Commercial leases & indexation clause: important ruling by the Cour de cassation (French Supreme Court) dated 30th June, 2021

In a ruling rendered on June 30, 2021, in a matter followed by our Firm, the 3rd Civil Chamber of the Cour de cassation, partly reversing previous rulings, confirmed the imprescriptible nature of the action seeking to declare unwritten  indexation clauses prohibiting any rent decrease, based on article L.145-39 of the Commercial Code applicable to commercial leases. The Court however limited the consequences of such action, by ruling that “…only the prohibited provision must be deemed unwritten“.

Lower jurisdictions are therefore invited to correct the faulty clause: for the future, the clause shall continue to apply, but both upwards and downwards; for the past, the indexation calculations shall be rectified, taking into account any decrease in the index.