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Impacts of the health crisis on deadlines in civil and commercial matters

The clarifications provided by Ordinance no. 2020-306 of 25 March 2020 – Q&A

17/04/2020

The current health crisis sometimes makes it difficult or even impossible to meet certain deadlines in civil and commercial matters (due to the disruption of postal services, closure of the courts, etc.). Ordinance no. 2020-306 of 25 March 2020 provides solutions.

This article has been updated to comply with the publication in the Official Journal of Order No. 2020-427 of 15 April 2020 on various provisions relating to the time frame for dealing with the Covid-19 epidemic. This ordinance adjusts the initial provisions.

What deadlines are affected by Ordinance no. 2020-306 of 25 March 2020?

From a substantive perspective, Article 2 of the ordinance refers to “any act, appeal, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation” on penalty of sanctions (annulment, invalidity, time-barring, limitation, etc.)

This provision therefore relates particularly to the deadlines applicable before the courts for performing any procedural act (appeals, submissions, declarations, etc.), with the exception of any acts defined by the judge (on this point, see our article “Functioning of the courts given the challenges of Covid-19”).

A new ordinance n°2020-427 of 15 April 2020 clarifies the interpretation of this provision by expressly excluding from the scope of this article 2 the periods of reflection, retraction and renunciation provided for by the law or the regulation, as well as the periods provided for the reimbursement of sums of money following the exercise of one of these rights.

Contractual deadlines are excluded, except for certain specific provisions mentioned below.

Certain specific matters are also explicitly excluded from the application scope of Ordinance no. 2020-306 by its first article, such as deadlines applicable in criminal matters and criminal proceedings, which are dealt with by Ordinance no. 2020-303.

Other ordinances passed on the basis of the emergency law of 23 March 2020 take care to specify deadlines applicable in specific cases (for example, deadlines concerning collective proceedings are governed by Ordinance no. 2020-341 of 27 March 2020).

Ordinance no. 2020-306 defines general rules in civil and commercial matters applicable in the absence of specific rules provided for in other texts.

From a temporal perspective, the ordinance concerns any act or formality which should have been performed during the period beginning on 12 March 2020 and ending one month after the end of the emergency health situation.

This period will be referred to in this article as the “legally protected period”, currently running from 12 March to 24 June 2020, subject to extension.

What solution is adopted by the ordinance?

Acts and formalities falling within the scope of article 2 of the ordinance will be deemed to have been completed on time if they have been performed within the legally prescribed period to act from the end of the legally protected period and within a maximum of two months.

It should be understood here that these acts may therefore exceptionally be carried out, from the end of the legally protected period (state of emergency + one month):

  • within the period legally specified to act; OR
  • if that period is longer than two months, within two months.

Example:

A first instance judgment was notified to the parties on 20 February 2020 and appeal against that judgment was in principle only possible until 20 March 2020. However, assuming that the health emergency ends on 24 May, according to Ordinance no. 2020-306, appeal is now possible until 25 July 2020.

What adjustments are made to limitation periods?

Article 2 of the ordinance also covers the limitation periods for bringing proceedings. Not all limitations are affected by this provision – it only concerns limitation periods expiring during the legally protected period.

Therefore limitation periods are neither suspended or interrupted. This is simply an “extension of the deadlines expiring during the health emergency”.

In practice, the plaintiff may therefore act within the new deadline provided for by the ordinance, without his action being declared inadmissible due to the limitation period.

Since the five-year limitation period under common law is more than two months, personal and possessory actions which have become time-barred during the legally protected period will be deemed to have been taken within the deadline, for up to three months following the end of the state of emergency.

This provision is particularly welcome given the very great difficulty in issuing any new summons during the lockdown period.

Example:

A debt became due on 30 March 2015. The corresponding recovery action should therefore be time-barred from 30 March 2020. If the health emergency ends on 24 May 2020, a recovery action would exceptionally be admissible until 25 August 2020.

What impact on contracts?

The solution adopted by the ordinance does not concern contractually agreed deadlines.

If a contract contains a deadline for performing an obligation, this must therefore be scrupulously respected regardless of the legally protected period, subject to force majeure or unforeseen circumstances (on this point, see our articles: “Covid-19 and force majeure: questions and answers” and “Covid-19 and contract renegotiation: questions and answers”).

However, Ordinance no. 2020-306 does address the effect of certain specific contractual provisions.

Firstly, article 4 of the ordinance suspends the effects of clauses intended to penalise non-performance of an obligation within a specified deadline. More specifically, this concerns clauses providing for fines, penalty clauses, termination clauses and clauses providing for forfeiture.The new wording of Article 4 of Ordinance No. 2020-306 resulting from Ordinance No. 2020-427 of 15 April 2020 provides that, if the debtor has not performed his obligation, the date on which these periodic penalty payments and these clauses produce their effects is postponed for a period of time, calculated after the end of the legally protected period, equal to the time elapsing between the later of 12 March 2020 or the date on which the obligation arose and the date on which it should have been fulfilled.

Moreover, with specific regard to those periodic penalty payments and clauses which have the purpose of sanctioning the non-performance of an obligation (other than those concerning sums of money) within a specified period expiring after the legally protected period, Article 4.3 provides that the date on which such periodic penalty payments and clauses take effect is postponed for a period equal to the time elapsing between 12 March 2020 or, if later, the date on which the obligation arose and the end of the legally protected period.

It is also specified that the applicability period for fines and application of penalty clauses which came into effect before 12 March 2020 are suspended during the legally protected period.

Article 5 of the ordinance, meanwhile, covers agreements renewable by tacit agreement and those whose termination is subject to specific deadlines.

If they were due to expire during the legally protected period, deadlines provided for the termination or cancellation of agreements are extended by two months from the end of the legally protected period.

Example:

An agreement is automatically renewed on 1 July 2020, unless terminated with three months' notice, which must therefore be notified by 1 April 2020. If the health emergency ends on 24 May 2020, the agreement may be terminated up until 25 August 2020.

For more information, our Litigation & Arbitration team is at your entire disposal.


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