Bankruptcy Law

The territorial jurisdiction of the court is mainly determined by the place of the debtor's headquarters (1) and, in the absence of headquarters on the national territory, by the place of the main center of his interests in France (2). However, there are certain imperatives that require departing from these rules and relocating the proceedings (3), or, for larger companies, having them heard by a  …

Jurisdiction ratione loci

The territorial jurisdiction of the court is mainly determined by the place of the debtor's headquarters (1) and, in the absence of headquarters on the national territory, by the place of the main center of his interests in France (2). However, there are certain imperatives that require departing from these rules and relocating the proceedings (3), or, for larger companies, having them heard by a specialized court (4).

Pursuant to Article R. 600-1 of the Commercial Code, the court with territorial jurisdiction to hear insolvency proceedings is the one in whose jurisdiction the debtor, a natural person, has declared the address of his business or activity. When the debtor is a legal entity, the competent court is the one in the jurisdiction where the debtor has his headquarters. In order to avoid delaying tactics, Article R. 600-1(2), provides that in the event of a change of headquarters of the legal entity within six months preceding the referral to the court, the court in whose jurisdiction the initial headquarters were located remains the only competent court. The text specifies that this period runs from the date of the amending entry in the Company and trade register ("Registre du commerce et des sociétés") of the initial headquarters. Thus, the headquarters to be taken into account are that of the company on the day of the introduction of proceedings, and not that of the jurisdiction to which the debtor transferred his company afterwards . Similarly, where a company has been removed from the Company and trade register after having transferred its headquarters to the jurisdiction of another court and brought proceedings before a court in the jurisdiction of the original headquarters, the latter has jurisdiction to open the insolvency proceedings if less than six months have elapsed between the modifying registration and the referral . The Court of Cassation also considers that a company which hastily transfers its headquarters before the imminent opening of insolvency proceedings commits a fraud on the rights of creditors, which reflects the fictitious nature of the new headquarters and renders the commercial court in whose jurisdiction it is established incompetent . Nevertheless, the fictitiousness of a company's headquarters cannot be deduced from the mere fact that they have remained unoccupied and that no personnel has been assigned to them, when the activity is reduced to that of a lessor of goodwill . The competent court is, in principle, that of the debtor's headquarters, unless it is established that this is only a fiction and that its activities are in reality carried on, for the most part, in another place . The same applies to the headquarters of a company which does not own any property, office or infrastructure which would justify the exercise of a real activity at the place where it is registered: its headquarters must be considered to be located within the jurisdiction of the court on which territory managing partner is active and where the creditors are domiciled .

2) Place of the main center of his interests in France

Article R. 600-1 of the Commercial Code provides that in the absence of headquarters on French territory, the competent court is the one within whose jurisdiction the debtor has the main center of his interests in France. The main center of a company's interests is located within the jurisdiction of the court on which its principal place of business is located with regard to its registration with the Company and trade register  or corresponds to the place where the debtor usually manages its interests . Indeed, the conclusion of important legal acts, such as the taking out of a loan and the constitution of securities subject to publicity in France, which can be verified by third parties, demonstrates that the center of main interests of a company whose headquarters are located abroad is in fact located in France where its main interests are managed and brings it under the jurisdiction of the French courts . On the other hand, the tax status of a company is not a criterion for determining the center of its main interests . Where a company has several secondary establishments in France, the commercial court having jurisdiction over the principal of these establishments, i.e., the one with the most important offices, has territorial jurisdiction to open insolvency proceedings against it as long as the judgment that subjected it to proceedings abroad has not been granted exequatur in France .

According to Article L. 662-2 of the Commercial Code, “[w]here the interests involved so justify, the court of appeal may decide to transfer the case to another court” of the same nature as the court initially having jurisdiction. In application of this text, it is possible to derogate from the regimes of territorial jurisdiction for the opening of insolvency proceedings and to transfer the case to a court other than the one in whose jurisdiction the debtor, as a legal entity, has its headquarters or the debtor, as a natural person, has declared the address of its business or activity, when the interests involved, such as the preservation of the impartiality of justice, justify it . Where there is a suspicion of friendship, or even a conflict of interest, between the court and one of the parties, the transfer of the insolvency proceedings initiated against a company to a court of the same jurisdiction is justified . Article R. 662-7 of the Commercial Code specifies that “[t]hese decisions are binding on the parties and on the designated transfer court”. These provisions are particularly useful for putting an end to the conflict of solutions that can arise when courts in different jurisdictions initiate proceedings of a different nature with respect to the same company. In such a case, the decision to refer the case automatically invalidates the decisions to initiate the proceedings by any court other than the one designated . In addition, article 47 of the Code of Civil Procedure grants lawyers a jurisdictional prerogative that allows them to request the court in which they practice to transfer the case to another court located in a neighboring jurisdiction . The Court of Cassation has held that this jurisdictional prerogative is binding on the bankruptcy judge (juge-commissaire) . Article R. 662-7 of the Commercial Code defines the procedures for obtaining a removal. It specifies that the removal decision is an administrative measure not subject to appeal.

Article L. 721-8 of the Commercial Code lists the cases in which “specially designated commercial courts” have jurisdiction. These courts have jurisdiction to hear safeguard proceedings when the debtor is a company with 250 or more employees and net sales of at least EUR 20 million, or a company with net sales of at least EUR 40 million. They are also competent to hear a safeguard procedure opened against a company which owns or controls another company, within the meaning of Articles L. 233-1 and L. 233-3, provided that the companies are at least EUR 40 million. In addition, the text grants jurisdiction to the specialized commercial courts to hear collective proceedings that are opened internationally. The seat and jurisdiction of the specialized courts is set out in Appendix 7-1 of Book 7 of the Commercial Code. The specific territorial jurisdiction of the specialized commercial courts is assessed with regard to the concrete economic situation of the company on the date of its application to open insolvency proceedings, and not necessarily on the date of the closing of its last accounting period, which may be several months earlier . A challenge by the Public Prosecutor's Office to the jurisdiction of a non-specialized commercial court is not a plea of non-admissibility, but rather a plea of lack of jurisdiction, so that if the Public Prosecutor's Office concluded on the merits in the first instance, it is no longer admissible to raise it for the first time in appeal . 

CA Paris, 24 October 1989, LawLex202100005001JBJ (LJ).

Cass. com., 6 January 1998, LawLex202100002179JBJ (RJ).

Cass. com., 11 April 1995, LawLex202100004382JBJ (RJ).

Cass. com., 2 April 2020, LawLex202100004362JBJ (LJ).

CA Paris, 21 December 2018, LawLex202100004401JBJ (LJ).

Cass. com., 17 February 1998, LawLex202100002185JBJ (LJ).

Cass. com., 28 October 2008, LawLex202100002186JBJ (LJ) ; 2 October 2012, LawLex202100004387JBJ (LJ).

Cass. com., 12 October 2010, LawLex202100004383JBJ (LJ) ; 31 January 2012, LawLex202100004384JBJ (LJ) ; 10 May 2012, LawLex202100004386JBJ (LJ).

CA Lyon, 14 November 2019, LawLex202100004397JBJ (RJ).

Cass. com., 17 November 2021, LawLex202100005896JBJ (RJ).

Cass. com., 8 March 1988, LawLex202100002175JBJ (LJ).

Cass. com., 24 November 1982, LawLex202100002168JBJ (RJ).

Cass. 1ère civ., 21 July 1987, LawLex202100002172JBJ (LJ).

Cass. com., 5 January 1999, LawLex202100004388JBJ (RJ).

Cass. com., 21 March 2006, LawLex202100005122JBJ (RJ) ; LawLex202100005124JBJ (RJ).

CA Paris, 18 December 2014, LawLex202100005123JBJ (LJ).

CA Versailles, 19 January 2012, LawLex202100005628JBJ (S).

Bankruptcy Law

59. Jurisdiction ratione loci

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

59. Jurisdiction ratione loci

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