In the context of a dispute relating to a loan agreement, Le Bot Avocat represented the interests of a company subject to a protective seizure on its bank account, amounting to one million euros.
During these proceedings, Le Bot Avocat obtained, before the Paris Court of Appeal, the nullification of the entire proceedings and, consequently, the lifting of the protective seizure.
The facts underlying the dispute: a one-million-euro loan
A company had taken out a loan amounting to one million euros from an investor. Following the investor’s death, his heirs initiated protective seizure proceedings on the company’s accounts, considering the loan to be void.
They had obtained, by order of the President of the Paris Commercial Court, the protective seizure of the sum of 960,000 euros on the company’s bank account.
To challenge the seizure, the company argued in particular that the application for a protective seizure was void due to a substantive defect, which should result in the nullification of the entire proceedings and, consequently, the lifting of the protective seizure.
Having been dismissed at first instance before the President of the Paris Commercial Court, the company lodged an appeal.
The nullification of the application for a protective seizure: the absence of the appointed counsel’s signature
The nullification of the application was based on the following circumstance: the application was filed on behalf of the heirs by a lawyer registered at the Lyon Bar, described as ” trial counsel “, but the first page of the application also mentioned a Paris lawyer as ” appointed counsel “, constituted on behalf of the heirs.
However, the application was signed by the trial counsel.
To better understand why this was likely to constitute a procedural nullity, it is helpful to recall certain rules specific to protective seizure proceedings.
Article R511-1 of the Code of Civil Enforcement Procedures provides that “The application for authorisation provided for in Article L. 511-1 shall be made by petition“.
Article 57 of the Code of Civil Procedure provides that the petition must be signed, on pain of nullity.
Article 853 of the Code of Civil Procedure provides that “The parties are, unless otherwise provided, required to appoint counsel before the commercial court“.
Article 414 of the Code of Civil Procedure provides that “a party may only be represented by one of the persons, whether natural or legal, authorised by law“.
Finally, Article 117 of the Code of Civil Procedure provides that “The following constitute substantive irregularities affecting the validity of the act: Lack of legal capacity to bring proceedings; Lack of authority of a party or of a person appearing in the proceedings as representative of either a legal person or a person lacking legal capacity; Lack of capacity or authority of a person acting as representative of a party in legal proceedings“.
Applying the aforementioned rules, case law specifies that the petition must be dated and signed by the appointed counsel. Failing this, the Court of Cassation considers, according to settled case law, that the petition is void due to a substantive defect (Civ. 2nd, 24 Feb. 2005, no. 03-11.718 [overturning the judgment of the Pau Court of Appeal, 2 December 2002, no. 01/01660], Bull. civ. II, no. 49; Agen Court of Appeal, 18 September 2013, no. 12/01676).
In the present case, however, the application for a protective seizure was not signed by the sole appointed counsel (” the appointed counsel “).
Consequently, the company argued that the petition was not signed by the only person declared as the legal representative of the applicants, which constituted a substantive defect affecting the validity of the act.
The Court of Appeal’s decision: nullification of the entire proceedings and lifting of the seizure
Having been dismissed at first instance, the company lodged an appeal and obtained the lifting of the seizure before the Paris Court of Appeal.
In its decision, the Paris Court of Appeal adopted the company’s arguments, pursuant to Article 117 of the Code of Civil Procedure, by ruling that:
” (…) it must be noted that Me [X], a lawyer registered at the Lyon Bar, could not validly sign this petition, not because of the rules of territorial jurisdiction for representation, but because he was not appointed as counsel for the [E] heirs.
Indeed, the petition expressly states that the applicants appoint Me [I] [L] at whose offices they elect domicile.
It follows that only this lawyer had the authority to represent the [E] heirs and to sign the disputed petition on their behalf.
In these circumstances, it will be necessary to declare the petition of 8 March 2021 void, which entails the nullification of the order of 11 March 2021. The challenged order shall therefore be overturned and the protective measure detailed in the operative part shall be lifted “.
This decision of the Paris Court of Appeal underscores the importance of strict compliance with the rules of legal representation in court. The absence of a signature by the duly appointed counsel constitutes a substantive defect, resulting in the nullification of the proceedings and the lifting of protective measures.
This case law serves as a reminder to parties of the importance of attention to detail and procedural rigour in the implementation of enforcement measures.
Le Bot Avocat is at your disposal to advise and assist you in your banking disputes and seizure proceedings, and is committed to defending your interests with rigour and expertise.
Read the full decision on the Court of Cassation website:
CA Paris, Division 1 Ch. 3, 21 Sept. 2022, Case No. 22/02313
