Sudden Breach Of An Established Business Relationship: The Summary Judge May Order The Continuation Of The Contract

• Published date: 30 September 2020
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Contracts and Commercial Law
• Law Firm: Soulier Avocats
• Author: Ms Ana'lle Idjeri

Faced with the urgency of the situation and the risk of imminent damage caused by the sudden termination of an established business relationship, the terminated business partner may ask the summary judge to order the continuation of the relevant contract This was recalled by the Cour de Cassation (French Supreme Court) in a decision dated June 24, 2020¹.

In 2016, Technicolor responded to a call for tenders issued by Canal+ for the supply of ultra HD set-top boxes. Following the signature of a letter of intent, Canal+ placed in 2017 an order for several set-top boxes that were duly delivered by Technicolor.

However, explaining that it had to deal with a significant increase in the cost of the memory chips needed to manufacture the set-top boxes and that Canal+ refused to renegotiate the prices of the boxes, Technicolor notified Canal+ of the termination of their contractual relationship.

In these circumstances, Canal+ brought summary proceedings before the President of the Nanterre Commercial Court, arguing that it was necessary to prevent the imminent damage it was facing as a result of the termination of the contractual relationship by Technicolor. Canal + requested, in particular, that its supplier be ordered to deliver past and future orders, subject to a periodic penalty payment, until a decision on the merits of the case Technicolor, for its part, considered that it was up to the Commercial Court to determine whether the imminent damage was unlawful and, in particular, to determine whether Canal+ was at fault in the occurrence of such damage.

In accordance with Article 873 of the French Code of Civil Procedure according to which the President of the Commercial Court may order interim measures either to prevent imminent damage or to put an end to a manifestly unlawful nuisance, the President of the Nanterre Commercial Court dismissed Canal+'s claims.

Canal+ lodged an appeal and, in a decision dated December 6 2018, the Versailles Court of Appeals overturned the order issued by the President of the Nanterre Commercial Court.

It ordered, as an interim measure, Technicolor to deliver future orders from Canal+, subject to a penalty payment of 10,000 euros for each observed infringement, it being specified that this penalty payment was intended to last for a period of 6 months and that the interim measure was to remain in effect until the Commercial Court renders its decision on the merits...