Abrupt termination of established commercial relationships: no need for a specialised court to obtain a precautionary attachment

On the one hand, a precautionary attachment (saisie conservatoire) allows a creditor whose claim appears well-founded in principle, and whose recovery is under threat, to have the debtor’s bank accounts or assets frozen before any judgment (Article L. 511-1 of the Code of Civil Enforcement Procedures).

It is authorised by the enforcement judge or by the president of the commercial court of the place where the debtor resides (Articles L. 511-3 and R. 511-2 of the same code).

On the other hand, disputes over the abrupt termination of established commercial relationships are subject to a special rule of jurisdiction: only a few specialised courts may hear them at first instance and, on appeal, only the Paris Court of Appeal (Articles L. 442-4, III and D. 442-2 of the Commercial Code).

Which rule prevails when the claim that the attachment is meant to secure arises from an abrupt termination?

In this case, an IT service provider obtained from the president of the Niort commercial court authorisation to attach its client’s bank accounts.

The claim relied on included, among other things, compensation for the losses caused by the abrupt termination of their relationship.

The client applied for the attachment to be lifted. The president of the Niort commercial court refused.

The Poitiers Court of Appeal, by contrast, ordered the attachment to be lifted in full.

As regards the part of the attachment based on compensation for the abrupt termination, it raised its own lack of jurisdiction of its own motion: in its view, this type of dispute fell exclusively within the jurisdiction of the Rennes commercial court, the specialised court for its area, and, on appeal, of the Paris Court of Appeal.

According to the court, the courts within its area, including the president of the Niort commercial court, could therefore not rely on the abrupt termination to justify the attachment without breaching a rule of exclusive jurisdiction.

It also ordered the service provider to pay €10,000 in damages for wrongful attachment.

The Court of Cassation overturned the decision: the jurisdiction rules of the Commercial Code do not apply to precautionary measures, which remain within the jurisdiction of the enforcement judge or the president of the commercial court of the place where the debtor resides.

The order to pay damages for wrongful attachment falls with the lifting of the attachment, on which it depended.

In practice, two judges are involved.

First, the judge of the attachment: the enforcement judge or the president of the commercial court of the place where the debtor resides. That judge may authorise the attachment, or refuse to lift it, taking into account compensation for abrupt termination, even though he or she could not rule on that termination on the merits.

Second, the judge of the merits. Unless the creditor already holds an enforceable title, it must, within one month of the attachment being carried out and on pain of the attachment lapsing, bring proceedings or complete the formalities needed to obtain an enforceable title (Article R. 511-7 of the Code of Civil Enforcement Procedures). For abrupt termination, that action must be brought before the specialised court: before any other court, the claim would be inadmissible.