The commercial law applicable to the Wallis and Futuna Islands is a striking example of the legal complexity of overseas collectivities. Although under French sovereignty and the authority of the High Administrator, this Pacific territory (made up of the islands of Wallis (Uvéa), Futuna and Alofi) does not see metropolitan law applied automatically. For any business, whether local or considering setting up there, understanding this unique legal framework is fundamental to securing its activities. Navigating between the provisions of ordinary law that are extended, those that are adapted by law or ordinance and those that are purely and simply excluded requires detailed analysis. If you have any complex questions about commercial law in Wallis and Futuna or would like tailor-made legal advice, please do not hesitate to contact our experts in commercial law.
The basis for the application of French law and its specific limitations
The legal system of Wallis and Futuna illustrates the principle of legislative speciality which governs certain overseas collectivities. In contrast to application by operation of law, all French legislation must explicitly mention its extension to this territory in order to be in force there.
Constitutional status and the principle of nuanced assimilation
As an overseas collectivity governed by Article 74 of the Constitution, Wallis and Futuna is not subject to the principle of the unity of French legislation. In practice, metropolitan laws and regulations are only applicable if expressly mentioned in the text, generally in the version in force at the time of promulgation. This mechanism allows the law to be adapted to local circumstances, but it creates a single set of rules. The Commercial Code does not therefore apply en bloc. While a large proportion of its provisions have been extended, many exceptions and adaptations remain, creating a variable-geometry legal landscape that all economic players need to master.
Reasons for exclusions and adaptations to the Commercial Code
The reasons justifying the non-application of certain sections of the Commercial Code are often linked to the economic, social and geographical realities of the area. For example, the provisions of Book I relating to itinerant professional activities (art. L. 123-29 to L. 123-31 of the French Commercial Code) are excluded, as the local economic fabric follows a different logic to that of mainland France. Similarly, the texts concerning cooperative societies of shopkeepers or independent door-to-door salespeople are not applicable. These legislative and regulatory particularities are not isolated and can be compared to specific commercial law regimes in Mayottewhich shares certain similarities in terms of adaptation. This approach, presented as a foundation for local development, aims to provide the status of a territory with a legal framework which, while inspired by common law, does not constitute an obstacle to its development.
The commercial judicial system specific to Wallis and Futuna
One of the most distinctive features of commercial law in Wallis and Futuna is its judicial organisation. In the absence of an autonomous commercial court, business litigation is handled by a common law structure with unique characteristics. For a more comprehensive understanding of the specific legal features of the overseas territories, see our article on the organisation of commercial courts in the French overseas territories and mixed commercial courts offers a valuable perspective.
The Court of First Instance of Mata-Utu: mixed commercial justice
There is no separate commercial court in Wallis and Futuna. It is the Tribunal de Première Instance (TPI) of Mata-Utu that rules on commercial matters. Its composition reveals an original form of mixed justice. While cases may be heard by a single judge, a career magistrate, the procedure allows cases to be referred to a panel. This panel is not made up solely of professional judges; it includes citizen assessors, chosen for their guaranteed competence and impartiality. The aim of this mix is to bring the justice system closer to local realities by including people from civil society, some of whom are familiar with customary law, even though they are not formally required to have specific technical expertise in business law.
Substantive and territorial jurisdiction of commercial courts
The Court of First Instance of Mata-Utu has general jurisdiction over all commercial disputes, whether relating to commitments between traders, commercial companies or commercial acts. Its territorial jurisdiction covers the entire community. Appeals against its decisions are lodged with the Nouméa Court of Appeal (COJ, art. D. 532-1), in New Caledonia, reflecting the close judicial links between Nouméa and Mata-Utu. This centralised organisation is a direct consequence of the small size of the territory and the volume of cases, which do not justify the creation of a local court of appeal.
The nuances of commercial leases and management contracts
Commercial leases and management agreements are two essential contractual tools for businesses. In Wallis and Futuna, their legal regime has some adaptations that are essential for both lessors and lessees to be aware of.
Changes to the commercial leases regime: rents and conciliation
The Commercial Leases Act applies, but with significant adjustments. Article L. 951-12 of the French Commercial Code adapts metropolitan France's provisions for setting the rent for renewed leases. Rent variation is not capped by reference to the national commercial rent index (ILC) or cost of construction index (ICC), but by reference to a quarterly local cost of construction index, which sets the review rate. In addition, since a 2017 decree, the regulatory provisions relating to the conciliation commission have been applicable, offering an amicable resolution route for rental disputes. For an in-depth understanding of the rights and obligations of the parties, a a comprehensive guide to the day-to-day management of commercial leases is relevant.
Managing agents: pre-contractual information and compliance
A management agency contract allows the owner of a business to entrust its management to an agent. An important particularity in Wallis and Futuna is the applicability, since decree no. 2017-630 of 25 April 2017, of the regulatory provisions concerning pre-contractual information. Previously excluded, the provisions of Articles D. 146-1 and D. 146-2 of the French Commercial Code, applicable in the wording resulting from this text, now apply. The principal is therefore obliged to provide the future managing agent with a detailed document containing truthful information about the business. This obligation strengthens the legal security of the managing agent by enabling him to make a commitment with full knowledge of the facts.
Insolvency law: specific features and practical implications
Companies experiencing difficulties in Wallis and Futuna are subject to the safeguard, receivership and judicial liquidation procedures under ordinary law, the framework for which was modernised by the Order of 12 March 2014. However, specific exclusions change the legal landscape and have significant practical consequences. In the event of difficulties, understanding the observation period is a key factor in the success of a business. essential guide to insolvency proceedings for companies in difficulty, even if local specificities apply.
Exclusions from certain salary provisions and asset realisation rules
One of the most significant exclusions concerns the guarantee of wages. Article L. 625-9 of the French Commercial Code, which governs the guarantee of wage claims by the Association pour la gestion du régime de Garantie des créances des Salariés (AGS), is not applicable in France. This inapplicability, resulting from the non-extension provided for by law, has a direct impact on the employees of a company in receivership, who do not benefit from the same level of protection as in mainland France. Similarly, the tax provisions relating to sums paid by the AGS (article L. 622-19) are excluded. These exclusions stem from the specific features of local employment law and require greater vigilance in the management of employee claims.
Impact of special arrangements on companies in difficulty
The absence of certain safety nets under ordinary law, particularly in relation to wages, alters the balance of insolvency proceedings. For managers, this means anticipating difficulties and paying particular attention to the cash available to cover employees' rights and the financing of the observation period. For creditors, the absence of the AGS as an interlocutor changes the hierarchy of payments. These special arrangements create an environment where anticipation and upstream legal advice are even more decisive for the survival of the company or the orderly liquidation of its assets.
Other special features of commercial law in Wallis and Futuna
In addition to the main areas of commercial leases and collective proceedings, business law in Wallis and Futuna is characterised by other specific features relating to competition, securities and the status of sole traders.
Competition law: the right application
Competition law applies accordingly. If European Union rules in this area are excluded, national competition law, in particular the provisions of art. L. 752-27 of the French Commercial Code relating to the fight against monopolies and quasi-monopolies in the wholesale or retail trade, is applicable. The Autorité de la concurrence can intervene to issue injunctions or impose penalties on a company in a dominant position whose prices or margins are deemed to be excessive. In this context, market surveillance is crucial to prevent anti-competitive practices, such as exploitation abuses by a dominant company.
Warrants, itinerant activities and status of the collaborating spouse
The local legal regime is characterised by targeted exclusions. The legislative provisions relating to deposits in general warehouses (articles L. 522-1 to L. 522-40 of the French Commercial Code), which form the basis of warrants on stocks, do not apply. This financial specificity limits the options for securing goods. Similarly, the regulations governing itinerant commercial and craft activities do not apply. On the other hand, a notable change, resulting from Act no. 2019-486 of 22 May 2019 on business growth and transformation (known as the PACTE Act), concerns the status of the collaborating spouse. Long subject to exceptional rules, this status has recently been brought into line with ordinary law. There is no longer a condition relating to a maximum number of employees, which harmonises the situation with that in mainland France. Among the specific financial issues, the question of securities on stocks can be examined in greater depth by our practical guide to the general shop warranteven if its direct application is affected by local exclusions.
Wallis and Futuna's commercial law, with its à la carte application of French law, requires specialist expertise for any company operating in the territory. To navigate this specific legal landscape with confidence and benefit from appropriate advice, do not hesitate to consult our experts in commercial lawwho are involved in appeals in Noumea.
Sources
- Commercial code
- Code of judicial organisation
- Constitution of 4 October 1958
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