Background
Addinn Group, an information-technology service provider for Strada, obtained authorization from the president of a commercial court on July 19, 2022, to impose a conservatory seizure on Strada’s bank accounts. The seizure was carried out on September 19 and notified to Strada the following day.
Strada sought release of the seizure, but the commercial court president denied that request on November 8, 2022. On appeal, the Poitiers Court of Appeal ordered the seizure released in full. It reasoned that Addinn’s asserted claim included compensation for financial and moral harm caused by the abrupt termination of an established commercial relationship, a category of dispute assigned by the Commercial Code to specially designated courts and, on appeal, to the Paris Court of Appeal.
The Court’s Holding
The Court of Cassation held that the Commercial Code’s specialized-jurisdiction rules for disputes concerning the abrupt termination of established commercial relationships do not govern applications for conservatory measures. Such measures remain governed by Book V of the Code of Civil Enforcement Procedures and fall within the jurisdiction of the enforcement judge or the president of the commercial court where the debtor is located, even when resolving the dispute requires consideration of the underlying substantive right.
The Poitiers Court of Appeal therefore erred by concluding that courts within its territorial jurisdiction could not assess the asserted abrupt-termination claim as the basis for a conservatory seizure. The Court of Cassation partially quashed the appellate judgment, including both the order releasing the seizure and the dependent award requiring Addinn Group to pay Strada €10,000 for abusive seizure. It preserved only the ruling excluding Strada’s post-hearing note and remanded the remaining issues to the Limoges Court of Appeal.
Key Takeaways
- France’s specialized jurisdictional scheme for substantive abrupt-termination disputes does not extend to applications for conservatory measures.
- An enforcement judge or the president of the commercial court where the debtor is located may address a conservatory measure even when the asserted claim arises from the abrupt termination of an established commercial relationship.
- Because the abusive-seizure damages award necessarily depended on the order releasing the seizure, reversal of the latter also required reversal of the €10,000 award.
Why It Matters
The decision separates jurisdiction over provisional asset-preservation measures from jurisdiction over the eventual merits of certain specialized commercial disputes. A creditor asserting damages from the abrupt termination of an established commercial relationship need not seek a conservatory seizure exclusively before the courts designated to decide that substantive claim.
The ruling also confirms that a damages award for abusive seizure cannot stand when the underlying decision invalidating or releasing the seizure has itself been quashed.