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13 November 2018
Two recent Supreme Court decisions regarding cross-border litigation have clarified that the French courts will have jurisdiction over forensic examinations ordered as protective measures by a French judge, although foreign judges will likely have jurisdiction over the substance of the matter.
In its first decision,(1) the Supreme Court dealt with a complex dispute between several French and foreign parties concerning the construction of a solar energy plant in the south of France.
A company incorporated under German law, Windwarts Energie GmbH, was operating under an energy procurement and construction contract for a French entity based in Montpellier. Windwarts Energie GmbH's liability was covered by a German insurer, Ergo Versicherung AG.
Following a number of defects, a pre-trial proceeding requesting a forensic examination was launched before the Montpellier High Court under Article 145 of the French Code of Civil Procedure(2) against Windwarts Energie GmbH and the other entities working on the plant. The precise scope of the examination was to assess any damages caused and determine any liabilities therein.
Following the Montpellier High Court's approval of the forensic examination, Ergo Versicherung AG (one of the parties which was later added to the dispute) challenged the French courts' jurisdiction to order such protective measures, as the dispute was clearly of a cross-border nature.
When the challenge was brought before the Supreme Court, Ergo Versicherung AG argued that the Court of Appeal, which had confirmed the Montpellier High Court's jurisdiction, violated Article 35 of EU Regulation 1215/2012. Article 35 grants parties the right to apply for provisional measures before any EU member state court, even if another member state court will have jurisdiction over the substance of the matter.
In Ergo Versicherung AG's opinion, the Montpellier High Court had been required to determine whether it or a foreign court had jurisdiction regarding the dispute before ruling on the provisional measure. To this end, the Montpellier High Court should have enforced the dispute resolution clause provided in the contract entered into between Windwarts Energie GmbH and the French client, thereby acknowledging the German courts' jurisdiction.
The Supreme Court confirmed the Court of Appeal's ruling, holding that Article 35 of EU Regulation 1215/2012 does not require an EU member state court to first determine whether another EU member state court has jurisdiction over the substance of the matter. As such, the Montpellier High Court had been entitled to rule on the forensic measure under Article 145 of the Code of Civil Procedure, even if jurisdiction over the substance of the matter had not yet been established.
The second case(3) concerned an injury caused to a mare by a stallion during an equestrian competition in Switzerland.
The mare was the property of a French entity operating a stud farm in France. The French entity applied to the French courts for a provisional measure to determine the injuries suffered by the mare and the liability of the stallion's owner.
The defendant contested the French courts' jurisdiction to order the provisional measure.
The Court of Appeal found that the French courts had no jurisdiction in this regard as, under Article 5(3) of the Lugano Convention,(4) the place of damage was Switzerland.
In its appeal before the French Supreme Court, the mare's owner challenged the appellate judgment, arguing that the place of damage was France, as that was where the mare's injuries had been assessed. Moreover, the financial damage suffered by the owner was evident in France, the place of his registered business.
The Supreme Court dismissed these arguments, holding that the litigation was not the consequence of a complex event. Rather, the court found that the dispute was of a quasi-delictual nature, and that since the damage had been caused by the harmful collision of the two horses in Switzerland, Article 5(3) of the Lugano Convention applied. Thus, the Swiss courts had jurisdiction.
However, the Supreme Court upheld an argument for annulling the appellate judgment. According to the Supreme Court, by ruling on the French courts' jurisdiction to order protective measures, the Court of Appeal had violated Article 31 of the Lugano Convention, which gives parties to a dispute the right to apply before any EU member state court, irrespective of which court has jurisdiction over the substance of the matter.
By way of these two decisions, the Supreme Court has clearly answered the question of whether a forensic measure ordered under Article 145 of the Code of Civil Procedure must be considered as a 'provisional measure', as defined under Article 35 of EU Regulation 1215/2012.
EU law has a restrictive concept of provisional measures. According to the European Court of Justice in the famous case of Reichert v Dresdner Bank, 'provisional measures' are:
measures which, in matters within the scope of the Convention, are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is sought elsewhere from the court having jurisdiction as to the substance of the matter.(5)
Measures ordered under Article 145 of the Code of Civil Procedure are intended to not only preserve a factual or legal situation, but also obtain evidence of a violation of rights.
By considering that measures under Article 145 of the Code of Civil Procedure must be considered as provisional measures under Article 35 of EU Regulation 1215/2012, the Supreme Court has clarified that parties to a dispute can apply before a French court for a forensic measure even if a foreign court would have jurisdiction over the substantive matter.
In light of these judgments, the French courts are likely to order forensic measures if they are closer to the facts of the dispute even if the matter will be settled by a foreign court.
For further information on this topic please contact Nicolas Contis or Leonardo Pinto at Kalliopé by telephone (+33 1 44 70 64 70) or email (firstname.lastname@example.org or email@example.com). The Kalliopé website can be accessed at www.kalliope-law.com.
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