French Supreme Court Confirms Jurisdiction in Sudden Break Cases Outside EU

Q: Why do some practitioners contest the tort nature of the action based on sudden termination?

Since the Granarolo ruling (CJEU, 14 July 2016), EU law treats sudden termination claims as contractual when a tacit contractual relationship exists. The French Supreme Court applies this logic within the EU, but not outside it, as Granarolo is based on EU law and does not apply to non-EU disputes.

Q: Can a French company sue a U.S. company in France in the event of a sudden termination?

Yes. When the dispute arises outside the European Union, a sudden termination of commercial relations is treated as a tort claim. This qualification allows the application of tort‑based jurisdiction rules and, in the absence of a jurisdiction clause, enables the claimant to bring the case before the court of the place where the damage occurred — which is often France, since that is where the French company suffers the consequences of the termination.

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I. A Landmark Decision for French Exporters

On 12 March 2025 (No. 23-22.051), the French Supreme Court rendered a ruling with major implications for French businesses trading outside the European Union. The Court confirmed that actions based on Article L.442-1, II of the Commercial Code—which sanctions sudden termination of established commercial relationships—are tort-based in international disputes outside the EU.

This clarification strengthens the position of French SMEs and micro-businesses against foreign partners, particularly in the context of growing trade tensions between the United States and the European Union.

A. The Dispute: Halt in French Spirits Imports

The case involved a French spirits producer suing a US distributor for sudden termination of their commercial relationship. Under French law, such abrupt termination constitutes a fault under Article L.442-1, II of the Commercial Code.

The Paris Court of Appeal had declared itself incompetent, considering the matter contractual and therefore subject to US jurisdiction—the place of delivery and the importer’s domicile.

B. The French Supreme Court Overturns the Decision

In its 12 March 2025 ruling, the French Supreme Court quashed the appellate decision, holding that the action for sudden termination is tortious when the dispute falls outside the EU.

This classification triggers the application of tort jurisdiction rules, notably Article 46 of the Code of Civil Procedure, allowing the claimant to sue in the jurisdiction where the damage occurred—here, France.

Result: In the absence of a jurisdiction clause, the French company can sue the US distributor in France.

II. Why This Matters for French SMEs and non-EU companies

This ruling sends a strong signal in favour of protecting French businesses, especially SMEs and micro-enterprises, from imbalanced commercial relationships. It ensures that French companies are not forced to litigate in foreign courts that may disregard French market protection rules.

III. Practical Impact: Jurisdiction and Strategy

Tort-based qualification means French courts can hear cases where damage is suffered in France
No jurisdiction clause? French exporters can sue foreign partners in France
Contractual qualification would have forced litigation abroad—often unfavourable for French businesses

If your company faces risks in cross-border trade, contact our firm today to protect your rights.

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Frequently Asked Questions

Why is the tort vs contractual qualification so important under French law?

A tort-based action allows the claimant to bring proceedings either before the courts of the defendant’s domicile or before the courts of the place where the damage occurred under France law.

On the other hand, a contractual action can be brought to the place of performance or delivery (or to the defendant's domicile), which is often disadvantageous for French companies delivering services of goods abroad.

Why do some practitioners contest the tort nature of the action based on sudden termination?

Since the Granarolo ruling (CJEU, 14 July 2016), EU law treats sudden termination claims as contractual when a tacit contractual relationship exists. The French Supreme Court applies this logic within the EU, but not outside it, as Granarolo is based on EU law and does not apply to non-EU disputes.

Can a French company sue a U.S. company in France in the event of a sudden termination?

Yes. When the dispute arises outside the European Union, a sudden termination of commercial relations is treated as a tort claim. This qualification allows the application of tort‑based jurisdiction rules and, in the absence of a jurisdiction clause, enables the claimant to bring the case before the court of the place where the damage occurred — which is often France, since that is where the French company suffers the consequences of the termination.