Originally from Dispute Resolution Journal

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RECENT DECISIONS BY NATIONAL COURTS

FRANCE

In a highly politicized case that was often in the media spotlight, the French Supreme Court – the Cour de cassation – upheld on June 30, 2016 the overturning of an arbitral award that had been rendered in favor of the famous French businessman Bernard Tapie (Cass. Civ. 1, Docket No. 15-13.755). The case, often called “l’affaire Tapie” in the French media, concerns fraud, political favoritism, and whether an arbitration is domestic or international under French law. 

Background

The case is CDR-Consortium de réalisation v. Monsieur Bernard Tapie. We reported on the previous developments in this case in an earlier issue (DRJ, Vol. 70, No. 2, page 146). Mr. Bernhard Tapie (“Tapie”) is to a certain extent the Donald Trump of France. He is a nationally-known businessman, former TV-host and former owner of the Olympique de Marseille soccer team, who was often in the French media in the 80’s and 90’s and who also entered into politics. 

In the early 1990’s Tapie acquired the then-struggling German sporting goods company Adidas through his holding companies (one of which was a German GmbH). The acquisition was financed by several banks, including a subsidiary of the then state-owned Crédit Lyonnais: Société de Banque Occidentale (“SdBO”). When Tapie joined the French socialist government as a minister in 1992, he ceased his commercial activities and entered into a contract with SdBO to discharge his debts. Pursuant to this contract SdBO was to sell Adidas at a certain minimum price. SdBO sold it to various buyers, including Clinvest, another subsidiary of Crédit Lyonnais. Adidas was then resold by Crédit Lyonnais for a much higher price. 
Tapie alleged that he had been misled by Crédit Lyonnais and SdBO, which led to various legal disputes being brought in the French courts. Following Crédit Lyonnais’ bankruptcy, SdBo became CDR Créances and Clinvest became CDR-Consortium de réalisation, both state-owned companies (together the “CDR companies”). In 2007 the disputing parties entered into a submission agreement agreeing that all pending disputes between them would be settled by arbitration.