Court of Cassation Ruling on Subcontracting Relationships

Extract

[...] The control of the advantage without counterpart is therefore independent of the price negotiation. The requirement of a precise and motivated control - The Court of Cassation criticizes the Court of Appeal for not having examined « the invoices and the summary tables produced in the debates. - This lack of motivation shows well the importance of a concrete and rigorous control of the facts. - It is therefore imperative that judges justify their decision in a precise manner to better ensure the transparency and the reliability of the control of commercial practices. [...]

[...] By a decision of the 4 November 2020, The Paris Court of Appeal rejected the minister's request, finding that the provisions of Article L 442-6 I 1° of the Commercial Code did not apply to these discounts, due to the lack of free negotiation of the price, and that the disputed practice was solely within the significant imbalance provided for in 2° of the same article. The manufacturer thus formed a for incident challenging the application of article L. 442-6 to subcontracting relationships. [...]

[...] It is in this context that the Court of Cassation had to rule on the question of whether the subcontracting relations in the field of construction may fall within the scope of application of Article L 442-6 I 1° of the Commercial Code ? However, also if the practices of discounts and rebates in this case, constituted an advantage without reciprocity? The high judges have responded positively to the first question :« the subcontracting relationships fall within the scope of Article L. 442-6 I of the Commercial Code, this article does not provide any rule incompatible with those of the Building and Housing Code. On the second question, she casse partiellement the Court of Appeal judgment. [...]

[...] Application of competition law to subcontracting To assert the application of competition law to subcontracting, the Court of Cassation recognizes the compatibility between the Commercial and Construction Code which are complementary, for better protection (B). Compatibility between Commercial Code and Construction Code - The judges indicate that « the relations of subcontracting fall within the scope of Article L. 442-6 I of the Commercial Code. They then specify that the text « does not enact any rule incompatible with the provisions of the Building and Housing Code. This means that the two regimes can coexist: the building law technically frames the contract and economic law protects against abuses. [...]

[...] - Thus the minister of the economy may intervene to sanction abuses in subcontracting. - The scope of the law on restrictive practices is broadened by this interpretation and the coherence of commercial law in general is strengthened II) Enhanced control of restrictive practices in subcontracting The high judges recognize the autonomous basis of the non-reciprocal advantage and require the Court of Appeal to have precise and motivated control The non-reciprocal advantage: an autonomous basis - The Court recalls that « engages the liability of its author the fact of obtaining or attempting to obtain any advantage that does not correspond to any commercial service actually rendered. [...]