(French Court of Cassation, January 17th, 2012, No. 10-24.811) 

The French Court of Cassation has laid down a principled solution as regards the validity of a power of attorney for representing a company in legal proceedings when granted for an indefinite term.

In the case in point, the administrative and financial manager of a semi-public joint-stock company having a management board (société anonyme d’économie mixte à directoire) was empowered by the chairman of the management board with the power to represent the company in legal proceedings by being granted a power of attorney for an indefinite term.

He then objected to a court order to pay that was rendered in favour of another company, that this company had contested by calling into question the validity of the power of attorney granted to him, on the grounds that that power of attorney was not given for a definite term.

In a decision rendered on 21st June 2010, the Tribunal Supérieur d’Appel [Court of Appeal] of Mamoudzou (Mayotte) declared the objection to the order to pay null and void.

That Court indicated that although the chairman of the management board could grant powers of attorney to management staff, such powers of attorney should be limited in time, unlike the power of attorney in question.

The Commercial Division of the French Court of Cassation quashed the decision of that Court of Appeal on the basis of Articles 1948 and 2003 of the French Civil Code (relating to mandate or power of attorney). In its reasons, the Court of Cassation states that “no provision requires that the power of attorney for representing a company in legal proceedings be granted for a definite term”.