This thread is resolved. Here is a description of the problem and solution.
Problem: shop pagination doesn't work in second language, returning a 404 error
Solution: there was a problem with rewrite rules, we had some functionality to have our category & product base the same string, namely "shop".
But this was interfering with second pages because the regex that was handling this functionality wasn't supporting pagination.
This is the technical support forum for WPML - the multilingual WordPress plugin.