476 FRENCH COURT DECISION ON JURISDICTION OVER SUBSIDIARIES OF FOREIGN COMPANIES; EAST-WEST TRADE France. Court of Appeals of Paris, 14th Chamber. Fruehauf Corporation v. Massardy, Decision of May 22, 1965. La Gazette du Palais, Paris, 1965.11, Pp. 86-90. ~ ~~ Note* In December 1964 Fruehauf-France, S.A., a French company in which the Frue- hauf Corporation (United States) held a two-thirds stock interest, signed a con- tract with Automobiles Berliet, S.A., another French company, for delivery of 60 "Pruehauf" vans, valued at 1,785,310 francs, for eventual delivery to the People's Republic of China. The first deliveries were to be made in February 1965. In January 1965 the U.S. Treasury Department issued an order directing the Fruehaut Corporation to suspend execution of the contract as violating the U.S. Transaction Control Regulations. ** When Fruchauf-France approached Automobiles Berliet about rescinding the con- tract, Berliet refused. Fearing that failure to perform the contract would weaken the company's position to obtain future contracts from its largest customer (Ber- liet) and subject the company to suit for damages, the French minority directors on February 15, 1965, instituted a proceeding against the Fruehauf Corporation and the American directors before the Tribunal of Commerce of Corbeil Essonnes. on February 16 the President of the Tribunal appointed a temporary administrator to head Fruehauf-France, S.A., for three months and to execute the contract. ‘The Fruehauf Corporation appealed to the Court of Appeals of Paris. The Court of Appeals in a decision of May 22, 1965, affirmed the order of Feburary 16, 1965, appointing an administrator for three months to execute the contract with Berliet. among the considerations cited by the Court of Appeals in its decision were: “The evidence demonstrates, without serious question, not only the clear and present interest Fruehauf-France, S.A. has in the execution of a contract made with its principal customer, Berliet, S.A., which accounts for about 40 per cent of its exports, but above all the catastrophic results which would have been produced, on the eve of delivery date, and which would be felt even today, if the con- tract had been breached, because the buyer would be in a position to demand of its seller all commercial damages resulting therefrom, valued at more than five million francs, following upon the break-off of its dealings with China. . . these damages, which Fruehauf Corporation or Fruehauf- International [the United States parent companies] did not indicate _ any intention of assuming, would be of such an order as to ruin the financial equilibrium and the moral credit of Fruehauf-France, S.A. and provoke its disappearance and the unemployment of more than 600 workers; . . . in order to name a temporary administrator the judge- referee must take into account the interests of the company rather than the personal interests of any shareholders even if they be the majority." ‘[Prepared by the editors of International Legal Materials. The editors wish to thank Mrs. Rita E, Hauser for the English translation of the opinion which she provided. The English translation of the full opinion is in the library of the American Society of International Law.] *#(31 Code of Federal Regulations sec. 505.01 et seq.)