Since the election of Emmanuel Macron as President of the French Republic, the whole world has its eyes on our country and one of the issues for which Emmanuel Macron and his Government will be under much scrutiny is of course French labor and employment law. The Government’s ambition is to find innovative solutions very quickly, by relying on consultations between social partners (i.e. employees’ and employers’ representative bodies) in order to articulate social and economic performance.
While it is still too early to tell whether the “work program to renew our social model” submitted to the social partners on June 6 will be the launch pad for ambitious and efficient major labor reforms, one thing is certain: The wind of hope and positivism is blowing again on French social partners and actors.
Unlisted companies and legal entities required to be incorporated with the Register of Trade and Companies and headquartered in France (in particular branches of foreign corporations) will very soon have the obligation to file with the clerk of the Commercial Court a document that sets forth identification data on their beneficial owner(s), his/her/their personal place of residence as well as the way in which he/she/they exercise(s) control over the relevant company or entity.
Since March 1, 2017, new provisions govern the statutes of limitations for the prosecution of criminal offenses (i.e. the time-line during which an offense must be prosecuted) and the statutes of limitations for the enforcement of penalties.
What are the consequences of these changes?
Ordinance n°2017-748 of May 4, 2017 adopted in furtherance of the so-called “Sapin II” Law on transparency, fight against corruption and modernization of the economy, adds a new element to the concept of Security Agent in the context of syndicated loans, thereby offering banks and other institutions an efficient and secure device comparable to what is known, in particular in Anglo-Saxon countries, as the “Security Trustee”.
This widely welcomed reform should contribute to improve the competitiveness of the French finance industry with respect to syndicated financing.
Appeals lodged in disputes based on Article L. 442-6 of the French Commercial Code (the “FCC”) on restrictive trade practices – including, but not limited to, significant imbalance in the rights and obligations of contractual parties and sudden breach of established business relationships – fall within the exclusive jurisdiction of the Paris Court of Appeals. This rule had been so far applied extensively by the Cour de Cassation (French Supreme Court).
In a decision dated March 29, 2017, confirmed by a second decision dated April 26, 2017, the Cour de Cassation reversed its case law and ruled that in certain circumstances such disputes can escape the exclusive jurisdiction of the Paris Court of Appeals and be validly brought before another court of appeals.
The sale of all or part of corporate assets is an important step of the judicial liquidation of a company as such sale is designed to ensure the survival of activities that are capable of being operated independently and save the associated jobs on the one hand, and to settle the company’s liabilities on the other hand.
Wherever the bankruptcy court considers that such a sale may be envisaged, it authorizes the continuation of the business activities and sets the deadline by which purchase offers must be filed.
To avoid fraudulent sales, Article L. 642-3 of the French Commercial Code prohibits the corporate officers of a company placed in judicial liquidation to file such an offer, either directly or through an intermediary.
In a decision dated March 8, 2017, the Cour de Cassation (French Supreme Court) provided for the first time a definition of the concept of “use of intermediary(ies)” within the meaning of the aforementioned Article.
The United Kingdom is the first Member of the European Union that used the withdrawal option provided for under Article 50 that was introduced in the Treaty on European Union by the Lisbon Treaty. This unexpected withdrawal raises major challenges that no one seems to have actually anticipated.
Countdown to Brexit started on March 29, 2017, date on which Theresa May officially notified the Chair of the European Council of the United Kingdom's intention to leave the EU. This notification launches two years of tough negotiations at the end of which the United Kingdom and the European Union must agree on the terms and conditions of UK’s withdrawal, unless this timeline is extended by unanimous agreement from all EU Member States.
The timetable for negotiations coincides with the entry into force in 2019 of a series of financial rules, one of the most important in the banking and financial sector being the Directive on markets in financial instruments, known as the MiFID Directive. The implementation of this Directive is essential to allow banks and investment firms to operate within the European Union.
Theresa May said that she is in favor of the preservation of expatriates’ rights provided that an agreement on “reciprocal rights” is reached.
In fact, it is highly likely that the British Government will impose work permit restrictions. In that case, and as the principle of reciprocity will apply, British citizens will need a visa to work in France.
The future of expatriates will most certainly be used as a bargaining chip during the withdrawal negotiations and chances are high that what happens to them will be decided at the last minute, in 2019, when UK’s withdrawal from the European Union will become effective.
Let us hope, at least, that our leaders will work out efficient agreements to impair as little as possible the free movement of people between the United Kingdom and France, in particular with respect to business immigration.
The Cour de Cassation (French Supreme Court) recently held that a price reduction clause contractually agreed upon between a supplier and its distributor can create a significant imbalance in the rights and obligations of the parties, within the meaning of Article L. 442-6 I §2 of the French Commercial Code.
The concept of “significant imbalance”, sometimes criticized for its vagueness, is addressed in a growing number of court decisions that provide a concrete illustration thereof through a factual analysis of behaviors and contractual provisions agreed upon between business partners.
The decision commented in this article is particularly noteworthy because it recalls that, as per the terms of the above-mentioned Article, the judge is empowered to check the price set by the parties.
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