Facts and Points Decided

French law has for some time distinguished contracts with an international element from domestic contracts in respect of the application of certain provisions expressed to be matters of public policy. The latter are applied domestically, but not necessarily internationally. This case brings out this tension in a matter involving provisions expressed to be of public policy which protect commercial agents, as defined, against the termination of their contracts without indemnity.

Held:

The protective provisions of Article 134-1 et seq. of the Commercial Code are matters of public policy internally, but have no effect internationally.

THE COURT,
Recognises that Allium has dropped its case against Alfin Incorporated;

As regards the only argument pleaded, taken in its three parts:
Whereas, according to the judgement brought before this Court (Paris, 12 September 1997), 1) pursuant to the contracts dated 14 and 21 July 1989, the American company Alfin Incorporated granted to Allium the exclusive rights to distribute throughout Europe and Israel perfumes which Alfin was entitled to market by virtue of a worldwide licence; 2) on 14 July 1993, the licence was purchased by the Groupe Interparfums which rescinded the international agency contract on 31 July, with effect from 31 January 1994; 3) Allium issued a writ against it for the payment of FF 2 million by way of damages for breach of contract;

Whereas Allium criticises the jugement for rejecting its claim, whilst, according to the argument:
1) a) the provisions of article 12 of the law of 25 June 1991, according to which if relations between the sales representative and the principal are broken off, the former has a right to damages to make good the harm suffered, and article16 of the same law, according to which any clause diverging from the provisions of article12 is considered nul and void, are immediately applicable internationally as a law of public policy as regards commercial agents carrying out their activities in France; b) it follows that these provisions must be applied, whatever contrary provisions may appear in the international contract or in the law chosen by the parties to govern their agreement; c) by claiming, in order to find against Allium’s claim under this head, that the agency contract concluded with Alfin Incorporated and taken over by the Groupe Interparfums was expressly subject to the law of the State of New York, and that the protective provisions of the law of 25 June 1991 could not be integrated into this contract, the stipulations of which are said to be entire and indissociable, the Court of Appeal has violated the aforementioned provisions, as well as article 3 of the Civil Code;

2) a) article 1 of the law of 25 June 1991, applicable to all contracts in existence as at 1st January 1994, considers to be a commercial agent any agent who, as an independent contractor, without being bound by a service contract, is made responsible in a permanent way for negotiating, and possibly, for signing contracts, be they sales contracts, purchase contracts, contracts of hiring or contracts of provision of services, in the name of and on behalf of a producer, a manufacturer, a retailer or another sales representative; b) the benefit of the status of commercial agent does not depend on formal registration in a special register with the Office of the Clerk of the Commercial Court or of the Civil Court of the place of the principal office of the commercial agent; c) by holding that Allium had no right to compensation when its contact was rescinded as of 31st January 1994, as it could not prove that it was registered in the special sales representatives’ register, the Court of Appeal has violated articles 1 and 20 of the law of 25 June 1991, as well as article 4 of the decree of 23 December 1958; furthermore,

3) a) the waiver of a right can only result from documents which unequivocally demonstrate the absolute will to waive, and can only take place after the right has come into being; b) in order to find against Allium’s claim to receive damages for breach of contract as stipulated by article 12 of the law of 25 June 1991, applicable to all contracts in existence as of 1st January 1994, the Court of Appeal declared that the contract did not provide for the awarding of these damages, that the high level of commissions was due to the agreed absence of damages and that the whole of these stipulations would seem to constitute an indivisible whole into which Allium’s claim for compensation could not be inserted; c) in coming to these conclusions, for reasons which fail to identify the waiver of Allium of the benefit of damages, which could only result from the silence on this point of the contract of 14 and 21 July 1989, the Court of Appeal has violated the aforementioned provisions and article 1134 of the Civil Code;

But whereas 1) the law of 25 June 1991, codified in articles L.134-1 et seq. of the Commercial Code, a protective law of internal public policy applicable to all contracts in existence as of 1st January 1994, is not a law of public policy which applies internationally; 2) leaving aside the erroneous but ineffective ground criticised in the second branch, the judgement, far from holding that Allium has renounced a right, holds that the contract subject to international law which was concluded in July 1989 is expressly subject to the law of the State of NewYork, which does not provide damages for breach; 3) the Court of Appeal has thus legally justified its decision; 4) the argument, inadmissible in its second part, is also ill founded;

ON THESE GROUNDS:
DISMISSES the Appeal;
Awards costs against Allium;

In view of article 700 of the new Code of Civil Procedure, orders Allium to pay the sum of FF15,000 to the Groupe Interparfums.

Based on the report of Mrs. Tric, Councillor, the comments of the SCP Piwnica et Molinié, advocate for the company Allium, and those of the SCP Bouzidi, advocate for the Groupe Interparfums, the arguments of Mr. Feuillard, Advocate-General. Mr. DUMAS, President.

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