Enforcement of an International Arbitral Award in France: Versailles Court of Appeal (10 December 2024, No. 23/03647) Rules on Five-Year Limitation Period

On 10 December 2024, the Versailles Court of Appeal delivered a significant decision on the limitation period applicable to actions for the enforcement (exequatur) of international arbitral awards in France. The Court ruled that such actions are subject to the five-year limitation period. This decision departs from the approach applied to the enforcement of foreign court judgments and raises major practical concerns for international creditors, exposing underlying tensions within the principle of autonomy in international arbitration. 

Facts and Procedural History

The case involved an Italian-American investor and Citigroup Global Markets Inc., along with one of its executives. The investor suffered substantial financial losses on a portfolio managed by Citigroup during the 2008 financial crisis and initiated arbitration proceedings before FINRA’s dispute resolution center in New York. On 30 July 2013, the arbitral tribunal awarded the investor over USD 11 million. 

However, in January 2014, the New York state courts annulled the award, with the annulment confirmed on appeal in 2015. In 2016, the investor obtained an initial exequatur order in France but subsequently withdrew it under pressure from U.S. court orders, including an injunction and the threat of imprisonment for contempt of court. In November 2018, the investor filed another application with the Paris Judicial Court (tribunal judiciaire de Paris) for exequatur, which granted a second favorable order. The matter was appealed, brought before the Cour de cassation, and ultimately remanded to the Versailles Court of Appeal. 

During the proceedings before the Versailles Court of Appeal, Citigroup raised several procedural objections (fins de non-recevoir), including the time-bar of the action, the claimant’s prior waiver of enforcement, and the existence of a 2012 settlement agreement. 

In its judgment of 10 December 2024, the Versailles Court of Appeal overturned the 2018 exequatur order and declared the investor’s application inadmissible. The Court held that: 

• The five-year limitation period under Article 2224 of the French Civil Code applies to actions seeking enforcement of international arbitral awards; 
• The limitation period begins to run from the date of the arbitral award (30 July 2013); 
• Under Article 2244 of the French Civil Code, limitation or foreclosure periods are interrupted by a conservatory measure taken under the French Code of Civil Enforcement Procedures or by an act of enforcement. However, Article 2243 provides that such interruption is void if the claimant withdraws the application, with such withdrawal treated as a discontinuance. 

Accordingly, the Court dismissed the November 2018 exequatur application as time-barred, without considering the enforceability of the award on the merits. 

Limitation Period for Enforcement of Arbitral Awards

The core issue addressed by the Versailles Court of Appeal was whether the second exequatur application, filed more than five years after the award was rendered, was admissible. The Court held that such action was subject to the five-year limitation under ordinary law, as provided by Article 2224 of the French Civil Code. 

This approach contrasts with that adopted by the Cour de cassation in relation to the enforcement of foreign court judgments. In its decision of 11 January 2023 (No. 21-21.168), the Cour de cassation held that actions to enforce foreign judgments are, in principle, not subject to limitation periods (imprescriptible), provided the foreign judgment remains enforceable in its jurisdiction of origin. In other words, there is no limitation period in France, provided the foreign judgment remains enforceable in its jurisdiction of origin (a form of qualified absence of limitation). 

The Versailles Court of Appeal chose not to apply this reasoning to arbitral awards, emphasizing their autonomy from the law of the seat of arbitration, as established in the landmark Putrabali ruling (Cass. 1st Civ., 29 June 2007, No. 05-18.053). 

By adopting this “delocalised” approach, the Court ruled out the possibility of an equivalent “indirect” limitation scheme and instead applied the ordinary limitation period in the absence of any specific rule, refusing to develop an independent substantive rule under international law. This choice is open to criticism, as such a substantive rule might have better ensured the effectiveness of international arbitration. 

Conclusion: A Controversial Decision with Significant Practical Consequences 

This decision of the Versailles Court of Appeal raises a number of concerns. By subjecting enforcement actions for arbitral awards to a strict five-year limitation period, French law creates legal uncertainty for creditors. In this case, U.S. court orders forced the creditor to delay proceedings in France, leaving him at risk of the limitation period expiring. 

This outcome is paradoxical: French jurisprudence, traditionally supportive of international arbitration, adopts an approach that in practice undermines its effectiveness. Such differentiated treatment, compared to the enforcement of foreign judgments, risks weakening the consistency and attractiveness of French law in the field of arbitration. 

Moreover, this ruling may encourage obstructive tactics, allowing debtors to engage in dilatory proceedings in the hope of the limitation period expiring in France. 

Finally, it is unclear whether the Cour de cassation will confirm this approach or adopt an approach more consistent with the transnational logic of arbitration.