Bankruptcy Law

Under the terms of Article L. 622-7, I of the Commercial Code, applicable to the receivership procedure by reference to Article L. 631-14, “[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”. According to case law, reciprocal debts  …

Connectedness criterion

Under the terms of Article L. 622-7, I of the Commercial Code, applicable to the receivership procedure by reference to Article L. 631-14, “[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”. According to case law, reciprocal debts are related when they arise from the same agreement .

A debtor's claim arising from his bank's failure to comply with its advisory obligations and the bank's claim arising from the debit balance of his securities deposit account , or the debt arising from overbilling following the defective performance of a contract and the debt arising from that contract , therefore constitute related claims. The debtor's claim arising from unpaid rents by his tenant and the astreinte (penalty) debt arising from his order to carry out work may be offset, provided they both arise from the lease agreement . The same applies to reciprocal claims arising from the same factoring contract, the first corresponding to the debit balance of the current account owed by the debtor company to the creditor company, and the second to the balance of the guarantee account owed by the creditor company to the debtor company after termination of the factoring contract .

On the other hand, no connection can be established between two claims arising from different contracts . For example, a partner's debt arising from the partnership agreement, who has not paid up his contribution in full, cannot be set off against either his claim arising from an agency agreement  or his claim arising from the credit balance of his partner's current account, which derives from a loan granted to the partnership . Similarly, a clause in a loan contract providing for set-off between the bank's claim under the contract and the credit balance in its customer's bank account cannot be enforced, in the absence of a connection between the obligations arising from separate agreements . A link of connection between two claims, which do not arise from the same contract, may nevertheless be established if it is shown that they arise from an agreement setting the framework for the development of the parties' business relations . As a result, set-off may be triggered by the connection between receivables and payables arising from sales and purchases made under two supply contracts, which constitute elements of a single contractual package serving as a general framework for the parties' relations .

Set-off is also excluded when one of the claims in question has no contractual basis whatsoever. Indeed, there can be no connection between a claim arising from fraud, with no link to any order or delivery, and a claim for payment of the price of goods delivered to the debtor . There can no longer be any set-off between the debtor company's debt in respect of unpaid invoices under the supply contract between it and the creditor, and its claim against the creditor, which arises from a quasi-delictual fault , between a contractual claim and a claim for damages arising from the debtor's tortious liability , or between the debtor's claim for damages arising from the conviction of its general agents for breach of trust, and its debt to them in compensation for the claims they have waived on commissions, arising from the contract between them . Finally, there can be no set-off between a claim for unpaid rent deriving from the contract between the parties and an indemnity for abusive contestation of the debtor's right to a lease, in the absence of connection .

Set-off between two related debts may be established even if they are not due  and even if they are a prior and a subsequent debt . 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 operations subsequent to this judgment, does not allow set-off . The assignment of reciprocal claims by means of a Dailly slip, even prior to the opening judgment, does not prevent them from being set off, provided they are linked . On the other hand, there can be no set-off of related debts when the claim has been assigned for the sole purpose of satisfying the reciprocity requirement .

The trial court hearing a claim for set-off of a related prior claim, opposed to the claim for payment lodged by a debtor in insolvency procedure, must first rule on the plausibility of the claim asserted, and, where applicable, accept the principle of set-off, then order set-off up to the amount of the claim to be determined by the bankruptcy judge, without the creditor having to prove that his claim has been accepted at this stage . If the court finds that the principle of set-off applies, given the likelihood of the creditor's claim and the absence of a decision admitting the disputed claim, it must stay its decision on the debtor's application to release the seizures until the bankruptcy judge has made a decision . 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 offset against related debts of the debtor .

Lastly, the person intending to invoke set-off must ensure that the claim is related to the debt he wishes to set off . In the case of several debts that can be offset against a debtor's claim, 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., 6 January 1998, LawLex202100002697JBJ (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 April1997, 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., 5 November 2013, LawLex202100002703JBJ (LJ).

Cass. com., 27 January 2015, LawLex202100002742JBJ (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 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. v. Cass. com., 9 December 1997, LawLex202100002708JBJ (LJ) considering that compensation can validly be effected, even in the absence of connexity, between a bank's claim and the credit balance of the debtor company's bank account, by virtue of a conventional compensation clause.

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

Bankruptcy Law

387. Connectedness criterion

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

387. Connectedness criterion

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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