- Arbitral Award
- Chinese European Arbitration Centre (CEAC)
LONG-TERM CONTRACTS - EXCLUSIVE AGENCY CONTRACT - BETWEEN A CHINESE COMPANY (AGENT) AND A GERMAN COMPANY (PRINCIPAL) - PARTIES' CHOICE OF THE UNIDROIT PRINCIPLES 2016 AS THE LAW GOVERNING THEIR CONTRACT
VIOLATION OF THE EXCLUSIVITY CLAUSE BY THE PRINCIPAL - BREACH OF CONTRACT - AGENT ENTITLED TO DAMAGES ACCORDING TO ART. 7.4.1 UNIDROIT PRINCIPLES - REFERENCE BY THE ARBITRAL TRIBUNAL ALSO TO ARTS. 7.4.2 AND 7.4.3 UNIDROIT IN ORDER TO DETERMINE THE AMOUNT OF SUCH DAMAGES
Claimant, a Chinese company, entered into an exclusive agency agreement with Respondent, a German company, for the distribution of whey powder produced by the latter. Claimant sold the product to its customers in China, acting as an exclusive agent for Respondent who delivered the product directly to Claimant´s customers. Only exceptionally, Respondent not only delivered but also sold the product directly to Claimants customers. Any such sale required Claimant´s express approval.
The agreement provided that any disputes would be resolved by institutional arbitration administered by the Chinese European Arbitration Centre (CEAC) and was governed by the UNIDROIT Principles of International Commercial Contracts.
After the conclusion of the agreement, Respondent repeatedly sold its product directly to one of Claimant´s customers without obtaining Claimant´s approval. This led Claimant to initiate arbitral proceedings for alleged breach by Respondent of the exclusivity clause contained in the agreement.
During the arbitration, the parties agreed to apply the UNIDROIT Principles (2016) to the substance of their dispute and German law to the arbitration proceedings.
The Arbitral Tribunal granted Claimant´s claim for damages under Art. 7.4.1 UNIDROIT Principles as Respondent breached the exclusive agency agreement and determined the damages pursuant to Arts. 7.4.2 and 7.4.3 UNIDROIT Principles.