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28 November 2017
A recent Supreme Court decision(1) confirms that the estoppel principle is recognised under French law as a general principle and is now a procedural tool in the hands of litigators. However, the decision also revives the debate about the principle's true effectiveness before the French courts.
Two sisters contacted an auctioneer to sell a piece of art (ie, a nautilus cup made of precious metals). The Stockholm National Museum, having heard of the intended sale and suspecting the cup to be an item which had been stolen from its collection 30 years earlier, initiated summary proceedings before the French courts to request the appointment of a legal expert to assess the cup's authenticity.
Before the proceedings began, the defendants presented themselves to the museum as the owners of the nautilus cup. However, on the eve of the hearing, the defendants changed their stance and argued that the cup had belonged to their mother, for whom they were acting as representatives only. On these grounds, they moved for dismissal of the museum's claim for lack of defendant standing.
Facing the defendants' stark turnaround, the museum sought to dismiss their motion under the procedural estoppel rule.
The Paris Court of Appeal(2) ruled in favour of the museum and dismissed the defendants' motion for relief. The judges held that the defendants' change of legal argument misled the museum as to their intentions and was detrimental to the claimant. Hence, such procedural behaviour violated the principle of fair and loyal judicial proceedings.
However, the Supreme Court overturned the Paris Court of Appeal's ruling, holding that the defendants did not modify their claims throughout the judicial proceedings and that the allegations they made before the summary proceedings could not be taken into account when assessing whether they had contradicted themselves to the museum's detriment.
The principle that "one cannot contradict oneself to the detriment of others"(3) was originally created under common law, under the name of the 'estoppel' principle. Mainly used in international trade law, it first appeared under French law in a Supreme Court decision on international arbitration.(4)
Following a decisive ruling by the court,(5) the principle has been extended to other areas of French law and is now affirmed by the courts as a general principle of civil procedure, which compels the parties to judicial proceedings to remain consistent and refrain from raising contradictory arguments throughout the proceedings, under penalty of inadmissibility of the claims.
However, its effectiveness under French law is questionable as, despite the clear affirmation and recognition of its existence, the restrictive approach adopted by the Supreme Court is particularly unsettling for French practitioners.
The decision at hand is a case in point: even though the facts revealed a clear contradiction in the defendants' successive allegations as to their ownership of the cup – and hence their standing to defend the action that was brought against them – the Supreme Court refused to approve the dismissal of the defendants' lack of standing claim. In doing so, the court confirmed that if French procedural law has adopted the estoppel principle from international law, it has uniquely defined its scope, keeping in mind that "the mere fact that a party contradicts itself to the detriment of others does not, in itself, render the claim inadmissible".(6)
The decision also clarifies the conditions that the lower courts are expected to assess when deciding whether a claim should be dismissed on the grounds of a procedural estoppel. It can be inferred from this ruling that to face the procedural penalty of dismissal, not only must the change of stance happen throughout the judicial proceedings (ie, notably, that a contradiction including a repeated allegation made before the launching of a suit could not pass the estoppel test), but the party at fault must also have changed its 'pretentions' – that is, its legal claims (meaning that changing the factual allegations presented to the courts could not pass the test either).
This restrictive approach, if it is indeed followed by the lower courts, will likely prevent most motions to dismiss on the grounds of the procedural estoppel principle from succeeding.
Facing such uncertainty when it comes to both their opponent's behaviour and the success of their motion to dismiss, litigants and their counsels can only be advised to invoke the estoppel rule along with alternative procedural tools and grounds to fight procedural inconsistency.
For further information on this topic please contact Nicolas Contis at Kalliopé by telephone (+33 1 44 70 64 70) or email (firstname.lastname@example.org). The Kalliopé website can be accessed at www.kalliope-law.com.
Cassandra Loriot, legal counsel, assisted in the preparation of this update.
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