French Supreme Court Rules Rome I Forbids Application of Religious Law

In a judgment of 11 February 2026, the French supreme court for private and criminal matters (Cour de cassation) ruled that Article 3(3) of the Rome 1 Regulation forbids courts to apply non state law. As a result, it allowed an appeal against the judgment of a court of appeal which had applied Jewish law.

The case was complex, as the parties had initially agreed to submit their dispute to arbitration, and a rabbinical arbitral tribunal had rendered an arbitral award. But the parties disagreed on the aftermath of the award and after one refused to go back to arbitration to settle the dispute, the other initiated proceedings in court. The issue arose as to whether, pursuant to the arbitral award, French courts should resolve the dispute in accordance with Jewish law or whether they should ignore the determination of the award and determine the applicable law irrespective of its existence.

Background

Two investors, who were most likely Jews and resident in France, agreed to take a loan to invest into a summer resort for Jewish kids in Normandy. A dispute arose that the investors submitted to Jewish arbitration. The rabbinical arbitral tribunal decided pursuant to Jewish law and ruled that,

1) should the investors decide to continue their joint project, the investor managing the resort would reimburse the loan and pay taxes, but would not pay a rent to the other investor, and

2) should the investors decide to terminate their joint project, they should part ways in accordance with the Jewish “God et Igoud” procedure.

During 5 years, the investor managing the resort paid the loan and taxes, and did not pay a rent to the other investor. But after the loan was entirely reimbursed, the other investor demanded a rent. As the investor managing the resort refused, the other investor took steps to enter into an arbitration agreement to submit the dispute to Jewish arbitration, but finally changed his mind and initiated proceedings in French courts seeking payment of rents and taxes. The defendant made a counterclaim seeking the authorisation to sell the property. In the meantime, the summer resort had ceased its activity.

Applying the Arbitral Award

At first sight, it seemed that the dispute was governed by the arbital award. The arbitral tribunal had ruled that, should the parties want to terminate the joint investment, it should be liquidated pursuant to a specific procedure of Jewish law, “God et Igoud”.

This is what the parties argued before the lower courts. The Court of Appeal of Rouen ruled that the arbitral award had authority, and that courts should therefore apply it. The award, however, had not elaborated on the content of this Jewish procedure. The Court heard rabbis as expert witnesses and ascertained the content of Jewish law.

The investor seeking the sale of the resort challenged the judgment of the Court of Appeal before the Cour de cassation. Again, the debate focused on the effect and impact of the arbitral award. The reporting judge wrote a report entirely focused on this issue.

Applying the Rome I Regulation

At some point of the proceedings, however, the Cour de cassation raised ex officio the application of Article 3(3) of the Rome I Regulation and, after inviting the parties to present observations on this point, decided the case on this ground.

As a preliminary question, the Court ruled that the parties had waived “the arbitration”, and that the exclusion of arbitration from the scope of the Rome I Regulation was irrelevant. It seems clear that the parties agreed to resolve the aftermath of the award in court, as none of them challenged its jurisdiction and both filed substantive claims. The Cour de cassation however ruled that the parties “had not waived the choice of the Jewish rule in God et Igoud as a result of the award”.

Article 3(3) of the Rome I Regulation is concerned with domestic contracts. The dispute was indeed a dispute between two French residents concerned with an investment in France, although one of the parties had moved to Israel during the proceedings.

The Cour de cassation ruled that, as the Court of Appeal had applied Jewish law, it had violated Article 3(3) which forbad French courts to apply non state law.

The Court of Appeal, which found that the parties had not waived the choice of applying the rabbinical rule of  « God et Igoud » resulting from the award, applied a rule which did not belong to the law of state, and thus violated Article 12 of the French Code of Civil Procedure and Articles 3(1) and 3(3) of the Rome I Regulation.

Assessment

The judgment of the Court seems to be based on a literal interpretation of Article 3(3), which provides that:

Whereall other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

The view of the court seems to be that Article 3(3) only allows choice of foreign laws in domestic contracts, and thus forbids choice of non state laws.

If the Court wanted to focus on the text of the Regulation, it should at the very least have considered Recital 13 of the Preamble to the Regulation, which expressly addresses the issue of the application of non state law. Recital 13 reads:

This Regulation does not preclude parties from incorporating by reference into their contract a non-State body of law or an international convention.

The fundamental problem with the judgement seems to be that it failed, or did not attempt to assess the rationale behind Article 3(3).  If it had, it might have come to the conclusion Article 3(3) equally applies to non state law, and that its rationale is the exact same as the rationale of Recital 13.

Contrary to Article 3(1), Article 3(3) does not allow the parties to choose the law governing the contract. It only allows to choose foreign law to displace the default rules of the local state law. Article 3(3) expressly provides that the mandatory rules of the local state law remain applicable, which shows that only the local law actually governs the contract, through its mandatory provisions.

Choice of foreign law in domestic contracts through Article 3(3), therefore, only incorporates provisions of foreign law in the contract. It contractualises foreign law. This is exactly what Recital 13 provides. Non state law cannot be chosen as the law governing the contract, but it can be incorporated and thus applied as contractual terms, to the extent that it does not violate mandatory rules of the applicable state law.

The ruling of the Cour de cassation that Article 3(3) forbids French courts to apply non state law in general, and Jewish law in particular, is thus wrong. Article 3(3) allows the application of non state law insofar as it does not violate the mandatory rules of the local state law.

The Cour de cassation should therefore have determined first whether the rules of the French law of the sale of jointly owned property (Art. 815 and f. of the French civil code) are mandatory rules or whether the parties may contract out from them.