A Paris court yesterdayruled that the company 2003 Productions falls outside regulations that wouldhave qualified it as French. The decision means that the Jean-PierreJeunet-directed film A Very LongEngagement(Un Long Dimanche De Fiancailles) no longer qualifies underFrench nationality rules.

The ruling came after nearlya year of wrangling and a courtroom challenge by a number of French producers'unions to the earlier decision by the French Cinema Office (CNC) that the filmwas French and would qualify for local subsidies.

The Euros47m film whichstars Audrey Tautou, was made in the French-language, based on a French novel,shot on location in France, with a French crew and post-produced in France. Butit was ruled not French enough because the court took the view that 2003Productions, although domiciled in France, was controlled by non-Europeanpowers.

The company is headed byWarner France chief Francis Boespflug and is jointly owned with staff employedby Warner Bros in France. Engagement is set to be distributed by Warner IndependentPictures in the US.

To many in the Frenchproduction community the controversial decision came as little surprise, giventhat another court ruling earlier this month had also disbarred a JosianeBalasko-directed film also made by 2003 Productions from qualifying.

The immediate effect of theruling is that the film will not generate "compte de soutien" subsidy that 2003Productions would otherwise have been able to draw down for futureFrench-qualifying productions. But the decision is also likely to have far reachingrepercussions for inward investment into France.

It also means that the filmwill be disbarred from competing in the main categories of the local Cesarawards - the French equivalent of the Oscars - and would only be a contender inthe foreign film category. Its stars will be disbarred altogether, a move whichWarner is understood to deplore.

" We sincerely hope that the CNC will appeal this decision and continuesupporting this film which received 99 points out of a maximum of 100 on theCNC's agreement scale," declared Francis Boespflug, President of 2003Productions.

In a statement, 2003 Productions said it "does not understand how this film can no longer be consideredFrench since all of the auspices in front of and behind the camera are French, starting with noted French filmmaker Jean-Pierre Jeunet, and his movie tells a French saga, is adapted from a French novel, was filmed in completely in France and in the French language. It provided work for over 2000 French extras, over 500 technicians as well as 30 French comedians, for over 18 months. It also saved from bankruptcy the French special effects company Dubois."

The statement added: "This incredible decision today threatens the film in its financing, 2003Productions and, on the longer term, investments in French film production.

Local film-maker representatives were also quick to react. "The court decision isentirely logical in terms of the law and follows the precedent it set with theBalasko film [L'Ex-Femme De Ma Vie]. Warner France was badly advised by the CNC, which sought toqualify it as French, when 2003 Productions is clearly controlled by Warnerstaff," said Pascal Rogard, head of the SACD union and former head of auteurbody l'ARP. "But on any aesthetic andcultural grounds this film is French and should be recognised as such."

Rogard said that his union,the French directors association (SRF) and l'ARP would be immediatelypetitioning the ministry of culture in order to modify the regulatoryframework. "It is not often that I side with the Americans, but this is anonsense, it is a matter of decree and one that can be altered by government at the stroke of a pen." Headded that the creative unions, as opposed to the producers' associations,would argue that such a modification could be made with retroactive effect.

Perversely the mega-budgetOliver Stone film Alexander, which was made with many of the samepartners, does qualify as French. Although it was filmed in English and haslittle obvious French content, it meets French nationality requiements because it was setup as a minority French co-production involving the UK and The Netherlandsthrough a partner, Pathe, whose French nationality is unquestioned. Warner Brosis understood to have put up 30% of A Very Long Engagement's budget andapproximately $50m of Alexander's.