Partial Exequatur of an Arbitral Award: When Judges Separate the Wheat from the Chaff

In Ernée, a small peaceful housing estate, two neighbours have been at loggerheads for months. One sold a plot of land to the other, but according to the buyer, the sale price fixed in the preliminary contract (compromis de vente) was not respected. The buyer refers the matter to an arbitral tribunal, as provided for in their contract. But here's the catch: the arbitrators, in addition to deciding the dispute over the price, award damages for non-contractual harm. The furious seller refuses to enforce the award. He pleads a procedural defect: in his view, the arbitrators ruled outside the scope of the arbitration agreement, which would render the entire award void. The question that then arises for every owner engaged in arbitration proceedings: if part of the decision is challengeable, must everything be thrown out?

The answer of the Court of Cassation, in a judgment of 28 April 1987, is a model of pragmatism. It tells us: no, all is not lost. If the different heads of the award (i.e., the different decisions taken by the arbitrators) are not indivisible or dependent on each other, one can request a partial exequatur (the authorisation given by a judge to make an arbitral award enforceable, but only for a part). In other words, one can save what is valid and set aside what is not. A breath of fresh air for litigants, but only if they understand the criteria.

This decision, although rendered under the former Article 1028 of the Code of Civil Procedure (now repealed, but whose spirit persists in Article 1500 of the same code), remains a reference for all those who resort to arbitration: property developers, co-owners, or private individuals. So, how did the judges separate the wheat from the chaff? Let us delve into this typical case from Mayenne, between Ernée and Craon.

The facts: an everyday story

Mr X, an owner in Ernée, sells a building plot to Mr Y, a young entrepreneur from Laval. The preliminary contract (compromis de vente) fixes a price, but also provides for an arbitration clause in case of dispute. On the day of signing at the notary's office, Mr X demands an increase in the price, arguing a rise in value due to a building permit obtained in the meantime. Mr Y refuses and pays the initial price. A conflict ensues: Mr X refers the matter to the arbitral tribunal, as agreed.

The arbitrators, after an expert report, render their award: they order Mr Y to pay the initial price (contractual head), but also damages for the harm suffered by Mr X due to the delay in payment (non-contractual head, according to the seller). Mr X, dissatisfied, seeks the annulment of the entire award before the exequatur judge (the President of the Tribunal de Grande Instance of Laval, at the time). His argument: the arbitrators ruled outside the arbitration agreement by awarding damages on a non-contractual basis (i.e., outside the contract, based on Article 1240 of the Civil Code, which requires reparation for harm caused by fault). However, the arbitration agreement only allowed disputes contractual in nature to be decided. Therefore, according to him, the entire award is void.

The exequatur judge partially agrees with Mr X: he refuses to enforce the non-contractual part, but grants exequatur for the rest. Mr Y, who prevailed on the merits, appeals. The Angers Court of Appeal confirms: the arbitrators did not rule outside the arbitration agreement, because the claim for damages was linked to the defective performance of the contract. Mr X appeals to the Court of Cassation. In its judgment of 28 April 1987, the Court of Cassation upholds the position of the Court of Appeal: it considers that the arbitrators acted within the contractual framework, and in any case, even if the non-contractual part was outside the arbitration agreement, it was not indivisible from the rest. Therefore, a partial exequatur was possible.

The reasoning of the court — analysed

The Court of Cassation relies on Article 1028 of the Code of Civil Procedure (former), which provides that 'the arbitral award is susceptible of exequatur only if it is not contrary to public policy and if it was rendered within the limits of the mission entrusted to the arbitrators'. In plain language: to be enforceable, the award must respect the framework set by the arbitration agreement. But the Court adds a nuance: if a part of the award falls outside this framework, one can validate only the remainder, provided that the different parts are not indivisible (inseparable) or dependent (linked to each other).

In this case, the trial judges (Court of Appeal) had considered that the damages were not non-contractual, but contractual: they compensated the harm arising from the breach of contract (the delay in payment). The Court of Cassation approves this reasoning: the arbitrators did not exceed the arbitration agreement. But it goes further: even if the non-contractual classification had been retained, that would not have led to the annulment of the entire award. Why? Because the order to pay the price and the order to pay damages are two distinct matters, without any link of dependency. One can be enforced without the other.

This decision is a confirmation of prior case law: the Court of Cassation is attached to the principle of partial preservation of legal acts. It thus avoids a minor defect (a part outside the arbitration agreement) causing everything to fail. This is a pragmatic approach, which protects the effectiveness of arbitration. Mr X's arguments (total nullity) were rejected as too rigid. The Court preferred a balanced solution: validate what is compliant, set aside what is not. And to determine whether separation is possible, one looks at whether the heads of the award are independent.

Note: this decision was rendered under the former Code of Civil Procedure. Since 2011, the rules on arbitration are set out in Articles 1442 et seq. of the Code of Civil Procedure. Article 1500 retains the essence: the award may be subject to a partial exequatur if the heads are divisible. Therefore, the 1987 decision remains a reference.

What this means for you — concretely

Are you a landlord owner in Craon and have signed a preliminary contract with an arbitration clause? If a dispute arises and the arbitrators render an award that exceeds the scope of the arbitration agreement, all is not lost. You can ask the exequatur judge (the President of the Tribunal Judiciaire) to enforce only the valid part. For example, if the award orders you to pay €10,000 in damages for harm you consider outside the arbitration agreement, but also to pay €50,000 for the sale price, you can challenge the first part without risking everything. Provided you prove that the two heads are independent.

For buyers: if the seller refuses to enforce an award favourable to you by pleading a partial defect, you can counter by requesting a partial exequatur. Concrete example: in Ernée, a property developer obtained an award ordering an owner to sell him a plot under conditions. The owner challenged a penalty clause (late payment penalty) he considered excessive. The judge granted exequatur on the sale, but not on the penalty clause. Result: the sale took place, and the owner saved €5,000 in penalties.

For property professionals (agents, notaries): this case law allows you to advise your clients on the drafting of arbitration clauses. If you provide that the arbitrators can only rule on specific contractual issues, you limit the risk of overreach. But if an overreach occurs, reassure your client: the award is not necessarily void in its entirety.

If you are in this situation, you must act quickly. An appeal against an arbitral award must be brought within one month of its notification (Article 1494 of the Code of Civil Procedure). After this time limit, you can only challenge the exequatur, and only under restrictive conditions. Consult a lawyer specialised in real estate arbitration to assess your chances.

Four tips to avoid this type of dispute

• Draft a precise arbitration agreement: clearly define the scope of the arbitrators' mission. For example: 'The arbitrators shall decide any dispute relating to the performance of this contract, to the exclusion of any claim based on a quasi-delict.' This avoids differing interpretations.
• Include a severability clause: in the arbitration agreement, stipulate that if part of the award is annulled, the remainder remains valid. This facilitates partial exequatur.
• Limit ancillary claims: if you are a claimant, do not mix contractual and non-contractual claims. Present them separately, with distinct heads of decision, to avoid a judge considering them indivisible.
• Engage a lawyer from the drafting stage: a lawyer specialised in arbitration (such as at Maître Zakine's firm) can help you structure your arbitration agreement to be 'exequatur-friendly'. In Laval, I had a case where a poorly drafted clause cost my client €20,000. Prevention is better than cure.

In-depth: related case law and developments

Before 1987, the Court of Cassation had already admitted partial exequatur in a judgment of 12 December 1984 (No. 83-15.246), for an award that ruled beyond the claim. It laid down the criterion of indivisibility. The 1987 decision confirms and clarifies: there must also be a link of dependency. Since then, case law has evolved consistently. For example, in a judgment of 13 March 2013 (No. 11-26.759), the Court of Cassation recalled that partial exequatur is possible even if the award was rendered in violation of public policy, provided that the non-violating part is divisible.

The trend is therefore towards flexibility. Arbitral tribunals and exequatur judges favour preserving the award rather than destroying it. This is explained by the desire to promote arbitration as an alternative dispute resolution method, efficient and fast. For the future, one can expect judges to be even more tolerant, especially in real estate disputes where financial stakes are high. Provided, however, that the parties have properly separated the heads of their claim.

Frequently asked questions

• Can I request exequatur of an arbitral award that was rendered outside the arbitration agreement? Yes, partially. If the part outside the arbitration agreement is divisible from the rest, you can obtain exequatur for the valid part. You must show that there is no indivisibility or link of dependency between the heads.
• What should I do if I am ordered by an arbitral award that I consider partly void? You have a one-month period from notification of the award to bring an appeal for annulment. Thereafter, you can challenge the exequatur. Consult a lawyer promptly to avoid losing your rights.
• What is the cost of a partial exequatur procedure? Lawyer's fees vary depending on complexity. For a simple case, expect between €1,500 and €3,000. But if the stake is high (e.g., a sale of €100,000), these fees are often recoverable if successful.
• Can a private individual resort to arbitration? Yes, provided the contract provides for it. This is common in property development or co-ownership contracts. It is rarer for a simple sale between individuals, but nothing prohibits it.
• What is the difference between an arbitration agreement (compromis) and an arbitration clause (clause compromissoire)? An arbitration agreement is a contract by which the parties agree to submit an existing dispute to arbitration. An arbitration clause is a clause inserted in a contract to submit future disputes to arbitration. Both are valid subject to conditions.

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 →