The French government has made the assessment that certain small commercial courts were regularly finding themselves confronted with cases of great complexity, only because the company in difficulty had its head office in the jurisdiction of these courts. It therefore announced the establishment of specialised commercial courts (TCS) which will process the most complex insolvency proceedings. See our earlier article for more background.
When the initial list of 18 specialised commercial courts was announced, it was surprising that Bobigny, Créteil and Versailles were not on the list, even though they deal with important matters and ensure that the Paris area is not under-represented.
Many leading figures of the Bobigny Commercial Court, the second busiest court in terms of activity, have recently pointed out the qualities of the jurisdiction and requested the government to review its list, in the interest of those legally accountable. They highlighted the risk of having to face a true “loss of skills” to the other nearby TCS (Nanterre or Evry). Bobigny is also at the heart of the “Grand Paris project” and a dynamic employment area which, according to them, justifies the choice of this tribunal in the top 18.
The final list was published in the Decree No. 2016-217 on 26 February 2016 with the courts of Besancon and Lille being replaced by those of Bobigny, Dijon and Tourcoing. The mobilisation of all the legal stakeholders and the judiciary from the Bobigny court has paid off.
Therefore, the final list is of 19 courts is as follows:
Bobigny, Bordeaux, Dijon, Evry, Grenoble, Lyon, Marseille, Montpellier, Nanterre, Nantes, Nice, Orléans, Paris, Poitiers, Rennes, Rouen, Strasbourg, Toulouse and Tourcoing.
The jurisdiction of each specialised court is outlined as an appendix to the decree. As from March 2016, legal professionals should refer to Article L 721-8 of the Commercial Code (as created by Article 231 of the Decree of 6 August 2015) to determine the jurisdiction of the courts. The Article provides as follows:
The specially designated Commercial courts will recognise cases where the debtor carries out a commercial or trade activity:
- The safeguard procedures, receivership and liquidation as outlined in Book VI will apply to situations where the debtor is:
- A business in which the number of employees is equal to or greater than 250 and whose net turnover is at least EUR 20 million;
- A company whose net turnover is at least EUR 40 million;
- A company that holds or controls another company, as defined in Articles L. 233-1 and L. 233-3 of the Commercial Code, insofar as the number of employees of all the companies taken together is equal to or greater than 250 and the combined net turnover amount of all the companies is at least EUR 20 million; or (d) A company that holds or controls another company, as defined in Articles L. 233-1 and L. 233-3, insofar as the net turnover of all the companies taken together is at least EUR 40 million.
- The procedures for the establishment of the international jurisdiction of the court are to be determined pursuant to the application of European Union acts relating to insolvency proceedings.
- The procedures for the establishment of the international jurisdiction of the court are to result from the jurisdiction of the debtor’s main centre of interests.
- The conciliation procedure as provided for by Title I of Book VI, may be utilised on direct appeal by the debtor, at the request of the public prosecutor or by a decision of the president of the commercial court, or where the debtor is a company or a set of companies fulfilling the conditions as outlined in point 1 subsection (a) – (d).
The competent specialised commercial court for the purposes of (c) and (d) of points 1 and 4 of this article, is the jurisdiction of the company that holds or controls another company within the meaning of Articles L. 233- 1 and L. 233-3.
In the application of point 2 of this Article, the competent specialised commercial court is the one with the jurisdiction in the debtor’s main centre of interests. For corporate entities, the centre of principal interests is deemed, until the contrary is proved, to be the registered office.
Beyond the criteria of turnover and number of employees, we note that this new text goes much further and extra attention will be required particularly in respect of large groups and in the context of international & cross-border insolvency (notably European insolvency, which will undergo a major reform in 2017).
Further, it should be noted that the president of the commercial court in the jurisdiction of the company’s main centre of interests, or a judge delegated by him, will sit in the competent specialised commercial court, which should limit the certain “frustration” felt following this text.
The future will tell us if this evolution is heading the right direction and whether such a focus on jurisdiction or means will allow for an improvement to the litigants’ situation and the safeguarding of employment, as currently prioritised by the government.