Court of Cassation Ruling on AARPI Collective Decisions

Extract

[...] In this judgment, the Court of Cassation highlighted that the AARPI operates on the principle of indivision, which means that the claims of the AARPI are in reality shared claims between its members, without patrimonial autonomy. It therefore rejected the argument of the former associate that the AARPI would have had a separate patrimony capable of being managed in a distinct manner from the associates. The constant jurisprudence, as in a judgment of the commercial chamber of 16 September 2014, specifies that the lack of moral personality prevents the existence of an autonomous patrimony. [...]

[...] Court of Cassation, Civil Chamber April No. 22-24.667 - Are the deliberations of the general assembly of an association lacking moral personality and having taken place with the participation and vote of a third party lacking the quality of associate valid? In this case, on September a lawyer within an AARPI notified her withdrawal to the two other members who made up the association. On November an extraordinary general meeting took note of her withdrawal effective December 31, 2018. On March one of the other lawyers of the AARPI filed a disciplinary complaint and an arbitration request against the lawyer. [...]

[...] The Court of Cassation stressed that these claims, although described with inaccurate terminology by the Court of Appeal, nevertheless respected the legal framework applicable to AARPIs. Indeed, the validation of the claims by an ordered expertise guaranteed transparency and fairness in the evaluation of the financial rights of the associates, particularly with regard to the contributions and withdrawals made by the former associate. This approach is in line with prior jurisprudence of the Court of Cassation of 5 November 2015 which confirmed that disagreements relating to the distribution of claims and debts in structures without moral personality must be resolved by objective means, such as accounting expertise. [...]

[...] The impropriety of the terms and the confirmation of the claims established In this judgment, the judges of law also addressed the impropriety of the terms used by the Court of Appeal regarding the claims of the AARPI. The former associate argued that the Court of Appeal had made a mistake in suggesting that the AARPI had its own patrimony. The Court of Cassation rejected this argument, specifying that the impropriety of terms does not change the legal qualification of the claims, as long as the decisions respect the legal framework and the principles applicable to AARPIs. [...]

[...] The refusal of the request for annulment of the collective decisions taken within the AARPI The judgment recalls that the quality of associate is indispensable to participate in the collective decisions of an AARPI and that an interest to act is required to contest the decisions of the general meeting, notably after the loss of this quality A. The recall of the quality of associate required to participate in collective decisions The participation in collective decisions within an AARPI is strictly regulated. In fact, pursuant to Articles 1844 and 1844-10, paragraph 1871-1 of the Civil Code, as well as Article 124 of Decree No. 91-1197 of November the quality of associate confers the exclusive right to participate in general meetings and to vote on collective decisions. [...]