Droit Immobilier

The New York Convention of 10 June

📅 Décision du 07 June 2006⚖️ Cour de cassation👁️ 1 vues📖 2 min de lecture

The New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, ratified by the United States and France, reserves the application of a more favourable domestic law for the recognition and validity of the arbitration agreement. The principle of validity of the international arbitration agreement and the principle that it is for the arbitrator to rule on his own jurisdiction are substantive rules of French international arbitration law, which establish, on the one hand, the lawfulness of the arbitration clause regardless of any reference to a state law and, on the other hand, the effectiveness of arbitration by allowing the arbitrator, when seized of a challenge to his jurisdictional power, to decide it as a priority.

Reference decision: Cass. • No. 03-12.034 • 7 June 2006 • Consult the decision →

This decision sheds important light on your real estate law. Here is what it changes for you.

The situation

The New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, ratified by the United States and France, reserves the application of a more favourable domestic law for the recognition and validity of the arbitration agreement. The principle of validity of the international arbitration agreement and the principle that it is for the arbitrator to rule on his own jurisdiction are substantive rules of French international arbitration law, which establish, on the one hand, the lawfulness of the arbitration clause regardless of any reference to a state law and, on the other hand, the effectiveness of arbitration by allowing the arbitrator, when seized of a challenge to his jurisdictional power, to decide it as a priority.

What the law says

This decision confirms the fundamental principles of property law.

Key points to remember

  • Scrupulously respect the legal time limits for appeals
  • Keep all your supporting documents (title deeds, instruments, letters)
  • Anticipate: preventative advice always costs less than litigation

For an analysis of your situation: 30-min consultation at €45 with Maître Zakine.

📌 Does this apply to your situation? Maître Cécile Zakine, French real estate lawyer, practises throughout France.
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Informations juridiques

  • Numéro: 03-12.034
  • Juridiction: Cour de cassation
  • Date de décision: 07 juin 2006

Mots-clés

droit immobilierjurisprudenceimmobilier

Cas d'usage pratiques

1

International Tenant Disputes Lease Arbitration Clause

A landlord in Nice rents a furnished flat to an American executive on a 3-year lease at €2,000/month. The tenancy agreement includes an International Chamber of Commerce (ICC) arbitration clause. After 6 months, the tenant stops paying rent (€12,000 arrears) and claims the arbitration clause is invalid under U.S. law, insisting on French court proceedings.

Application pratique:

Under the Cass. 7 June 2006 ruling, French international arbitration law recognises the arbitration clause's validity independently of any national law. The landlord should immediately commence ICC arbitration as per the contract. The arbitrator will first rule on their own jurisdiction (competence-competence) and any award will be enforceable in the U.S. under the New York Convention. Notify the tenant in writing and appoint a French avocat specialised in arbitration to draft the request.

2

First-Time Buyer Enforces Arbitration Against Foreign Seller

A first-time buyer in Bordeaux purchases a renovated apartment from an Italian seller for €250,000. The sale deed includes an arbitration clause under French law. After moving in, the buyer discovers hidden water damage requiring €15,000 in repairs. The seller denies liability and argues the arbitration clause is void under Italian law, filing a court claim in Italy.

Application pratique:

The buyer should immediately initiate arbitration in France, citing the 2006 Court of Cassation decision which confirms that international arbitration agreements are valid without reference to any state law. The arbitrator has the power to decide on their own jurisdiction, so the Italian court proceedings cannot block the arbitration. Collect all evidence (expert reports, photos, correspondence) and instruct a French lawyer to file a request for arbitration, seeking damages for the concealed defects.

3

Co-Ownership Dispute with German Contractor Over Roof Works

A Paris co-ownership syndicate hires a German construction firm to replace the roof for €100,000, with an arbitration clause designating Paris as the seat. After completion, persistent leaks cause €20,000 in communal damage. The firm refuses to return and challenges the arbitration clause, claiming it was not properly agreed under German law and filing a lawsuit in Berlin.

Application pratique:

The syndicate should rely on the 2006 precedent to assert that under French international arbitration law, the clause is valid and the arbitrator alone determines jurisdiction. Immediately send a formal notice to the contractor invoking arbitration, then appoint a lawyer to file an ICC request in Paris. The arbitrator will decide on competence and, if found valid, award damages. Keep all meeting minutes, invoices, and expert reports as evidence.

Maître Cécile Zakine

À propos de l'auteur

Maître Cécile Zakine — Avocate au Barreau des Alpes-Maritimes, Docteur en Droit. Chaque article de ce magazine est rédigé à partir de l'analyse d'une décision de jurisprudence réelle, commentée et mise en perspective par les équipes de Maître Zakine.

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