Adopted as part of the measures supporting enterprises in the context of the Covid-19 crisis, the ordinance n° 2020-306 of March 25th, 2020 contains the following temporary provisions applicable to contractual deadlines:
According to Article 4 of the ordinance: “Penalty payments, penalty clauses, termination clauses and acceleration clauses, the purpose of which is to sanction the non-performance of an obligation within a specified period of time, are considered not to have started running or to have taken effect, if that period has expired between 12 March 2020 and the expiry of a one-month period from the date of cessation of the state of health emergency.”
The ordinance therefore covers the following:
Period of suspension and resumption of effects:
Pursuant to Article 5 of the ordinance: “when an agreement may be terminated only during a specified period of time or is renewed in the absence of termination notice within a specific period, such period or deadline shall be extended if it expires between March 12th, 2020 and the expiry of one-month period starting from the date of cessation of the state of health emergency, increased by two months after the end of that period.”
• Application as of right
These provisions shall apply as of right on the date on which they take legal effect. It is therefore unnecessary for the debtor to request their application by way of notification. Moreover, the debtor does not have to show that its business has suffered as a result of the economic crisis and the containment measures resulting from the Covid-19 pandemic in order to set aside the implementation of the contractual terms covered by the ordinance.
• Covered contracts
These measures apply without doubt to contracts governed by French law, even when the debtor is a non-French party.
These measures seek to draw the consequences of the exceptional public health crisis on the above clauses and mitigate its negative impact on debtors and the French economy in general. In this regard, they are, in our view, part of the French international public policy.
Therefore, in our opinion, they would also apply to contracts subject to foreign law when the contract is enforced in France against a French debtor. In such case, a French court would apply these provisions if it were referred to on the merits of a dispute or in relation to the search for protective measures and could refuse exequatur of a foreign court decision or arbitral award taken in breach of the provisions of this ordinance.
This ordinance does not apply to time limits and measures that have been the subject matter of other specific adaptations under the Emergency Law of 23 March 2020 in response to the Covid-19 outbreak or implementation measures.