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Mar 26, 2020

COVID-19: Status of Proceedings Before French Courts—Focus on International Arbitration Matters

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COVID-19: STATUS OF PROCEEDINGS BEFORE FRENCH COURTS—FOCUS ON INTERNATIONAL ARBITRATION MATTERS

In the context of the rapid spread of the novel coronavirus (“COVID-19”), French President Emmanuel Macron announced on 16 March 2020 a 15-day confinement of the population effective as of noon the following day. It is widely expected that the confinement will be further extended.

At the same time, the French court system has enacted continuity-of-operations plans (“plans de continuation d’activité”) designed to reduce court activity and the risk of further spread of COVID-19.

This note aims to provide information on the status of proceedings currently before French courts in light of this extraordinary situation, with a particular focus on proceedings concerning the recognition, enforcement and setting aside of international or foreign arbitral awards.

Timeline of the Measures Adopted

On 12 March 2020, President Macron announced a set of measures to combat the spread of COVID-19, including the closure of all French educational institutions, from daycare centers to universities, effective as of 16 March 2020 and until further notice.

On 14 March, the French Ministry of Justice issued instructions (“circulaire”) to all first instance courts (“tribunaux judiciaires”) and courts of appeal on how to align their operations with the measures taken by the French Government. That same day, Prime Minister Edouard Philippe announced social distancing measures designed to reduce physical contact between people.

On 15 March, the French Ministry of Justice issued a press release announcing that, beginning on 16 March, all courts would be implementing continuity-of-operations plans, pursuant to which all courthouses will be closed except for “essential litigations” (“contentieux essentiels”) in both civil and criminal matters.

The 15-day confinement of the population was announced on the following day.

On 22 March, the French Parliament passed a law enabling the French Government to declare a “state of health emergency” (“état d’urgence sanitaire”) in the face of the COVID-19 crisis and to take a number of emergency measures by orders. On 25 March, the French Council of Ministers adopted 25 orders pursuant to this law.

French Judicial Activity Limited to ‘Essential Litigations’

Overview

The measures described above have now been implemented throughout the French court system.

Each court has enacted a continuity-of-operations plan in accordance with the French Ministry of Justice’s 14 March circular. Since 16 March, all courthouses are closed to the public and court activity in civil and criminal matters is minimal or non-existent. The vast majority of hearings and issuances of judgments are postponed until further notice, or have been rescheduled for some far-off date.

Judicial activity is limited to the following “essential litigations” only:

  • Criminal hearings for pre-trial detention and judicial supervision measures (“Les audiences correctionnelles pour les mesures de détention provisoire et de contrôle judiciaire”)
  • Criminal hearings involving immediate appearances by defendants (“Les audiences de comparution immédiate”)
  • Presentations before investigating judges and liberty and custody judges (“Les présentations devant le juge d’instruction et le juge des libertés et de la détention”)
  • Hearings before judges responsible for enforcing sentences for the management of emergencies (“Les audiences du juge de l’application des peines pour la gestion des urgences”)
  • Hearings before the juvenile court and juvenile judges for the management of emergencies for, inter alia, educational assistance (“Les audiences du tribunal pour enfants et du juge pour enfant pour la gestion des urgences, notamment pour l’assistance éducative”)
  • On-call services of the public prosecutor’s department (“Les permanences du parquet”)
  • Summary proceedings before courts for emergency matters and emergency measures falling within the jurisdiction of family judges (“Les référés devant le tribunal judiciaire visant l’urgence, et les mesures urgentes relevant du juge aux affaires familiales”)
  • Hearings before civil liberty and custody judges (“Les audiences auprès d’un juge des libertés et de la détention civil”)
  • On-call services of courts for juvenile and emergency educational assistance (“Les permanences au tribunal pour enfants, l’assistance éducative d’urgence”);
  • Hearings before the investigating chamber for detention (“Les audiences de la chambre de l’instruction pour la détention”)
  • Hearings before the court of criminal appeals and the chamber responsible for enforcing sentences for the management of emergencies (“Les audiences de la chambre des appels correctionnels et de la chambre d’applications des peines pour la gestion des urgences”).

Given that the president of each court has been given a certain margin of discretion in enacting each court’s continuity-of-operations plan, the status of proceedings before French courts needs to be assessed on a case-by-case basis, by requesting information from each court.

As a result of the above measures, the vast majority of court hearings have been postponed.

Importantly, although judicial activity itself is minimal or non-existent in these civil and/or commercial proceedings, parties to judicial proceedings are not relieved of their obligation to comply with deadlines or procedural calendars for the filing of their submissions (as they can still file these submissions electronically), subject to the implementation of the law providing for emergency measures to address the COVID-19 crisis adopted by Parliament on 22 March 2020 (see below).

We address below the status of pending civil and/or commercial proceedings before four major French courts (the Paris Commercial Court, the Paris Court of Appeal, the Nanterre Commercial Court and the Versailles Court of Appeal).

Paris Commercial Court and Paris Court of Appeal

Paris Commercial Court (Tribunal de commerce de Paris): all hearings scheduled to take place before 17 April 2020 are postponed until further notice and no new hearings are to be scheduled before that date, except for hearings on summary proceedings in cases of clear emergency (“urgence caractérisée”). With respect to such cases, it remains possible for parties to request the President of the Court to authorize summary proceedings on short notice (“référé d’heure à heure”). The Court is also maintaining a service for the prevention of business difficulties (“prévention des difficultés des entreprises”).

Paris Court of Appeal (Cour d’appel de Paris): all hearings scheduled to take place before 30 April 2020 are postponed and all affected cases will be discussed at procedural hearings to be scheduled from 28 September 2020 onwards to set new hearing dates. Even though it is still possible to initiate summary proceedings for emergency matters, no oral hearings will be held, meaning that the Court will rule on the basis of the parties’ written submissions only.

Nanterre Commercial Court and Versailles Court of Appeal

Nanterre Commercial Court (Tribunal de commerce de Nanterre): all activity is suspended for an indefinite period (and until 5 May 2020 at the earliest). All hearings scheduled to take place between 16 and 20 March have been automatically postponed for eight weeks while hearings scheduled to take place afterwards have been postponed for six weeks. No judgments will be signed by the Court for the time being. It remains possible to initiate summary proceedings in cases of emergency, provided that prior authorization to bring summary proceedings on short notice (“référé d’heure à heure”) is requested and granted. The Court is also maintaining a service for the prevention of business difficulties (“prévention des difficultés des entreprises”).

Versailles Court of Appeal (Cour d’appel de Versailles): all hearings scheduled between 16 March and 20 April 2020 are postponed until further notice and no new hearings are to be scheduled before the latter date, except hearings on summary proceedings in cases of emergency and hearings on appeals brought at short notice upon authorization of the First President of the Court in cases where the rights of a party are in danger (“dont les droits sont en périls”).

Potential Future Measures by the French Government

On 22 March 2020, the French Parliament passed a law enabling the French Government to declare a “state of health emergency” (“état d’urgence sanitaire”) in the face of the COVID-19 crisis and to take a number of emergency measures by orders.

The French Government is now enabled to take measures that may have an impact on proceedings before French courts, including measures applying retroactively from 12 March 2020 onwards that are likely to affect procedural deadlines and timetables in pending or potential proceedings.

The French Government is thus enabled to take any measure:

  • “Modifying, interrupting, suspending or postponing deadlines whose expiry would result in nullity, void, foreclosure, lapse of a statute of limitations, inadmissibility, forfeiture of a right, expiration of a license or an authorization or the termination of a measure, with the exception of measures relating to detention or punitive sanctions. These measures shall be deemed to have become applicable beginning on 12 March 2020 and shall not exceed by more than three months the end of the administrative measures undertaken by the Government to slow the spread of COVID-19” (“Adaptant, interrompant, suspendant ou reportant le terme des délais prévus à peine de nullité, caducité, forclusion, prescription, inopposabilité, déchéance d’un droit, fin d’un agrément ou d’une autorisation ou cessation d’une mesure, à l’exception des mesures privatives de liberté et des sanctions. Ces mesures sont rendues applicables à compter du 12 mars 2020 et ne peuvent excéder de plus de trois mois la fin des mesures de police administrative prises par le Gouvernement pour ralentir la propagation du covid-19”); and
  • “Modifying, for the sole purpose of limiting the spread of COVID-19 among persons participating in court proceedings or their conduct, rules relating to territorial jurisdiction and the composition of administrative and judicial tribunals, as well as rules related to procedural timetables and deadlines for issuing judgments, public attendance at and the holding of hearings, the use of videoconference technology before such tribunals and the means of referring a matter to a court and the organization of adversarial proceedings.” (“Adaptant, aux seules fins de limiter la propagation du covid-19 parmi les personnes participant à la conduite et au déroulement des instances, les règles relatives à la compétence territoriale et aux formations de jugement des juridictions de l’ordre administratif et de l’ordre judiciaire, ainsi que les règles relatives aux délais de procédure et de jugement, à la publicité des audiences et à leur tenue, au recours à la visioconférence devant ces juridictions et aux modalités de saisine de la juridiction et d’organisation du contradictoire devant les juridictions”).

On 25 March 2020, the French Council of Ministers adopted 25 orders, which were published today in the Official Journal of the French Republic, including Order No. 2020-306 relating to the extension of deadlines that expire during the period of the state of health emergency and to the procedural adjustment of proceedings during that same period (“Ordonnance n° 2020-306 du 25 mars 2020 relative à la prorogation des délais échus pendant la période d’urgence sanitaire et à l’adaptation des procédures pendant cette même période”). This order applies to measures, deadlines and other time periods which have expired or will expire between 12 March 2020 and the date falling one month after the end of the state of health emergency, which will be declared pursuant to Article 4 of the law of 22 March 2020 (Article 1).

Specifically, Article 2 of Order No. 2020-306 provides that “[a}ny act, recourse, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation whose expiry or non-occurrence would result in nullity, sanction, void, foreclosure, lapse of a statute of limitations, non-opposability, inadmissibility, expiration, automatic withdrawal, application of a special legal regime, or in any right whatsoever not having arisen or being forfeited, and which should have been completed during the period mentioned in Article 1, will be deemed to have been completed in time if it is completed within a period that shall not exceed, from the end of the period mentioned in Article 1, the period provided by law within the limit of two months. The same applies to any payment prescribed by law or regulation for the acquisition or retention of a right.” (“Tout acte, recours, action en justice, formalité, inscription, déclaration, notification ou publication prescrit par la loi ou le règlement à peine de nullité, sanction, caducité, forclusion, prescription, inopposabilité, irrecevabilité, péremption, désistement d’office, application d’un régime particulier, non avenu ou déchéance d’un droit quelconque et qui aurait dû être accompli pendant la période mentionnée à l’article 1er sera réputé avoir été fait à temps s’il a été effectué dans un délai qui ne peut excéder, à compter de la fin de cette période, le délai légalement imparti pour agir, dans la limite de deux mois. Il en est de même de tout paiement prescrit par la loi ou le règlement en vue de l’acquisition ou de la conservation d’un droit.”)

Status of Proceedings Concerning the Recognition, Setting Aside and Enforcement of International or Foreign Arbitral Awards

Status of Pending Proceedings

Under the continuity-of-operations plans, proceedings concerning the recognition, enforcement and setting aside of international or foreign arbitral awards are not considered to be “essential litigations” and, consequently, are significantly affected by the French Government’s efforts to combat the spread of COVID-19.

As indicated above, hearings and the issuances of judgments have either been postponed until further notice or been rescheduled for a far-off date. Given that the majority of setting aside proceedings and appeal proceedings against recognition orders in international arbitration matters are brought before the Paris Court of Appeal, all hearings scheduled to take place before 30 April 2020 in such proceedings are postponed. Affected cases will be discussed at procedural hearings to be scheduled from 28 September 2020 onwards to set new hearing dates.

Accordingly, very few decisions related to international arbitration are expected to be rendered by French courts over the coming months.

Applications for Recognition or Enforcement (Exequatur)

Pursuant to Article 1516 of the French Code of Civil Procedure, awards rendered in international arbitration matters may only be enforced by virtue of an enforcement order (exequatur) issued by a judicial tribunal (“tribunal judiciaire”). This judicial tribunal is to be the judicial tribunal of the place where the award was made if the award was made in France, or the Judicial Tribunal of Paris if the award was made abroad.

In practice, given that most awards made in France are rendered in arbitration proceedings having their seat in Paris, the vast majority of arbitral awards made in France and abroad are enforced before the Judicial Tribunal of Paris (Tribunal judiciaire de Paris).

Under Article 1516, recognition proceedings are ex parte and applications to recognize an award shall be filed by a party with the court registrar (“greffe de la juridiction”), together with the original award and arbitration agreement or duly authenticated copies of the same.

For the duration of the measures undertaken by the French Government to combat the spread of COVID 19, it will not be possible to obtain the recognition or enforcement (exequatur) of an arbitral award before the Judicial Tribunal of Paris, as it is closed for all but the “essential litigations” discussed above (which do not include proceedings for the recognition and enforcement of an arbitral award). In any event, an application to recognize an award can only be filed in person at the judicial tribunal and cannot be filed electronically. Consequently, even if a party were to leave an application to recognize an arbitral award at the entrance of the Judicial Tribunal, there is no guarantee that a clerk and/or a judge would be present to process it.

Applications for Setting Aside

As an initial reminder, pursuant to Article 1519 of the French Code of Civil Procedure, an action to set aside an award (in international arbitration matters) must be brought before the Court of Appeal of the place where the award was made. In practice, given that most international arbitral awards made in France are rendered in proceedings having their seat in Paris, the Paris Court of Appeal has jurisdiction to rule upon the vast majority of applications to set aside awards rendered in international arbitration matters.
The measures that reduce the activity of French courts do not prevent parties from bringing setting aside proceedings with respect to international arbitral awards rendered in France, given that the application to set aside an award (“déclaration de recours en annulation”) is to be filed electronically.

Applications for setting aside may be filed electronically via the Private Virtual Network for Lawyers (RPVA). Once the application is submitted, the applicant has three months to file its first submissions in accordance with Article 908 of the French Code of Civil Procedure. When the applicant is a foreign party, this time limit is extended to five months from the date of submission of the application, in accordance with Article 643 2° of the French Code of Civil Procedure. These deadlines are mandatory and failure to comply with them will result in the setting aside proceedings being declared void (“caduque”).

Pursuant to Article 1526 of the French Code of Civil Procedure, it is also possible, in principle, to request a ruling from the First President of the Paris Court of Appeal (or the Conseiller de la mise en état, if one has already been assigned) to stay or set the conditions for the enforcement of an award in situations where enforcement measures could severely prejudice the rights of a party. However, since no oral hearings before the Paris Court of Appeal are possible, the decision would be made solely on the basis of the parties’ written submissions.

Attachment Proceedings

In France, when a creditor has an enforcement order (“titre exécutoire”) against its debtor (e.g., with respect to an arbitral award or a foreign judgment recognized in France or a judgement rendered by a French court), the creditor can directly request a bailiff to carry out attachments against the debtor, without having to request authorization from a judge.

Following the measures undertaken to combat the spread of COVID 19, bailiffs do not carry out attachments for the time being.

With respect to attachments of monetary debt owed to a debtor in the hands of a third party (“saisies-attributions de créances”) already carried out, the award debtor can challenge these attachments and request that they be lifted by filing the appropriate summons before the enforcement judge of the place of the relevant attachments. Any such challenge must be made within one month of the notification of the attachment pursuant to Article R. 211-11 of the French Code of Civil Enforcement Proceedings (which is increased to three months when the debtor is a foreign party, pursuant to Article 643 2° of the French Code of Civil Procedure).

The Enforcement Judge will register such a challenge to an attachment provided that it is filed on time. However, for the time being, in Paris and, to our knowledge, in the rest of France, no hearing will take place on the challenge, as such challenges are not defined as “essential litigations”. As a result, the challenged enforcement measures would remain in effect until lifted by the Enforcement Judge. Before the Paris Enforcement Judge, as an exception, an award debtor may be authorized to challenge such attachment at short notice, and a hearing will be held, but only in cases of “extreme urgency” (“urgence extrême”).

It also remains possible to make urgent requests for authorization to make conservatory attachments before the Paris Enforcement Judge (although such authorization is not required to make conservatory attachments on the basis of an arbitral award that has not yet been recognized in France). In any event, in light of the fact that bailiffs are not carrying out attachments for the time being, this possibility is likely to be of little interest in practice.

Conclusion

We have listed some key points to be checked in the present circumstances. Our International Arbitration team is experienced in these issues and remains available to discuss them with you and answer specific questions you may have.

Authors and Contributors

Yas Banifatemi

Partner

International Arbitration

+33 1 53 89 70 00

+33 1 53 89 70 00

Paris

Benjamin Siino

Partner

International Arbitration

+33 1 53 89 70 00

+33 1 53 89 70 00

Paris

François Bordes

Associate

International Arbitration

+33 1 53 89 48 20

+33 1 53 89 48 20

Paris