## Facts

- A French company (Ugilor, later Norsolor S.A.) and a Turkish company (Pabalk) were parties to an international commercial agency contract containing an ICC arbitration clause referring to the 1975 ICC Rules.
- Ugilor/Norsolor unilaterally terminated the agency contract; Pabalk commenced ICC arbitration in 1977, and Vienna, Austria was designated as the seat.
- In a 1979 award, the arbitral tribunal declined to select Turkish or French substantive law and instead applied “international lex mercatoria,” emphasizing good faith and ordering Norsolor to pay damages to Pabalk based on unjustified harm requiring repair in equity.
- In Austria (the seat), Norsolor sought annulment; the Vienna Court of Appeal partially set aside the award, reasoning that reliance on lex mercatoria without identifying an applicable national law breached the tribunal’s mandate under the ICC Rules.
- In France, Pabalk obtained an exequatur order from the Paris court of first instance; after the Austrian partial annulment, the Paris Court of Appeal partially withdrew exequatur, treating annulment at the seat as sufficient to refuse enforcement.
- Pabalk appealed to the French Court of Cassation.

## Issues

1. Whether a French court may refuse exequatur solely because the award was set aside at the seat under Article V(1)(e) of the New York Convention.
2. Whether Article VII(1) of the New York Convention requires the enforcing court to consider enforcement under any more favorable domestic regime, even when the award was annulled at the seat.
3. Whether French procedural law obliges the enforcement judge to examine, including on its own initiative, whether domestic law permits enforcement notwithstanding foreign annulment.

## Decision

- The Court of Cassation quashed the Paris Court of Appeal’s decision and remanded.
- The court held that the Court of Appeal erred by refusing enforcement solely on the basis of the Austrian partial annulment without determining whether French law nevertheless allowed Pabalk to rely on the award.
- Relying on Article VII(1) of the New York Convention and Article 12 of the French Code of Civil Procedure, the court stated the judge cannot refuse exequatur when national law authorizes it and must conduct that inquiry even sua sponte.

## Legal Principles

- Article VII(1) of the New York Convention preserves a party’s right to seek recognition or enforcement under the enforcing forum’s more favorable domestic law or treaties.
- Article V(1)(e) (award set aside at the seat) is a permissive refusal ground and does not eliminate the enforcing court’s duty to consider more favorable domestic enforcement rules via Article VII(1).
- Under French procedural law, the enforcement judge must verify—on the court’s own motion when necessary—whether exequatur is authorized by French law, rather than mechanically denying enforcement based only on foreign annulment.
- The enforcing court’s task is not satisfied by noting annulment abroad; it must determine whether the award may still be invoked in France under the applicable French enforcement regime.

## Conclusion

The Court of Cassation held that French courts must evaluate whether French law allows enforcement of an international arbitral award even after annulment at the seat, because the New York Convention’s more-favorable-right rule preserves domestic enforcement routes and obliges the judge to consider them before refusing exequatur.


Norsolor S.A. v. Pabalk Ticaret Ltd. Şti., Cass. 1e civ., Oct. 9, 1984 (Fr.)