Maître Laurent FELLOUS, a lawyer at the Paris Bar, assists companies that are confronted with disputes in their daily lives. By these disputes, we can mean commercial litigation, but also the internal conflicts represented by litigation between partners.

Handling commercial disputes

There are many situations that can lead to commercial litigation.

What can be the sources of commercial litigation?

One commercial litigation can arise for example from the Termination of commercial relationships, of a disloyal behavior or even unpaid trade receivables.

The breakup of commercial relationships

It is theArticle L. 442-1 2° of the Commercial Code Who regulates the practice Of commercial relationships.

” II. - Engages the responsibility of its author and obliges him to repair the damage caused by the fact, by any person carrying out production, distribution or service activities, of abruptly breaking, even partially, an established commercial relationship, in the absence of written notice that takes into account in particular the duration of the commercial relationship, in reference to commercial practices or interprofessional agreements.

In the event of a dispute between the parties over the duration of the notice period, the person responsible for the breakup cannot be held liable for an insufficient period of time provided that he has respected a notice period of 18 months.

The provisions of this II do not prevent the possibility of termination without notice, in the event of non-performance by the other party of its obligations or in the event of force majeure. ”.

What is the sudden termination of a commercial relationship?

La sudden termination of an established commercial relationship Is the fact of Break up abruptly, even partially, a commercial relationship, without written notice taking into account the duration of the commercial relationship and respecting the minimum period of notice determined, with reference to commercial practices, by interprofessional agreements.

The fact that we are talking about the “commercial” relationship and not the “contractual” relationship is relative to territorial jurisdiction, but it is also linked to tacit renewal of successive contracts between the parties, the notice period would then not be the same.

What relationships does article L. 442-1 2° of the Commercial Code refer to?

The text covers all established relationships, regardless of whether they are pre-contractual, Contractual And even post-contractual ; regardless of whether the contract was formalized or not in writing, whether he is at indefinite period or concluded for a fixed term And let it be renewable.

Thus, a succession of extended or renewed contracts makes relationships sustainable as long as it is demonstrated.” the regularity, the significance and the stability of these ” (Cass, com, September 6, 2011, No. 10-30679), without however needing to demonstrate the permanent character and Continued exchanges.

THEIntent of the parties Or thelegitimate expectations of the breakup victim in the continuation of the relationship is taken into consideration to characterize this stable character.

The application of Article L. 442-1, II is not subject to the proof of a state of economic dependence.

The breakup simply has to be unpredictable, Sudden and violent by not respecting a sufficient written notice.

What is adequate notice?

Sufficient notice is the one that will allow the partner retraining.

How is it appreciated?

It is appreciated in view of the duration of the commercial relationship and from the day on which the contractor informs his partner of his desire not to continue their exchanges.

In addition to the length of the relationships, the criteria to be taken into consideration when setting the length of notice are the nature And the field of relationships, the seasonality, the production cycle, the notoriety and the number of products, thestate of economic dependence (Cass, com, October 4, 2016, No. 15-14025), the ability of the victim company to find opportunities (Cass, com, March 21, 2018, No. 16-17146), The importance of the investments that have been requested...

If there is a dispute over this notice period, what happens?

It's theOrdinance No. 2019-359 of 24 April 2019 which indicates that in the event of a dispute between the parties over the duration of the notice period, the person responsible for the breach may be held liable if he has not respected a eighteen-month notice.

Unfair competition

The Principle of freedom of trade and industry was established by Article 7 of the law of 2 and 17 March 1791, known as the “Allarde decree”.

This Freedom of enterprise derives fromArticle 4 of the Declaration of the Rights of Man and of the Citizen which states that” Freedom consists in being able to do anything that does not harm others ”.

Thus, operators cannot adopt a disloyal behavior, that is to say contrary to commercial practices or to the laws and regulations in force.

How can disloyal behavior be reprimanded?

THEUnfair competition action allows the victim of procedures contrary to commercial rules to sue the perpetrator in civil liability, without any private right.

The action is based on articles 1240 and 1241 of the Civil Code.

La Disloyalty Constitutes a mistake and requires repair.

Unfair competition action based on civil liability Assume that the victim provides evidence of a mistake, of a prejudice And of a causal relationship between the fault and the resulting damage.

What types of unfair acts exist?

For example, there is the bashing, the confusion, the parasitism or even the disorganization through the poaching of personnel from the competitor.

The bashing is an act of unfair competition of legal origin that is defined by the behavior of traders who throw out the disrepute on a competitor, by spreading about him, or about his products or services, malicious information (Lyon Court of Appeal, May 21, 1974).

It is thus about” damage the brand image of a designated or identifiable company or product in order to divert customers by using reprehensible words or arguments, with or without an exact basis, disseminated or issued in any case in such a way as to reach the customers of the target company ” (Versailles Court of Appeal, September 9, 1999)

La confusion is the result of an imitation.

It must be clearly distinguished from counterfeiting.

THECounterfeiting offence necessarily implies the existence of intellectual property rights on a product (copyright, trademark, patent, designs or model...).

Conversely, acts of unfair competition may be characterized in the absence of such rights insofar as the slavish copying of a third party's products constitutes a fault when it is likely to cause confusion in the public mind.

The parasitism is defined by case law as” all the behaviors by which an economic agent interferes in the wake of another in order to take advantage, without spending anything, of its efforts and know-how ” (Court of Cassation, Commercial Chamber, 26 January 1999, appeal no. 96-22.457).

For example, by adopting the name “Champagne” for the launch of his new perfume, Yves Saint Laurent, by borrowing the prestige of the disputed appellation, misappropriated his notoriety by a parasitic process (Paris Court of Appeal, 15 December 1993)

The debauching customers, for its part, has the effect of disorganizing the company.

It is frequently qualified when there are Illegal maneuvers.

Thus, the new employer is guilty of unfair competition if it hires employees of a competitor when it knew of the existence of the non-competition clause (Cass. com., Feb. 5, 1991).

Unpaid commercial claims

Unless otherwise agreed between commercial partners, the payment term between professionals is fixed at thirtieth day following the date of receipt of wares or of performance of the service.

Specific features are planned for certain sectors.

Receivables are often not collected within this time frame.

FELLOUS AVOCATS law firm intervenes in amicable recovery on the one hand, and in the Judicial recovery on the other hand.

Why prefer amicable action?

In terms ofefficiency And of cost, it is best to opt for theamicable action.

If the aim is to maintaining the commercial relationship, it is for this procedure that you will have to opt for.

The commercial debt collection will then be the subject of a negotiation.

In what cases is judicial recovery used?

In the event of failure of amicable recovery, the judicial recovery method will certainly be the most suitable for the situation even if the costs prove to be significant and the procedure is complex.

The actions that are mainly suitable for the recovery of commercial debts are, for example, thewrit, the Referred provision or even theAssignment to the bottom.

This method is often used for claims relating to commercial leases.

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- The prevention of disputes between partners

Disputes between partners must be anticipated prior to the creation of the company.

How can disputes between partners be defined?

These conflicts have their source in a Misunderstanding relating to the strategy to be carried out, the remuneration of the leaders, the financial management of the company or the capital management With thestarter Or the Departure of associates.

They very often generate a concrete negative impact In a distribution of dividends, of transfer of shares or even Withdrawal of a partner from the company for example.

This is the case, for example, when egalitarian partners disagree, which makes it impossible to obtain any majority in votes in the assembly.

The objective is therefore to avoid this situation of paralysis of society upstream but also as a result of the emergence of conflicts.

What should we understand by the concept of disagreement between partners

La Disagreement between partners has been defined by case law and means:

” The disappearance of affectio societatis, which results in an impossibility or too great difficulty in continuing social exploitation, or even the impossibility of continuing the relationships that the partners previously maintained in the context of the operation of all their companies ”.

(Court of Cassation, Commercial Chamber, April 10, 2019, April 10, 2019, 17-20.506, Unpublished).

How is it possible to anticipate possible disagreements in order to manage conflicts between partners?

Different solutions make it possible to resolve conflicts between partners by conventional means, and therefore to avoid litigation in general. Longs and injurious.

These solutions must be provided for as early as the constitution, in the Statutes of the company.

Otherwise, it is possible to foresee them in the Shareholders' agreement.

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Is the partners' pact really considered to be a strategic instrument developed prior to the occurrence of a conflict?

In the absence in The Statutes of the company of provisions as well as of a partners' agreement providing for the outcome of disputes between partners, numerous difficulties may arise when a conflict arises.

But what is a partners' agreement?

The Shareholders' agreement Is a extra-statutory legal act which makes it possible to organize the movements of shares and the operation of the company.

It can be signed for all the partners of the same company or by certain partners only.

If it is only signed by some partners, the others will not be aware of it.

The partners' agreement is a “secret” act insofar as it is not known to third parties.

How long does it last?

The signatories must agree on a duration for the pact that can be determined over time, by fixing a specific date or a certain event, or indefinite, but in this case the pact may be terminated unilaterally.

Sometimes, the partners expect the pact to last as long as the signatories or their substitutes remain together partners.

In this case, the duration of the contract is deemed to be indefinite because the end of this condition may very well never take place.

What are the alternatives that will allow an amicable solution to avoid a long and expensive legal procedure?

Several alternative methods of resolving disputes between partners exist, including the intervention of a third party.

It is possible to have to deal with the mediation, the conciliation And thearbitration.

In the mediation, the partners will be able to reach an agreement.

The role of the mediator, while remaining neutral, is limited to the smooth running of these exchanges.

It favors thebalance of speaking time And theListen to the arguments of each of the parties.

In the conciliation, the role of the conciliator is to listen to the views of the parties and to propose similar solutions accordingly.

In thearbitration, the final solution is binding on the parties.

The arbitrator is appointed by the judge because of his expertise.

A specific clause can be defined in the company's articles of association consisting in defining the choice of amicable settlement between these three alternatives.

Would the use of an exclusion clause in the articles of association not make it possible to end a conflict when a partner commits serious acts causing damage to the company or its partners?

It is entirely possible to provide a exclusion clause in the statutes, thus punishing, an associate.

But what is the exclusion of an associate?

THEexclusion of a partner corresponds then to the situation in which the partners decide to exclude one of the partners from the company when a specified event, clear and purpose comes true or if certain qualities justifying its presence disappear.

Acts of such severity may for example correspond to decisions that paralyse the proper functioning of the company or that are taken in violation of the statutes.

How should it be adopted?

Such a clause must be adopted by all the partners when the statutes are signed, or subsequently by unanimous decisions.

THEArticle L 231-6 of the Commercial Code provides that in commercial companies:

” It may be stipulated that the general meeting has the right to decide, by a majority fixed for the amendment of the statutes, that one or more of the partners cease to be part of the company.”

In addition, the exclusion clause may be provided for in the articles of association of the commercial company in accordance withArticle L 227-16 of the Commercial Code :

” Under the conditions they determine, the articles of association may provide that a partner may be required to sell his shares.

They may also provide for the suspension of the non-pecuniary rights of this partner until the latter has made this transfer. ”

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What is its purpose?

La exclusion clause Allows, under the conditions determined by it, to exclude the partner from the company by buying back his shares.

Can the judicial dissolution of the company be pronounced in the event of disagreement between the partners?

Even though it is the most extreme solution, judicial dissolution can be ordered by the courts.

This Dissolution is provided for by theArticle 1844-7 5° of the Civil Code Which states that:

” The company ends by the early dissolution pronounced by the court at the request of a partner for just reasons, in particular in the event of non-performance of its obligations by a partner, or of a disagreement between partners paralyzing the functioning of the company. ”

However, the dissolution Cannot be requested by the partner who caused the disagreement, but by the partner who takes advantage of a Legitimate Interest.

In addition, the dissolution requires that the disagreement between the partners be Severe Enough And Serious And trains a Total paralysis of the functioning of society.

It has been considered, for example, that the dissolution of a company is justified when its functioning is paralyzed due to disagreement between the partners, the latter being in The Impossibility of Holding General Meetings and to decide the fate of society (Civil Cassation 1st, 15 June 2022, no. 20-19781).