Competition Law

#COVID-19 : Confirmation by the Court of Appeals of Paris of the orders imposing on EDF to suspend the performance of the contracts for the sale of ARENH power due to force majeure

Posted on August 24, 2020 by

1. By three rulings adopted on 28 July 2020, the Court of Appeals (Cour d’appel) of Paris confirmed the interim orders issued by the Presiding Judge of the Commercial Court (Tribunal de commerce) of Paris.  These interim orders imposed on Electricité de France (hereinafter “EDF”) to suspend the performance of the framework agreements for the supply of power executed in application of the regulated access to historic nuclear electricity mechanism (hereinafter the “ARENH“) due to the fulfillment of the conditions for the application of force majeure defined in these agreements.

2. In our article of 25 May 2020, we presented the ARENH mechanism and the interim order of the Commercial Court of Paris of 20 May 2020 between EDF and Total Direct Energie, which is the subject of one of the three rulings of 28 July 2020 of the Court of Paris.  Three other interim orders were adopted on the following 26 and 27 May between EDF, on the one hand, and Gazel Energie Génération, Gazel Energie Solutions and Alpiq Energie France, on the other hand, relating to the same question and taking up the solution developed in the order of 20 May 2020.  All these four interim orders were appealed by EDF.

3. With its three ruling of 28 July 2020, the Court of Appeals of Paris confirmed in full the three interim orders issued between EDF, on the one hand, and Total Direct Energie, Gazel Energie Génération and Gazel Energie Solutions, on the other hand.  Like the Commercial Court of Paris, it considered that the conditions for the application of force majeure provided for by the ARENH supply framework agreements were in these cases clearly met and consequently that EDF’s refusal to apply this clause blatantly called into question the principle of the binding force of contracts as well as the one prohibiting self-justice and therefore resulted in a clearly unlawful disorder.

4. To date, no information is available as to whether or not EDF intends to appeal the rulings of the Court of Appeals of Paris before the French Judicial Supreme Court (Cour de cassation) in these cases.

5. The Court of Appeals of Paris adopted a fourth ruling on 28 July 2020 relating to the interim order between EDF and Alpiq Energie France.  This ruling was limited to acknowledging EDF’s withdrawal and its acceptance by the respondent.

6. Finally, the French Electricity Regulatory Commission (Commission de regulation de l’électricité), which drafted the standard model used for the preparation of the framework agreements concluded between EDF and power purchasers under the ARENH, initiated on 31 July 2020 and until 15 September a public consultation.  This public consultation intends to improve the drafting of the force majeure clause to take account of the solution adopted by the Court of Appeals of Paris.

Jérémy BERNARD

Partner - Competition law
Attorney at the Paris Bar, Jérémy Bernard is a partner of Delcade Avocats & Solicitors.

He has developed a practice covering EU and French competition and distribution law as well as the regulation of liberalized sectors, litigation and arbitration.

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