CD: Could you provide an overview of the different ways available to resolve commercial disputes in France? What considerations should parties make when deciding which method, or methods, to choose?

Mathieu: There are several ways of resolving business disputes in France, including principally judicial proceedings, arbitration proceedings and mediation. Concerning judicial proceedings, most business disputes are dealt with by the competent commercial courts. Commercial courts judges are elected by the local business community, which explains why foreign enterprises often resort to arbitration to avoid the ‘partiality’ of those judges. Certain special matters, such as trademarks, commercial leases or competition, do not come within the jurisdiction of the commercial courts. Instead they are dealt with by civil or specialised jurisdictions. The Code of Civil Procedure provides that before instituting any judicial proceedings, one must be in a position to demonstrate that attempts were made to find an amicable solution to the dispute in question. In other words, today in France, no judicial proceedings may be instituted unless attempts are made to find an amicable solution to the dispute. This is now a condition of admissibility of the judicial action. This shows that as a general principle, French law is favourable to alternative dispute resolutions. Arbitration, whether domestic or international, is a dispute resolution method that French law and French courts have systematically favoured and supported. Over the last 20 years, other ADRs have been developed in France. For instance, judges often invite parties to carry out conciliation with the assistance of a court appointed conciliator. If an agreement is reached, it is set forth in writing and remains confidential. The judge simply issues a judgement stating that the dispute was resolved. If no agreement is reached, then the judicial proceedings are resumed. Litigants may also have recourse to mediation. This method of dispute resolution is flexible and no specific legal regime is applicable. There are, however, institutions which have been created to organise and facilitate mediation proceedings, such as the Centre de Médiation et d’Arbitrage de Paris (CMAP), or the specialised Centre de Médiation de la Filière Automobile, dedicated to disputes involving the automobile industry – car manufacturers, equipment suppliers, and so on. Settlement agreements are frequently concluded to resolve disputes. Such agreements may take place at any time before, during and even after a court action. A settlement agreement has the effect as a court decision. When a settlement is approved by a court decision, it is automatically enforceable under French law.

Jul-Sep 2016 issue

FLV & Associés AARPI