## Facts

- A British company (Project XJ 220 Ltd) agreed to produce a limited-series Jaguar XJ 220 automobile, marketed in France through the French distributor V 2000 (formerly Jaguar France).
- In January 1990, a French individual buyer signed an offer to purchase the vehicle and agreed to pay in installments.
- The contractual documents (in English and French) included an arbitration clause providing for arbitration in London under the auspices of the Law Society (London).
- The manufacturer notified acceptance in March 1990; the buyer later attempted to cancel and sought a refund of amounts paid.
- The buyer sued in the Paris Tribunal de grande instance seeking nullity (or avoidance) of the contract and restitution.
- V 2000 and Project XJ 220 raised the arbitration clause and challenged French court jurisdiction.
- The trial court retained jurisdiction, reasoning that the English-language form was not binding on the consumer and that the arbitration clause in the French version was void.
- The defendants appealed; the appellate judgment was later upheld by the Cour de cassation (First Civil Chamber) on 21 May 1997.

## Issues

1. Whether a French consumer’s purchase from a foreign manufacturer, involving cross-border performance, constitutes an international transaction implicating “interests of international commerce” for purposes of international arbitration.
2. Whether the London arbitration clause was valid and enforceable despite consumer status and asserted defects in consent and documentation.
3. Whether a valid international arbitration clause required French courts to decline jurisdiction in favor of the arbitral tribunal.

## Decision

- The Paris Court of Appeal reversed the trial court’s jurisdictional ruling and held the French courts lacked jurisdiction due to the arbitration clause.
- The court found the contract implicated international commerce because it involved a cross-border transfer of goods and funds between France and the United Kingdom.
- Treating the agreement as international arbitration, the court enforced the arbitration clause as valid and binding on the buyer.
- The Cour de cassation later affirmed, holding that consumer purpose did not prevent characterization as international where the contract entailed cross-border transfers, and that the clause applied by virtue of its independence in international arbitration, subject to international public policy.

## Legal Principles

- A transaction can qualify as international arbitration based on objective cross-border economic elements (transfer of goods and funds), even if one party is a consumer purchasing for personal use.
- In international arbitration, the arbitration clause is legally independent (separable) from the main contract; challenges to the main contract do not, by themselves, defeat the arbitration agreement.
- Enforcement of an international arbitration clause is subject primarily to international public policy limits, with jurisdictional and arbitrability questions generally addressed first by arbitrators, under later judicial control in annulment proceedings.
- When an international arbitration clause is not manifestly void and designates a foreign seat, the court seized of the dispute should decline jurisdiction and refer the parties to arbitration.

## Conclusion

The court enforced a London-seated arbitration clause in a cross-border automobile purchase despite the buyer’s consumer status, holding the dispute was international in character and that the separable arbitration agreement required French courts to dismiss for lack of jurisdiction in favor of arbitration.


V 2000 v. Project XJ 220 Ltd, 1996 Rev. Arb. 245 (Paris Ct. App. 1994)