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31-12-2018

 

Determination of the competent Court in the event of sudden termination by a foreign company

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Under Article D.442-3 of the Commercial Code, disputes relating to a sudden termination of commercial relations established within the meaning of Article L.442-6 of the Commercial Code must imperatively be brought before specialized courts. which have exclusive jurisdiction. The Paris Court of Appeal is the appeal court for these specialized courts. 

The Paris Court of Appeal recently considered that this rule of jurisdiction, which is of public order when it comes to a commercial relationship between French operators, does not apply in international matters. (CA Paris, April 10, 2018, RG n°17/15593)

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In this case, from 2011, the French company TRADIS established a commercial relationship with a Polish company named ZPH relating to the distribution of decorative and furnishing articles manufactured by ZPH. In 2013, this relationship was formalized with the signing of a commercial agreement between the two parties. In October 2016, ZPH informed TRADIS of their desire to end their relationship on one month's notice.

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TRADIS then sued ZPH for sudden termination of commercial relations before the Commercial Court of Rennes, a specialized court designated by article D.442-3 of the Commercial Code. ZPH raised the territorial incompetence of the Rennes court. The court retained its jurisdiction by considering that in the case of a tort action, the competent court is that of the place where the harmful event (sudden rupture) occurred (here, the head office of the company TRADIS located within the jurisdiction of the Rennes court). The Rennes court also considered that ZPH did not demonstrate that the dispute over the sudden termination would have any manifestly closer links with Poland rather than with France.

ZPH challenged this decision before the Paris Court of Appeal, which overturned the judgment and considered that the Rennes court did not have jurisdiction for the following reasons :

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First of all, under the terms of Article 7, point 2, of the Brussels I bis Regulation interpreted in the light of the case law of the Court of Justice of the European Union (CJEU, 14 July 2016, case C-196 /15, Granolo SpA v. A. Emmi France SA), an action for damages based on a sudden termination of long-established commercial relations does not fall within the scope of tort within the meaning of these regulations if there was, between the parties, a tacit contractual relationship based on a range of concordant elements, including in particular the existence of long-established commercial relations, good faith between the parties, the regularity of transactions and their evolution over time expressed in quantity and value, any agreements on the prices invoiced and/or on the discounts granted, as well as the correspondence exchanged. The Court considers that in the present case, the commercial relationship continued for several years was characterized by sales contracts accompanied by general conditions and is indeed a matter of contract, contrary to what the Court of Rennes had ruled.

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After noting that the contract does not provide for an extension of jurisdiction clause, the Court of Appeal applied Article 7 of the Brussels I bis Regulation which provides that in contractual matters, the court of the place of fulfillment of the obligation which serves as the basis for the request and which is the place of delivery with regard to the sale of goods. The Court of Appeal nevertheless considered that TRADIS did not provide proof that the goods purchased from ZPH were delivered in France.

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Since the French company TRADIS failed to justify the special jurisdiction of the French courts under Article 7 of the Brussels bis Regulation, the Court of Appeal then applied Article 4 of this Regulation, which provides that persons domiciled in a Member State are brought before the courts of that Member State so that only the Polish courts had jurisdiction to hear the action initiated by TRADIS against the Polish company ZPH.

 

RolandRinaldo, lawyer, Cabinet ARTLEX Nantes

JeansOrieux, lawyer, Cabinet ARTLEX Nantes

 

Court of Appeal of Paris, April 10, 2018, RG n°17/15593, commercial relations, restrictive practices

of competition, international jurisdiction, Brussels I bis Regulation