French court mandates Citroën's 24.3 million dinar payment

The Paris Commercial Court ruled that Citroën is obliged to pay total compensation of 24.375 million Tunisian dinars (approximately 7.2 million euros) to Oras Auto and Oras Gross, due to the abrupt termination of their business relationship which began in 2005 and ended in 2020 without providing sufficient notice. This case is considered significant because it involves substantial investments by Oras in the distribution network and a rise in car sales, with investments exceeding 85 million dinars over 15 years. The court noted that the termination occurred amidst financial disagreements, including debts owed by Oras amounting to approximately 3.3 million euros, and that the French company had ceased vehicle deliveries starting July 2020 before officially notifying of the termination, leading to demands for compensation. The court dismissed further financial claims made by Oras, affirming that the relationship was stable and that the notice period was 12 months, despite Citroën having announced its intention to end the partnership in May 2020. It also considered that the continuation of the relationship and the updating of the terms before the crisis demonstrated the parties' intention to maintain it, and held Citroën responsible for not providing an appropriate notice period. After the relationship ended, the distributor in the Tunisian market was changed to Stafim. However, the judgment highlights the responsibility of international companies in their dealings with local distributors, especially in sectors requiring significant investments. The court also revealed that Oras entered into an out-of-court settlement in Tunisia in October 2023, amid its financial decline following the termination of the relationship.

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