Kabab-Ji in France: independent assessment of an international clause

Court and procedural stage

On 28 September 2022 the First Civil Chamber of the French Court of Cassation decided Kout Food Group’s appeal no 20-20.260, ECLI:FR:CCASS:2022:C100679. The challenged Paris Court of Appeal judgment of 23 June 2020 had refused to annul the ICC award of 11 September 2017. The proceedings concerned French supervision of a Paris-seated award.

Why governing law mattered

Kabab-Ji’s franchise contracts with Al-Homaizi selected English law and arbitration in Paris. Following corporate restructuring, the arbitration claim was brought against KFG. The objection raised the law governing the clause’s effectiveness and extension to that company. A general choice for the contracts and a separate choice for the arbitration agreement proved to be distinct issues.

Reasoning in paragraphs 7–9

Paragraph 7 states the French substantive rule of international arbitration: the clause is legally independent, and its existence and effectiveness are assessed through the parties’ common intention, subject to mandatory French rules and international public policy. Reference to a State law is required where the parties expressly subjected the validity and effects of the arbitration agreement itself to that law.

Paragraph 8 confirms that the contractual English-law provision and the prohibition on applying rules contradicting the contracts did not establish that separate choice. No other circumstances unequivocally demonstrating the parties’ common intention to make the relevant choice were established. The Court approved the reasoning applying French substantive rules of international arbitration.

Disposition and limits

The appeal was dismissed and the refusal to annul remained in place. The Court neither issued a new contractual damages award nor guaranteed enforcement elsewhere. The second ground of appeal was rejected without special reasoning under Article 1014 of the French Code of Civil Procedure; no elaborate holding should be invented for that part.

The judgment does not establish that every group company is bound by a clause or that French rules displace every express choice made by the parties. The international character of the arbitration, the actual agreement and common intention matter. This French approach must not be presented as the universally required interpretation of the New York Convention.

Reading the paired English judgment

The English Kabab-Ji judgment of 2021 refused enforcement. A comparison should preserve both procedural descriptions: annulment refused and enforcement refused. Compare the law governing the arbitration agreement, the object of review and territorial effects. Merely saying that the courts disagreed obscures the legal mechanism that makes the paired decisions informative.