On 2 September 2020, the French Supreme Court for private and criminal matters (Cour de cassation) issued an interesting decision on both service of judicial documents and international jurisdiction (Cass., First Civil Chamber, 2 September 2020, no. 19-15.337, unreported).
Although elementary at first view, the case provides a good opportunity to discuss the global understanding and acceptance of European private international law rules by French courts.
Facts and Legal Issues at Stake
Private investors living in France suffered financial losses following financial services contracts concluded with a company governed by English law, established in London. They sued the company before French courts. Despite an agreement conferring jurisdiction in favour of English courts provided for in the general conditions, the Parisian tribunal accepted its jurisdiction. The Parisian Court of appeal confirmed the judgement. The company appealed to the French Supreme Court.
First, the company disputed, on the basis of (inter alia) the Service of documents Regulation, the validity of the writ of summons which was served to the branch manager of the company in France, pursuant domestic procedural rules and not at its head office in London. Second, the company challenged the French jurisdiction by virtue of the jurisdiction clause, pursuant Brussels I bis Regulation, while the first judges had applied the French jurisdictional rules to invalidate the clause.
Were these two EU regulations the relevant legal basis in this case, instead of the domestic PIL rules?
Response of the French Supreme Court
Responding to the first litigious item, the French Supreme Court precludes the application of the Service of documents Regulation and confirms the decision of the Court of appeal. The presence in France of a representative of the foreign company eliminates the cross-border dimension of the transmission of documents. Therefore, the transmission of the writ of summons to the branch manager of the company in France was valid since it complied with French domestic procedural law. Then, regarding the competent jurisdiction, the validity of the agreement conferring jurisdiction shall be assessed pursuant Brussels I bis Regulation and not pursuant to national PIL. EU law prevails on national rules. The French Supreme Court invalidates the decision of the Parisian Court of appeal on that latter ground.
Behind these two legal issues, the case deals with the articulation between EU and national PIL rules. Despite the well-known principle of primacy of EU law, French judges still have difficulties to implement EU PIL. More globally, they are maybe not fully aware of the multilevel sources in the field and, in particular, how their articulation works
But why? How could we explain this “judicial malfunction” regarding EU PIL? Without being dramatic, nor prophetic, I would like to suggest two possible lines of thought.
On the Service of Documents Regulation
The non-application of the Service of documents Regulation is not surprising regarding the case law of the French Supreme Court. The Commercial Chamber of the Court ruled exactly the same in 2012, regarding another London-based company having a representative in France (Comm. Chamber, 20 November 2012, no. 11-17.653). Domestic procedural rules on service of documents regain the upper hand thanks to the legal representation ad agendumin France. But the French Supreme Court does not give any explicit grounds for its ruling regarding EU law. The European Regulation is set aside without consistent legal explanations. It surely contributes to the lack of awareness of French judges regarding EU PIL instruments in procedural and cooperation matters.
Some scholars have mentioned an implicit reference to recital 8 of the Regulation, which lays down that it “should not apply to service of a document on the party’s authorised representative in the Member State where the proceedings are taking place regardless of the place of residence of that party”. Recital 8 should provide for a kind of subsidiarity of the European regime on cross-border transmission of documents, vis-à-vis national rules.
However, the European Court of Justice had the opportunity to clarify the scope of this recital in Adler (C-325/11). The ECJ ruled that
from a systematic interpretation of the regulation […] [it] provides for only two circumstances in which the service of a judicial document between Member States falls outside its scope, namely (i) where the permanent or habitual residence of the addressee is unknown and (ii) where that person has appointed an authorised representative in the Member State where the judicial proceedings are taking place (para 24).
In order to support a uniform application of the regulation, the circumstances in which a judicial document has to be served in another Member State should not be conducted by reference to the national law of the Member State in which the proceedings take place (see paras 26-27). This is, however, the core reasoning of the French Supreme Court.
When should it be considered that the litigant (here the London-based company) has appointed an “authorised representative”? Should the manager of the branch of the company be considered a “representative” within the meaning of the Service of documents Regulation? In the end, the French Supreme Court could have referred a question to the Court of Justice. Its ruling takes the opposite direction.
At least, it shows that a legal explanation from the French Supreme Court of its solution would have not been superfluous.
On the Brussels I bis Regulation
On the contrary, when explaining why French PIL rules are not the relevant legal basis to control the validity of the prorogation, the French Supreme Court takes a true educational approach towards the lower courts (see already Civ. First Chamber, 23 January 2008, no. 06-21.898 under Article 23 of Brussels I regulation). The validity of the agreement conferring jurisdiction had to be assessed under Article 25 of the Brussels I bis Regulation, applicable to prorogations of jurisdiction in favour of the national Court of an EU Member State (including the UK at the time of the dispute) in civil and commercial matters.
Why did the lower courts did not apply EU PIL? Quite ironically, the absence of French PIL codification can be an explanation for the faulty reasoning of the lower courts. It should be recalled that the French rules of international jurisdiction do not formally exist. They are the result of an extension of the domestic territorial jurisdiction rules into international disputes (see Civ. First Civil Chamber, 30 October 1962, Scheffel). This could explain why the lower courts applied the French Civil Procedural Code, mixing up domestic and international disputes, and the related applicable procedural rules.
Such a basic legal mistake grounded on the oversight of EU PIL requires all the attention of the French expert group on French PIL codification recently created by the French Ministry of Justice. A future Code should probably recall that the validity of an agreement conferring jurisdiction in a cross-border relationship has to be assessed pursuant supra-national sources, in particular the 2005 Hague Convention and the Brussels I bis Regulation and, by default only, pursuant national PIL rules. Clarity regarding multilevel sources in PIL (and their articulation) is crucial for operational legal practice.
Last but not least, Brexit will add more complexity in such a case as it will require applying the 2005 Hague Convention instead of the Brussels I bis Regulation. The London-based company will have to be regarded as located in a third State which is a Contracting Party to the Convention (Article 26(6) of the 2005 Hague Convention).
French courts, get ready!