During a control conducted by the DIRECCTE (French Regional directorate for companies, competition, consumption, work and employment) bearing on commercial agreements negotiated by an international distribution Group, the State Prosecutor instituted proceedings before the Criminal Court on charges which were punishable by a fine of € 375.000. The latter deemed that the distributor was unable to justify that it negotiated commercial agreements on an annual basis as required by section L. 441-7 of the French Commercial Code, which agreements must be signed prior to March 1 of each year to avoid any retroactive or unfair discounts.
It transpired that no contract had in effect been signed as the parties were awaiting negotiations between their respective parent companies located abroad.
Our team of practitioners specialized in competition-distribution and criminal law succeeded in demonstrating before the Court of Appeal that a mere exchange of emails, although this had the effect of prolonging the previous agreements on a temporary basis only, constituted a satisfactory agreement in the eyes of the law.
We equally demonstrated that adapting to the life of a business did not prevent developments in regard to commercial negotiations in the course of the year, on condition that this did not disrupt the business.
The Court quashed the first instance ruling and dropped all charges held against the distributor.
The ruling handed down constitutes a case law cited by the CEPC Commission in its annual review.