A logical solution result of a constant jurisprudence

The judgment delivered on 9 October by the Court of cassation in the case of Adidas is interesting in more than one title. The High Court reaffirmed its mission with brightness: ensure the correct application of the law without judging the facts. It was done in Recalling with force its jurisprudence on the autonomy of legal persons in a group.

A corporation enjoys legal personality from its registration in the register of commerce and corporations (1). Except in specific circumstances, any company belonging to a group is, legally, a legal entity separate from the other members of the group, including its parent company. The commitments entered into by a company require that it and other companies of the group. Conversely, a company can claim to exercise any rights resulting from a contract entered into by another company, even if it belongs to the same group. This principle is opposable to third parties: one which dealt with a company may require compliance with the contract by other companies in the same group (2), even if the latter are involved in the performance of the contract (3).

In the case, a group company Tapie had entrusted to the SDBO, a subsidiary of Crédit Lyonnais, a mandate for the sale of a controlling interest in the capital of Adidas. To fulfil this mandate, eight companies (including Clinvest, another subsidiary of Crédit Lyonnais) had acquired this participation. The same day, a third party is was made consent by all holders of securities Adidas and through the Crédit Lyonnais, promises of sale on all of the Adidas capital at a price higher than that paid to the Group Tapie. The third party had lifted the promises and acquired Adidas. After first acknowledging that the three companies of the Group (Credit Lyonnais, SDBO and Clinvest) had separate legal personalities and were therefore a priori held that the acts undertaken by each of them, the Court of appeal of Paris (4) noted the following facts: the three companies had participated in the operations of sale Adidas and financing of the Group Tapieeach with specialized activity studies of Crédit Lyonnais management was responsible for feasibility studies; the loans had been made sometimes by Crédit Lyonnais, sometimes by SDBO; Clinvest took interests in Adidas; decisions were made at the top of the Crédit Lyonnais; and some buyers selected by SDBO was financed by Credit Lyonnais.

The Court of appeal had concluded that the Credit Lyonnais and Clinvest were related by the warrant signed by SDBO and was therefore considered by acquiring a part of participation in Adidas and not informing the Group Tapie that someone was willing to purchase these shares at a higher price and that Crédit Lyonnais was prepared to finance this operationCredit Lyonnais had "breached the obligations arising from its mandate." It had therefore retained its responsibility and sentenced him.

A logical solution

Not convinced by the reasoning of the Court of Paris and the facts identified by it, the Supreme Court overturned its judgment. It is merely to apply his case settled: in assessing that Credit Lyonnais was bound by the mandate signed by its only subsidiary, SDBO, and not by himself, should have been, according to the judges, show that SDBO was a fictitious legal person or that his heritage was bound up dispensing with mother-house, or even what the interference of Credit Lyonnais in the execution of the mandate given to SDBO was created for the Group Tapie a misleading appearance to him to believe that Credit Lyonnais was his contractor and was therefore bound by a mandate that it had not signed.

The Court of cassation is then logically place the field chosen by the Tapie group liquidators, namely the contractual field. SDBO being the only company of the Crédit Lyonnais group to be held by the obligations imposed by the mandate, sections 1134 which provides that the "conventions take place law to those who have made" and 1165 which limits the effect of contracts only Contracting Parties of the civil Code prevented that the responsibility of the Credit Lyonnais is retained. A logical solution, result of a constant jurisprudence.