The French Law of Obligations features an institution unknown to many other laws, but of direct relevance to arbitration: the “retrait litigieux” (literally “litigious withdrawal”). Provided for in Article 1699 of the French Civil Code, this mechanism comes into play when a disputed claim is the subject of an onerous assignment to a third party. The debtor then has a choice: to continue the proceedings in the hope of not being condemned, or to free himself by paying the assignee, not the amount of the claim, but the price of the assignment (which in practice is always lower). Initially conceived in the perspective of a trial before a national court, “retrait litigieux” also applies to international arbitration. This poses a number of practical difficulties: what is the applicable law? Which court has jurisdiction? Does the claim remain “litigious” as long as the award has not been granted exequatur? Two recent rulings by the French Supreme Court (Cour de cassation) shed some light on these questions, without however exhausting them completely.
ASA Bulletin