Alternative Dispute Resolution in French Commercial Lease Disputes

The General Framework

French procedural law strongly encourages alternative resolution of disputes. Since the Decree of 11 March 2015 and the Justice Programming Law of 23 March 2019, parties must attempt amicable resolution before certain types of proceedings, and the initiating act must record that attempt. For claims not exceeding €5,000, the amended Article 750-1 of the Code de procédure civile (as reworded by Decree n° 2023-351 of 11 May 2023) requires a prior attempt at conciliation, mediation, or the participative procedure, failing which the court may declare the claim inadmissible.

In commercial lease disputes specifically, this general trend towards ADR intersects with the mandatory provisions of the statute (Arts. L. 145-15 and L. 145-16 of the Code de commerce), which protect the tenant and cannot be waived in advance. Any ADR mechanism that would circumvent those provisions — for example, by fixing a renewal rent below the capping rules or denying the right to renewal — is void. Within that constraint, all four mechanisms below are available. Settlements reached by any method can be homologated by a judge and given executory effect; once homologated, they must be served before enforcement even where homologation was obtained by unilateral application (Cass. 2e civ., n° 21-198.44).

Mediation

Judicial Mediation

At any stage of proceedings — including on interim relief (référé) — the judge may order the parties to meet a mediator. Since the 2019 reform, the court can enjoin the parties to attend a mediation meeting, rather than merely propose it. The mediation lasts a maximum of three months, renewable once. If the parties reach an agreement, it can be homologated by the court. Judicial mediation suspends limitation periods (Art. 2238 Civil Code).

Following the Decree of 29 July 2023, the judge may also convene the parties to an audience de règlement amiable (amicable settlement hearing) conducted by a different judge from the one who will decide the case. Everything said and written at that hearing is confidential, and parties must appear in person with their lawyers.

Contractual Mediation Clause

The lease can include a clause requiring mediation before any court proceedings are initiated. Such a clause constitutes a bar to the admissibility of any judicial claim brought in breach of it (Art. 122 CPC; Cass. ch. mixte, 14 February 2003; Cass. 3e civ., 19 May 2016). If a claim is declared inadmissible for breach of the clause, any limitation period that had been interrupted will be treated as not having been interrupted (Cass., avis, 8 October 2015). However, the clause does not prevent emergency interim relief applications (Cass. 3e civ., 28 March 2007), and it is not opposable where the defendant raises an exception d'inexécution as a defence.

Mediators must be trained, independent of the parties, and impartial; they are bound by strict confidentiality. Neither the mediator's observations nor statements made by the parties during the mediation may be used in subsequent proceedings without the parties' agreement.

The Participative Procedure

The participative procedure (Arts. 2062–2068 Civil Code; Arts. 1542 et seq. CPC), created in 2010, is a lawyer-assisted cooperative process in which the parties agree to work together to resolve their dispute before resorting to a judge. Lawyer assistance is mandatory. The procedure suspends limitation periods (Art. 2244 Civil Code) and, critically for commercial lease disputes, allows the parties to freely designate their own expert, whose findings are then binding on the court (CPC Art. 1547). This avoids the constraints of judicial expert appointment under Art. 240 CPC, under which the expert cannot take on a conciliation role.

Common Expert Mandate (Mandataire Commun)

The parties may agree in the lease, or at any time, to appoint a single expert or a panel to determine the renewal rent, the eviction indemnity, or the occupation indemnity. This is a contract: the expert's determination has contractual force and binds the parties, subject only to erreur grossière (gross error: Cass. 3e civ., 19 October 2017; Cass. 1re civ., 9 May 2019). Since Arts. L. 145-33 and L. 145-34 are not public-order provisions, the parties can freely define the valuation method and criteria.

The mission can also include a conciliation component — something judicial experts cannot have under Art. 240 CPC. Several experts may be appointed; their mandate cannot be revoked unilaterally (Cass. 3e civ., 5 February 1997). The common mandate mechanism does not apply to triennial revision proceedings, which are subject to the public-order provisions of Arts. L. 145-37 and L. 145-38 — no agreement can waive these before the right of revision has arisen, though a post-dispute agreement is possible.

Arbitration

The Arbitration Clause (Clause Compromissoire)

An arbitration clause in a lease is valid only where all parties were acting in a professional capacity at the moment of signing (Art. 2061 Civil Code as amended in 2001 and 2016). Where one party has ceased professional activity by the time of a later assignment, the clause may be unenforceable against the new parties if they were not professionals at the date of the relevant act (Cass. 1re civ., 29 February 2012). The clause must be in writing and may designate the arbitrators or provide for their appointment.

Scope and Public-Order Limits

Arbitration may cover: the renewal rent; the eviction indemnity; the occupation indemnity; and various disputes arising from the lease relationship. It cannot cover matters protected by Arts. L. 145-15 and L. 145-16 (the right to renewal, lease duration, triennial revision, advance rent interest, the clause résolutoire). An arbitrator who is seized of an arbitrable matter must nevertheless respect all public-order provisions in reaching their award. If the arbitrator strays into prohibited territory, a nullity appeal is unavoidable.

Arbitration on the Merits vs Amiable Composition

Arbitration en droit requires the arbitrator to apply the law. Arbitration en amiable composition allows the arbitrator to depart from strict legal rules in favour of a commercially fair outcome — if the arbitrator applies strict law instead, they must justify that choice. In commercial lease disputes, amiable composition is generally preferred because of the discretionary elements in valuation. A post-dispute compromis d'arbitrage (once a dispute has arisen) is available to all parties regardless of whether they were professionals at the lease signing date.

Procedure and Enforcement

The parties define the arbitration procedure, subject to the fundamental procedural principles at Arts. 4–23 CPC. An arbitral award can be appealed if the parties have not excluded that right (CPC Art. 1492). No opposition or cassation appeal lies against an award directly — only the court of appeal judgment can be appealed to the Court of Cassation (CPC Art. 1503). For enforcement, the award requires an exequatur order from the tribunal judiciaire in whose jurisdiction it was rendered (CPC Art. 1487). The court may refuse exequatur where the award contravenes public policy (CPC Art. 1488).

This article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Laws and regulations may have changed since publication. Always seek qualified French legal advice on dispute resolution in French commercial lease matters.