In Société Carrefour v SA Pro Trade, (Cour d'appel de Versailles, 13 December 2011 case no. 11/06556) several companies in the Carrefour group (collectively, Carrefour) had an ongoing relationship with SA Pro Trade (Pro Trade). Pro Trade entered liquidation proceedings in December 2009. In June 2010, the court-appointed officer responsible for Pro Trade's liquidation commenced litigation against Carrefour, seeking damages for the rupture brutale (sudden breach, generally a breach without sufficient notice) of their commercial relations before a commercial court in Nanterre. In a judgment dated 29 July 2011, the Nanterre court found that it did not have jurisdiction over the dispute and referred the parties to the Commercial Court of Paris.

Carrefour appealed the decision, arguing before the Versailles Court of Appeal that the dispute should have been referred to arbitration pursuant to an ICC arbitration clause contained in one of the contracts between the parties. The Nanterre court had referred the dispute to the Paris court on the basis of two provisions of the French Commercial Code. The first provides for a fine of up to €75,000 for certain anti-competitive practices (L. 442-2). The second specifies that actions claiming damages for an abusive breach are to be brought before a "competent jurisdiction" (L. 442-6).

The Versailles Court of Appeal rejected arguments that these provisions prevented the parties from submitting their dispute to arbitration. In particular, the court noted that the fact that the two sections cited above concerned issues of "loi de police" (mandatory law) did not prevent the parties from having recourse to arbitration. It also rejected Pro Trade's argument that Carrefour had waived its rights under the arbitration clause by litigating several related disputes in the past. The Court of Appeal noted that, pursuant to the doctrine of kompetenz-kompetenz, as codified in Article 1465 of the Civil Code, the dispute was to be referred to arbitration unless the invalidity or inapplicability of the arbitration clause is "manifest", and that Pro Trade's waiver argument did not meet this high threshold. Accordingly, the dispute, which centred on the alleged wrongful termination of a contract containing an arbitration clause, was to be referred to arbitration.

The case confirms the French courts' pro-arbitration stance. In particular, it is an example of the doctrine of "kompetenz-kompetenz" as understood under French law. Applying the doctrine, French courts will generally refer arguments with respect to the validity of an arbitration clause or the jurisdiction of an arbitral tribunal for determination by that arbitral tribunal.