Approval of a transaction protocol in France: a comprehensive lawyer's guide for SME managers

What is a transactional protocol?

One transactional protocol refers to an agreement by which two parties put an end to an existing or future dispute through mutual concessions. Under French law, the transaction is definitively binding and has the authority of res judicata. It thus avoids a trial or puts an end to it if proceedings are initiated.

Concrete example: A company refuses to pay an invoice for lack of compliance. Instead of going to the point of judgment, the parties sign a transaction protocol: the supplier accepts a 20% reduction, the customer undertakes to pay the rest within 15 days. This compromise officially put an end to the dispute.

Why request the approval of a transaction protocol?

Homologation consists in requesting the authority of the judge to make the amicable agreement enforceable. If the transaction already produces res judicata between the parties, it does not automatically benefit from the enforceability (forced execution without new legal proceedings).

Key benefits:

• Increased security: makes the agreement enforceable as a judgment.
• Forced execution possible by a bailiff if one party does not respect the agreement.
• Reinforced proof vis-à-vis third parties, administrations or creditors.
• Limits the risk of subsequent disputes on the merits of the dispute.

Approval of a transaction protocol: in which cases should it be considered?

You can apply for certification in several cases:

• To guarantee the payment of a debt in installments (example: settlement plan);
• During a contractual breach (end of commercial relationship, early termination of lease, etc.);
• In the context of an ongoing dispute (procedure before the commercial court) interrupted by amicable agreement;
• When the implementation of non-financial obligations (inventory delivery, confidentiality agreement) must be secured.

To remember: Approval is particularly strategic if you fear the failure of your counterparty to perform.

Procedure for approving a settlement protocol before the commercial court

Which court to file and when?

Approval is carried out in front of the Competent commercial court, generally that of the debtor's seat or that seized of the original dispute (if proceedings were pending).

There are two cases:

• The dispute is already the subject of a proceeding: filing the application with the judge hearing the case.
• No pending proceedings: voluntary referral to the competent court (article 1441-4 of the Code of Civil Procedure).

Which parties need to apply for certification?

The initiative belongs either to a single party or jointly. However, it is strongly recommended that at least both parties co-sign the request (more credible for the judge, reduces the risk of refusal). If it is introduced by only one party, the other may be heard or called by the judge.

Transactional protocol certification application template

Here is an example of the editorial structure for a request, to be adapted to each file:

Example of an approval clause:

” The parties agree to present this settlement protocol for approval by the Paris Commercial Court. They request that this protocol be provided with an enforceable form in order to ensure its execution, in accordance with articles 2044 and following of the Civil Code and 1441-4 of the Code of Civil Procedure. ”

Practical process of the approval procedure

1. Filing the request accompanied by the signed protocol and supporting documents.
2. Review by the judge : control of the legality, balance and clarity of the agreement (verification of the absence of fraud, lack of consent, or violation of public order).
3. Approval judgment : if the application is admissible, the judge issues an order or judgment backing up the enforceable form. If the judge refuses to approve, he must give reasons for his decision.
4. Delivery of the judgment : the decision can be served on the defaulting party or used by a bailiff if necessary.

Good to know: the judge does not rule on the merits of the dispute but ensures that public order and concessions are balanced.

Legal effects of certification

• Forced execution : the approved protocol has the same value as a civil judgment. You can mandate a bailiff to seize a bank account, seize assets, etc.
• Strengthened authority : it becomes very difficult for a party to question the agreement, except for cancellation due to fraud or lack of consent.
• Enforceability against third parties : the probate judgment can be used as evidence in other proceedings or in front of certain creditors.

Cases of invalidation or refusal of approval

The court may refuse to approve:

• In the event of a clear imbalance between the parties,
• If the agreement relates to matters that are not available (for example: marital status, personal abilities),
• If there is obvious fraud or a lack of consent (e.g. signature under pressure).

In this case, the parties still maintain the value of their transaction but it cannot become enforceable. It is possible to file a new request after correction, or to settle the dispute on other bases.

Approval of an amicable agreement - specific features

Everything amicable agreement, whether it is a simple acknowledgement of debt or a complex transaction, may be subject to approval to secure execution. However, it must comply with the substantive and formal conditions specific to the transaction.

Concrete example: Two former associated companies sign a protocol ending a partnership. The approval of the protocol by the court guarantees the obligation of non-competition over the expected period.

Approval judgment: appeals and disputes

After issuance of the Judgement approving the agreement :

• The decision is subject to appeal within 15 days (procedure upon request).
• The appeal must be motivated by the violation of the rights of the defence, the incompetence of the judge or the violation of public order.
• An appeal to cassation is possible later on certain grounds (abuse of power, fundamental defect, etc.).

Important: appeals against a probate judgment are strict and rarely successful outside of serious causes.

Summary table: advantages and pitfalls of certification

Lexicon

• Transactional protocol : contract settling a dispute by mutual concessions
• Approval : act of the judge conferring enforceability on a private agreement
• Enforceability : possibility of recourse to forced execution (bailiff, seizure)
• Public order : set of rules protecting the general interest, which cannot be flouted even by amicable agreement

Practical FAQs on the certification of a transactional protocol

What is the model for requesting the approval of a transactional protocol?

A typical query template contains:

• The statement of the dispute and the circumstances of the agreement,
• The full text of the signed protocol,
• The express request for approval on the basis of article 1441-4 of the CPC,
• The list of items in the appendix,
• The signatures of the parties.

How do I file an application for certification with the commercial court?

The file must be submitted or sent to the registry office, accompanied by the protocol signed in original, the written request (letter or act), and, if necessary, the payment of the registry fee (variable rate depending on the jurisdiction).

Is the presence of a lawyer mandatory?

The presence of a lawyer, although not always mandatory, is strongly recommended to secure the drafting of the protocol and to anticipate the judge's control. A lawyer protects you from possible breaches of consent or unlawful clauses.

Is certification systematic?

No, the judge has sovereign discretion. He may refuse certification due to public order, obvious imbalance or non-compliance with consent. In this case, the transaction remains valid between the parties, but without enforceability.

What are the deadlines for obtaining a certification?

The deadlines vary: from 10 to 45 days on average, depending on the burden of the court and the complexity of the case. Some commercial courts offer expedited procedures for simple disputes.

What remedies are available against a certification judgment?

An appeal is possible within 15 days in some cases, mainly for lack of consent or violation of the adversarial procedure. An appeal in cassation may be attempted on a point of law.

What is the difference between an approved and non-approved amicable agreement?

• Amicable agreement not approved: contractual value, res judicata, but the need for legal proceedings to force execution.
• Approved agreement: immediate effect, legally enforceable, direct mobilization of means of forced execution.

Can any type of transaction be approved?

No Only agreements on rights that the parties have free disposal of (claims, payment terms, indemnities, etc.) are only admissible. Public order matters (civil status, unconventional divorce, etc.) are excluded.

Toolkit for SME managers

• Checklist for successful certification :
  • Verify that the agreement is balanced and written unambiguously.
  • Ban any illegal or public order clause.
  • Plan the intervention of a lawyer to secure the file.
  • Anticipate the production of all supporting documents.
  • Prefer approval if the solvency of the counterparty is doubtful.

Personalized advice for managers

Having your transaction protocol approved avoids most unpleasant surprises. However, as this matter is regulated, only personalized legal advice will allow you to anticipate all the risks specific to your operation: sensitive clauses to be secured, documents to be produced, evaluation of the advisability of certification according to your situation.

Do not hesitate to consult beforehand to give your agreement its full effectiveness.

Article written by Guillaume Leclerc, lawyer in commercial contracts and commercial litigation in Paris.

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