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Clifford Chance

Clifford Chance

Business & Human Rights Insights

France designates ordinary judges to rule on disputes over the Vigilance Law

The French Parliament is about to put an end to the uncertainty concerning the competent court to rule on disputes regarding the Vigilance Law by providing that the ordinary judge of the Tribunal judiciaire will enforce the Vigilance Law rather than Commercial Courts.

Obligations imposed on companies under the Vigilance Law

The Vigilance Law of 27 March 2017 requires large companies to establish and implement a vigilance plan to prevent any serious violations of human rights, health and safety protections and the environment due to their activities or those of their subsidiaries and entities within their supply chain. In addition to establishing and implementing their vigilance plan, the Law also requires companies to publish their plan and the report of its effective implementation.

Legal actions under the Vigilance Law and the debate over jurisdiction

In addition to a "traditional" civil action that anyone could bring against alleged defaulting companies to seek to hold them liable for harms, the Law provides for a "preventive" action, allowing any interested party to bring companies to court and require them to comply with the Law.

With respect to this specific second action, a debate has very early emerged as to whether the ordinary judge of the Tribunal judiciaire or the commercial court had jurisdiction to hear disputes based on this law. This debate over jurisdiction was key as the commercial court is thought to be a better forum from a business perspective than the ordinary court.

In the first action engaged under the Vigilance Law, the company targeted by this action argued that the injunction requests under the Vigilance Law should fall within the the jurisdiction of Commercial Courts. The judge in charge of interim measures then adopted this reasoning.

In December 2020 the Court of Appeal of Versailles confirmed that the Commercial Court had jurisdiction to hear disputes arising from the Vigilance Law. The rationale for this decision was that the vigilance plan provided by the law and targeted by the claim was directly linked to the internal management of the company and that it was therefore a dispute "relating to commercial companies" as required by Article 713-3, 2° of the French Commercial Code to establish the jurisdiction of Commercial Courts (see our blog post on that case).

However, in February 2021, in another case involving the same company but claiming damages on the merits (rather than claiming for interim measures), the Tribunal judiciaire of Nanterre rejected the motion filed by the defendant, which argued that the Commercial Court had jurisdiction. The regular civil courts ruled that they had jurisdiction to hear disputes on the ground of the Vigilance Law considering that the alleged direct link between the vigilance plan and the management of the company did not prevent civil courts from having jurisdiction when the claimants are from the civil society (rather than businesses). The judge mainly grounded its reasoning on the basis of a recent case law in France in a matter of unfair competition, in which the French Highest Supreme Court ruled that when the claimants are non-business people, they have the choice of filing the case before a civil court, even if there is a direct link with the management of the company (Uber judgement of 18 November 2020).

The end of the debate?

A new legislation should put an end to this debate as the draft Law on confidence in the judicial system contains a provision which explicitly provides that regular civil courts (Tribunal judiciaire) have jurisdiction to deal with disputes in relation to the Vigilance Law. Despite the attempt of the Senate to set this provision aside, the joint committee of the French Parliament (a legislative organ composed of senators and representatives of the National Assembly aimed at finding compromises over draft bills) reached an agreement on this provision on 21 October and maintained the initial suggestion in the final version of the draft Law. This Law is expected to be enacted by the end of the year.

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