Bankruptcy Law

According to Article L. 622-7, I of the Commercial Code, "[t]he judgment opening the procedure entails, ipso jure, a prohibition on the payment of any claim arising prior to the judgment opening the procedure, with the exception of payment by way of set-off of related claims. Thus, in the context of the safeguard procedure, set-off may result not only from the meeting of the legal conditions , but …

Criterion of connexity

According to Article L. 622-7, I of the Commercial Code, "[t]he judgment opening the procedure entails, ipso jure, a prohibition on the payment of any claim arising prior to the judgment opening the procedure, with the exception of payment by way of set-off of related claims. Thus, in the context of the safeguard procedure, set-off may result not only from the meeting of the legal conditions , but also from the link of connection between two claims. Reciprocal debts are connected when they arise from the same agreement .

A debtor's claim arising from a breach of his bank's advisory obligations and the bank's claim for the debit balance of his securities deposit account arising from the same contract are related claims that can be set off . A claim arising from overcharging as a result of the defective performance of a contract and a debt arising from the same contract can be set off by virtue of their connexity . The debtor's claim arising from unpaid rent by his tenant and the debt of penalty which accompanies his order to carry out work may be set off as long as they both arise from the lease contract . Reciprocal claims arising from the same factoring contract are related when they correspond, for the first, to the debit balance of the current account for which the debtor company is indebted to the creditor company, and for the second, to the balance of the guarantee account owed by the latter to the debtor company after termination of the factoring contract .

On the other hand, where two claims arise from different contracts , they are not linked by a connection that would permit their set-off. Thus, there can be no set-off of the debt of a partner, arising from the partnership agreement, who has not paid up all of his contribution, with his claim arising from a contract of agency  or with his claim constituted by the credit balance of his partner's current account, which derives from a loan granted to the partnership , since they do not arise from the same contract. A clause in a loan agreement which provides for the set-off of the bank's claim under the agreement against the credit balance in its client's bank account cannot be enforced, since there can be no connection between the obligations arising from separate agreements .

A connection between two claims that do not arise from the same contract may nevertheless be established if it is shown that they arise from a single contractual package that serves as the general framework for the business relationship or from an agreement that sets the framework for the development of the business relationship . Therefore, set-off may be established by virtue of the connection between receivables and payables arising from sales and purchases made pursuant to two supply contracts that constitute elements of a single contractual package serving as the general framework for the parties' relationship .

Set-off is also excluded when one of the claims has no contractual basis. Indeed, there can be no connection that would allow a set-off between a claim that arises from a fraud, that has no contractual basis and that has no connection with any order or delivery, and a claim for payment of the price of goods delivered to the debtor . There can also be no set-off between the debtor company's debt for unpaid invoices in the context of a contractual agreement. Nor can there be any set-off between the debtor company's debt for unpaid invoices under the supply contract between it and the creditor, and its claim against the creditor, which results from a non-intentional tort (faute quasi-délictuelle) , between a claim of a contractual nature and a claim for damages resulting from the debtor's tortious liability , or between the debtor's claim for damages in respect of the conviction for breach of trust of his general agents, which has no contractual basis, and his debt to them in respect of the compensatory indemnity for the rights to claims which they have abandoned on commissions, which arises from the contract between them . Finally, there can be no set-off between a claim for unpaid rent that derives from the contract between the parties and an indemnity for abusive contestation of the debtor's right to the lease, in the absence of a connection .

Set-off between two related claims may be established even if they are not due yet  and even if one is regarded as an earlier claim and the other as a later claim . However, the deductibility of VAT , which does not establish any connection between a VAT debt prior to the debtor's opening judgment and a VAT credit relating to transactions subsequent to that judgment, is not an issue that can be resolved. However, the deductibility of VAT, which does not establish any connection between a VAT debt prior to the opening judgment of the debtor and a VAT credit relating to transactions subsequent to that judgment, does not permit set-off . The assignment of reciprocal claims by way of a receivables transfer form (bordereau Dailly), even prior to the judgment of the debtor's insolvency, does not preclude their set-off if they are linked by a connection . On the other hand, there can be no set-off of related debts where the claim was assigned for the sole purpose of satisfying the requirement of reciprocity .

A trial court hearing a claim for set-off of a prior related claim that has been declared against the claim for payment filed by a debtor in insolvency proceedings must first rule on the likelihood of the claim asserted, and, if applicable, admit the principle of set-off and order it up to the amount of the claim to be determined by the bankruptcy judge without the creditor having to prove that his claim was admitted at this stage . The court who establishes the principle of set-off because of the likelihood of the creditor's claim and the absence of a decision admitting the contested claim must stay the decision on the claim for payment filed by the debtor in insolvency proceedings. The court who finds that the set-off is admissible because of the likelihood of the creditor's claim and the absence of a decision to admit the contested claim must stay the decision on the application for release of the seizures made by the debtor until the bankruptcy judge decides .

The contestation of a claim, the existence and amount of which must be verified by the bankruptcy judge, does not therefore preclude it from being the subject of a set-off against related debts of the debtor .

Finally, the person who intends to apply set-off must ensure that the claim is related to the debt he wishes to set off . If there are several debts that can be set off against a claim of the debtor, it is in the debtor's interest to give priority to debts that arose after the opening judgment . 

Cass. com., 25 March 1997, LawLex202100002737JBJ (RJ).

Cass. com. 5 April 1994, LawLex202100002706JBJ (LJ); 22 March 2011, LawLex202100002749JBJ (LJ); 19 March 1991, LawLex202200000404JBJ (LJ).

Cass. com., 9 May 1995, LawLex202100002707JBJ (RJ).

Cass. com., 14 May 1996, LawLex202100002698JBJ (RJ).

Cass. com., 18 December 2012, LawLex202100002165JBJ (LJ).

Cass. 1re civ., 16 May 2000, LawLex202100002699JBJ (LJ).

Cass. com., 18 September 2007, LawLex202200001991JBJ (LJ).

Cass. com., 22 April 1997, LawLex202200001989JBJ (RJ).

Cass. com., 18 November 2014, LawLex202100002744JBJ (S).

Cass. com., 7 April 2006, LawLex202200000597JBJ (RJ); 21 February 2012, LawLex202100005239JBJ (LJ).

Cass. com., 19 January 1999, LawLex202100002731JBJ (RJ).

Cass. com., 6 January 1998, LawLex202100002697JBJ (LJ).

Cass. com., 5 November 2013, LawLex202100002703JBJ (LJ).

Cass. com., 22 October 2013, LawLex202100002704JBJ (RJ).

Cass. com., 3 April 2019, LawLex202100002738JBJ (RJ); 30 June 2009, LawLex202100005240JBJ (RJ).

Cass. com., 21 February 2012, cited above.

Cass. com., 10 March 2009, LawLex202100002751JBJ (LJ).

Cass. com., 12 January 2010, LawLex202100002694JBJ (LJ).

Cass. com., 24 June 2003, LawLex202100002739JBJ (LJ).

Cass. com., 27 January 2015, LawLex202100002742JBJ (LJ).

Cass. com., 27 September 2016, LawLex202100002745JBJ (LJ).

Cass. com., 20 September 2017, LawLex202100002746JBJ (LJ).

Cass. com., 7 July 1998, LawLex202100002700JBJ (LJ).

Cass. com., 17 July 2001, LawLex202100002705JBJ (LJ).

Cass. com., 20 May 1997, LawLex202100002701JBJ (LJ); 18 January 2000, LawLex202100002702JBJ (LJ).

Cass. com. 9 December 1997, LawLex202100002709JBJ, LawLex202100002711JBJ (LJ). Contra. see Cass. com., 9 December 1997, LawLex202100002708JBJ (LJ), considering that the set-off can validly be effected, even in the absence of connection, between the claim of a bank and the credit balance of the bank account of the debtor company, by virtue of a conventional set-off clause.

Bankruptcy Law

122. Criterion of connexity

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

122. Criterion of connexity

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise