In a ruling handed down on September 18, 2024, the French Supreme Court reiterated that, while the intervention of the absorbing company in the course of proceedings, in the event of a merger-absorption, makes it possible to set aside the plea of inadmissibility based on the disappearance of the absorbed company, it does not exonerate the other party from the obligation to direct its claims against the absorbing company.
In this case, two companies had entered into a vehicle leasing contract. The lessor sued the lessee for payment of unpaid invoices. In the meantime, the lessor company had been absorbed and subsequently removed from the trade and companies register.
The Paris Court of Appeal upheld the lessor’s claim and rejected the lessee’s counterclaims, on the grounds that the lessee’s claims should have been made against the absorbing company, which had intervened in the proceedings, since the absorbed company had disappeared.
The lessee appealed to the French Supreme Court, criticizing the Court of Appeal for failing to take into account the fact that the lessee’s claims were rightly directed against the absorbed company; the intervention of the absorbing company made it possible to set aside the plea of inadmissibility linked to the disappearance of the absorbed company.
The Court of Cassation dismissed the appeal, stating that “[w]hiletheintervention of the absorbing company in a merger-absorption transaction during the course of a legal proceeding makes it possible to set aside the plea of inadmissibility based on the disappearance of the absorbed company’s right to sue, it does not dispense the other party from presenting its claims against the absorbing company ”.
This ruling therefore reminds us that, even if the merger-absorption rules out the plea of inadmissibility based on the disappearance of the absorbed company’s right to sue, it is against the absorbing company that the claims must imperatively be formulated.
