Legal Insights

The ongoing debate on the contractual or tortious nature of the action for damages arising from the abrupt termination of a long-standing business relationship continues to rage among legal scholars and before the courts.

Two recent decisions issued by the Cour de Cassation (French supreme Court) have indeed revived this controversy, which can have very concrete practical implications for business relationships between two companies, especially when they are established in different countries.

Whether the French regime under Article L. 442-1, II of the French Commercial Code may be invoked, the law applicable to the dispute, or the competent court to rule on the damage suffered – these are all questions faced by companies suffering from an abrupt termination of business relationships. And the answers may vary depending on the legal characterization of the action.

In today’s global economy, businesses increasingly operate across borders, entering into partnerships with counterparts on multiple continents and negotiating contracts governed by diverse legal systems. These global operations expose them to geopolitical, regulatory, and economic risks that are often difficult to predict.

When disputes arise, domestic courts rarely offer a satisfactory solution: proceedings are lengthy, cross-border service is complex, and the enforcement of judgments abroad remains uncertain.

In this context, international arbitration has emerged as a preferred method for resolving transnational commercial disputes.

The protracted length of proceedings before traditional courts, heavily impacted by a chronic shortage of resources and judges allocated by the State, the rapid expansion of digital tools and the digitalization of exchanges, and the impact of the health crisis with its restrictions on movement, have all combined to encourage a growing number of French businesses to turn to arbitration, mediation, or conciliation.

Parties may resort to what are now commonly referred to as amicable dispute resolution methods (modes amiables de résolution des différends or MARD in French), either prior to the initiation of court proceedings or at any time thereafter.

In a decision published in the Bulletin on June 4, 2025, the Commercial Chamber of the Cour de Cassation (French Supreme Court) reaffirmed a fundamental principle of contract law: The determination of the price lies exclusively with the will of the parties or, where applicable, a third party designated by them – but never with the judge.

This decision highlights the importance of complying with Articles 1591 and 1592 of the French Civil Code, which respectively provide that the price must be determined and identified by the parties, or left to the determination of a third party expressly designated for that purpose.

The European regulatory landscape on sustainability is entering a new phase. Following the adoption of the Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive, the European Commission introduced a legislative simplification package in February 2025, known as the “Omnibus” package, aimed at adjusting the scope and timeline of these landmark legislative acts.

Stated objective: Enhancing the competitiveness of European businesses while reducing their administrative burden, particularly for SMBs. According to European Commission estimates, the proposed measures could generate €6.3 billion in savings and unlock up to €50 billion in additional investments.

The latest summit of the World Law Group, of which our firm is a member, was held in Riga at the invitation of the outstanding law firm Sorainen, which operates in Latvia, Lithuania, and Estonia.

The economic success of these three Baltic States is remarkable. Their unwavering commitment to democratic values largely explains this outstanding achievement.