Exequatur of foreign insolvency and bankruptcy judgments in France
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All foreign insolvency and bankruptcy judgments may be recognised and enforced in France pursuant to Article 509 of the French Code of Civil Procedure.
Pursuant to article 509 of the French Code of Civil Procedure "Decisions handed down by foreign courts and acts adopted by foreign officials are recognized and enforceable on the territory of the Republic as provided by law".
The procedure of recognizing and enforcing a foreign judgment in France is called “exequatur”.
When is an exequatur application necessary for a foreign insolvency and bankruptcy judgment ?
It is necessary to apply for exequatur in France whenever the debtor of an international bankruptcy or insolvency judgment has assets in France.
If a foreign bankruptcy judgment produces a certain number of effects by itself in France, its actual enforcement can only occur if it is granted exequatur by a French judge.
Without exequatur, a foreign bankruptcy judgment cannot be enforced against a debtor located on French territory.
In the absence of exequatur, a debtor will thus be considered as not being insolvent or bankrupt in France. This means that the judgment debtor will still be allowed to manage and dispose of its assets in France and may also be subject to individual lawsuits by creditors in France (Com. 25 February 1986, no. 84-14.208, Kléber; Civ. 1re, 24 March 1998, no. 96-10.171).
In addition, in the absence of exequatur, a foreign trustee will not be able to proceed to forced execution on a debtor's assets located in France. The French Supreme Court has clearly stated that: "a foreign court judgment cannot be enforced if an exequatur decision [in France] has not been handed down" (Com. 25 February 1986, no. 84-14.208).
A foreign trustee will thus not be able to pursue the sale of a debtor’s assets located in France in the absence of exequatur.
Exequatur procedure in France of an international insolvency and bankruptcy decision
A foreign bankruptcy judgment can only be enforced in France if it is granted exequatur by a French court.
A French court may, under certain conditions, grant exequatur to any foreign judgment handed down by a judicial authority.
As an example, the opening application of Chapter 11 of the United States Bankruptcy Code that suspends all creditor proceedings may be presented for exequatur in France (Civ. 1re, 17 October 2000, no. 98-19.913).
For more information on the type of judgments that may be subject to exequatur in France see: https://www.legal-gc.com/post/which-foreign-court-judgments-can-be-recognized-and-enforced-in-france
In addition to this prior requirement, the conditions to obtain exequatur of a foreign bankruptcy judgment in France are set out in the Cornelissen case of the French Supreme Court (Civ. 1re, February 20, 2007, n° 05-14.082).
Under this well-known case law, the French judge is required to verify whether the foreign bankruptcy judgment was rendered by a foreign court having jurisdiction, whether it violates the French concept of international public policy and whether it was not subject to fraud (for additional information see https://www.legal-gc.com/post/recognition-and-enforcement-of-foreign-court-decisions-in-france).
The above rules apply if no bilateral or multilateral international treaty exists.
Today international treaties essentially regard the Convention concluded between Monaco and France on 13 September 1950 containing provisions applicable to the enforcement of bankruptcy judgments and European Union regulations.
Regarding bankruptcies and insolvency judgments handed down by Member States of the European Union (excluding Denmark), the applicable European texts, and in particular European Regulation n°2015/848 of May 20 2015, are based on the principle of the immediate and automatic recognition of decisions relating to insolvency proceedings.
Nevertheless, even for insolvency judgments handed down in EU States, exequatur remains necessary in France for all enforcement measures ordered by the foreign judgment. In this respect, article 33 of European Regulation n°2015/848 expressly refers to the application of the Brussels 1 Recast Regulation regarding, inter alia, the recognition of judgments in civil and commercial matters.
Caterina Giudiceandrea is a French lawyer, native in English, specialized in international private law and especially recognition and enforcement of foreign judgments.