France: two claims based on the duty of vigilance declared admissible

On 18 June 2024, for the first time, the Court of Appeal of Paris declared admissible two out of three claims based on the duty of vigilance against major French Corporations. The defendants have two months to appeal to the French Court of cassation, failing which, the cases will continue before the Judicial Court of Paris on the merits.

Key Takeaways

• The newly created Chamber within the Paris Court of Appeal sided with the claimants in two cases related to the duty of vigilance. It recognized the admissibility of the claims and clarified the procedural requirements under the French Duty of Vigilance Law (the “FDVL”).
• These rulings strengthen the effectiveness of the FDVL and paves the way for judicial examination of the merits of both cases. It confirmed that the obligation of vigilance is not limited to a formal obligation and should be effectively executed.
• In addressing procedural issues, the Paris Court of Appeal adheres to the wording of the law and refuses to add conditions that would result from parliamentary proceedings, as was held by the first instance judge.

Background

As announced by the Court of Appeal, its newly created chamber dedicated to emerging litigation and in charge of disputes related to the duty of vigilance and environmental liability cases rendered its first decisions with respect to the FDVL. The FDVL requires large companies to adopt and monitor a vigilance plan addressing human rights and environmental impacts related to their business activities in their supply chains, including potential impacts outside of France. 

According to the FDVL, subject to admissibility and prior to filing a complaint, claimants must send a formal notice listing the grounds of alleged non-compliance of the defendant’s vigilance plan. The FDVL is however mute on the issue of whether the grounds presented to the court by way of the writ of summons should be identical to those listed in the formal notice or whether a sufficient connection between the two is enough.

The decisions were rendered in three different cases, albeit addressing substantially the same issues: 

• The first case was brought by NGOs and local authorities against a French oil and gas major, seeking injunctive measures to adopt a new vigilance plan because the existing plan was allegedly insufficient to effectively address climate change-related issues. The case was dismissed in first instance on 6 July 2023 on the grounds that the claims under the writ of summons were not identical to the claims raised in the formal notice (see our previous blog post on the first instance decision). 
• The second case was brought by French NGOs and Mexican NGOs against a French electricity major, seeking both injunctive measures to adopt a new vigilance plan and compensatory damages regarding the implementation of a wind farm project on indigenous Mexican lands. The case had been held inadmissible at first instance on the same grounds as the first case.
• The third case was launched by French NGOs and Chilean NGOs against a French water major, seeking injunctive measures to adopt a new plan of vigilance concerning alleged water pollution in Chile. The case was also dismissed at first instance for lack of admissibility, albeit on a different ground: because the defending party was not the company having set up the vigilance plan further to internal restructuration and later merger with another company.

All three cases were considered by the same judges at a single hearing on 5 March 2024 and decided on the same day as they related to the procedural issue of admissibility.  

The decisions

• Admissibility of the claim filed against the French major oil and gas

This decision contains the most significant findings among the three decisions. 

First, the Court reiterated that, under the FDVL, a formal notice is mandatory before filing a claim in respect of the vigilance plan. However, the grounds listed in the formal notice and those presented to the courts in the writ of summons need not be identical, subject to the caveat that they must be sufficiently related so that the defendant is given sufficient notice of the alleged non-compliance(s). In particular the Court found that the formal notice and the writ of summons need not to refer to the exact same vigilance plans, as long as they refer to the same substantial obligations under the FDVL.. The Court added that it will be up to the judge on the merits to assess whether the grounds were sufficiently connected. The previous and more restrictive approach taken by the first instance judge was highly criticised in France, for creating additional procedural hurdles to access justice, , since companies were able to amend their vigilance plans after the formal notice had been served. 

Second, the Court quashed the first instance judge’ construction that the claimants to the proceedings must be the authors of the formal notice. It acknowledged the right of any interested party to initiate a case after the issuance of a formal notice, regardless of whether they authored the formal notice or not.

Third, the Court sided with the defendant with respect to the admissibility of the claims by local authorities. It considered that a local entity’s ability to act is limited to the territory it manages. Because the action at hand aimed at a global reduction of GES emissions, local municipalities had not demonstrated a particular harm on their territory as a repercussion of global warming. The Court nevertheless found that the city of Paris had a legitimate interest because it was particularly exposed to negative impacts of climate change and was part of the European Commission program to be a neutral carbon city by 2030.

Fourth, the Court admitted the claim based on the prevention of ecological damage. At first instance, the pre-trial judge had held that a formal notice was mandatory before lodging a claim for environmental damages. The Court quashed this ruling and upheld the claim by NGOs on this ground, because it was based on a cause of action distinct from the FDVL.

• Admissibility of the claim filed against the French electricity major

The Court confirmed the admissibility of the claim on the same ground as in the previous case, i.e., that the writ of summons and formal notice need not to refer to the same vigilance plans. The Court followed the claimants’ reasoning that the vigilance obligations were not “merely formal obligations” but instead “entail a continuous obligation of means that is not limited to a compliance exercise of publishing a vigilance plan”. 

The Court however refused to order the defendant to suspend its operations in Mexico until a final decision on the merits has been rendered. As the requested measures targeted the project itself and not the vigilance plan, the Court held that they fell outside of the scope of the FDVL.

• Inadmissibility of the claim filed against the French water major

The Court held the inadmissibility of the claim on the basis of the defendant’s lack of interest to defend. The writ of summons was delivered to the former subsidiary of the group, while the vigilance plan had been established by the parent company.

Next steps

Subject to an appeal before the Court of Cassation, the two admissible cases will continue on the merits before the Paris Judicial Court. 

Impact

Uniform case law regarding the admissibility of such cases is welcomed, both in terms of judicial security and consistency. These decisions have now paved the way for an in-depth examination of these cases on their merits, occurring three to four years after the claims were filed and delivered to the companies involved.

These decisions pave the way for more ESG litigation grounded on the FDVL. To date, only one decision on the merits under the FDVL has been rendered in which the Judicial Court of Paris upheld the claim of a trade union against the French state-owned postal company and ordered the latter to amend and supplement its vigilance plan (see our blog on the decision). 

For more information on French Duty of Vigilance Law, see our blog posts here, here and here.