A foreign company caught in a dispute with a French supplier, distributor or business partner often assumes the only way out is a courtroom. In France it rarely has to be. Alternative dispute resolution in France — known locally as modes alternatifs de règlement des différends (MARD) — gives you several ways to reach a binding out-of-court settlement without ever setting foot in a tribunal de commerce. For a non-French business, these routes are usually faster, cheaper and far less damaging to a commercial relationship you may still want to keep.
French law not only permits these mechanisms; in several situations it expects you to try them first. Understanding what each one does, and when it binds you, is the difference between a clean resolution and a costly detour.
Why choose alternative dispute resolution in France?
Litigation before a French commercial court is public, slow and adversarial. A contested matter can take a year or more to reach a first-instance judgment, and appeals are common. Out-of-court routes flip most of that. They are confidential, which matters when reputations or trade secrets are in play; they are quicker; and they leave room to preserve the working relationship rather than end it.
There is also a procedural incentive. Since 2019, French civil procedure requires parties to attempt an amicable resolution before bringing certain smaller claims to court (article 750-1 of the Code de procédure civile), and judges increasingly expect to see that an attempt was made. Skipping the settlement stage can slow your own case down. For the practical mechanics of resolving a commercial conflict, our guide on business disputes in France and how to resolve them sets out the wider picture.
The main out-of-court settlement options under French law
Direct negotiation and the settlement agreement (transaction)
The simplest route is a negotiated settlement recorded in a transaction — a formal settlement contract governed by article 2044 of the Code civil. This is more powerful than an informal handshake: a properly drafted transaction carries the force of res judicata (autorité de la chose jugée), meaning neither side can reopen the settled points in court afterwards. Each party must make genuine mutual concessions for it to hold. This is where foreign companies most often trip up — a one-sided “agreement” that concedes nothing can later be challenged. Clear drafting, ideally alongside careful negotiation of contracts with French companies, is what makes it enforceable.
Mediation (médiation)
Médiation brings in a neutral third party to help both sides reach their own agreement. It can be contractual (agreed by the parties, often because a contract clause requires it) or judicial (ordered by a judge once proceedings have begun). The mediator does not impose a decision; they steer the parties toward one, and the process stays confidential throughout. For business-to-business conflicts, France also runs an official service, the Médiateur des entreprises, which offers free and confidential mediation. Any agreement reached can be given binding, enforceable status through court approval (homologation).
Conciliation
Conciliation is close to mediation but tends to be lighter and, for lower-value matters, free through a conciliateur de justice. The conciliator may propose concrete terms rather than simply facilitating. For international commercial disputes of any size, mediation is usually the better fit, but conciliation is worth knowing about — it is one of the routes a French court may expect you to have considered before it hears the claim.
Collaborative negotiation (procédure participative)
A procédure participative is a negotiation conducted through a written agreement in which both parties, each assisted by their lawyer, commit to work toward a settlement for a set period (article 2062 of the Code civil). It suits complex commercial matters where the parties want structure and legal representation but not a public trial. If it succeeds, the outcome can be submitted to the court for approval and enforcement; if it fails, the parties keep the right to litigate.
Arbitration (arbitrage)
Arbitrage is the most formal of the out-of-court routes. A private tribunal arbitral hears the dispute and issues a binding award (sentence arbitrale) that carries much the same weight as a court judgment. It is the default choice in many cross-border contracts, usually triggered by an arbitration clause (clause compromissoire) written in at the outset. Arbitration is confidential and lets you choose arbitrators with the right sector expertise, but it is not cheap — arbitrators’ fees and institutional costs add up, so it earns its place on higher-value or genuinely international matters.
Choosing the right route for your dispute
The best option depends on the amount at stake, whether a contract clause already dictates the path, and how much of the relationship you want to salvage. A payment dispute with a long-standing distributor may be settled in a few sessions of médiation; a high-value shareholder or joint-venture conflict may belong in arbitration. What matters most is acting early, before positions harden. Many disputes are decided long before any hearing, in how the first letter is written and what your contract already says about dispute resolution.
When settlement genuinely is not possible — the other side won’t engage, or a limitation period is about to expire — litigation before the tribunal de commerce remains the backstop. Choosing between amicable settlement and court, and moving smoothly from one to the other, is exactly where our litigation services for international businesses come in.
How do you start an out-of-court settlement in a French business dispute?
Start by having your contract and correspondence reviewed before you make any move — the right first step depends on what you have already agreed and on the deadlines running against you. As an English-speaking lawyer at the Paris Bar, George Apostel helps foreign companies weigh negotiation, mediation, procédure participative and arbitration, and then handles the chosen route on your behalf. To discuss your situation, use the contact form, or reach LysLegal directly by email or phone — all three are on the contact page.