Court of Cassation, Commercial Chamber, judgment of 7 May 2025, appeal no. 23-24.041
In this ruling of 7 May 2025, the Commercial Chamber of the Court of Cassation clarified the limits of the control that a judge may exercise over the mission of an expert appointed pursuant to Article 1843-4 of the Civil Code for the valuation of shares.
Several shareholder companies had been excluded from Pharmabest. An expert had been appointed by the court to determine the value of the shares held by the excluded companies, in accordance with the existing articles of association or agreements.
Article 1843-4 of the Civil Code provides that:
« I. – In cases where the law refers to this article to determine the price conditions for the transfer of a partner’s rights, or the repurchase of such rights by the company, the value of such rights shall be determined, in the event of a dispute, by an expert appointed either by the parties or, failing agreement between them, by a ruling of the president of the competent judicial or commercial court, ruling in accordance with the accelerated procedure on the merits and without any possibility of appeal.
The expert thus appointed shall be required to apply, where they exist, the rules and procedures for determining value laid down in the company’s articles of association or in any agreement binding on the parties.
II. – In cases where the articles of association provide for the transfer of a shareholder’s rights or the repurchase of those rights by the company without their value being determined or determinable, the value shall be determined, in the event of a dispute, by an expert appointed under the conditions set out in the first paragraph.
The expert so appointed shall be required to apply, where they exist, the rules and procedures for determining value provided for in any agreement binding on the parties.«
The valuation of shares is often a sensitive issue and a source of dispute, as the valuation criteria adopted by an expert are rarely accepted by all shareholders.
In this case, faced with disagreement between the parties on the financial year to be taken into account in determining this value, the expert proposed two different valuations. The expert then left it to the judge to select the valuation to be used according to his interpretation of the partners’ intentions.
However, the Court of Appeal of Aix-en-Provence ruled that the expert could not propose several valuations and should have suspended his assignment by inviting the parties to refer the matter to the judge for a preliminary ruling on the interpretation of the agreements.
The Court of Cassation partially overturned this decision, firmly reiterating that the expert appointed on the basis of Article 1843-4 of the Civil Code has sole power to determine the value of the shares.
The expert may validly select several valuations corresponding to the different interpretations claimed by the parties, leaving it to the judge to identify the common intention of the parties in order to choose the appropriate valuation.
By requiring the expert to suspend his work and seek prior judicial intervention on the interpretation of the contract, the Court of Appeal had exceeded its powers and violated Article 1843-4, I, of the Civil Code.
The Court of Cassation thus clearly reaffirms the autonomy and scope of the expert’s powers in the valuation of shares. It therefore validates the expert’s approach, who, in the presence of two possible interpretations, had preferred not to arbitrate between them and to leave it to the judge to do so.
The expert’s decision was commendable and respectful of the limits of his powers, leaving the judge free to choose the method of valuation to be used. This solution was more effective, allowing the expert to complete his assignment and leave the decision to the judges. The solution adopted by the Aix Court of Appeal was more complex and restrictive. It imposed a double procedure on the parties.
The solution adopted by the Court of Cassation therefore seems pragmatic and limits the risk of unnecessary procedural complexity.
By Olivier Vibert, lawyer, Paris
French Law . BLOG 