French Supreme Court rejects religious law as governing law

In a decision earlier this year the First Civil Chamber of the Cour de cassation set aside a ruling (link in French) of the Rouen Court of Appeal which had upheld the application of Jewish religious law to a dispute between co‑owners of real estate.

The parties had agreed to submit their disputes to a rabbinical arbitral tribunal and to apply the Talmudic rule of Gad ve‑Igud, a mechanism comparable to a “buy or sell” clause.

While the Court of Appeal previously accepted (link in French) that the arbitral award had ‘res judicata’ effect and displaced the French Civil Code rules on co‑ownership, the Supreme Court took a different view. Referring for the first time to the Rome I Regulation in relation to religious norms, it held that only state law may be designated by a choice‑of‑law clause.

Because the rule relied upon was religious in nature and did not emanate from a state legal system, it could not be applied as the governing law of the dispute.

A novel use of Rome I

French law already provides a settled framework for the contractual incorporation of religious norms. Substantively, such norms may operate only within areas left to the parties’ free disposition and without calling into question the overall legal relationship, which remains in principle governed by state law.

Formally, their application requires the unequivocal agreement of the parties and absolute certainty as to the content of the religious rule relied upon, which must generally be reproduced in full rather than defined by a vague reference to an external religious corpus.

In the present case, those formal requirements were arguably not satisfied. The arbitral award merely referred to Gad ve‑Igud without defining its content; its application appeared contingent upon the continuation of the arbitral proceedings; and its implementation ultimately required recourse to expert testimony from rabbis. This last point in particular placed the state judge in a position uncomfortably close to that of an interpreter of religious law, at odds with the requirements of judicial neutrality.

Against that background, the Supreme Court did not need to rule on the principle of ‘laïcité’ – constitutional secularism – or to reassess whether the appellate court had been overly permissive in accepting the contractual incorporation of a religious rule. While such issues might have been sufficient to justify cassation, they were not strictly necessary to resolve the dispute.

It is in this context that the court’s reliance on European private international law becomes decisive. Article 3 of the Rome I Regulation allows parties to choose the law applicable to their contract, but the Supreme Court interprets that freedom as being confined to state law. Although the Regulation makes clear that non‑state rules may be incorporated by reference into a contract (Recital 13: “This Regulation does not preclude parties from incorporating by reference into their contract a non‑State body of law or an international convention”), this type of incorporation does not constitute a valid choice of law and therefore cannot displace the otherwise applicable national legal system.

By resolving the case on this narrow conflict‑of‑laws basis, the court adopted a technically innovative solution that allowed it to avoid reopening sensitive debates on laïcité or unsettling long‑standing jurisprudence on the contractual use of religious norms, even though the factual circumstances might arguably have warranted such an examination.

Uncertain consequences

The ruling nonetheless raises concerns. For decades, French courts have accepted that religious rules could be contractually incorporated, provided that the parties’ consent was clear and that public policy and mandatory rules were respected. This long‑standing approach, rooted in the Supreme Court’s 1978 Cours Sainte‑Marthe decision, allowed room for so‑called “faith‑based” economic activities.

Against that background, the 2026 decision creates uncertainty. If religious norms cannot be applied because they are not state law, questions arise as to the future enforceability of contractual mechanisms used in sectors such as Islamic finance or faith‑based food production. These activities typically rely not on the substitution of state law, but on the incorporation of religious constraints alongside it.

The precise reach of the ruling remains unclear. It may be read narrowly, as rejecting the application of religious rules where the parties merely refer to them without clearly incorporating their content. Alternatively, it could be understood more broadly as excluding any contractual application of religious norms by the state courts where those norms are not part of a state legal system.

Until clarified by future case law, the decision introduces legal uncertainty as to the place of religious rules in French contract law – and highlights the growing influence of EU private international law instruments in shaping that debate.