Sanofi Wins Appeal and Defeats Rhodia’s €1.6 Billion Claim

January 13, 2014

On behalf of its client Sanofi, Cleary Gottlieb defeated Rhodia’s appeal of an earlier decision by the Paris Commercial Court dismissing Rhodia’s claims.

Rhodia, a spin-off of Rhône-Poulenc, sued Sanofi as successor of Aventis and Rhône-Poulenc, alleging damages of €1.3 billion for unfunded pension liabilities and €326 million for unfunded environmental liabilities, both stemming, according to Rhodia, from a faultily designed spin-off and the subsequent failure to remedy the flaws of the spin-off.

The Paris Court of Appeals affirmed in full the 2011 ruling of the Paris Commercial Court, which had dismissed both of Rhodia’s claims, and ordered Rhodia to pay €300,000 in attorney’s fees to Sanofi.

This decision is the latest in a series of victories for Sanofi in its nine-year litigation against Rhodia. In 2006, Cleary Gottlieb obtained the dismissal of Rhodia’s claims against Sanofi before a Paris ad hoc arbitral tribunal, which ruled that it had no jurisdiction to adjudicate Rhodia’s pension claim and that Rhodia’s environmental claim was barred because a 2003 settlement agreement, which released the parties of their obligations, was valid and enforceable. In 2008, Cleary Gottlieb defeated Rhodia’s attempt to set aside the arbitral award before the Paris Court of Appeals. In 2011, Cleary Gottlieb won a favorable decision before the Paris Commercial Court, which rejected Rhodia’s claims on the merits, i.e., the decision that Rhodia unsuccessfully attempted to overturn before the Paris Court of Appeals.

Rhodia has commenced a special appeal of the decision of the Paris Court of Appeals, and as a result the case will ultimately be heard by the French Supreme Court.