On 14 October 2009, the Cour de cassation, France’s highest court for private and commercial matters, executed an American court’s anti-suit injunction in In Beverage International, ex. Zone Brands Europe v. In Zone Brands Inc. (In Zone Brands), Cass. 1e civ., Oct. 14, 2009. The decision could bear significantly on the ability of courts outside the European Union to prevent parallel litigation in France.
An anti-suit injunction restrains a party from continuing legal proceedings brought in breach of a dispute resolution agreement. While the injunction is directed at the party bringing proceedings in breach of the agreement, it inevitably affects the proceedings before the court seized of the matter. The anti-suit injunction has thus been criticized, and resisted by many courts, for infringing on the seized court’s competence to determine its own jurisdiction.
The dispute before the Cour de cassation concerned a contract between In Zone Brands Inc., a children’s beverage company, and In Beverage, a French company that distributed the drinks in Europe. The contract was subject to the laws of the State of Georgia in the United States, and contained a forum selection clause providing for the exclusive jurisdiction of Georgia courts. After In Zone Brands Inc. terminated the contract, In Beverage and its director responded by bringing an action before the Tribunal de commerce in Nanterre, France. In Zone Brands Inc. challenged the French court’s jurisdiction and initiated proceedings before the Superior Court of Cobb County, Georgia.
The Georgia court issued a default judgment on the merits in favor of the American plaintiffs and issued an anti-suit injunction enjoining the French parties to dismiss the proceedings before the French court. The Versailles Court of Appeal held that the anti-suit injunction was enforceable in France, and the French parties appealed to the Cour de cassation.
The Cour de Cassation’s decision
The Cour de cassation confirmed that the anti-suit injunction was enforceable for the following reasons:
- The decision to sue before the American courts was not animated by fraud or strategic behavior because the parties had agreed to the jurisdiction of the American court;
- The French parties were not being denied access to court because the American court was ruling on its own jurisdiction and enforcing the parties’ own agreement on forum; and
- Anti-suit injunctions are not contrary to French international public order when they are outside the field of European community laws or treaties, and the object is only to sanction a violation of a contractual obligation previously undertaken by the parties.
Impact of the Cour de Cassation’s decision
The Cour de cassation’s decision is surprising because the Court had previously suggested in obiter dictum that anti-suit injunctions were not enforceable in France because they infringe on the jurisdiction of French courts.1
The decision is also interesting because it comes in the wake of the European Court of Justice’s (ECJ) recent decision in West Tankers,2 which held that courts of European Member States may not issue anti-suit injunctions in the context of an arbitral proceeding, in relation to judicial proceedings in other European Member States. In so doing, the ECJ’s decision embraced the principle that each court is competent to determine its jurisdiction. Rather than broadening the application of this principle, the Cour de cassation instead took pains to limit the effect of its ruling to anti-suit injunctions emanating from non-EU jurisdictions. Notably, the opinion of the avocat general, which was submitted to the Court before its ruling, clearly distinguishes between the recognition and enforcement of anti-suit injunctions issued by courts in non-EU jurisdictions and anti-suit injunctions issued by courts in EU jurisdictions, the latter of which must be rejected by French courts as a matter of principle.
This decision suggests that French courts will recognize forum selection clauses involving a French party providing for dispute resolution by US courts and actions taken by US courts to enforce those clauses, in normal circumstances. But whether this decision may signal a trend of greater willingness in Europe’s national courts to enforce anti-suit injunctions is difficult to determine.
For now, the Cour de cassation’s decision should be considered when parties consider forum selection clauses and craft their litigation strategies.