Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

Assets belonging to a foreign state are, in principle, immune from enforcement in France. There, nevertheless, exist some exceptions to this rule, which are laid out at articles L 111-1-1 to L 111-1-3 of the Code of Civil Procedures of Enforcement.

Prior to the enactment of the Sapin II Law in 2016, France allowed enforcement measures over a foreign state’s assets without prior consent from a judge. Nowadays, any creditor wishing to obtain interim measures or enforce a decision against state property shall obtain judicial authorisation prior to undertaking any enforcement measures (article L 111-1-1 of the Code of Civil Procedures of Enforcement). The decision on whether an authorisation for enforcement should be granted is usually made by judges who are specialised in such matters within a few days.

Where the envisaged enforcement measures target diplomatic assets, judicial authorisation will be granted only if the state consented to the taking of enforcement measures against said diplomatic assets, by an express and specific waiver (article L 111-1-3 of the Code of Civil Procedures of Enforcement).

Pursuant to article L 111-1-2 of Code of Civil Procedures of Enforcement, where the enforcement measures target non-diplomatic assets, judicial authorisation will be granted only if:

  • the state expressly consented to such measures;
  • the state allocated these assets to the satisfaction of the claim at stake in the proceedings; or
  • the assets targeted are used for commercial purposes, and have a connection with the entity against which the enforcement proceedings are directed.
Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

YSave for articles L 111-1-1 to L 111-1-3 of the Code of Civil Procedures of Enforcement, setting out the framework to enforcement immunity of foreign states, there exists no other sets of rules specific to enforcement proceedings against states. Pursuant to article L 111-7 of Code of Civil Procedures of Enforcement, a creditor holding an enforceable title may decide what enforcement measure to carry out, provided that such measure is implemented in a way that does not exceed what is necessary to obtain payment. To the extent enforcement immunity would not be applicable (see question 16), all of the enforcement measures of the Code of Civil Procedures of Enforcement are available.

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

A prior submission to the jurisdiction of a court or tribunal cannot constitute consent for any further enforcement proceedings against the property of the state. Under French law, immunity from jurisdiction and immunity from execution are two independent concepts. As seen above (question 16), even if the state’s creditor were to obtain a waiver of jurisdictional immunity from the state, it will still have to comply with the provisions laid out in articles L 111-1-1 to L 111-1-3 of the Code of Civil Procedures of Enforcement, to initiate enforcement measures against the states’ assets.

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

As explained in question 16, under French law, a state’s assets might be subject to enforcement measures in three cases: when the state has waived its enforcement immunity regarding these assets; when the state has assigned these assets to the satisfaction of the claim at stake; and when the assets have been used or are intended to be used for commercial purposes rather than public service purposes.

While article L 111-1-2 of the Code of Civil Procedures of Enforcement sets forth a non-exhaustive list of protected assets and property, it does not provide a list of assets that would typically be subject to enforcement. French courts are also yet to develop case-law on determining what assets should be deemed as ‘used for commercial purposes and connected with the entity concerned by the proceedings’ under the Sapin II Law.

That said, among the assets that would typically be subject to enforcement and execution, one can think of property used or intended for use for commercial purposes, including movable and immovable property, such as debts owed to a state by third parties in relation to commercial transactions. To illustrate this point, prior to the enactment of the Sapin II Law, French courts had ruled that receivables related to the purchase and the management by a foreign state of real estate property would be subject to enforcement or execution, as it constituted a mere ‘commercial operation governed by the rules of private law’ (Court of Cassation, civ 1, 19 November 2009).

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

Article L 111-1-2, third paragraph of the Code of Civil Procedures of Enforcement lists assets that are deemed to be non-commercial, and therefore, would be covered by enforcement immunity, including:

  • the assets, including any bank account, which are used or are intended for use in the performance of the diplomatic mission of the state or its consular posts, special missions, missions to international organisations or delegations to organs of international organisations or to international conferences;
  • the assets of a military character or used or intended for use in the performance of military functions;
  • the assets forming part of the cultural heritage of the state or part of its archives and not placed or intended to be placed on sale;
  • the assets forming part of an exhibition of items of scientific, cultural or historical interest and not placed or intended to be placed on sale; and
  • labour or tax revenues of the state.

However, this list is not exhaustive. French courts could extend the non-commercial qualification to other assets of a foreign state.

Pursuant to that same article, it is the creditor seeking to enforce a decision who bears the burden of proving that the assets targeted by the measures are not covered by enforcement immunity.

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

In principle, assets that are held by or managed for the account of the state by central banks are covered by enforcement immunity (article L 153-1, paragraph 1 of the Monetary and Financial Code). Nonetheless, if the creditor seeking to seize such assets can prove that these are held by the central bank for its own account, and that they are assigned to an activity governed by private law, no immunity may be invoked by the central bank before the courts (article L 153-1, paragraph 2 of the Monetary and Financial Code).

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

No such further test has been developed by French courts.

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

Service of process is generally effected in the same way as described previously (questions 13 and 14).

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

There is a history of enforcement proceedings against foreign states in France. A significant number of these proceedings relate to the enforcement and execution of both commercial and investor-state awards.

Public databases

Are there any public databases through which assets held by states may be identified?

No.

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

There are no specific courts that would be competent to assist with or otherwise intervene to help identify assets held by states in the territory. Nevertheless, article 145 of the Code of Civil Procedure might help to identify assets of foreign states. It provides that:

If there is a legitimate reason to preserve or to establish, before any legal process, the evidence of the facts upon which the resolution of the dispute depends, legally permissible preparatory inquiries may be ordered at the request of any interested party, by way of a petition or by way of a summary procedure.