The Duty of Vigilance for parent companies was introduced into the French Commercial Code by the Duty of Vigilance Law on 27 March 2017. The statute provides for French corporations with over 5,000 employees in France and/or over 10,000 employees worldwide (including affiliates' employees) to set up, publish and implement a "vigilance plan". Such a plan is intended to identify, anticipate and prevent human rights violations that might result from the activities of the parent company, its subsidiaries and controlled affiliates, as well as suppliers and subcontractors.
Uncertain case law
As discussed in our previous article "New jurisdiction rules for Duty of Vigilance disputes", the Duty of Vigilance Law does not provide for any special jurisdictional rules for disputes related to vigilance plans. This question gave rise to conflicting interpretations in case law: while the Versailles Court of Appeal considered that commercial courts had jurisdiction on 10 December 2020, the Nanterre Judicial Court declared it had jurisdiction on 11 February 2021.
The Climate and Resilience Bill: a missed opportunity to clarify jurisdiction rules
On 20 July 2021, the French Parliament adopted the Climate and Resilience Bill which was the occasion for some debates about potential amendments to the Duty of Vigilance Law, especially regarding jurisdiction rules. The French Senate and the French National Assembly agreed at first on a provision under which a few designated civil courts would have jurisdiction for matters related to the duty of vigilance. However, and as discussed in our previous article "Update on amendments to the French duty of vigilance Law", this provision was eventually deleted considering the fact that the French bill for building confidence in the justice system already dealt with the issue of jurisdiction.
The final outcome: jurisdiction conferred on the Paris Civil Court
In its Article 34, the French bill for building confidence in the justice system, as adopted at first reading by the French National Assembly, provided that a handful of civil courts would have jurisdiction for matters related to the duty of vigilance.
However, the French Senate amended this article by designating the Paris Commercial Court as the court that should have jurisdiction in such matters, arguing that the Paris Commercial Court is best suited since its judges have strong economic skills and a robust knowledge of corporate operations.
This amendment sparked strong reactions, notably amongst human rights organisations. In an open letter, 26 human rights and environmental organisations called for such amendment to be reconsidered. Eric Dupont Moretti, the French Minister of Justice, also expressed disagreement with respect to the jurisdiction of the Paris Commercial Court and argued that "the purpose of the duty of vigilance is to prevent and remedy serious breaches to human rights, fundamental freedoms, health, personal safety and to the environment - matters that essentially fall under the responsibility of judicial courts".
On 21 October 2021, French MPs and senators met in a joint committee and eventually decided to confer jurisdiction to the Paris Civil Court. Article 34 should come into force on the day that follows the publication of the law for building confidence in the justice system in the French Official Journal.
Please contact a member of Hogan Lovells’ Business and Human Rights group or your usual Hogan Lovells contact if you wish to discuss this development. We stand ready to assist companies from all industry sectors to assess how to adjust their processes and operations in this context.
Authored by Christelle Coslin and Margaux Renard.