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Decision no. 2011-213 QPC of 27 JANUARY 2012

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COFACE [Suspension of legal proceedings in favour of certain repatriates from former overseas territories]

On 9 November 2011, the Constitutional Council, in the conditions provided for by Article 61-1 of the Constitution, received an application for a priority preliminary ruling on the issue of constitutionality raised by the Cour de cassation (second civil division, judgment no. 1945 of 9 November 2011) on behalf of the French Insurance Company for Foreign Trade [Compagnie française d'assurance pour le commerce extérieur, COFACE], raising the conformity of Article 100 of Law no. 971269 of 30 December 1997 on finance, amended for 1998, and Article 25 of Law no. 981267 of 30 December 1998 on finance, amended as adjusted for 1998, with the rights and freedoms guaranteed by the Constitution.

THE CONSTITUTIONAL COUNCIL,

Having regard to the Constitution;

Having regard to Ordinance no. 581067 of 7 November 1958 as amended, concerning organic law on the Constitutional Council;

Having regard to Law no. 611439 of 26 December 1961 on the reception and reintegration of overseas French citizens;

Having regard to Law no. 97-1269 of 30 December 1997 on finance, amended for 2009;

Having regard to Law no. 98546 of 2 July 1998 making various amendments to provisions governing economic and financial matters;

Having regard to Law no. 981267 of 30 December 1998 on finance, amended for 1998;

Having regard to the Regulation of 4 February 2010 on the procedure applicable before the Constitutional Council with respect to applications for priority preliminary rulings on the issue of constitutionality;

Having regard to the observations in interventions on behalf of the Trade Union for the Defence of the Interests of French Citizens repatriated from Algeria and other Overseas Territories, Populations Displaced against their Will ["Union syndicale de défense des Intérêts des Français repliés d'Algérie, d'Outremer, populations déplacées contre leur gré, USDIFRA"], registered on 30 November 2011;

Having regard to the observations on behalf of the applicant by SCP GadiouChevalier, Attorney at the Conseil d'État and the Cour de Cassation, registered on 1 and 19 December 2011;

Having regard to the observations on behalf of SNC CAZORLA and Cie, submitted by Ludovic Serée de Roche Esq., attorney at the Toulouse bar, registered on 1 and 5 December 2011;

Having regard to the observations of the Prime Minister, registered on 2 December 2011;

Having regard to the documents produced and appended to the case files;

Having heard JeanPierre Chevalier Esq. for the applicant company, Ludovic Serée de Roche Esq. for company CAZORLA, Grégoire Ladouari Esq., attorney at the Marseille bar for the intervener association and Mr Xavier Pottier, appointed by the Prime Minister, at the public hearing of 17 January 2012;

Having heard the Rapporteur;

1. Considering that pursuant to Article 100 of Law no. 97 1269 of 30 December 1997 on finance, amended for 1998, as in force prior to the enactment of Article 25 of Law no. 981267 of 30 December 1998 on finance, amended for 1998:

"Any person who has filed an application prior to 18 November 1997 with the departmental committees for assistance to repatriated citizens who have been reintegrated into a non-salaried profession shall benefit from a provisional suspension of proceedings initiated against them until adoption of the decision of the competent administrative authority, the decision of the administrative authority with standing to hear a non-judicial appeal against the former where applicable or, in the event of a judicial appeal, until the adoption of the definitive decision of the competent judicial body.

"Any person who does not fall within the scope of the first subparagraph and has filed an application before 18 November 1997 and the time limit specified under the new regulatory provisions on debt relief assistance shall benefit from a provisional suspension of proceedings under the same conditions as those specified in the previous subparagraph.

"These provisions shall also apply to collective creditor proceedings and to interim measures, although not to tax debts. They shall be applicable before all courts, including the appeal courts and the Cour de Cassation.

"Any person who has filed an application before 18 November 1997 against an unfavourable decision taken pursuant to Article 44 of the Law on finance, amended as adjusted for 1986 (no. 861318 of 30 December 1986) and Article 12 of Law no. 87549 of 16 July 1987 shall also benefit from the provisional suspension of proceedings initiated against them until the definitive decision by the competent court.

"The guarantors, including those with joint and several liability, of persons eligible for a provisional suspension of proceedings under the terms of the previous subparagraphs shall also benefit from a provisional suspension of proceedings initiated against them according to the same procedures";

2. Considering that, according to the applicant company, in making provision for an automatic suspension of proceedings for an indefinite period of time in favour of repatriated persons, these provisions restrict the rights of creditors to recover the amounts due to them in a manner which violates the constitutional protection of the right to property as well as freedom of contract; that in imposing on creditors alone a restriction based on national solidarity, the contested provisions also violate the principle of equality before the law and in contribution to public expenditure; that it also follows that there has been a violation of the right of access to the courts and of the right to a fair and equitable trial;

3. Considering that pursuant to Article 6 of the 1789 Declaration of the Rights of Man and the Citizen, the law "must be the same for all, whether it protects or punishes"; that Article 16 provides that: "A society in which the observance of the law is not assured, nor the separation of powers defined, has no constitution at all"; that whilst Parliament may provide for procedural rules which differ depending upon the circumstances, the situations and persons to which they apply, this is conditional upon the requirement that the differences don't create unjustified distinctions and that equal guarantees be afforded to the parties to the trial, in particular as regards the principle of the right to a defence, which implies in particular the existence of a just and equitable procedure guaranteeing an equilibrium between the rights of the parties;

4. Considering that the contested provisions benefited repatriated French citizens, as defined under Article 1 of the aforementioned Law of 26 December 1961, who exercise a non-salaried profession or have ceased their professional activity or sold their business, as well as certain members of their families and the companies held by them; that they are applicable when these persons have filed an application requesting that the special debt relief procedure for repatriated citizens be applied to them;

5. Considering that according to the provisions, once such an application has been filed, irrespective of the state of the procedure, the court must rule that proceedings against such persons be suspended; that such a suspension applies to court actions seeking confirmation of any debt, irrespective of its origin; that it also applies to collective creditor proceedings and prohibits the implementation of interim or enforcement measures, except in relation to tax debts; that the creditor does not have any means of appeal in order to object to it; that the suspension of proceedings is prolonged until the decision by the competent administrative authority, the non-judicial appeal against it or, in the event of a judicial appeal, the definitive decision of the competent judicial body;

6. Considering that after the territories previously placed under the sovereignty or protection of France or which were French protectorates gained independence, Parliament enacted as a matter of national solidarity measures in order to provide assistance to French citizens who were required or considered that they were required to leave these territories, including in particular the provisions permitting the provisional suspension of legal proceedings against repatriated citizens;

7. Considering however that Article 100 of the law on finance, amended for 1998, restructured these arrangements governing the suspension of proceedings and established them with the scope resulting from the contested provisions; that, taking account of the period of time which has passed since the events which gave rise to these provisions as well as the effect, scope and duration of the suspension which does not apply solely to debts associated with the reception and reintegration of the interested parties, the contested provisions violate the constitutional requirements referred to above;

8. Considering that it follows from the above that Article 100 of the aforementioned Law of 30 December 1997, as in force following the enactment of Article 25 of the aforementioned Law of 30 December 1998, must be ruled unconstitutional, without any requirement to examine the other challenges;

9. Considering that the second paragraph of Article 62 of the Constitution provides: “A provision declared unconstitutional on the basis of Article 611 is repealed as from the publication of the decision of the Constitutional Council or at a later date stipulated in the decision. The Constitutional Council determines the conditions and the limits according to which the effects produced by the provision are subject to revision"; whilst, as a matter of principle, the declaration of unconstitutionality must benefit the party submitting the priority question on constitutionality and the provision ruled unconstitutional cannot be applied to proceedings in progress at the time the decision of the Constitutional Council is published, the provisions of Article 62 of the Constitution grant the Council the power both to set the date of repeal and to defer its effects as well as to provide for the review of the effects that the provision generates before this declaration takes effect;

10. Considering that the repeal of Article 100 of the aforementioned Law of 30 December 1997 shall take effect from the publication of this decision; that it shall apply to all applications respect of which definitive judgment has not been passed prior to that date,

HELD:

Article 1. Article 100 of Law no. 971269 of 30 December 1997 on finance, amended for 1998, as in force following the enactment of Article 25 of Law no. 981267 of 30 December 1998 on finance, amended as adjusted for 1998, is unconstitutional.

Article 2 The declaration of unconstitutionality of Article 1 shall take effect on the date of publication of this decision in the conditions set down by its recital 10.

Article 3. – This decision shall be published in the Journal Officiel of the French Republic and notified in the conditions provided for under Article 23-11 of the Ordinance of 7 November 1958 referred to hereinabove.

Deliberated by the Constitutional Council in its session on 26 January 2012, sat on by: Mr JeanLouis DEBRÉ, President, Ms Claire BAZY MALAURIE, Mr Guy CANIVET, Mr Michel CHARASSE, Mr Renaud DENOIX de SAINT MARC, Ms Jacqueline de GUILLENCHMIDT, Mr Hubert HAENEL and Mr Pierre STEINMETZ.

Announced on 27 January 2012.