International Arbitration Newsletter
First Semester 2025
THE AUTHORS:
Eglantine Canale Jamet, Associate at Sygna Partners
Dayane Darwich, Jurist and Trainee Lawyer at Sygna Partners
As a leading Paris-based firm in international law and dispute resolution, Sygna Partners brings its legal insight to Daily Jus. Through this collaboration, we feature select articles from Sygna’s biannual International Arbitration Newsletter, offering sharp analysis of key French court decisions and their broader relevance to the global arbitration community.
Summary
In 2008, an Indian businessman, established a Trust in the Cayman Islands to hold the assets of a proposed iron ore mining operation in Uruguay. In August 2016, his three children, all British nationals, became beneficiaries of the Trust. They claimed to have thereby acquired an indirect investment in Uruguay protected under the 1997 Uruguay-United Kingdom BIT.
Between 2013 and 2015, Uruguay introduced new mining regulations implementing new requirements and caused key authorizations and permits, such as mining concessions, environmental approvals, and tax incentives.
Alleging that Uruguay had, through a series of acts and omissions, unlawfully expropriated their investment and failed to provide fair and equitable treatment, the siblings notified Uruguay of their dispute on 3 October 2016 pursuant to Article 8 of the BIT. They subsequently commenced arbitration on 19 July 2017 seeking compensation for the alleged breaches.
On 6 August 2020, the arbitral tribunal in Agarwal and Mehta v. Uruguay (“Uruguay case“) issued a preliminary award declining jurisdiction. It held that the claimants had failed to satisfy the temporal requirement under the BIT, finding that their investment was not protected at the relevant time and that the preconditions for Uruguay’s consent to arbitrate were not met.
On 1 October 2020, the siblings filed an application before the Paris Court of Appeal to annul the award. After proceedings in which the instruction closed on 13 September 2022, the Court of Appeal rendered its decision on 21 February 2023, setting aside the arbitral award.
The Paris Court of Appeal held that Uruguay had given a standing and unconditional offer to arbitrate disputes under Article 8 of the BIT, and that the conditions contained in Article 8(2), and in particular, the requirement to first submit the dispute to the host State’s domestic courts for a period of 18 months, did not relate to the tribunal’s jurisdiction, but instead concerned the admissibility of the claims. Crucially, the Court also ruled that the question of whether the investment existed at the relevant time, and whether it qualified as a protected investment under the BIT, pertained to the substantive merits of the dispute, not to jurisdiction. Accordingly, it held that the arbitral tribunal had wrongly characterized these issues as jurisdictional and had therefore incorrectly declined jurisdiction.
Uruguay appealed this decision to the Cour de cassation. On 2 April 2025, the latter quashed the judgment of the Court of Appeal in its entirety. Reaffirming the scope of its review under Article 1520(1) FCCP, the Cour de cassation held that conditions such as those found in Article 8(2) of the BIT could form part of the State’s consent to arbitration and thus affect jurisdiction. The Cour de cassation concluded that the Court of Appeal had erred in characterizing these requirements as merely procedural or admissibility-related.
Furthermore, the Cour de cassation found that the appellate court had overstepped its role by reinterpreting key aspects of the arbitral tribunal’s reasoning, particularly the temporal application of the treaty and the existence of a protected investment, thereby engaging in a review of the merits, which is impermissible under French law governing annulment proceedings.
Misidentifying the Judge’s Role: When Review Becomes Revision
The Uruguay case reflects a pivotal moment in the evolution of French judicial review of investment arbitration awards. The dispute arose after the arbitral tribunal declined jurisdiction, finding that the claimants did not own the investment at the time of the alleged treaty breaches.
The Paris Court of Appeal annulled the award, reasoning that the temporal requirement applied by the tribunal was a substantive condition and had been misinterpreted. However, the Court of Cassation overturned this decision, holding that the appellate court had impermissibly reviewed the merits of the case, rather than confining itself to jurisdictional questions.
In annulment proceedings under Article 1520(1) FCCP, the reviewing judge controls the arbitral tribunal’s decision on jurisdiction. This means the judge can examine whether, as a matter of law and fact, the tribunal had the authority to hear the dispute, based on the arbitration agreement and relevant treaty instruments.
However, the judge cannot second-guess the arbitrators’ conclusions on substantive issues such as whether a treaty breach occurred, whether there was an expropriation, or whether fair and equitable treatment was denied. These are issues of substance, which cannot be examined in annulment proceedings.
In the Uruguay case, the arbitral tribunal found that the investors were not the legal owners of the investment at the relevant time, and on that basis, it declined jurisdiction. The Paris Court of Appeal disagreed with the arbitrators and held that this issue was one of substance, not jurisdiction, and proceeded to annul the award.
Even if the tribunal’s reasoning was flawed, the reviewing court was not entitled to substitute its own view. The character of the issue (jurisdictional vs. substantive) is not determined by how the arbitrators label it. It must be analysed independently under French arbitration law.
The Court of Appeal should have requalified the tribunal’s reasoning and examined whether this was a jurisdictional issue or a matter of merits. It failed to conduct this preliminary step and directly reviewed the correctness of the tribunal’s interpretation of treaty conditions.
Under French law, judicial review of arbitral jurisdiction is limited, and does not allow the judge to engage in a substantive reassessment of whether treaty conditions were met. Otherwise, the reviewing court would effectively become a court of appeal on the merits.
The Legacy of Oschadbank: Reaffirming the Limits of Judicial Review
The Oschadbank v. Russia (I), Judgment of the French Court of Cassation (First Civil Chamber) 21-15.390 had already laid down a clear standard: a judge may review all facts and legal considerations relevant to jurisdiction but must not engage in a re-examination of the tribunal’s decision on the merits. This precedent, echoed in Uruguay, clarifies that jurisdictional review is procedural and distinct from any substantive assessment. The Court of appeal’s failure to adhere to this framework reveals lingering confusion regarding the limits of its powers.
As the Uruguay case shows, even when a tribunal declines jurisdiction, it may do so based on substantive considerations, yet this does not grant the reviewing court the authority to challenge those conclusions. The Uruguay ruling brings much-needed consistency between the appellate and cassation levels. It underscores the importance of distinguishing between procedural conditions for jurisdiction and substantive requirements under the applicable treaty.
This approach prevents tribunals from insulating themselves from review by labelling issues as jurisdictional, or conversely, courts from overreaching by reinterpreting the merits under the guise of a jurisdictional inquiry.
However, the decision also highlights a deeper tension between respecting arbitral autonomy and ensuring effective judicial oversight, particularly in cases where a tribunal’s reasoning rests on an entirely unfounded or imaginary condition. Situations like these underscore the limits of judicial review and the complexities that arise when arbitral awards are based on dubious or ill-conceived grounds.
ABOUT THE AUTHORS
Eglantine Canale Jamet joined Sygna Partners‘ International Litigation and Arbitration Department in 2022 as an Associate. She holds a Master’s in Public International Law (Paris Nanterre) and an Advanced LL.M. in International Criminal Law (Leiden). She has gained experience with international courts (ICC and ICJ) as well as in the Legal Affairs Division of France’s Ministry of Foreign Affairs. Her practice focuses on immunities and international disputes, with a particular interest in evidence, open-source investigations, and procedural issues.
Dayane Darwich joined Sygna Partners’ International Litigation and Arbitration Department in 2022 as a Jurist and Trainee Lawyer. She holds a Master’s degree in International Law and International Organizations (Paris 1 Panthéon-Sorbonne). She has worked on numerous contentious and advisory proceedings before the International Court of Justice, and has also gained experience at UNESCO. Her work spans a broad spectrum of issues in international law, with a primary focus on international disputes. She has a particular intellectual interest in questions relating to sanctions, territorial matters, the use of force, statehood, and human rights.
The authors thank Inès Pilpré, Legal Intern, for her valuable work.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.