A Belgian company who had been conducting business with a French distributor since 2003 abruptly broke off their business relationship. The French company went to the Paris Commercial Court and claimed for compensation on Article L. 442-6, I, 5° of the French Commercial Code. The defendant challenged the jurisdiction of the French court, arguing that Belgian courts have jurisdiction. The Paris Commercial Court ruled that it had jurisdiction. On first appeal, the Paris Court of Appeal held that the French courts did not have jurisdiction. On the final appeal of the French company, the Court of Cassation confirmed the appellate judgment and dismissed the final appeal. While doing so, the Court of Cassation quoted a recent judgment given by the ECJ in a similar case and on the application of the same French legal provision.
Article L. 442-6, I, 5° of the French Commercial Code states that “Any producer, trader, manufacturer or person registered in the trades register shall be liable for, and obliged to compensate for the harm resulting from, any act which: 5° abruptly terminates an established business relationship wholly or in part without prior written notice that takes account of the duration of the business relationship and is in accordance with the minimum notice period as determined, with regard to standard commercial practices, by inter-industry agreements. […]”.
In a case similar to the Proutheau one, the Paris Court of Appeal had referred to the ECJ regarding questions relating to this legal provision. After the Granarolo company informed the Ambrosi company that from 1 January 2013 its products would be distributed in France and Belgium by another French company, the French company brought a compensation claim before a French court. On appeal, the Paris court of appeal asked the ECJ whether an action for damages for the termination of an established business relationship consisting in the supply of goods over several years to a distributor without a framework contract or an exclusivity agreement is a matter relating to tort or delict in the meaning of Article 5, no. 3, of the Brussels Regulation and if not, whether Article 5, no. 1, lit. b) of the Brussels Regulation is applicable in determining the place of performance of the obligation at issue. Up to this point, the French case law (commercial chamber of the Court of Cassation) had held that Article 5, no. 3, should apply because the abrupt termination of the business relationship qualifies as a tort (see e.g. Cass. Com. 15 September 2009, no. 07-10.493 – 18 January 2011, no. 10-11.885, RDC 2011.941, comment E. Treppoz. Contra: Cass. Civ. I, 22 October 2008, no. 07-15.823, Bull. civ. I, n°233; D. 2009. 200, comment F. Jault-Seseke; JCP G 2008. II. 10087, comment L. d’Avout).
The ECJ ruled (14 July 2016, Granarolo, C-196/15) that Article 5, no. 3, must be interpreted as meaning that an action for damages founded on an abrupt termination of a long-standing business relationship is not a matter relating to tort, delict or quasi-delict within the meaning of that regulation if a tacit contractual relationship existed between the parties, a matter which is for the referring court to ascertain. Demonstration of the existence of a tacit contractual relationship of that kind must be based on a body of consistent evidence, which may include in particular the existence of a long-standing business relationship, the good faith between the parties, the regularity of the transactions and their development over time expressed in terms of quantity and value, any agreements as to prices charged and/or discounts granted, and the correspondence exchanged.
One year later, the same question was brought before the commercial chamber of the Court of Cassation which quoted very precisely the Granolo judgment of the ECJ, applied its solution and ruled that the observations and assessments made by the court of appeal bring to light the existence of a tacit contractual relationship, so that the court of appeal was legally entitled to rule that the legal action was a contractual matter and – the goods being delivered to Belgium – declared that the Paris commercial court lacked jurisdiction.