On 17 June 2026, the First Civil Chamber of the French Cour de cassation (“Court of Cassation”) (English version of decision here) drew an important boundary around enforcement against assets of State-linked entities. The Court accepted the general French-law principle that a creditor of a foreign State may, in certain circumstances, enforce against assets held by a legally separate entity treated as an “emanation of the State” (an entity formally distinct from the State but treated as the State for enforcement purposes where it lacks sufficient functional independence and its assets are confused with the State’s assets). But it held that this characterisation must be excluded where using it would compromise objectives pursued by measures instituted by the European Union.[1]
The practical result is significant: Hellenic Shipyards SA (“HSY”), an arbitral award creditor of the Greek State, could not use French enforcement proceedings to attach assets of Hellenic Corporation of Assets & Participations SA (“HCAP”), even though the Paris Court of Appeal had treated HCAP as an emanation of Greece.[2]
Facts
The Greek State had been ordered by an arbitral award, declared enforceable in France, to pay a sum to HSY. HSY then sought to enforce that award not directly against Greek State assets, but against funds supposedly held by HCAP in an HSBC account in Paris. HSY’s theory was that HCAP was an emanation of the Greek State.[3]
HCAP had been created by Greek Law No. 4389/2016 so that Greece could qualify for financial assistance under the European Stability Mechanism (“ESM”). Its statutory purpose was to manage and exploit private assets transferred by the Greek State in the public interest, generate resources for investment and economic development, and contribute to reducing the financial liabilities of the Hellenic Republic.[4]
In 2019, the Paris Court of Appeal authorised a saisie-attribution (“third-party debt attachment”, a French enforcement measure by which a creditor seeks to seize a debtor’s monetary claim against a third party) over half of the funds in the supposed HSBC account. The attachment failed in practice because HSBC stated that HCAP held no monetary claim in its books. In 2020, HCAP sought retraction of the Paris Court of Appeal’s authorisation.[5]
The Paris Court of Appeal rejected HCAP’s retraction request in 2022. It reasoned that HCAP lacked sufficient actual organic autonomy, that Greece exercised permanent control and direction over it, and that HCAP had no patrimony distinct from the Greek State’s patrimony. On that basis, the Court of Appeal characterised HCAP as an emanation of the Greek State.[6]
Issue
The central question was whether a French court could permit an arbitral award creditor of Greece to enforce against HCAP’s assets on the basis that HCAP was an emanation of the Greek State, notwithstanding HCAP’s creation as part of EU-supervised ESM financial-assistance arrangements.[7]
Put differently, the Court had to decide whether the State-emanation doctrine yields when its use would undermine the objectives of EU measures – here, the ESM framework and the EU-supervised independence and asset-monetisation role assigned to HCAP.[8]
Rule and Holding
The governing rule began with Article 2284 of the French Civil Code, under which a person who binds itself personally must perform its obligation out of all present and future movable and immovable property.[9] The Court interpreted that provision in light of EU law, including Article 136(3) of the Treaty on the Functioning of the European Union and Article 12(1) of the ESM Treaty, both of which emphasise that euro-area stability assistance is conditioned on strict requirements.[10]
The Court held that, as a general matter, a creditor of a foreign State may enforce in France against property of a legally separate entity where that entity lacks sufficient functional independence, lacks legal and factual autonomy from the State, and has assets confused with those of the State. But the Court added a decisive limitation: the emanation-of-State characterisation must be set aside where applying it would compromise objectives pursued by EU measures.[11]
Applying that rule, the Court held that HCAP’s assets could not be subject to any French enforcement measure by creditors of the Greek State.[12]
Reasoning and Disposition
The Court’s reasoning turned on the legal and institutional purpose of HCAP. The Paris Court of Appeal had acknowledged that, after the 12 July 2015 euro-area summit, Greece committed to transferring valuable Greek assets into an independent fund that would monetise them through privatisations and other means, under the supervision of the relevant European institutions.[13]
The Court of Cassation also emphasised that HCAP was a private commercial company registered in Greece, acting in the public interest but operating under private-sector rules. It had been created to allow Greece to obtain ESM assistance, and its object was to manage and exploit transferred Greek State private property so as to support investment, economic development, and the reduction of Greece’s financial liabilities.[14]
The European Commission’s November 2017 report on the ESM assistance programme likewise described HCAP as a new independent privatisation and investment fund created to manage and maximise the value of Greek assets.[15]
Against that background, the Court concluded that the Paris Court of Appeal had erred. HCAP’s independence from the Greek government and supervision by European institutions were not incidental facts; they were conditions of the ESM assistance granted to Greece. Likewise, HCAP’s very object – monetising transferred assets to help Greece repay European assistance – was incompatible with direct enforcement by Greek State creditors against HCAP’s patrimony. Therefore, the emanation-of-State characterisation had to be excluded.[16]
The disposition was a cassation partielle sans renvoi (“partial quashing without remand”, meaning that the Court of Cassation partially set aside the lower judgment and decided the remaining issue itself). The Court partially quashed the Paris Court of Appeal’s 15 September 2022 judgment, held that no remand was necessary, ordered retraction of the Paris Court of Appeal’s 27 June 2019 authorisation, confirmed the 13 February 2018 order of the Paris enforcement judge, rejected HSY’s request to attach HCAP’s supposed HSBC account in Paris, and ordered HSY to pay costs and EUR 6,000 to HCAP under Article 700 of the French Code of Civil Procedure.[17]
Conclusion
This decision matters because it preserves the State-emanation doctrine while imposing a clear EU-law limit on its use. Award creditors may still argue that a State-linked entity is, in substance, the State where the entity lacks real autonomy and its assets are confused with State assets. But where the target entity exists to implement EU-mandated financial-stability objectives – especially under ESM conditionality – French courts must ask whether enforcement would frustrate those objectives.[18]
For arbitration practitioners, the ruling is a reminder that recognition of an award and enforcement against assets are distinct steps. A creditor may hold an enforceable arbitral award against a State, yet still be barred from reaching assets held by a separate entity where EU law gives that entity’s independence and asset-preservation function legal significance. The decision is therefore likely to influence future enforcement strategy against sovereigns and State-linked restructuring, privatisation, or stabilisation vehicles in Europe.[19]
[1] Hellenic Corporation of Assets & Participations SA v Hellenic Shipyards SA, Cour de cassation, Première chambre civile, 17 June 2026, No. 23-10.435, ECLI:FR:CCASS:2026:C100393, para. 9.
[2] Id., paras. 2, 13-18.
[3] Id., paras. 1-2.
[4] Id., para. 11.
[5] Id., paras. 2-4.
[6] Id., para. 13.
[7] Id., paras. 5, 9, 14.
[8] Id., paras. 7-14.
[9] French Civil Code, Art. 2284.
[10] Consolidated Version of the Treaty on the Functioning of the European Union [2012] OJ C 326/47, Art. 136(3); Treaty Establishing the European Stability Mechanism, signed 2 February 2012, Art. 12(1); Hellenic Corporation of Assets & Participations SA v Hellenic Shipyards SA, Cour de cassation, Première chambre civile, 17 June 2026, No. 23-10.435, ECLI:FR:CCASS:2026:C100393, paras. 6-8.
[11] Id., para. 9.
[12] Id., para. 17.
[13] Id., para. 10.
[14] Id., para. 11.
[15] Id., para. 12.
[16] Id., para. 14.
[17] Id., operative part (« dispositif »).
[18] Id., paras. 9, 14, 17.
[19] Id., paras. 1-4, 9, 14, 17-18.