CANNES — French pay television Canal Plus has filed suit in the French courts against Arnon Milchan’s Swiss-based holding company Monarchy Enterprises.The legal action involves Wednesday’s four-year, exclusive output agreement between Milchan’s Regency Enterprises and French digital consortium Television Par Satellite (TPS). Canal Plus is challenging the deal in the courts, claiming Milchan, via Monarchy, is still contracted to an exclusive French pay TV rights deal for Regency pics, which he signed with Canal Plus in June 1996. Daily Variety believes the deal has three years to run. Neither TPS nor Milchan could be contacted Thursday, but Daily Variety understands that Milchan’s position is that Canal Plus failed to fulfill certain deal requirements, therefore freeing the prolific producer to talk to TPS. According to Canal Plus, the June deal was dependent on the resolution of outstanding issues concerning the transformation of the early 1990s co-production agreement between Studio Canal Plus and Milchan. That agreement became a rights acquisition pact in the mid 1990s. The second point covered Canal Plus’ Polska’s access to pics produced by Milchan’s Regency production company. Canal Plus claims both issues have been resolved.