By Louise Nicot
By a decision dated 3 June 2025, the International Commercial Chamber of the Paris Court of Appeal dismissed the application to set aside the arbitral award rendered under the arbitration rules of the London Court of International Arbitration (LCIA Arbitration Case No. 215285), in the dispute between the French companies S.A.S. B.Wing and S.A.S. Flight 83 (hereinafter, “the Claimants”) and the U.S. company Wingstop Franchising LLC (hereinafter, “the Respondent”).
In this case, the dispute concerned the performance of a franchise agreement (hereinafter, “the Agreement”) entered into in 2017 between the three companies, which operate in the fast-food sector. Under the Agreement, the Respondent granted the Claimants exclusive rights to operate its brand in France, in return for the opening of 75 restaurants over a 12-year period. As the Claimants only opened one restaurant and thus failed to meet the agreed timeline, the Respondent proposed an amendment to the Agreement, which was rejected by the Claimants, before unilaterally terminating the territorial exclusivity in February 2021. After rejecting several proposed locations outside the contractually agreed territory, the Respondent initiated arbitration proceedings in 2021, which resulted in an award unfavorable to the Claimants rendered on 27 September 2023. The Claimants then filed for annulment of the award before the Paris Court of Appeal on 27 October 2023.
In their first ground for annulment, based on Article 1520, paragraph 1 of the French Code of Civil Procedure, the Claimants argued that the arbitral tribunal lacked jurisdiction, on the basis that the Respondent had forfeited its right to arbitration by transferring it to a third party. The Court dismissed this argument, holding that the possible loss of the right to arbitrate due to a transfer of rights concerns the admissibility of the claims submitted to arbitration, not the jurisdiction of the arbitral tribunal.
In their second ground, based on Article 1520, paragraph 3 of the French Code of Civil Procedure, the Claimants alleged that the sole arbitrator failed to carry out his mandate by not ruling on the legal consequences of the Respondent’s contractual breaches, despite the Claimants having expressly raised these issues in their counterclaims. The Court rejected this ground, noting that such a failure does not justify annulment of the award, as an omission to rule is not one of the grounds for annulment under the Code.
In their third and final ground, based on Article 1520, paragraph 5 of the French Code of Civil Procedure, the Claimants alleged that the recognition or enforcement of the award would violate international public policy, as the arbitrator had, in their view, breached Article L. 330-3 of the French Commercial Code by recognizing the Respondent’s right to reject proposed sites not specified in the Agreement. The Court rejected this ground, finding that the Claimants failed to demonstrate that the allegedly missing information, in particular, regarding the broader site rejection rights, fell within the scope of Article L. 330-3 of the French Commercial Code, or that the award violated international public policy.
The Court dismissed the application to set aside the award, ordered the claimants jointly and severally to pay the costs, and the respondent €50,000 pursuant to Article 700 of the French Code of Civil Procedure. In conclusion, the judgment reaffirms the distinction between the concepts of admissibility and jurisdiction of the arbitral tribunal, and specifies that an omission to rule (infra petita) constitutes a breach only if a party was prevented from presenting its claims.