This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

A jurisdiction clause, even valid, may be unenforceable in certain cases. The issue is discussed on a regular basis as part of bankruptcy proceedings, tort actions or summary proceedings. The mandatory jurisdiction which is now conferred to eight specialized courts for actions involving competition law and Article L. 442-1 et seq. may alter the effect of jurisdiction clauses.
1) Is a jurisdiction  …

Enforceability.

Jurisdiction clauses enable contracting parties to remove the disputes referred to in the clause from the jurisdiction of their natural court in favor of another court. The validity of such clauses, which derogate from the applicable principles on court jurisdiction, depend on a number of conditions being fulfilled. Thus, the parties' agreement can only provide for the non-application of those jurisdiction rules which are not public policy rules . Furthermore, Article 48 of the Code of Civil Procedure states that jurisdiction clauses are valid only between merchants, provided that they are drafted in an explicit manner , and appear in the undertakings of the party against whom it will be enforced. The acceptance of the clause must be express and it has been ruled that merely mentioning it in the delivery orders cannot be relied on in litigation relating to the termination of the master agreement . Likewise, a draft contract, which is neither dated nor signed, and which includes a jurisdiction clause, or the silence in respect thereof by the party to whom it is addressed cannot be enforced against that party when it has not clearly and expressly consented to it in writing .

Regarding exclusive distribution, suppliers have a certain wariness in respect of commercial courts located in the provinces which are regarded as more sympathetic to local distributors' interests. As a result, distribution contracts often include a clause granting jurisdiction to the commercial court or the tribunal judiciaire in Paris. In this context, a jurisdiction clause that evicts the commercial court in favor of the tribunal judiciaire is valid where the distributor is a merchant who has accepted in full knowledge of the facts .

Lastly, the scope of application of such a clause is given a broad interpretation by the courts and a dispute relating to the pre-contract information owed by a supplier to an exclusive distributor is deemed to fall within contractual matters and may be subject to a jurisdiction clause where both parties are merchants .

TGI Paris, 15 December 1994, LawLex200300002848JBJ; CA Aix-en-Provence, 15 May 2001, LawLex200200004750JBJ; T. com. Orléans, 22 September 2004, LawLex200400002147JBJ; T. com. Angers, 30 June 1999, LawLex200400000226JBJ: a jurisdiction clause provided for in a motor vehicle distribution contract, in identical font compared to other clauses, is valid and enforceable to the distributor.

Cass. com., 3 October 2000, LawLex200200004783JBJ.

CA Versailles, 26 September2019, LawLex201900001134JBJ.

CA Versailles, 18 June 1998, LawLex200200005134JBJ; T. com. Paris, 21 February 2013,  LawLex201300000226JBJ.

CA Lyon, 12 January 2006, LawLex200600000235JBJ.

Validity and scope.

A jurisdiction clause, even valid, may be unenforceable in certain cases. The issue is discussed on a regular basis as part of bankruptcy proceedings, tort actions or summary proceedings. The mandatory jurisdiction which is now conferred to eight specialized courts for actions involving competition law and Article L. 442-1 et seq. may alter the effect of jurisdiction clauses.

1) Is a jurisdiction clause enforceable against the plaintiff in the context of an application for interim relief?

It is traditionally accepted that urgency can be used to set aside the application of a jurisdiction clause included in a distribution agreement . However, although it can be considered that urgency may permit derogation from the territorial jurisdiction agreed upon between the parties in favor of the local interim relief judge, it should have no influence regarding the material jurisdiction agreed upon so that, in case of granting of jurisdiction to the tribunal de grande instance, the interim relief judge of the tribunal de grande instance will have jurisdiction to rule instead of the commercial interim relief judge . As the rules regarding the specialization of courts having regard to competition law and Article L. 442-1 et seq. of the Commercial Code also apply to applications for interim relief  , the clause attributing jurisdiction to a specialized court must be respected in the event of applications relating to those matters.

2) Is a jurisdiction clause enforceable in case of bankruptcy proceedings?

The jurisdiction clause must be set aside where the dispute relating to the termination of the distribution contract is related to the distributor's bankruptcy proceedings . By contrast jurisdiction clauses may apply where the dispute has not arisen from the bankruptcy proceedings and they have no influence on its solution . Questions may be raised on the consequences of Article R. 662-3 of the Commercial Code which leads to entrusting a set of questions to the court handling the bankruptcy proceedings, and whose main objective is to ensure the continued existence of the undertaking facing judicial reorganization, that a court with less involvement in those proceedings might review with more distance and with the guarantee of a more neutral review.

The trial courts have however confined the scope of the exception . Thus, an action having as its purpose the finding of the existence of a wrongful act by the supplier which has led to the distributor's suspension of payments does not fall within the jurisdiction of the court seized in respect of the bankruptcy proceedings, where it relies on unrelated facts having taken place before those proceedings , nor does the action relating to the termination of a contract carried on after the decision to initiate proceeding . In effect, the jurisdiction clause concerns the performance of the contract including during bankruptcy proceedings .

3) Is a jurisdiction clause enforceable in tort actions?

A tort action initiated by a third party or against a third party to the contract is not covered by the jurisdiction clause. Thus, the jurisdiction clause does not apply to a tort action initiated by an importer of motor vehicles against the manufacturer who is a third party to the contract , which falls within Article 7(2) of Regulation No 1215/2012 of 12 December 2012, which replaces  44/2001 of 22 December 2000 , pursuant to which, “[a] person domiciled in a Member State may, in another Member State, be sued: […] in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. The same applies in case of tort actions for making good liabilities ("action en comblement du passif") brought against the supplier . The distributor's parent and sister companies which are third parties to the contract may not however claim damages for harm caused by the supplier's non-performance where the distributor has not made a claim to the court of arbitration contractually designated .

Where a liability action is brought by one of the parties against the other which would be the case when an established commercial relationship is suddenly terminated, the fate of the jurisdiction clause is no longer in doubt since the Commercial Chamber of the commercial court has accepted that actions based on Article 442-1, II (former Article L. 442-6, I, 5º) of the Commercial Code, which relate to a tort, remain subject to the terms of the jurisdiction clause if its scope of application concerns not only the contractual relationship but also the termination of a commercial relationship . The first Civil Chamber had moreover ruled that a jurisdiction clause in an international distribution agreement referring to the termination of that contract must be implemented even where there were French mandatory provisions of public policy, such as Article L. 442-1 . A fortiori such a solution is applied in domestic law .

4) What is the impact of the rules on the specialized courts for matters relating to competition law and actions falling under Article L. 442-1 et seq. on jurisdiction clauses? The institution of specialized courts for the application of the law on anticompetitive practices  and of Article L. 442-1 et seq. of the Commercial Code  is liable to modify the allocation of jurisdiction provided for by the parties in favor of the specialized court attached to the competent court. It should be noted that these mandatory jurisdiction rules also apply in the case of interim applications .

The case law shows an attachment to preserving the specialized courts' jurisdiction so as to protect the quality of decisions rendered. After some hesitation about restricting those courts to hearing actions based on competition law , the courts have rationally applied Article L. 420-7 in a general manner where competition law was relied on by the claimant or in defense since it is applicable to all disputes “in which those provisions are relied upon” , without any need to take account of the substance of the plea . The same reasoning is now acepted in litigation based on the application of Article L. 442-4 of the Commercial Code and it is sufficient that that article is invoked in defense, even incidentally, for the jurisdiction of the specialized court to be recognized . Are all jurisdiction clauses automatically set aside in that case as being contrary to mandatory provisions of public policy?  Nothing could be less certain. If the clause designates a non-specialized court, it would appear logical that it should be set aside. On the other hand, where such clauses do designate a specialized court they must be enforced. This was the position of the Court of Appeal which sets aside an interim relief order issued by the Commercial Court in the city of Meaux and upheld the allocation of jurisdiction to the Paris “Tribunal de grande instance” whereas the specialized court which would normally have been competent where there was no jurisdiction clause would have been the Paris Commercial Court . What of arbitration clauses? Can they circumvent the jurisdiction of the eight specialized courts in matters of competition and claims under Article L. 442-1 et seq. of the Commercial Code? The courts consider that claims brought under Article L. 442-1 et seq. are not part of those subject to the sole jurisidiction of the ordinary courts . Recourse to the specialized courts is only a requirement when bringing an action in the ordinary courts and cannot deprive an arbitration clause of its effect. It has also been held by the trial courts that an arbitration clause is applicable to “disputes that may arise concerning the validity, interpretation, performance or non-performance, the interruption or resolution” of a contract including actions for termination of an established commercial relationship.

5)  Will mediation or conciliation clauses be executed before introducing a claim before the court competent to hear the dispute?

Many contracts contain conciliation or mediation clauses imposing this type of dispute resolution prior to any legal action before the courts. The purposes of such clauses are manifold: promoting the amicable resolution of disputes, avoiding surprise legal actions at short notice or on a specific date giving the claimant a tactical advantage over the defendant who has insufficient time to prepare the case, laying legal traps to ensure the failure of future claims etc. Such clauses are also present in certain exclusive distribution agreements. The courts now consider that failure to comply with a mandatory conciliation procedure prior to bringing an action before the courts, which interrupts, until the procedure ends, the limitation period applicable for the introduction of legal action, constitutes grounds for a dismissal of the claim should the parties seek to rely on it , unless resolved during court proceedings . Although the courts were intially tolerant and considered that the implementation of a conciliation procedure could be rectified in the course of the procedure , they are now stricter and require that it be implemented before any action is brought before a court under penalty of inadmissibility of the suit which means that prior conciliation can no longer be the subject of a rectification in the course of the procedure . One of the main practical difficulties lies in defining the scope of application of the conciliation or mediation clause. It has been held that a clause providing for conciliation prior to any dispute relating to the “termination for any cause whatsoever” of the contract added to an agreement in 2006 did not refer to the termination of the commercial relationship established since 2002, the application of the clause being limited to the termination of the 2006 contract . Conversely, a very similar clause also relating to the contract and not the business relationship per se, was interpreted as applying to the termination of the established commercial relationship . To ensure the full effectiveness of such clauses, it seems prudent to state expressly that they cover all disputes relating to the conclusion, the performance and the termination of the agreement and of the commercial relations between the parties as a whole.

T. com. Mirecourt, 9 July 2004, LawLex200400002090JBJ: urgency is used to set aside the application of a jurisdiction clause contained in a motor vehicle distribution contract. 

CA Dijon, 25 February 2005, LawLex200500004357JBJ: "where referral to the summary court goes against, in territorial matters, the application of the jurisdiction clause", the plaintiff "should comply with the clause as it granted jurisdiction to the civil court to rule on their disputes"; T. com. Paris, 28 March 2008, LawLex200800000835JBJ: the jurisdiction clause in favor of TGI of Paris, to which no legal provision puts an obstacle, freely accepted and in full knowledge of the facts by the plaintiff, is enforceable to the commercial summary court and is binding on it.

Former Brussels Convention of 27 September 1968.

T. com. Bobigny, 24 January 2003, LawLex200300001195JBJ.

CA Paris, 13 June 2013, LawLex201300001012JBJ.

Cass. com., 9 March 2010, LawLex201000000373JBJ.

Cass. 1re civ., 1, 22 October 2008, LawLex200800001850JBJ.

For examples see CA Aix-en-Provence, 8 February 2012, LawLex201200000377JBJ; T. com. Paris, 21 February 2013, LawLex201300000226JBJ.

Articles L. 420-7 and R. 420-3 Commercial Code.

Articles L. 442-4, D. 442-3 and D. 442-6 Commercial Code.

T. com. Albi, 28 October 2009, LawLex200900003286JBJ.

CA Versailles, 24 May 2007, LawLex200700001334JBJ, ruling out the jurisdiction of the specialized courts where the rules laid down in Articles L. 420-1 and L. 420-5 of the Commercial Code are merely referred to as a defense.

T. com. Albi, 28 October 2009, Lawlex 200900003286JBJ; T. com. Mont-de-Marsan, 21 January 2011; CA Paris, 4 June 2013, LawLex 20130000927585.

CA Poitiers, 27 October 2009, LawLex201000003657JBJ.

Cass. com., 9 November 2010, LawLex201000001248JBJ.

CA Douai, 4 April 2012, LawLex201200000585JBJ; Cass. com., 26 March 2013, LawLex201300000481JBJ.

CA Paris, 4 June 2013, LawLex201300000927JBJ.

 Cass. 1re civ, 21 October 2015, LawLex201500001349JBJ, upholding CA Paris, 1 July 2014, LawLex201400002207JBJ; cf. CA Paris, 18 March 2014, LawLex201400001726JBJ.

Cass. 2e civ., 16 December 2010, No 09-71.575.

Cass. com., 16 December 2010, No 09-71.575,

Cass. ch. mixte, 12 December 2014, No 13-19684.

Cass. com., 12 June 2012, LawLex201200000904JBJ, the clause could have easily been interpreted differently, as the Avocat General indeed stated.

Cass. com., 6 June 1995, LawLex200200005472JBJ; CA Rennes, 12 January 2000, LawLex200200004740JBJ: the court referred to of the distributor's bankruptcy proceedings may review, despite the existence of a jurisdiction clause in favor of another court, the action for abusive support brought against the supplier. 

Cass. com., 17 January 1995, LawLex200200005435JBJ; 3 March 1998, LawLex200200005107JBJ.

CA Lyon, 12 January 2006, LawLex200600000235JBJ: where the grievances relied upon against the supplier have their origin in the period prior to the bankruptcy proceedings, the jurisdiction clause provided for in the contract may negate the jurisdiction of the court seized for the bankruptcy proceedings; 2 February 2006, LawLex200600000455JBJ: a jurisdiction clause prevails against the bankruptcy court where the bankruptcy proceedings have no influence on the outcome of the dispute, which relates to the termination of a contract which continued after the decision to initiate proceedings.

CA Aix-en-Provence, 15 May 2001, LawLex200200004750JBJ.

T. com. Lyon, 19 July 2005, LawLex200500008053JBJ.

T. com. Paris, 13 October 2000, LawLex200500003785JBJ.

CA Metz, 18 October 2000, LawLex200200004751JBJ. 

French Distribution Law

158. Enforceability.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

158. Enforceability.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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