Liquidation of a penalty payment (liquidation de l’astreinte)

Liquidation of a penalty payment is the process by which the court fixes the amount owed by the debtor under the penalty payment (astreinte) attached to an order, in the light of the compliance or non-compliance found. It is governed by Articles L. 131-3 and L. 131-4 of the French Code of Civil Enforcement Procedures. Until it is liquidated, the penalty payment remains a threat and does not constitute an enforceable debt.

The liquidating court

The penalty payment is liquidated by the enforcement judge, unless the court that ordered it remains seised of the case or has expressly reserved that power. In intellectual property, specialised courts frequently reserve the liquidation of the penalty payments they order, which keeps the dispute before a court familiar with the technology or signs at issue. The creditor must establish that the breaches actually occurred, often by means of a report by a commissaire de justice or test purchases. The liquidation decision then allows the creditor to recover the sum through enforcement measures.

Liquidation criteria

The amount of a provisional penalty payment is liquidated taking into account the conduct of the person to whom the order was addressed and the difficulties encountered in complying with it. The rate of a definitive penalty payment can never be altered on liquidation. Either may be cancelled in whole or in part if it is established that the non-compliance or delay stems from an external cause. The Court of Cassation further requires a court liquidating a provisional penalty payment to assess, when asked to do so, whether there is a reasonable relationship of proportionality between the amount liquidated and what is at stake in the dispute.

Points to watch

The penalty payment cannot run before the day on which the decision ordering it has become enforceable, which in principle requires its service. If the main order is later reversed, sums received on liquidation must be repaid, so that provisional enforcement of an injunction remains at the creditor’s risk. The precision of the operative part ultimately shapes the whole debate. Before the Unified Patent Court, penalty payments are payable to the court and not to the creditor.

Key points

A penalty payment is liquidated on evidence, and that evidence is built up from the moment the order is made. The creditor must have the breaches recorded, date by date, and check which court has jurisdiction to liquidate. The debtor, for its part, has an interest in keeping a record of every step taken to comply and of the obstacles encountered, as these are what the court will weigh.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats litigates patent disputes before the Paris Judicial Court, the Paris Court of Appeal and the Unified Patent Court. Where the question arises in a real case, the useful moment is almost always before proceedings are issued.

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