Welcome to our latest update, focused on bringing you closer to the pulse of arbitration in Paris. In this edition we have curated key arbitration points that we believe are important for you, our clients:

• An insight into the Paris Court of Appeal’s decision on the intervention of assignees in enforcement proceedings,
• An analysis of the CJEU's ruling on the EU ban on legal representation of Russia,
• Essential tips for crafting compelling closing statements in arbitration hearings,
• A deep dive into the burgeoning field of arbitration in the life sciences sector, and
• Highlights from a GC conference I attended in Budapest!

Enjoy the read! Please do get in touch if you have any feedback or questions.

Ioana

LATEST FRENCH ARBITRATION CASE LAW

ARBITRATION & ASSIGNMENT OF RIGHTS: In a landmark ruling dated 10 September 2024, the Paris Court of Appeal decided whether assignees of arbitration award rights can intervene in enforcement proceedings in France.

In a dispute between Antrix and Devas over India's electromagnetic spectrum, the Court overturned its pre-trial judge’s decision that had allowed the intervention of US companies which had been assigned the right to collect the arbitral award’s proceeds. Emphasizing the strict limitations on third-party intervention in French civil procedural law, the Court clarified that the rights to seek annulment of an award or appeal an exequatur order are strictly attached to the status of being a party to the arbitration. The Court found that the assignment agreements did not confer this status on the US assignees, thereby precluding their intervention in the proceedings.

Takeaway? This is the first case in which French Courts have ruled on the validity of assignments of arbitration awards, emphasizing that only direct parties to the arbitration or those conventionally admitted as such can intervene in enforcement or annulment procedures.

My detailed commentary on this decision will be published in the next ICC Bulletin so stay tuned!

(Read my analysis of the Paris Court of Appeal’s decision here)

REGIONAL HIGHLIGHTS - EU ban on legal advisory services to Russian entities

In a long-awaited ruling dated 2 October 2024, stemming from three consolidated cases, the CJEU upheld the prohibition on providing legal advisory services to the Russian Government and entities established in Russia, in the context of the ongoing sanctions regime against Russia.

• The legal challenge was initiated by various bar associations, including the Ordre néerlandais des avocats du barreau de Bruxelles and the Ordre des avocats à la cour de Paris, alongside individual lawyers and the Association Avocats Ensemble (ACE),
• The claimants challenged the EU Council’s sanctions on legal representation of Russian entities, arguing that they infringed upon fundamental rights such as access to legal advice, professional secrecy, and the independence of lawyers, ultimately contravening the rule of law and principles of proportionality and legal certainty,
• The Court dismissed all three cases, recalling the fundamental right to effective judicial protection, including the right to legal advice and representation in legal proceedings. The Court, however, clarified that such prohibition applies only to general legal advice but does not cover legal advisory services related to judicial, administrative, or arbitral proceedings,
• To justify its decision, the Court further explained that while the core duties of lawyers can be restricted for the EU’s general interest, these must not excessively hinder their essential role in upholding the rule of law and the fundamental role of lawyers in a democratic society,
• As I detailed in a prior publication, the EU position mirrors that of other jurisdictions on the specific point of advice related to legal proceedings. The UK sanctions regime, for example, does not contain a prohibition of providing legal services, meaning that UK-based lawyers are therefore also free to provide legal services related to arbitration, without any limitations.

(Read my article on the arbitration exception under the sanctions regime against Russia in Les Cahiers de l’Arbitrage)

PRACTICAL TIPS - Closing statements

The closing statement stands as the grand finale, the pivotal moment where the roadmap that you have built for your case comes together into a compelling narrative. It is your final opportunity to persuade the arbitral tribunal and to crystallize your arguments, building on what has transpired from the hearing and making it a crucial phase in the arbitration process. Here are some practical tips for preparing and delivering effective closing statements:

• Focus on the tribunal’s perspective: Start by revisiting the tribunal’s questions and concerns throughout the hearing. Your closing should aim to address these directly, providing clear and concise answers that reinforce your case’s strengths,
• Highlight the roadmap of your case: Use your closing statement to remind the tribunal of the logical structure of your case. Summarize the key points that support your position, linking them back to the evidence and testimonies presented during the hearing,
• Emphasize key evidence: Identify the most compelling pieces of evidence and testimonies that have emerged during the arbitration, especially in the course of the hearing, and use them to strengthen your arguments,
• Clarify the legal framework: Reiterate the essential legal principles and precedents that support your arguments. The tribunal must understand without a doubt the legal basis for your case, so make it easier for them to rule in your favor!,
• Be concise and structured: While it's important to cover all critical aspects of your case, avoid the temptation to re-litigate every point. Concentrate on the issues that matter most, emphasizing your strongest arguments and reinforcing any vulnerabilities in your case, and present them in a structured and digestible manner,
• End with your requests for relief: Clearly and succinctly restate the outcomes you are seeking from the tribunal. Make sure that your requests for relief are directly tied to the arguments and evidence you have presented,
• Stay adaptable: Be prepared to adjust your closing based on the developments during the hearing and the tribunal’s inclinations (as some arbitrators may prefer posing particular questions at the hearing’s conclusion). Your ability to incorporate responses to new information or arguments presented by the opposing party is especially important if you act as the respondent and plead last.

SECTORIAL NEWS - Arbitration & life sciences

In a week when all eyes are focused on the sale of Sanofi’s Doliprane (the French paracetamol) to an American fund, we turn ours to the life sciences sector – now a $2.83 trillion global industry – which is experiencing unparalleled growth, a trend that has been significantly accelerated by the COVID-19 pandemic. This dynamic sector is increasingly adopting arbitration for dispute resolution, given its complex, high-value disputes often involving cross-border collaborations, valuable intellectual property rights, and the high-risk nature of research and development.

• Surge in economic investments: The life sciences sector has witnessed a significant influx of investments, with biotech company investments reaching an all-time high of US$105bn in 2021 – a surge that is attributed to the sector’s rapid innovation pace and the global push for advancements in healthcare and pharmaceuticals,
• Increase in arbitration: This growth trajectory has been mirrored in the realm of arbitration, with major arbitral institutions reporting significant increases in life sciences cases. For instance, the ICC noted a 50% increase in the life sciences arbitrations it administered in 2022, with similar trends observed even earlier in 2020 by the ICDR (+26%), the SCAI (+13%) and the SIAC (+11%),
• Typology of disputes: Life sciences arbitration disputes arise at every stage of the product life cycle, from initial co-inventorship and licensing challenges to the acquisition of startups by larger pharmaceutical companies and subsequent commercialization conflicts. These disputes cover contractual claims, including breaches of R&D and licensing agreements, as well as non-contractual claims related to IP rights and regulatory issues, showcasing the sector's intricate blend of innovation and regulatory compliance,
• Notable arbitration cases: Specific examples of arbitration disputes in the life sciences sector include BeiGene and Bristol Myers Squibb-Celgene disputing over distribution rights in China, Sucampo clashing with Takeda over its alleged insufficient efforts to market for Amitiza, Alkermes v. Janssen Pharmaceutica NV over licensing agreements and royalties for biopharmaceutical products, and Genentech v. Biogen Idec over the development of follow-on products to the Rituxan,
• Commercial vs investment arbitration: The sector sees a further dichotomy in dispute types, between (i) commercial arbitration, often involving disputes between private parties over contractual obligations, IP rights, and confidentiality issues, and (ii) investment arbitration, which is becoming increasingly relevant for life sciences companies utilizing investment treaties to protect their investments, addressing issues such as regulation on patented medicines and mandatory prohibition order against generic competitors, refusal to renew marketing authorizations, arbitrary invalidation of patents, etc.,
• Damages considerations: Quantifying damages poses unique challenges due to the sector’s innovation-driven nature and the significant R&D investments. Disputes thus often involve complex calculations of lost profits, royalty payments, and the valuation of intellectual property and trade secrets.

BY THE WAY

Just last week, I was back in Budapest for an event dedicated to in-house lawyers, organized by CEE Legal Matters. I had the pleasure to speak on a particularly intriguing and stimulating topic, namely: second opinions. The discussions with Daniel Varga (Spectris), Nora Rabe (Wizz Air Group) and Peter Ban (E.On) were exceptionally engaging, moderated by Tamas Feher (Jalsovsky).

In a nutshell, we concluded that second opinions are a useful tool for in-house counsels, allowing them to double-check complex points of law or of legal strategy. Second opinions are also relied upon in order to confirm a strategy or a point of law in front of shareholders or a board when the dispute is of strategic importance for the company. However, such second opinions remain limited to a small number of cases, because of the extra costs involved but also the trust in-house counsels have developed with their lawyers.