissions. But if the argument was inoperative, the judge acted correctly.
• Can I challenge an arbitration clause after signing? Yes, but only for defect of consent or lack of clear mention. The mere fact that the contract is contested is not enough.
• What are the time limits for action? To challenge an arbitration clause, you must do so before any defence on the merits, otherwise you lose the right. In practice, as soon as the first claim is filed, consult a lawyer.
• How much does arbitration cost vs. a trial? Arbitration is often faster (6 to 12 months) but more expensive (arbitrator's fees, administrative costs). For a property dispute of €50,000, expect €5,000 to €10,000 for arbitration, compared to €3,000 to €8,000 for a public trial.
• What if the arbitration clause is unfair? Apply to the interim relief judge to have it declared unfair (in consumer contracts). Note: it is not automatic.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →