Recognition of foreign judgments and terror attack—is France a haven for states that fund terrorism? (M [P] [X] v République islamique d’Iran) - Cour de cassation 28 June 2023, Pourvoi n°21-19.766

This analysis was first published on Lexis+® UK on 24 July 2023 and can be found here (subscription required)

Arbitration analysis: In its decision of 28 June 2023, the French Cour de cassation confirms the current case law that three conditions must be met to grant exequatur to a foreign judicial decision, in the absence of an international convention. Applying Article 509 of the French Code of Civil Procedure and having first verified the admissibility of the action, the French judge must ensure that three conditions are met (the indirect jurisdiction of the foreign judge based on the connection of the dispute to the court that rendered the decision, compliance with substantive and procedural international public policy, and the absence of fraud). In the second part of its decision the Cour de cassation also confirms that French courts must abstain from reviewing the merits of the foreign court’s decision, but when a foreign state claims immunity from jurisdiction, this ground of admissibility must be decided first, independently from the findings of the foreign judge which, applying its own law, already decided on the plea of inadmissibility. In addition, to these rather standard conclusions, the Cour de cassation adds an intriguing analysis according to which, supposing that the prohibition of acts of terrorism could constitute a jus cogens norm of international law, which is not established by the current state of international law, an exception cannot be made to the immunity of a state, where there is no evidence that the state and its agents were directly involved in a terror attack, but solely provided material or financial assistance to the perpetrators of the attack. This raises the question of whether France is to be considered a safe haven for states that finance terrorism.

Written by Christophe Dugué, avocat, admitted to the Paris Bar, Christophe Dugué-International Arbitration.

M [P] [X] v République islamique d’Iran Pourvoi n°21-19.766

What are the practical implications of this case?

The first takeaway of this decision is the clear confirmation of existing case law regarding the exequatur of a foreign judicial decision, in the absence of an international convention

Article 509 of the French Code of Civil Procedure provides ‘Judgments handed down by foreign courts and deeds received by foreign officers are enforceable in the territory of the Republic in the manner and in the cases provided for by law’. The number of conditions set forth by the Cour de cassation has evolved over time and was decreased from five to three (Munzer, Civ 1, 7 January 1964, five conditions; Bachir, Civ 1, 4 October 1967: four conditions, since the regularity of the procedure is deemed part of the control of compliance with international public policy; Cornelissen, Civ 1, 20 February 2007, no 05 14 082, three conditions, with the abandonment of the fourth condition that the law applied by the foreign court is the one designated by the French conflict of laws rules). In this decision of 28 June 2023, the Cour de cassation confirms its position that, applying Article 509 of the French Code of Civil Procedure, the French judge, having first verified the admissibility of the action, must determine if three cumulative conditions are met, namely, the indirect jurisdiction of the foreign judge based on the connection of the dispute to the court that rendered the decision, the compliance with substantive and procedural international public policy, and the absence of fraud.

The second takeaway relates to confirmation of the principles that apply when the exception of immunity of jurisdiction is raised before French courts, even if already raised before the foreign court

In exequatur proceedings a French court must abstain from reviewing the merits of the foreign court’s decision. However, when a foreign state claims immunity from jurisdiction, it must rule first on this ground of admissibility, independently from the findings of the foreign judge which, applying its own law already, did set aside the plea of inadmissibility. In this regard, the Cour de cassation rules that the fact that the foreign judge that rendered the decision did decide, by virtue of his own law, to set aside the state’s immunity from jurisdiction does not exempt the French judge from exercising his own jurisdictional power to decide, independently, on the plea of inadmissibility based on the immunity from jurisdiction raised before it.

The last takeaway is that from now on French case law raises the question of whether France is a safe haven for states that finance or provide material support to terrorism? With the consequence that litigants facing a similar set of facts will have to think carefully before initiating exequatur proceedings before the French courts

The last part of the analysis of the Cour de cassation is perplexing. The Cour de cassation held that a Court of Appeal is correct in holding that when the foreign judgement relates to the payment by a state of damages for civil liability by reason of the financial support by a state to acts of terrorism, and is not based on evidence of the direct involvement of that state and its agents in a terror attack, these circumstances do not constitute a legitimate restriction on its immunity from jurisdiction.

Doesn’t this subtle differentiation between levels and degrees of involvement in terrorist acts raise a much more direct question: has France become a safe haven for states that finance terrorism?

What was the background?

Facts

The case relates to enforcement proceedings in France of a judgment of 11 March 1998, rendered by the United States District Court for the District of Columbia, ordering the Islamic Republic of Iran, the Iranian Ministry of Information and Security, as well as a number of individuals to pay damages for loss to a natural person (the claimant, acting in a personal capacity and on behalf of the estate), resulting from the death, in Israel, of the claimant’s daughter following a terror attack committed using a vehicle loaded with explosives and claimed by a Palestinian faction of the Islamic jihad.

Enforcement proceedings in France

The claimant sought the exequatur of the US District Court decision in France, and thereafter filed a claim for annulment of the decision of the Court of Appeal of 16 March 2021 that held that the Islamic Republic of Iran was entitled to invoke immunity from jurisdiction and, consequently, declared the application for exequatur inadmissible.

Questions to be decided by the Cour de cassation

To support his claim before the Cour de cassation, the claimant raised a series of arguments:

• first, the exequatur judge cannot review the merits of a foreign decision. The Court of Appeal assessed afresh the admissibility and merits of the immunity of jurisdiction of the state of Iran and hold it admissible and well-founded, while the US District Court had set aside Iran’s immunity from jurisdiction, by virtue of its own law. The Court of Appeal thus disregarded the principle of prohibition of review of the merits of foreign decisions, infringed Article 509 of the French Code of Civil Procedure and exceeded its jurisdictional power;
• second, foreign states enjoy immunity from jurisdiction only in respect of acts which, by their nature or purpose, are connected with the exercise of state sovereignty, which cannot be the case where a state participates in the preparation and implementation of acts of terrorism;
• third, and in any event, the prohibition of acts of terrorism constitutes a peremptory norm of international law, the very nature of which must absolutely preclude the invocation of immunity from jurisdiction by a state found responsible for having actively participated in such acts;
• fourth, the impossibility of obtaining in France recognition of a decision condemning a state held responsible for a terror attack constitutes a breach of French law and infringes the right of access to a court enshrined in Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, which cannot be restricted by the principle of the immunity of jurisdiction of foreign states;
• fifth, it is the judge’s duty not to distort the documents on record. The Court of Appeal held that the circumstances of the case are not base on the criminal liability of the direct involvement of the state of Iran and its agents in a terror attack while the US District Court judgment of 11 March 1998 held that ‘the explosion was caused by a bomb which had been deliberately planted in the bus by a member of the faction of [G] of the Palestinian Islamic Jihad acting under the instructions of the Defendants, [in particular] the Islamic Republic of Iran’. The Court of Appeal thus distorted the terms of the judgment of the US District Court in breach of this duty.

What did the court decide?

The decision of 28 June 2023 of the French Cour de cassation is a confirmation of several principles applicable in exequatur proceedings. First, three cumulative conditions must be met to grant exequatur to a foreign judicial decision, in the absence of an international convention. Applying Article 509 of the French Code of Civil Procedure, the French judge, having first verified the admissibility of the action, must determine the indirect jurisdiction of the foreign judge based on the connection of the dispute to the court that rendered the decision, compliance with substantive and procedural international public policy, and the absence of fraud. Second, in exequatur proceedings, a French court must abstain from reviewing the merits of the foreign court’s decision, but when a foreign state claims immunity from jurisdiction, it must rule first on this ground of admissibility, independently from the findings of the foreign judge which, applying its own law, already decided on the plea of inadmissibility. Third, foreign states benefit from immunity from jurisdiction when the act that gives rise to the dispute is, by its nature or purpose, part of the exercise of their sovereignty and is thus not an act of management.

Regarding the arguments that are specific to the case, the Cour de cassation confirmed the analysis of the case by the Court of Appeal. First, even assuming that the prohibition of acts of terrorism might constitute a jus cogens norm of international law capable of constituting a legitimate restriction on immunity from jurisdiction, which does not result from the current state of international law, the Court of Appeal correctly held that the facts of the case did not allow an exception to be made to that immunity, since the award of damages by the US District Court was not based on evidence of the direct involvement of the state of Iran and its agents in the attack, but merely on its civil liability for the aid or material resources provided to the group that claimed responsibility for the terror attack. Second, the Court of Appeal rightly held that the acts that had given rise to the dispute between the claimant and the Islamic Republic of Iran, that consisted in financial support given to a terrorist group that had committed a suicide attack in which the claimant’s daughter was killed, were not acts of management by that state and the Court of Appeal could rightly find, without distortion, that the Islamic Republic of Iran could invoke its immunity from jurisdiction. As for the right of access to a court guaranteed by Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms, of which the enforcement of a court decision is the necessary extension, the Cour de cassation has ruled that it does not preclude a limitation of this right, resulting from the immunity of foreign states, when this limitation is enshrined in international law and does not exceed the generally recognised rules on state immunity.

Case details

• Court: Cour de cassation
• Judges: Mr Chauvin, president, Mr Ancel, reporting adviser, Ms Guihal, senior adviser, MM Hascher, Bruyère, advisers, Ms Kloda, Dumas, Champ, Robin-Raschel, referendum advisers
• Date of judgment: 28 June 2023

Christophe Dugué, avocat, admitted to the Paris Bar, Christophe Dugué-International Arbitration. If you have any questions about membership of our Case Analysis Expert Panels, please contact caseanalysiscommissioning@lexisnexis.co.uk.