Immunity from execution represents a major challenge for creditors seeking to recover their debts from public entities, whether French or foreign. This principle, which exempts the assets of public bodies from enforcement measures, is based on solid foundations such as the continuity of public services and state sovereignty. However, its contours and limits have evolved considerably, at a time when the right to enforcement of court decisions is itself enshrined in the ECHR. This evolution has been driven by court rulings and major legislative texts, such as the Sapin 2 law. Faced with these complexities, the assistance of a lawyer specialising in enforcement procedures is often essential to defining an effective collection strategy.
Fundamental principles and justifications of immunity from execution
The right of general pledge, enshrined in article 2284 of the Civil Code, in principle authorises any creditor to seize his debtor's assets. Immunity from execution is a major exception to this principle, prohibiting the application of the provisions of the Civil Code. civil enforcement procedures against certain persons. This mechanism protects not the assets themselves, but the person of the debtor because of its public law nature.
Distinction between immunity from seizure and immunity from execution
It is essential not to confuse immunity from execution with unseizability. Immunity from seizure is a form of protection attached to the nature of a specific asset, making it unfit for seizure regardless of who owns it. Article L. 112-2 of the Code of Civil Enforcement Procedures (CPCE), for example, lists the movable property necessary for the life and work of the distrainee debtor. Immunity from execution, on the other hand, is a personal privilege attached to the status of the debtor. To take a concrete example, an asset belonging to a public entity is protected by immunity, but this same asset, if owned by a private individual, could be seized without difficulty.
Foundations and criticisms of the immunity of public bodies from execution
The immunity of French public bodies is justified by several traditional arguments based on cardinal principles of public law. The first is the presumption of solvency of the State and its branches. The second, and more fundamental, is the need to ensure the continuity of the public service. Allowing the seizure of assets assigned to a mission of general interest could paralyse the operation of the State. Finally, the rules of public accounting provide for specific procedures for the payment of public debts, making enforcement unnecessary in theory. However, this principle is not without considerable debate, particularly when applied to public industrial and commercial establishments (EPICs) which operate on the market under conditions similar to those of private companies, raising questions of distortion of competition.
The legal regime governing immunity from execution of French public entities
French law enshrines a general principle that property belonging to public bodies may not be seized. This principle has been forcefully reaffirmed by the Court of Cassation, which describes it as a "general principle of law" (Civ. 1re, 21 Dec. 1987). Article L. 2311-1 of the Code général de la propriété des personnes publiques states that "the assets of public bodies (...) may not be seized".
Scope and entities concerned
Immunity from execution is granted to the State, local authorities (municipalities, departments, regions) and their groupings throughout France, as well as to public establishments, whether administrative or, under certain conditions, industrial and commercial. The protection covers all their property, whether in the public or private domain. However, the courts have ruled that EPICs are not entitled to immunity unless they can show that their assets are the very foundation of a public service and that seizure would jeopardise its operation.
Exceptions to immunity: attachment of earnings and administrative proceedings
Immunity is not absolute. One notable exception concerns the seizure of public employees' wages. This specific procedure, governed by the Labour Code, remains applicable. In addition, in order to compel a public entity to comply with a court order, the creditor may take administrative legal action. The law of 16 July 1980 introduced procedures for the compulsory payment of debts and the compulsory inclusion of expenditure in the budget of the defaulting entity. Similarly, recourse to administrative constraints can be used to circumvent immunity from execution to force an administration to execute.
Immunity from execution of foreign States and their emanations: the Sapin 2 Act and case law
The regime applicable to foreign States is traditionally more nuanced, based on a distinction between acts of public authority and acts of private management. This regime has been thoroughly modernised and codified by Law 2016-1691 of 9 December 2016, known as "Sapin 2", the entry into force of which marked a turning point, by introducing Articles L. 111-1-1 to L. 111-1-3 into the CPCE.
General principle and distinction between acts of sovereignty and acts of management
Under customary international law, immunity from execution protects a foreign state only in respect of its sovereign activities (acts jure imperii). On the other hand, when a State acts as a private person in the context of economic or commercial transactions (acts jure gestionis) relating to international trade, its property allocated to this activity is not covered by immunity. The position taken by the French courts, particularly in Paris in the Eurodif and Sonatrach rulings, has enshrined this principle, allowing the seizure of assets allocated to an economic activity governed by private law.
The contribution of the Sapin 2 Act and the presumption of public use of assets
The stated aim of the Sapin 2 Act was to clarify and strengthen the protection of foreign States in order to prevent abusive seizures. Article L. 111-1-2 of the CPCE establishes that an enforcement measure can only be authorised by the judge if three cumulative conditions, forming a new stringent criterion, are met: the claim is based on an activity that is not a public service, the asset in question is used for purposes other than a non-commercial public service, and there is a connecting link between the claim and the asset. Above all, this text establishes a presumption of allocation to non-commercial public service purposes for certain assets, in particular bank accounts used in the performance of the functions of the diplomatic mission or consular postsThe protection afforded to these items is reinforced.
Foreign central banks and monetary authorities
A specific and even more protective regime is provided for central banks and other foreign monetary organisations. Article L. 153-1 of the French Monetary and Financial Code establishes the principle that their assets, whether held on their own behalf or on behalf of their State, are virtually unseizable. The exception is very restrictive: a creditor must prove that the assets are part of a patrimony that the central bank assigns to a principal activity governed by private law. This immunity from seizure is distinct from the immunity of the State, and a waiver by the State has no effect on the protection of the assets of its central bank.
Waiver of immunity from execution: an 'express and special' act
A State may voluntarily waive its immunity from enforcement. However, the conditions for the validity of such a waiver have been the subject of intense case law development, now stabilised by the Sapin 2 Act. The principle is now that the waiver must be "express and special".
Case law developments on waiver requirements
For a long time, the Court of Cassation required an "express and special" waiver for property linked to diplomatic missions. In a reversal in 2015, it temporarily abandoned the "special" requirement, considering that a general express renunciation was sufficient. This new solution, deemed too favourable to creditors and potentially damaging to diplomatic relations, was quickly contradicted by the legislature with the Sapin 2 Act, which reaffirmed the dual requirement.
Scope of the waiver and property concerned
In order to be valid, the waiver must not only be in writing and unequivocal (express), but it must also specifically identify the property or categories of property to which it relates (special). For example, a general waiver of immunity clause in a contract is no longer sufficient to allow the seizure of any property. This applies with particular rigour to the diplomatic mission's bank accounts. Recent court rulings have also provided important clarifications concerning specific assets such as state aircraftwhich can be likened to ships.
Implied waiver via arbitration agreement
The question of whether the conclusion of an arbitration agreement by a State constitutes an implicit waiver of its immunity from enforcement is at the heart of a complex legal debate. Courts have held that agreeing to submit to arbitration rules providing for mandatory enforcement of the award constitutes such a waiver. However, caution is called for in the case of private co-contractors, such as commercial companies, who are well advised to include clear waiver clauses in their contracts that comply with current legal requirements to avoid any ambiguity.
The Enforcement Judge (JEX) and immunity disputes: jurisdiction and limits
Challenges relating to immunity, The Enforcement Judge (JEX) has virtually exclusive jurisdiction, albeit subject to specific limits. It is the guardian of the balance between the creditor's right to obtain satisfaction of his claim and the protection due to public entities.
Area of intervention of the JEX in matters of immunity
The JEX has jurisdiction over all difficulties relating to enforceable titles and disputes arising in connection with forced execution. This includes the power to assess whether or not an asset enjoys immunity from execution. Its jurisdiction extends to the examination of the merits of the law, provided that the question is raised in the context of an enforcement measure that has already been initiated and that it does not fall within the exclusive jurisdiction of an administrative court.
Limits to the power of the JEX: Intangibility of title and administrative issues
The powers of the JEX are subject to strict limits. One of the fundamental limits is that under no circumstances may he modify the enforcement order system on which the proceedings are based. Its role is limited to checking that the debt has been properly enforced. Similarly, it must declare of its own motion that it does not have jurisdiction over matters that come under the administrative system, such as the merits of a tax claim or the validity of an administrative act, since it can only rule on the formal legality of tax proceedings.
Prior judicial authorisation for measures against foreign states
Since the Sapin 2 Act, the JEX has played a crucial preventive role. No protective measure or compulsory execution on property belonging to a foreign State may be carried out without prior judicial authorisation, formalised by a judgment. The creditor must apply to the court, which will only give its authorisation if the strict conditions of article L. 111-1-2 of the CPCE are clearly met. This judicial filter procedure is designed to prevent vexatious seizures and to protect the sovereignty of States.
The impact of international economic sanctions on immunity from execution
International economic sanctions regimes, such as asset freezing measures decided by the UN or the European Union, interact with immunity from execution in a complex way. These measures, which are imposed by a supranational organisation, are designed to restrict a State's or certain entities' access to their economic resources for foreign policy and security reasons.
An asset freeze is not a seizure. It paralyses the right to dispose of funds but does not entail dispossession for the benefit of a creditor. In principle, frozen assets cannot be enforced, as this would contravene the prohibition on making funds available. However, European regulations provide for derogation mechanisms. A creditor may obtain authorisation from the competent authority (in France, the Direction Générale du Trésor) to release funds to enforce a court decision or an arbitration award, provided that this decision predates the designation of the legal person or entity under sanction. This field of law, which is constantly evolving in line with geopolitical developments, adds another layer of complexity to the recovery of claims against state entities.
Litigation relating to immunity from execution requires a detailed analysis of legal texts and rulings. Our firm offers you its expertise in defending your rights in this area and devising the strategy best suited to your situation. For an in-depth analysis of your situation and tailored advice, please contact our team of lawyers.
Sources
- Code of civil enforcement procedures
- Law 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernisation of economic life (known as the "Sapin 2 Law").
- Monetary and Financial Code
- Code général de la propriété des personnes publiques
- Vienna Convention on Diplomatic Relations of 18 April 1961
- United Nations Convention on Jurisdictional Immunity of States and Their Property of 2 December 2004
Immunity from execution represents a major challenge for creditors seeking to recover their debts from public entities, whether French or foreign. This principle, which exempts the assets of public bodies from enforcement measures, is based on solid foundations such as the continuity of public services and state sovereignty. However, its contours and limits have evolved considerably, at a time when the right to enforcement of court decisions is itself enshrined in the ECHR. This evolution has been driven by court rulings and major legislative texts, such as the Sapin 2 law. Faced with these complexities, the assistance of a lawyer specialising in enforcement procedures is often essential to defining an effective collection strategy.
Fundamental principles and justifications of immunity from execution
The right of general pledge, enshrined in article 2284 of the Civil Code, in principle authorises any creditor to seize his debtor's assets. Immunity from execution is a major exception to this principle, prohibiting the application of the provisions of the Civil Code. civil enforcement procedures against certain persons. This mechanism protects not the assets themselves, but the person of the debtor because of its public law nature.
Distinction between immunity from seizure and immunity from execution
It is essential not to confuse immunity from execution with unseizability. Immunity from seizure is a form of protection attached to the nature of a specific asset, making it unfit for seizure regardless of who owns it. Article L. 112-2 of the Code of Civil Enforcement Procedures (CPCE), for example, lists the movable property necessary for the life and work of the distrainee debtor. Immunity from execution, on the other hand, is a personal privilege attached to the status of the debtor. To take a concrete example, an asset belonging to a public entity is protected by immunity, but this same asset, if owned by a private individual, could be seized without difficulty.
Foundations and criticisms of the immunity of public bodies from execution
The immunity of French public bodies is justified by several traditional arguments based on cardinal principles of public law. The first is the presumption of solvency of the State and its branches. The second, and more fundamental, is the need to ensure the continuity of the public service. Allowing the seizure of assets assigned to a mission of general interest could paralyse the operation of the State. Finally, the rules of public accounting provide for specific procedures for the payment of public debts, making enforcement unnecessary in theory. However, this principle is not without considerable debate, particularly when applied to public industrial and commercial establishments (EPICs) which operate on the market under conditions similar to those of private companies, raising questions of distortion of competition.
The legal regime governing immunity from execution of French public entities
French law enshrines a general principle that property belonging to public bodies may not be seized. This principle has been forcefully reaffirmed by the Court of Cassation, which describes it as a "general principle of law" (Civ. 1re, 21 Dec. 1987). Article L. 2311-1 of the Code général de la propriété des personnes publiques states that "the assets of public bodies (...) may not be seized".
Scope and entities concerned
Immunity from execution is granted to the State, local authorities (municipalities, departments, regions) and their groupings throughout France, as well as to public establishments, whether administrative or, under certain conditions, industrial and commercial. The protection covers all their property, whether in the public or private domain. However, the courts have ruled that EPICs are not entitled to immunity unless they can show that their assets are the very foundation of a public service and that seizure would jeopardise its operation.
Exceptions to immunity: attachment of earnings and administrative proceedings
Immunity is not absolute. One notable exception concerns the seizure of public employees' wages. This specific procedure, governed by the Labour Code, remains applicable. In addition, in order to compel a public entity to comply with a court order, the creditor may take administrative legal action. The law of 16 July 1980 introduced procedures for the compulsory payment of debts and the compulsory inclusion of expenditure in the budget of the defaulting entity. Similarly, recourse to administrative constraints can be used to circumvent immunity from execution to force an administration to execute.
Immunity from execution of foreign States and their emanations: the Sapin 2 Act and case law
The regime applicable to foreign States is traditionally more nuanced, based on a distinction between acts of public authority and acts of private management. This regime has been thoroughly modernised and codified by Law 2016-1691 of 9 December 2016, known as "Sapin 2", the entry into force of which marked a turning point, by introducing Articles L. 111-1-1 to L. 111-1-3 into the CPCE.
General principle and distinction between acts of sovereignty and acts of management
Under customary international law, immunity from execution protects a foreign state only in respect of its sovereign activities (acts jure imperii). On the other hand, when a State acts as a private person in the context of economic or commercial transactions (acts jure gestionis) relating to international trade, its property allocated to this activity is not covered by immunity. The position taken by the French courts, particularly in Paris in the Eurodif and Sonatrach rulings, has enshrined this principle, allowing the seizure of assets allocated to an economic activity governed by private law.
The contribution of the Sapin 2 Act and the presumption of public use of assets
The stated aim of the Sapin 2 Act was to clarify and strengthen the protection of foreign States in order to prevent abusive seizures. Article L. 111-1-2 of the CPCE establishes that an enforcement measure can only be authorised by the judge if three cumulative conditions, forming a new stringent criterion, are met: the claim is based on an activity that is not a public service, the asset in question is used for purposes other than a non-commercial public service, and there is a connecting link between the claim and the asset. Above all, this text establishes a presumption of allocation to non-commercial public service purposes for certain assets, in particular bank accounts used in the performance of the functions of the diplomatic mission or consular postsThe protection afforded to these items is reinforced.
Foreign central banks and monetary authorities
A specific and even more protective regime is provided for central banks and other foreign monetary organisations. Article L. 153-1 of the French Monetary and Financial Code establishes the principle that their assets, whether held on their own behalf or on behalf of their State, are virtually unseizable. The exception is very restrictive: a creditor must prove that the assets are part of a patrimony that the central bank assigns to a principal activity governed by private law. This immunity from seizure is distinct from the immunity of the State, and a waiver by the State has no effect on the protection of the assets of its central bank.
Waiver of immunity from execution: an 'express and special' act
A State may voluntarily waive its immunity from enforcement. However, the conditions for the validity of such a waiver have been the subject of intense case law development, now stabilised by the Sapin 2 Act. The principle is now that the waiver must be "express and special".
Case law developments on waiver requirements
For a long time, the Court of Cassation required an "express and special" waiver for property linked to diplomatic missions. In a reversal in 2015, it temporarily abandoned the "special" requirement, considering that a general express renunciation was sufficient. This new solution, deemed too favourable to creditors and potentially damaging to diplomatic relations, was quickly contradicted by the legislature with the Sapin 2 Act, which reaffirmed the dual requirement.
Scope of the waiver and property concerned
In order to be valid, the waiver must not only be in writing and unequivocal (express), but it must also specifically identify the property or categories of property to which it relates (special). For example, a general waiver of immunity clause in a contract is no longer sufficient to allow the seizure of any property. This applies with particular rigour to the diplomatic mission's bank accounts. Recent court rulings have also provided important clarifications concerning specific assets such as state aircraftwhich can be likened to ships.
Implied waiver via arbitration agreement
The question of whether the conclusion of an arbitration agreement by a State constitutes an implicit waiver of its immunity from enforcement is at the heart of a complex legal debate. Courts have held that agreeing to submit to arbitration rules providing for mandatory enforcement of the award constitutes such a waiver. However, caution is called for in the case of private co-contractors, such as commercial companies, who are well advised to include clear waiver clauses in their contracts that comply with current legal requirements to avoid any ambiguity.
The Enforcement Judge (JEX) and immunity disputes: jurisdiction and limits
Challenges relating to immunity, The Enforcement Judge (JEX) has virtually exclusive jurisdiction, albeit subject to specific limits. It is the guardian of the balance between the creditor's right to obtain satisfaction of his claim and the protection due to public entities.
Area of intervention of the JEX in matters of immunity
The JEX has jurisdiction over all difficulties relating to enforceable titles and disputes arising in connection with forced execution. This includes the power to assess whether or not an asset enjoys immunity from execution. Its jurisdiction extends to the examination of the merits of the law, provided that the question is raised in the context of an enforcement measure that has already been initiated and that it does not fall within the exclusive jurisdiction of an administrative court.
Limits to the power of the JEX: Intangibility of title and administrative issues
The powers of the JEX are subject to strict limits. One of the fundamental limits is that under no circumstances may he modify the enforcement order system on which the proceedings are based. Its role is limited to checking that the debt has been properly enforced. Similarly, it must declare of its own motion that it does not have jurisdiction over matters that come under the administrative system, such as the merits of a tax claim or the validity of an administrative act, since it can only rule on the formal legality of tax proceedings.
Prior judicial authorisation for measures against foreign states
Since the Sapin 2 Act, the JEX has played a crucial preventive role. No protective measure or compulsory execution on property belonging to a foreign State may be carried out without prior judicial authorisation, formalised by a judgment. The creditor must apply to the court, which will only give its authorisation if the strict conditions of article L. 111-1-2 of the CPCE are clearly met. This judicial filter procedure is designed to prevent vexatious seizures and to protect the sovereignty of States.
The impact of international economic sanctions on immunity from execution
International economic sanctions regimes, such as asset freezing measures decided by the UN or the European Union, interact with immunity from execution in a complex way. These measures, which are imposed by a supranational organisation, are designed to restrict a State's or certain entities' access to their economic resources for foreign policy and security reasons.
An asset freeze is not a seizure. It paralyses the right to dispose of funds but does not entail dispossession for the benefit of a creditor. In principle, frozen assets cannot be enforced, as this would contravene the prohibition on making funds available. However, European regulations provide for derogation mechanisms. A creditor may obtain authorisation from the competent authority (in France, the Direction Générale du Trésor) to release funds to enforce a court decision or an arbitration award, provided that this decision predates the designation of the legal person or entity under sanction. This field of law, which is constantly evolving in line with geopolitical developments, adds another layer of complexity to the recovery of claims against state entities.
Litigation relating to immunity from execution requires a detailed analysis of legal texts and rulings. Our firm offers you its expertise in defending your rights in this area and devising the strategy best suited to your situation. For an in-depth analysis of your situation and tailored advice, please contact our team of lawyers.
Sources
- Code of civil enforcement procedures
- Law 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernisation of economic life (known as the "Sapin 2 Law").
- Monetary and Financial Code
- Code général de la propriété des personnes publiques
- Vienna Convention on Diplomatic Relations of 18 April 1961
- United Nations Convention on Jurisdictional Immunity of States and Their Property of 2 December 2004
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