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Assignment of arbitral claims and arbitral awards: uncertain legal landscape in France (Eversheds Sutherland)

By Eversheds Sutherland

The assignment of arbitral claims and arbitral awards is a fast-growing market practice. When entering into agreements for such assignments, it is crucial to ensure that they comply with all the applicable legal requirements. In this context, the assignee should carefully assess the risks that may arise out of the award debtor's rights pursuant to the provisions of the law applicable at the seat of arbitration and/or at the place(s) of enforcement of the award. Under French law there is a specific mechanism called the right of "retrait litigieux" ("disputed withdrawal"). In accordance with this singular legal mechanism, which is designed as a tool to fight against speculation, when a disputed claim is assigned to a third party in the course of any judicial or arbitral proceedings, the debtor is entitled to discharge its debt by paying the assignee the actual price of the assignment, plus interest and costs, instead of the full amount of the original debt (article 1699 of the French Civil Code ). As has been seen in the FG Hemisphere v Democratic Republic of the Congo saga, the conditions and requirements for exercising the right of retrait litigieux in the context of assignment of arbitral claims or arbitral awards are uncertain under French law.

Articles

Global Legal Insights: International Arbitration 2024

By Global Legal Group

This multi-jurisdictional guide provides insight into the realities of international arbitration, highlighting market trends and legal developments as well as policy and strategic issues.

Topics covered include arbitration agreements, interim relief, arbitration awards, investment arbitration and decisions in 24 jurisdictions.

Articles

SCOTUS Delivers Blow to Fossil Fuel Industry Allowing Climate Change Suits to Proceed in State Court

By Claire E. Juneau, Partner and Kelicia D. Raya, Associate (Kean Miller)

This article discusses the Supreme Court's decision denying a petition of several oil and gas company seeking to remove a climate change lawsuit from state court to federal court. The case, BP P.L.C. v. Mayor and City Council of Baltimore, is one of more than a dozen lawsuits filed since July 2017 by local and state governments against oil and gas companies. 

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