Newsletter n° 21 – Business law
REGULATIONS
Duty of vigilance of parent companies and ordering companies
Bill of 11 February 2015
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Hamon Law
Orders of 11 and 17 March 2015
JURISPRUDENCE
… of March 24, 2015
Opposability of the declaration of exemption from seizure prior to the opening of the liquidation procedure
… of March 24, 2015
Statement of claims: additional mention of a court decision
… of March 10, 2015
Terms of service of judgment
… of April 8, 2015
End of the continuation plan
… of March 31, 2015
Termination of the right to commission of the commercial agent
… of April 8, 2015
Nature of the annual obligation to inform the guarantor
… of March 25, 2015
Transfer of the clause attribution of jurisdiction
… of March 3, 2015
Non-existence of an obligation of non-competition of the partner of SARL
REGULATIONS
Duty of vigilance of parent companies and ordering companies
The bill relating to the duty of vigilance of parent companies and ordering companies was adopted on March 30, 2015, at first reading by the National Assembly.
This text mainly provides that companies which employ, at the end of two consecutive financial years, at least five thousand employees within them and in their direct or indirect subsidiaries whose head office is located on French territory, or at least ten thousand employees within them and in their direct or indirect subsidiaries whose head office is located in France or abroad, must establish and effectively implement a vigilance plan.
The procedures for presenting and applying the vigilance plan as well as the conditions for monitoring its implementation must be the subject of a decree.
In the event of non-compliance with these provisions, the text provides for the possibility for the president of the court ruling in summary proceedings to impose a civil fine, the amount of which may not exceed 10 million euros.
This same sanction would be applicable in the event of the implementation of the company's liability. The text was tabled in the Senate on March 31, 2015. No committee work date has yet been set.
HAMON law: price reduction announcement
According to the decree of March 11, 2015 1 , any price reduction announcement is legal provided that it does not constitute an unfair commercial practice. It is specified that in the event of an announcement made in a commercial establishment, the labelling, marking or display of prices include:
- the advertised reduced price,
- the reference price which is determined by the advertiser and from which the price reduction.
Similarly, the price reduction of a uniform rate, relating to clearly identified products or services, can be made by cash discount.
In this case, this modality must be the subject of information. Finally, the decree specifies that the advertiser must be able to justify the reality of the reference price from which the price reduction is announced. HAMON LAW: PRIOR INFORMATION ON THE PROVISIONS OF PERSONAL SERVICES
Published in the official journal of March 25, 2015, the decree of March 17, 20152, fixes in addition to the posting already carried out, a list of information relating both to the service provider, than the services it provides.
JURISPRUDENCE
Opposability of the declaration of unseizability prior to the opening of the liquidation proceedings
Com. March 24, 2015 (No. 14-10.175) FS-PB:
The Court of Cassation recalls here that the debtor can oppose to his liquidator the declaration of unseizability that he made before being placed in judicial liquidation.
Consequently, the judge-commissioner could only consider that the declaration of exemption from seizure is opposable only to creditors whose rights arose after the publication of this declaration and on the occasion of the declarant's professional activity and authorize the liquidator to proceed with the sale of a building which could not be seized.
Statement of claims: additional mention of a court decision
Com. March 24, 2015 (n°14-10.954) F-PB:
A company has had its tax situation audited.
At the end of this audit, a role was rendered enforceable for the recovery of corporation tax due for the years 1993 to 1995. By judgment of April 16, 2002, the administrative court rejected the company's request to discharge or reduction of this tax. A judgment of July 11, 2002 opened the company's receivership proceedings. On September 16, 2002, the public accountant declared his claim, in view of the aforementioned enforceable title. On October 8, 2003, the supervising judge noted that proceedings were in progress due to the appeal filed by the company against the decision of the administrative court. The administrative court of appeal confirmed this by a final decision of July 7, 2005 which was mentioned on the statement of claims, which the company contested. The Court of Cassation confirms the appeal judgment supplementing the statement of claims with the mention of the judgment insofar as the Court of Appeal did not have to carry out any verifications other than that of the definitive nature of the the decision of the administrative court of appeal to complete the statement of claims by mentioning this decision.
Methods of service of judgment
Com. March 10, 2015 (n°13-22.777) F-PB:
In this case, a company had been placed in receivership and then in judicial liquidation.
The supervising judge had accepted the request of a creditor, seller, to claim the price of equipment and had authorized this creditor to recover the price from the sub-purchaser. The creditor then assigned the sub-purchaser and his action was declared admissible. The sub-purchaser criticizes the judgment for declaring the action admissible when the orders of the supervising judge had not been notified to him by the registry. The Court of Cassation dismissed the appeal on the grounds that it follows from Article 651 paragraph 3 of the Code of Civil Procedure that the notification of a judgment by way of service on the initiative of a party is authorized, even though the law provides for it in the ordinary form, at the behest of the registry.
Continuation plan term
Com. April 8, 2015 (n°13-28.061) F-PBI:
At the end of a recovery plan and for lack of payment during it, a creditor who had declared his claim after the adoption of the plan, summoned the debtor before the judge in chambers for payment of a provision.
The debtor was ordered to pay a provision and then challenged the decision, invoking the existence of a serious dispute relating to the creditor's standing to act.
The Court of Cassation dismissed the appeal. According to the Court, when the continuation plan has come to an end without having been the subject of a resolution decision, the creditor recovers his right of individual action against the debtor.
Termination of the right to commission of the commercial agent
Com. March 31, 2015 (No. 14-10.346) FS-PB:
The breach of a commercial agent contract having been declared abusive, the agent had sued the principal for compensation for his damage and for payment of the commissions remaining due.
The principal was ordered to pay a certain amount of commission and challenged this decision by invoking freedom of evidence. According to the Court of Cassation, the right to commission can only be extinguished if it is established that the contract between the third party and the principal will not be performed and if the non-performance is not due to circumstances attributable to the principal. In the present case, the only mentions concerning the causes of the reductions or assets, having been affixed by the principal, these cannot suffice, in the absence of other proof, to demonstrate that they correspond effectively to the different situations agreed in which can be done, nor, as such, to justify a subsequent reduction in the amount of commissions remaining due to the agent. Consequently, the Court considers that the principal does not provide the proof, which is incumbent upon him, of the extinction of his obligation to pay the commissions corresponding to the contracts entered into and dismisses the appeal.
Nature of the surety's annual information obligation
Com. April 8, 2015 (n°13-14.447) FS-PBI:
A credit institution, a creditor, challenged the appeal judgment pronouncing the nullity of the suretyship which it intended to rely on in order to obtain payment of its claim.
The court had indeed held that at the time when the surety had invoked the nullity of his commitment, the suretyship contract had not yet been executed by the sole issuance of the annual information which was legally due to him, so that the objection of nullity was admissible. According to the appeal, the annual information issued by the creditor to the surety constituting an act of execution of the suretyship, the exception of nullity could not be raised to defeat the request for execution of this legal act.
The Court of Cassation confirmed the appeal decision on the grounds that the various obligations imposed on the professional creditor are only legal obligations sanctioned by the forfeiture of the right to accessories of the claim and not the consideration for the obligation to the caution.
Transmission of the jurisdiction clause
1st Civil. March 25, 2015 (n°13-24.796) F-PB:
In the context of a dispute between a sub-purchaser and a supplier manufacturer established in the United Kingdom, the latter raised an objection to the jurisdiction of the French courts, by relying on the jurisdiction clause appearing in the initial contract, in favor of the English courts.
The Court of Appeal declined jurisdiction.
Indeed, according to the court, the supplier manufacturer had accepted the delegation of the sub-purchaser which had been made by the purchaser. Therefore, in the absence of express will to the contrary by the parties, it was appropriate to apply, in the relations between the supplier manufacturer and the sub-purchaser, the clause conferring jurisdiction stipulated by the original contract. The Court of Cassation notes that it follows from the case law of the Court of Justice of the European Union (CJEU, 7 February 2013, Refcomp, C-543/10) that a clause conferring jurisdiction, agreed in a contract concluded between the manufacturer supplying goods and the purchaser thereof, cannot be invoked against a third party sub-purchaser who, at the end of a succession of property transfer contracts concluded between parties established in different Member States, has acquired this good and wants to take action against the supplier manufacturer for reimbursement of the sums paid by way of payment of the price of the goods, unless it is established that this third party has given his effective consent with regard to this clause in the conditions of the aforementioned text. Consequently, the Court reverses the judgment of appeal.
Non-existence of a non-competition obligation of the SARL partner
Com. March 3, 2015 (n°13-25.237) FD:
In this case, the co-founder and manager of a limited company had left office in 2009 to carry out a competing activity in another company that he had founded.
In 2011, after authorization by the shareholders' meeting, he sold his shares and undertook not to canvass certain of the company's clients. Believing that he had committed acts of unfair competition, as soon as he left office, a partner of the first company sued him for payment of damages. Sentenced to pay damages by the Court of Appeal, the co-founder of the company contests the judgment before the Court of Cassation. The Court of Cassation reverses the judgment. According to the Court, unless otherwise stipulated, the member of a limited liability company is not, in this capacity, required to refrain from carrying on an activity competing with that of the company and must only refrain from acts of unfair competition.
