On the refusal to authorize under ordinary tort law liability:
The Court held that:
- In law, the requirement of good faith does not impose, on the head of a distribution network, the determination of a selection process based on objectively defined and fixed criteria, or the implementation of those criteria in a non-discriminatory manner;
- The rule, relating to the extent of the obligation of good faith in any distribution network, does not distinguish according to type of network:
This is the first very important contribution of the judgment. Following the Fiat / Catia judgment of the Court of Cassation (27 March 2019, LawLex19420), the question arose as to whether the solution of that judgment on the freedom of network heads to authorize or reject a candidate under contract law was limited to quantitative selective distribution or covered all distribution networks including qualitative selective distribution.
That Court of Cassation judgment held that:
“On the first ground, taken in its first branch: – In view of Article 1382, now 1240, of the Civil Code, together the principles of contractual freedom and freedom of trade and industry; Whereas by stating that the refusal of authorization of the company Catia is a tort of the company FCA and ordering the latter to pay the former compensation, the judgment, after establishing that the company FCA was at the head of a quantitative selective distribution network, declares that the “supplier” is required, from the pre-contractual stage, to respect its general obligation of good faith in the choice of its co-contracting partner and concludes that the network head must select its distributors on the basis of basis of defined and objectively fixed criteria and apply them in a non-discriminatory manner.
By ruling thus, whereas the requirement of good faith does not impose, on the head of a distribution network, the definition and the implementation of such a selection procedure, the Court of Appeal violated the text and principle referred to above”.
Legal commentators were divided on the issue even though many considered that second paragraph which no longer refers to the type of network, was of general application.
The decision in Mercedes / Garage de Bretagne clearly settles the question: the supplier’s discretion to authorize in civil contract law extends to all forms of distribution, whether or not the candidate meets the selection criteria without it being necessary to include in the civil law analysis elements of competition law which must be the subject of an independent assessment.