A recent judgment of the French Cour de Cassation has clarified
an issue which had been the source of some confusion.
Under general principles of French law, a party can normally
rely on the nullity of a contract at any time, provided the
contract has not been performed; in such circumstances no time bar
Under the French Insurance Code, a two year time bar applies to
claims under insurance contracts. An insurer may also seek the
annulment of an insurance contract in cases of wilful
Inconsistent decisions from the French courts have nevertheless
created uncertainty on certain key issues, including the effect of
performance of the contract on an insurer's entitlement to
raise nullity, and whether the two year time bar applies where an
insurer seeks to have a contract annulled, or also to nullity
raised as a defence to a claim by an insured.
The recent judgment of the Cour de cassation (Ben's Garage
du Stade v. AXA – 4th December 2008 – 2nd Civil
Chamber) has clarified the position somewhat.
The insured had comprehensive cover with AXA. A fire broke out
at the insured's premises. Provisional payment was made by the
insurers; they thereafter denied cover on the grounds that the
insured had wilfully misrepresented the risk, and sought
reimbursement of the sums paid on a provisional basis. The insured
sued its insurers, who alleged that the contract was null.
In the final appeal to the Cour de cassation, the insured argued
that nullity cannot be invoked where a contract has been partially
performed, in this case where provisional payment has already been
The Cour de cassation held that an insurer is always entitled to
rely on nullity as a defence, even where the insurer has performed
the contract by paying the indemnity, provided nullity is raised
within the two year bar. This judgment therefore clarifies at least
one area of law, even if others are left in abeyance.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The implementation of Solvency II remains a focus for the Central Bank but it also highlights issues such as the post-Brexit landscape, cyber risk exposure and the continuing low interest rate environment.
The European Insurance and Occupational Pensions Authority published a consultation paper on Implementing Technical Standards on the standardisation of the presentation of the insurance Product Information Document.
Colombia is among the world's most dynamic insurance markets, attracting leading global companies to compete against strong local players.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).