INTERPRETATION OF COMMISSION REGULATION ( EEC ) NO 123/85 OF 12 DECEMBER 1984 ON THE APPLICATION OF ARTICLE 85 ( 3 ) OF THE EEC TREATY TO CERTAIN CATEGORIES OF MOTOR VEHICLE DISTRIBUTION AND SERVICING AGREEMENTS ( OFFICIAL JOURNAL 1985 , L 15 , P . 16 ).
2 THE QUESTION WAS RAISED IN THE CONTEXT OF PROCEEDINGS BROUGHT BY VAG FRANCE SA , A DISTRIBUTOR IN FRANCE OF MOTOR VEHICLES AND PRODUCTS BEARING THE VOLKSWAGEN AND AUDI MARKS , AGAINST ETABLISSEMENTS MAGNE SA , AN EXCLUSIVE DEALER ENTRUSTED WITH THE SALE TO THE PUBLIC AND THE SERVICING OF VW AND AUDI PRODUCTS IN CERTAIN PARTS OF THE DISTRICT OF ANGOULEME . THE ACTION CONCERNS THE DISCONTINUANCE OF COMMERCIAL RELATIONS BETWEEN THE PARTIES TO THE MAIN ACTION WHICH AROSE FROM A DISPUTE REGARDING THE CONSEQUENCES FOR THEIR AGREEMENT OF THE ENTRY INTO FORCE OF REGULATION NO 123/85 .
3 ARTICLE 5 ( 2 ) OF REGULATION NO 123/85 MADE EXEMPTION FROM THE PROHIBITION CONTAINED IN ARTICLE 85 ( 1 ) OF THE EEC TREATY FOR CERTAIN CATEGORIES OF DISTRIBUTION AGREEMENTS IN THE MOTOR VEHICLE INDUSTRY DEPENDENT UPON THE CONDITION THAT THE AGREEMENT WAS FOR A FIXED TERM OF AT LEAST FOUR YEARS OR OF INDEFINITE DURATION AND SUBJECT TO TERMINATION ON AT LEAST ONE YEAR ' S NOTICE .
4 IT IS APPARENT FROM THE DOCUMENTS BEFORE THE COURT THAT THE COMMERCIAL RELATIONS BETWEEN THE PARTIES WERE GOVERNED PRIMARILY BY STANDARD AGREEMENTS CONCLUDED EACH YEAR FOR A TERM OF ONE YEAR AND THAT THE LAST SUCH AGREEMENT WAS SIGNED ON 18 DECEMBER 1984 FOR THE PERIOD FROM 1 JANUARY UNTIL 31 DECEMBER 1985 . AFTER THE ADOPTION OF REGULATION NO 123/85 VAG FRANCE PROPOSED TO ETABLISSEMENTS MAGNE THE CONCLUSION OF A NEW AGREEMENT OF INDEFINITE DURATION FROM 1 JANUARY 1986 BUT MADE THE CONCLUSION OF THAT AGREEMENT DEPENDENT UPON THE ATTAINMENT OF CERTAIN SALES TARGETS FOR THE YEAR THEN RUNNING . ETABLISSEMENTS MAGNE REJECTED THE PROPOSAL AND INSISTED UPON THE CONCLUSION OF A NEW CONTRACT FOR A FIXED TERM OF FOUR YEARS , POINTING OUT THAT THE EXISTING CONTRACT WHICH HAD TO BE BROUGHT INTO CONFORMITY WITH REGULATION NO 123/85 WAS ITSELF FOR A FIXED TERM .
5 THE TRIBUNAL DE GRANDE INSTANCE , PARIS , CONSIDERED THAT THE DISPUTE BETWEEN THE PARTIES TURNED ESSENTIALLY ON THE QUESTION WHETHER THE ENTRY INTO FORCE OF REGULATION NO 123/85 REQUIRED THEM TO AMEND THE EXISTING AGREEMENT BETWEEN THEM IN ORDER TO BRING IT INTO CONFORMITY , IN PARTICULAR , WITH ARTICLE 5 ( 2 ) OF THE REGULATION CONCERNING THE DURATION OF AN AGREEMENT BY EXTENDING THE DURATION OF THEIR AGREEMENT TO FOUR YEARS , AS IS MAINTAINED BY ETABLISSEMENTS MAGNE , OR WHETHER , AS IS ARGUED BY VAG FRANCE , IT MERELY HAD THE EFFECT OF RENDERING VOID THE EXCLUSIVITY AND NO-COMPETITION CLAUSES AND , CONCEIVABLY , THE WHOLE OF THE AGREEMENT UNTIL THE EXPIRY THEREOF OR UNTIL THE PARTIES HAD CONCLUDED A NEW AGREEMENT WHICH WAS IN CONFORMITY WITH