French Court Rules Duty of Vigilance is an Overriding Mandatory Provision

This post was contributed by Olivera Boskovic, who is a professor of law at the Université Paris Cité (formerly Paris Descartes).

On 12 March 2026, the 34th Civil Chamber of the Tribunal judiciaire ofParis (first instance court) rendered an important judgment in the case commonly known as Yves Rocher. The dispute arose from the mass layoffs in 2018 at a Turkish subsidiary of the Yves Rocher group, following the establishment of the local union Petrol‑Is. It was alleged that the dismissals were linked to the employees’ trade union membership. Former employees, the Turkish trade union and two French NGOs Sherpa and Action Aid, claimed that the parent company had breached its legal obligations under the French Duty of Vigilance Law (Law No. 2017‑399, codified in Articles L.225‑102‑1 and L.225‑102‑2 of the French Commercial Code) and claimed compensation for their damages (See also the comment of G. Van Calster who uploaded the judgment here).

Background

Before addressing the merits, the court had to address a preliminary objection to the admissibility of the claim raised by the defendant company. Indeed, the company considered that the claim was time-barred by application of Turkish law, designated by article 4 of the Rome II regulation. This argument compelled the court to address the thorny question of whether the 2017 Duty of Vigilance Law should be regarded as an overriding mandatory rule and to determine how it should be applied in cross-border cases. The issue was raised as soon as the bill was introduced, and it has been discussed ever since. The duty of vigilance law essentially contains two provisions which are now codified in the commercial code. The first creates an obligation, for certain companies, to establish a preventive vigilance plan. The second allows for the possibility of sanctioning any breach of that obligation, by compensating for any harm that may have been caused as a result of that breach. But it does this by referring to the general law of civil liability contained in the civil code.

Article L. 225-102-2 of the Commercial Code is drafted as follows :

“Under the conditions set out in Articles 1240 and 1241 of the French Civil Code, a breach of the obligations defined in Article L.225‑102‑1 of this Code engages the liability of the person responsible and obliges them to compensate for the harm that the proper fulfillment of these obligations would have prevented.”

This is where the difficulty lies.

The defendant’s argument was based on the fact that this general referral must be interpreted as meaning that when the situation is international the compensation claim will remain governed by the law designated by the choice of law rule. This interpretation is not unheard of. Many commentators have expressed the view that the 2017 law is not an overriding mandatory provision. For the preventive aspect, such a characterization would in any event be pointless since it is undisputed that the law only applies to French companies. On the other hand, the question is debated concerning civil liability. Although some commentators are in favour of such a characterization, the fact that the legislator referred to the general civil liability regime has indeed been viewed as a difficulty insofar as the classification as overriding mandatory provisions should remain exceptional and be limited to clearly identified rules. Along these lines, the defendant argued that the general regime of civil liability for fault cannot be elevated to the rank of overriding mandatory provisions within the meaning of article 16 of the Rome II regulation, and that even if this characterization was to be accepted for articles 1240 and 1241 of the civil code it could not be extended to other provisions and namely to article 2224 which lays down the rules on limitation. Therefore, the question of limitation must be determined by the law governing the non- contractual obligation which is designated by article 4 of the Rome II regulation, i.e, in this case by Turkish law.

Judgment

The argument was rejected by the court. The starting point of its reasoning was the case law of the CJEU. The court stated that it follows from that case law that the concept of overriding mandatory provisions must be interpreted restrictively and that such a characterization is subject to the fulfilment of two conditions: a sufficiently close connection with the territory of the forum, and the protection of a fundamental interest within the legal order of the forum. It is, of course, the second condition that proves problematic. Relying on the travaux préparatoires, but failing to take into account some elements such as the partial invalidation of the statute by the Constitutional Council, the court concluded that the 2017 law does indeed meet this condition and that the French legislator clearly intended to confer on these provisions the status of overriding mandatory provisions. More precisely the court held that :

“It follows from the foregoing that the Turkish legislation must be displaced in favor of the national rule, which mandatorily governs the situation within the meaning of Article 16 of the Rome II Regulation, under the conditions of the special regime, grounded in the general law of tort liability. The French law designated as applicable to the substance also applies to limitation periods, in accordance with the wording of Article 15(h) of the Regulation, and moreover in view of the close connection between the law applicable to the merits and to limitation.”

The objection to the admissibility of the claim based on limitation by virtue of Turkish law is hence rejected. Various other objections to admissibility were presented. They meet the same fate except for the objection based on lack of legal standing due to a previous settlement. This objection is accepted. Out of eighty-one former employees, only nine, who had not signed a 2019 settlement agreement, retained standing.

Moving to the merits the court found that the mother company had indeed breached its obligations and that the conditions of harm and causality were fulfilled. Hence the court awarded 8 000 Euros as compensation to six former employees, 40 000 Euros to the union as well as symbolic damages of one Euro to the two NGOs.

Comment

The significance of the decision lies in the characterization of the duty of vigilance law including, by the effect of its referral, the general civil liability regime in this context, as overriding mandatory provisions.

However, before coming to the main point, it is worth saying a few words about the specific problem of limitation. Indeed, the court considers that because French law “mandatorily governs the situation within the meaning of Article 16 of the Rome II Regulation”, it also applies to limitation (Interestingly under French law and Turkish law the same, five-year, limitation period applies. However, the starting point provided for by French law made it possible to conclude that the claim was not time-barred).

The problem of limitation in relation with liability actions for the violation of an obligation of vigilance (or corporate sustainability due diligence in the language of the European legislator) is a well-known problem. It was raised not only by commentators of the French law but also in the context of the CSDDD (Directive EU 2024/1760, adopted on 13 June 2024) as soon as the first versions of the draft directive were published. Indeed, the draft directive provided from the outset that the national provisions transposing the provision on civil liability should be considered as overriding mandatory rules. However, many observers noted that this was not sufficient because the rules relating to civil liability which are not included in the future directive but are part of pre-existing national legal systems would continue, for their applicability, to depend on the choice of law rule which may lead to the law of a non-member State. One of the examples of such rules were precisely rules on limitation. Interestingly, one of the first attempts to hold a multinational corporation accountable in its home country in the EU, the Kik case brought in Germany after a fire in a textile factory in Pakistan, failed, in 2019, precisely because of the application of a short limitation period provided for by Pakistani law. For this reason, many commentators considered that in addition to the provision on overriding mandatory application, there was a need for a specific choice of law rule. The GEDIP’s recommendation to the European Commission was along these lines. This idea was not accepted by the European legislator. However, while the text on civil liability did not address the question of limitation periods—neither in the Commission’s initial proposal nor in the Council’s position of 30 November 2022—the issue emerged at a later stage. Article 29(3) of the final text is devoted, inter alia, to this matter.

Indeed Article 29(3) provides that Member States shall ensure that:

(a) national rules on the beginning, duration, suspension or interruption of limitation periods do not unduly hamper the bringing of actions for damages and, in any case, are not more restrictive than the rules on national general civil liability regimes; the limitation period for bringing actions for damages under this Directive shall be at least five years and, in any case, not shorter than the limitation period laid down under national general civil liability regimes; limitation periods shall not begin to run before the infringement has ceased and the claimant knows, or can reasonably be expected to know: (i) of the behaviour and the fact that it constitutes an infringement; (ii) of the fact that the infringement caused harm to them; and (iii) the identity of the infringer;

This shows that the European legislator recognized the need to prevent this issue from being subject to the law of a non-Member State. The provision is unaffected by the omnibus directive (EU) 2026/470 adopted on 24 February 2026.

Beyond the mere issue of limitation, the court considers that the whole civil liability regime must be considered as overriding mandatory provisions. Although this idea can indeed seem problematic because the classification as overriding mandatory provisions should remain exceptional and be limited to clearly identified rules, it has been advocated by many observers.

Similarly, many commentators of the CSDDD adopted in 2024 indeed considered that elevating the whole civil liability regime to the rank of overriding mandatory provisions would be the only way of making sure that the legislator’s objective was achieved. Recital 90 of the Directive is also along these lines. It reads:

“when transposing the civil liability regime provided for in this Directive and choosing the methods to achieve such results, Member States should also be able to take into account all related national rules to the extent they are necessary to ensure the protection of victims and crucial for safeguarding the Member States’ public interests, such as its political, social or economic organization”.

In the Yves Rocher case, the question of the bearing of the CSDDD on the interpretation of the French law was raised. The court considers that although the omnibus directive removed the harmonized civil liability regime it does not prevent Member States from introducing or maintaining their own regime in order to achieve the directive’s unchanged objective which is to address the negative impacts on human rights and the environment caused by the activities of companies, their subsidiaries, and their partners in the supply chain, and to enable victims to access justice.

However, the court’s reasoning on article 16 is unorthodox. In points 79 and 80 of the judgment the court states that since, by virtue of article 16 of the Rome II Regulation, French law has been designated to govern the substance, it also applies to the question of limitation, by application of article 15(h) of the Regulation. Of course, this is not how the concept of overriding mandatory provisions should operate. The idea is not to designate a legal system which will then automatically apply to a number of questions enumerated by article 15. The idea is to reason provision by provision and recognize that some provisions, because of their objectives and their crucial importance, need to be applied to a situation even though it is generally governed by a different law.

Nevertheless, criticism should not be unduly stringent. Even though the reasoning is slightly unorthodox it seems that the result should be approved. A different position, allowing for the application of restrictive conditions or limitation periods of non-Member State laws would defeat the purpose of the law which already has a narrow scope of application. In addition, one can observe that even the CJEU has recently (C-86/23, Huk-Coburg) deviated from the classical theory of overriding mandatory provisions by introducing a comparison which was traditionally absent from the theory of overriding mandatory provisions. The Court decided that a national provision can only be considered as an overriding mandatory provision if it pursues an objective of safeguarding an essential public interest that cannot be achieved by the application of the law designated by the choice of law rule. This comparison could actually be useful in the context of corporate sustainability due diligence since it would allow to correctly address a concern voiced by NGOs who considered that the overriding mandatory provisions technique was not adequate insofar as it would not allow for the application of the law designated by the choice of law rule even if it was more protective of the claimant.

Leaving aside this last question, not considered by the court, it is true that one must also hear the criticisms of those who regret that heavy obligations are imposed solely on French companies, putting them at a disadvantage in global economic competition. This argument is a serious one and must indeed be taken into account. France has been a pioneer, but it must not remain isolated. One can therefore only regret the removal of a harmonized framework at the European level and the idea of its wide application including to non-European companies operating in the European Union and hope for new developments in this direction. In the absence of such developments the position adopted by the court in the Yves Rocher case could, unfortunately, become untenable.