The legal vacuum before 1991
Prior to 1991, there were no specific enforcement procedures for intangible rights. This legal vacuum posed a problem. In order to understanding the seizure of intangible rights, its definition and current scopeA historical perspective is essential.
Bailiffs improvised. For registered securities and partnership rights, they used garnishment. For bearer securities held by the debtor, they used execution.
These solutions were imperfect. Garnishment required judicial validation despite the existence of a writ of execution. Seizure in execution did not apply well to intangible assets.
The 1991-1992 revolution
The law of 9 July 1991 and its decree of 31 July 1992 created a specific procedure: the seizure of shareholders' rights and securities.
This reform has filled a major legal vacuum. It has brought enforcement procedures into line with economic reality. Practitioners have welcomed it.
The text was part of an overall modernisation of enforcement procedures. It replaced procedures dating from the Napoleonic Code of 1806.
2012 legislation: clarity and innovation
The Code of Civil Enforcement Procedures came into force on 1 June 2012. The provisions on the seizure of intangible rights are set out in articles L. 231-1 to L. 233-3 and R. 231-1 to R. 233-9.
This codification introduced a major innovation. Article R. 231-1 extends the procedure to all intangible rights "insofar as their specific nature does not prevent it".
The scope of application has thus been extended beyond shareholder rights and securities. The procedure now potentially covers all non-monetary intangible rights.
The creative role of case law
Before 2012, the Cour de cassation (French Supreme Court) remedied the text's shortcomings. Its opinion of 8 February 1999 authorised the analogous application of the procedure to public house licences.
Other landmark rulings have clarified the system:
- The decision of 4 November 2003 on the de facto unseizability of ministerial offices
- Judgment of 21 October 2010 on the precautionary seizure of shares in a public limited partnership (SCP)
- Judgment of 8 December 2022 on garnishees
Gradual extension of the domain
The field of data capture has expanded in stages, gradually encompassing much more than the shares initially targeted :
- Shareholder rights and securities (1992)
- Operating licences (1999)
- All intangible rights (2012)
Uncertainties persist for some properties:
- Cryptoassets (Bitcoin, NFT)
- Virtual goods in metaverses
- Personal data and customer files
A recent constitutional decision
On 17 November 2023, the Conseil constitutionnel declared unconstitutional "the words 'disputes arising in connection with enforcement' in the first paragraph of article L. 213-6 of the Code de l'organisation judiciaire".
This decision requires reform. Until 1 December 2024, the debtor may contest the amount of the upset price for the auction of intangible rights before the enforcement judge. This development highlights the continuing role of the courts, particularly the Cour de cassation, in the clarification of the procedures for contesting the seizure of intangible rights.
Where do we go from here?
There are several avenues for reform:
- Adapting the procedure to cryptoassets
- Harmonising enforcement law and company law
- Simplifying approval formalities
- Creating a specific regime for new intangible rights
- Comparing the French system with foreign laws to identify areas for harmonisation or inspiration.
These changes are necessary. Modern assets contain more and more intangible rights. The law must adapt to this new economic reality. To navigate these complexities and understand the impact of these developments on the seizure of shares Today, specialist legal advice is essential.
Sources
- Code of civil enforcement procedures
- Opinion of the Court of Cassation, 8 February 1999, No. 98-00.015
- Constitutional Council decision, 17 November 2023, no. 2023-1068 QPC
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