The French Court of Cassation recently confirmed the application of the general solution confirmed by the Joint Chamber on 12 December 2014 to mandatory, preliminary mediation clauses (Cass. mixte, 12 December 2014, no. 13-19.684).
In this case, a company had leased premises forming part of a shopping centre under construction, with effect from the delivery date of the premises to the lessee which was stipulated as being at least three months prior to the opening of the centre to the public. As the lessee refused to take possession of the premises, the lessor had summoned it to pay the reservation fee stipulated in the lease, without first complying with the mandatory mediation clause in the agreement.
After establishing the application of that contractual procedure during the appeal proceedings, the Bordeaux Court of Appeal declared the lessor’s action admissible, holding that on the basis of paragraph 1 of Article 126 of the French Code of Civil Procedure, it is possible to rectify a plea of non-admissibility, even on appeal, when the cause of the irregularity has been removed before the judge rules on it. Under the former Article 1134 of the French Civil Code1, the French Court of Cassation overturned the appeal judgment on the ground that "the situation giving rise to the plea of non-admissibility based on the failure to apply a contractual clause establishing a mandatory mediation procedure prior to taking legal action is not likely to be regularised by applying the clause in the course of proceedings" (Cass. 3rd civ., 6 October 2016, no. 15-17.989).
By refusing the regularisation of a breach of a mandatory mediation clause prior to taking legal action in the course of proceedings, the French Court of Cassation reinforces the effectiveness of the voluntary agreement and the binding force of the contract. The Supreme Court has previously had the opportunity to specify whether non-compliance with a preliminary amicable settlement clause constitutes a plea of non-admissibility (Cass. mixte, 14 February 2003, no. 00-19.423), which may be raised, in any case, even on appeal2 and which must be accepted by the court if the parties invoke it. In other words, non-compliance with such clauses falls within the category of pleas of non-admissibility, which cannot be automatically determined by the court3.
Furthermore, in order to constitute a plea of non-admissibility, they must be drafted in such a way that they clearly mention the mandatory nature of the procedure established and contractually require the court to comply with the preliminary procedure. The effectiveness of such clauses therefore requires careful drafting in the commercial lease.
1 New Articles 1103, 1104 and 1193 of the French Civil Code
2Article 123 of the French Code of Civil Procedure; Cass. com., 22 February 2005, no. 02-11.519
3 Article 125 of the French Code of Civil Procedure; Cass. Ch. mixte, 14 February 2003, mentioned above; Cass. 2nd civ., 28 February 2006, no. 04-15.983