[COVID-19] Ordinance No. 2020-306 of 25 March 2020 on the extension of time limits during the emergency period: what consequences in civil matters?

Information current as of the date of publication of this article.

Within the framework of the Emergency Law to fight the covid-19 epidemic of 23 March 2020, the Government adopted on 25 March 2020 a series of 25 ordinances aimed at taking various measures for the country’s economy.

One of such texts, referred to as Ordinance No. 2020-306, aims to grant individuals and companies an adjustment of the time limits during the period of health emergencies.

The general provisions of this text contain a genuine “moratorium” on time limits, which can be broken down into four parts.

The first part of this moratorium concerns its scope (I). The second part concerns the time limits resulting from the law and regulations (II). The third part concerns certain administrative and judicial measures (III). Finally, the fourth part covers several contractual mechanisms and periodic penalty payments (IV).

1. On the scope of application of Ordinance No. 2020-306

Article 1 I of the text specifies that its scope includes time limits expiring between 12 March 2020 and the expiry of a period of one month from the date of cessation of the declared state of public health emergency and, where appropriate, its extension.

The emergency law to deal with the covid-19 epidemic of 23 March 2020 was published on 24 March 2020 and provides in article 4 for a period of two months from its entry into force.

To date, the state of health emergency is therefore expected to end on 24 May 2020.

Ordinance No. 2020-306 therefore covers the deadlines that expire between 12 March 2020 and 24 June 2020 (unless the state of public health emergency is subsequently extended).

Therefore, as they stand, are not concerned by the present text:

• – Deadlines which expired before 12 March 2020;
• – Deadlines that end beyond 24 June 2020.

Article 1 II then specifies that the following are excluded from the scope of this text:

• – Time limits and measures resulting from the application of rules of criminal law and procedure, or concerning elections governed by the electoral code and consultations to which that code is made applicable;
• – Time limits for the enactment and implementation of measures involving deprivation of liberty;
• – Time limits for registration procedures in educational institutions or for access to the civil service;
• – The related financial and guarantee obligations mentioned in Articles L. 211-36 et seq. of the Monetary and Financial Code;
• – The deadlines and measures that have been the subject of other specific adaptations by the emergency law of 23 March 2020 to deal with the Covid-19 epidemic or in application thereof.

Finally, Article 1 III provides for the inclusion of measures restricting liberty and other measures limiting a constitutionally guaranteed right or freedom, provided that they do not entail an extension beyond 30 June 2020.

Other than the aforesaid exclusions, this ordinance has hence a very broad scope of application covering trials of the first instance, as well as appeal and cassation procedures. Moreover, all Courts of first instance of the judicial order are concerned, i.e. the judicial courts, commercial courts, labor courts and joint rural lease courts. Since only criminal matters are excluded from the scope of the Ordinance, it applies to all civil, commercial, social and tax matters, as well as to disciplinary matters.

2. On the time limits resulting from the law or regulations

Article 2 of the text lays down the following mechanism:

“Any act, recourse, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation which otherwise would entail nullity, sanction, lapse, foreclosure, prescription, unenforceability, inadmissibility, automatic withdrawal, application of a special regime, cancellation or forfeiture of any right whatsoever and which should have been accomplished during the period mentioned in Article 1 shall be deemed to have been performed in time if it was carried out within a period that may not exceed, as from the end of such period, the period legally prescribed for taking action, up to a limit of two months. The same shall apply to any payment prescribed by law or regulation for the acquisition or retention of a right“.

Several remarks on this text:

• – The ordinance does not provide for the abolition of any act or formality whose term expires within the period referred to, but considers as not being late the act performed within the additional time limit.
• – The “period referred to in Article 1” therefore covers periods expiring between 12 March 2020 and 24 June 2020 (unless the state of public health emergency is subsequently extended).
• – By specifying “Any act ... prescribed by law or regulation“, this text excludes its application to acts provided for by contractual stipulations. Payment of contractual obligations must therefore always take place on the date provided for in the contract. It should be noted, however, that the provisions of ordinary law remain applicable, in particular those stipulated in Article 2224 of the Civil Code, which allow the suspension of the statute of limitations in the event of impossibility of action, or force majeure as provided for in Article 1218 of the Civil Code.
• – The party is not exempted from performing the act required by this text, but such act must be performed within the extended time limit to be carried out.
• – The initial deadline for the party to act was extended to 24 June 2020. This text can therefore be analyzed more as an “interruption” of the time limit(within the meaning of Article 2231 of the Civil Code) than as a “suspension”, insofar as a new time limit of the same duration as the initial time limit will run from 24 June 2020, within the limit of two months (i.e. until 24 August 2020).

As an example, let us apply these texts to the time limit for appealing a civil judgment.

This time limit is one month when the appealing party is located in France, and is extended to three months when the appealing party resides abroad.

• – Hypothesis 1: in the case where a judgment is served on a party located in France on February 15, 2020, the deadline for appealing the said judgement should have expired on March 15, 2020. In view of the above, the appeal period will run again from 24 June 2020 and will therefore expire on 24 July 2020.
• – Hypothesis 2: in the case where the same judgment is served on a party located abroad on February 15, 2020, the deadline for appealing the said judgement should have expired on May 15, 2020. The appeal period will run again from 24 June 2020, up to a maximum of two months. The deadline for lodging an appeal will therefore expire on 24 August 2020.

This Ordinance will also extend the legal time limits for the parties to perform any act in the course of proceedings (such as the legal time limits for filing submissions in an appeal procedure), but also the time limits for the judge to rule.

3. On certain administrative and jurisdictional measures

Article 3 of Ordinance No. 2020-306 provides that certain administrative or jurisdictional measures, whose term would expire between 12 March 2020 and 24 June 2020 (unless the state of emergency is extended), will be automatically extended for two months following the end of this period, i.e. in principle until 24 August 2020.

These measures are as follows:

• – 1° Precautionary, investigative, investigative, conciliatory or mediation measures;
• – 2° Prohibition or suspension measures that have not been pronounced as a sanction;
• – 3° Authorizations, permits and approvals;
• – 4° Measures to assist, accompany or support people in social difficulty;
• – 5° Measures to help manage the family budget.

The text specifies, however, that in any event, the judge or competent authority may modify or terminate these measures where they were ordered before 12 March 2020.

Thus, there is no doubt that judicial expertise, conciliation and mediation missions, which should have expired between 12 March 2020 and 24 June 2020, will automatically be extended to 24 August 2020 (regardless of the length of the initial deadline).

This being said, experts, mediators and conciliators apparently remain free in setting their procedural timetable. Thus, the deadlines initially set for the sending of statements, pre-reports, reports must, in our opinion, be respected, unless the court expert, mediator or conciliator agrees to postpone.

It is more difficult to identify precisely the prohibition or suspension measures “which have not been imposed as a sanction“, which is easily open to interpretation. As the Report to the French President on Ordinance No. 2020-306 does not give any details on this point, it will therefore be up to the Courts to set a precedent by interpreting this text and determining the measures that may be considered as having been imposed as a sanction or not.

4. On contractual mechanisms and penalty payments

While it is very clear that the provisions of Article 2 of Ordinance No. 2020-306 are not intended to apply to contractual obligations, contracts are on the other hand the main subject of Articles 4 and 5 of this Ordinance.

Article 4 provides that:

“Penalty payments, penalty clauses, termination clauses and clauses providing for forfeiture, when their purpose is to penalize failure to perform an obligation within a specified period, shall be deemed not to have taken effect or to have taken effect, if that period has expired during the period defined in Article 1(I).Such periodic penalty payments shall take effect and produce their effects from the expiry of a period of one month after the end of that period if the debtor has not performed his obligation before that time.”

Paragraph 3 of Article 4 adds:

“The course of the periodic penalty payments and application of the penalty clauses which took effect before March 12, 2020 are suspended during the period defined in Article 1.I.“.

Thus, creditors of contractual obligations benefiting from financial penalties expiring between 12 March 2020 and 24 June 2020, such as the penalty payment or the penalty clause, will be deprived of their means of coercion between 12 March 2020 and 24 July 2020 (i.e. one month after the expiry of the state of health emergency).

As regards the rate of penalty payments and application of penalty clauses that took effect before March 12, 2020, their effect will be suspended between March 12, 2020 and June 24, 2020.

It is interesting to consider whether the periodic penalty payments referred to in Article 4 of this Ordinance, which essentially covers mechanisms arising from contractual clauses, also concern periodic penalty payments ordered by administrative authorities and Courts, or whether they fall under Article 3 of this Ordinance, which covers administrative and jurisdictional measures.

It is clear from the circular of the Minister of Justice dated 26 March 2020 that, although arising from non-contractual provisions, these periodic penalty payments are also affected by the provisions of Article 4 of Ordinance No. 2020-306.

This circular gives the following example:

“By judgment of 1 February 2020, a Court sentenced a company to carry out repair work under a provisional penalty payment of 500 euros per day of delay from the date of service of the judgment. The decision was served on March 1, 2020, and the work had not been carried out by March 12, 2020.

The course of the periodic penalty payment shall be suspended from 12 March until one month after the end of the state of emergency. It will resume its effect the following day if the company has not carried out the work to which it has been sentenced. »

This circular also specifies that in any event, when the periodic penalty payments have taken effect (or the clauses have produced their effect) before March 12, 2020, they may be terminated by the judge or the administrative authority if the matter is referred to them.

Finally, Article 5 of the said ordinance provides that where an agreement may be terminated only during a specified period or renewed if it is not terminated within a specified period, that period or period is extended, if it expires between 12 March 2020 and 24 June 2020, by two months after the end of that period, i.e. until 24 August 2020.

It should also be noted that, with regard to the obligations arising from commercial and professional leases, as well as electricity and gas supply contracts, specific provisions arising from Ordinance No. 2020-316 of 25 March 2020 will also apply to physical and legal persons under private law likely to benefit from the solidarity fund that will soon be created by the Government.

Thus, for those eligible for this mechanism, failure to pay rent or rental charges relating to professional and commercial premises may not give rise to the application of financial penalties, late payment interest, damages, penalty payments, application of the cancellation clause, penalty clause or any clause providing for forfeiture, or activation of guarantees or sureties, notwithstanding any contractual stipulation.

There is no doubt that individuals will not have an identical interpretation and application of these exceptional provisions and that the courts are likely to be seized with numerous disputes in this respect and will therefore be led to establish their own case law.