French Supreme Court Decides Choice of Law Rules Apply in Interim Proceedings

In a judgement dated 18 November 2020, the French Supreme Court for private and criminal matters (Cour de cassation) ruled that the obligation to apply choice of law rules equally applies in interim proceedings. In contrast, the court had ruled in 1996 that French courts did not have the power to apply choice of law rules in interim proceedings.

Background

The case was concerned with a traffic accident which had occurred in Italy. A car driven by a French woman had run over a professional Australian cyclist living in Monte Carlo (which one is anyone’s guess). The victim initiated interim proceedings in France against the driver and her insurer seeking the appointment of a judicial expert and a provisional payment order.

Various provisions of the French Code of Civil Procedure grant French courts the power to issue provisional payment orders (référé provision) where a claim cannot be “seriously disputed”. Such orders may be granted in interim proceedings for up to 100% of the claim. They are not final, and in theory the defendant may always reopen the issue in the proceedings on the merits. In practice, defendants often do not bother and provisional payment orders are never challenged.

The issue in this case was whether the French court had the power, and indeed the duty, to apply French choice of law rules and, as the case may be, assess whether the claim was undisputable be reference to the law governing the substantive rights.

Applicable Law

The case was clearly concerned with a tort claim. In many Member states, the Rome II Regulation would have applied, but France is a party to the 1971 Hague Convention on the law applicable to traffic accidents. Pursuant to Article 28 of the Rome II Regulation, the Regulation does not affect the application of the 1971 Convention because it also applies in third states (Switzerland, Morocco, Ukraine, etc…).

The Hague Convention is of universal application, and it thus applied in French courts irrespective of the fact that the accident occurred in a third state, and designated the law of a third state. The choice of law rules of the Convention are pretty complex, and include a number of exceptions to the application of the law of the place of the accident, in particular where the car was matriculated, and the victim was outside the vehicle and resided, in the same country (art. 4), but that was not the case here. So Italian law likely applied as the law of the place of the accident (Article 3).

However, maybe because it had limited knowledge of private international law or, more likely, because it had no intention of applying Italian law, the court of appeal of Aix en Provence applied the Rome II Regulation and found that the exception clause in Article 4(3) allowed for the conclusion that French law was manifestely more connected to the tort.

The Cour de cassation did not even bother to comment on the application of the exception clause. It set aside the judgment of the court of appeal on the ground that it had applied the wrong choice of law rule, as it had failed to apply the Hague Convention.

Most importantly, it held that the court of appeal had the duty to apply the Hague Convention to determine the applicable law, “even in interim proceedings” (“même statuant en référé“).

Substance and Procedure

Although the judgment of the Cour de cassation is concise, its meaning is clear.

It is not that foreign law might be applied to procedure or to determine which provisional measures might be available. This is governed by the law of the forum. So, the availability of the two provisional measures sought by the  victim was entirely governed by French law, and so were the requirements for granting them. French law provided that provisional payment orders could only be granted if the claim could not seriously be disputed.

Many provisional measures, however, aim at protecting and anticipating substantive rights. Freezing orders protect the payment of a claim. Under French law, a provisional payment order anticipates the payment of a claim. The issue was whether the existence of such claim should also be assessed in accordance with the law of the forum, or whether it should be assessed in accordance with the law governing the relevant claim. The Cour de cassation rightly holds that it should be in accordance with the law governing the relevant claim.

Assessment

The judgment is right. There is no acceptable alternative to the application of the law governing the claim. If the law of the forum is applied, the resulting measures will protect imaginery rights. Another possibility would be to rule that, as foreign law cannot be applied in interim proceedings, the application should be dismissed where the law of the forum does not apply. For protective measures at least, this would border denial of justice. But this was the outcome of the 1996 judgment of the Cour de cassation where it was held that French courts did not have the power to apply choice of law rules to determine whether the creditor seeking a freezing order had a good arguable case, and the application denied.

Of course, time is typically of the essence in interim proceedings. The establishment of foreign law may then raise difficulties. But the establishment of facts raises the same difficulties. For certain proctective measures such as freezing orders, the answer is to lower the standard of proof. It is possible to do the exact same for establishing foreign law. German courts have so held in several cases: only the likelihood of the content of foreign law should be established at that stage.

For other provisional measures, the standard of proof is high, if not higher. This is the case for establishing that a claim cannot be seriously disputed under French civil procedure. But such measures are not urgent, and it would not be a denial of justice to deny the remedy and to await for the outcome of the proceedings on the merits.