In several judgments dated June 21, 2024 (Nos. RG 23/56868, 23/55694, 23/57361, 23/54628, 24/50495, 24/50031), following a hearing1 on April 23, 2024, the Paris Judicial Court has ruled out its jurisdiction in cases it usually handled until now.
In matters of commercial leases, the question arose: can the Paris Judicial Court be territorially competent by applying a contractual clause when the property in question is located outside its jurisdiction?
The answer from the Paris Judicial Court is no.
To justify their decisions, the judges state that Article R. 145-23 of the Commercial Code, which grants territorial jurisdiction to the court where the property is located, should be considered as public order. However, no provision of this article confers such a character.
This argument of public order is based on an old ruling (Cass. 3rd civ., June 10, 1971, No. 70-12.678). However, this position had never been applied until now, as litigants continued to bring cases to the court designated by the territorial jurisdiction clause, and the Paris Court of Appeal had repeatedly held that Article R. 145-23 was not of public order (CA Paris, June 27, 2001, No. 2001/06069; June 4, 2009, No. 08/18149; November 25, 2016, No. 16/08557).
Before the reversal on June 21, 2024, since Article R. 145-23 of the Commercial Code was not considered public order, it was sufficient to determine if the territorial jurisdiction clause was valid under Article 48 of the Civil Procedure Code. As long as the clause was agreed (i) between parties contracting as merchants and (ii) specified conspicuously in the lease, it was applicable.
Therefore, this new position implies that any clause attributing territorial jurisdiction to the Paris Judicial Court while the property is located outside its jurisdiction will be deemed unwritten.
In matters of investigative measures in futurum, traditionally, the applicant had the option of choosing jurisdiction between the president of the court likely to hear the case on the merits and the president of the court in whose jurisdiction one of the measures is to be executed (Cass. 2nd civ., October 15, 2015, No. 14-17.564; July 2, 2020, No. 19-21.012).
However, following the judgments of June 21, 2024, the judges of the Paris Judicial Court declared themselves incompetent to hear such a measure in futurum since the property subject to this measure was located outside its jurisdiction, even though some defendants were domiciled within the jurisdiction of the Paris Judicial Court.
This incompetence is explained by the "great autonomy" of the regime of investigative measures in futurum of Article 145 of the Civil Procedure Code, which should also apply to territorial jurisdiction, as no text establishes its rules.
Thus, the jurisdiction where the measure is to be executed is imposed to the exclusion of any other.
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These four decisions are justified by the principle of proportionality, whereby proximity is an essential criterion for the proper administration of justice. In other words, parties must now resolve their disputes near the location of the property, even if they have mutually agreed to attribute jurisdiction to another court (often that of their respective headquarters) through a clause in a commercial lease or even if the defendants are domiciled within its jurisdiction in matters of expertise.
Although these new positions have only been adopted by the Paris Judicial Court (and not by other courts in France to date) and have not been confirmed by the Courts of Appeal and the Court of Cassation, they must be taken into account when initiating new legal actions and drafting new commercial leases.
Having said that, it is regrettable that these reversals occur to the detriment of litigants, creating legal uncertainty.
Footnote
1. Pursuant to article 487 of the Code of Civil Procedure, 'the interim relief judge may refer the case for interim relief to a hearing before a panel of the court, the date of which he shall set'.
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