Defending the manufacturer against a compensation claim
When a long-standing distributorship relationship came to an end, the distributor asserted a claim based on the compensation regime under German law; the defence — conducted around the conditions of the claim, the source of the portfolio and the calculation method — was resolved through negotiation.
The bill that arrives as the relationship ends: compensation
The claim rested on the assertion that the customer portfolio had been won through the distributor's efforts and that the manufacturer would continue to benefit from it.
The defence was structured along the lines that the portfolio arose from the brand's drawing power, that the statutory conditions were not met, and that the calculation cap had to be set correctly.
Our Approach
Keeping the commercial objective at the centre, we broke the legal risks into measurable steps.
01 · Case Analysis
The contract, the order history, and the customer-data sharing were examined against the conditions of the claim.
02 · Defence Construction
The defence under the headings of conditions, causation, and equity was supported by objections to the calculation method and the cap.
03 · Negotiation
With the litigation risk clarified for both sides, a resolution was reached through negotiation.
Chronology
The main stages of the process.
A claim closed through negotiation and a clean separation
The dispute was resolved through negotiation without being taken to litigation; a set of clauses managing compensation risk was left in place for future distribution agreements.
- Resolution of the claim through negotiation
- A release and closing arrangement
- A clause set for future contracts
- A network-wide risk map
Services Involved in This Matter
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Related Areas of Expertise
The practice and focus areas engaged on this matter.
Sectors
The sectors in which we most frequently advise on matters of this kind.
Automotive
Contract, compliance, investment, and dispute advisory across the automotive value chain for OEMs, suppliers, distributors, and investors.
Explore →Export & Import
Advisory for the sales, delivery, payment, customs, distributorship, collection, and cross-border dispute processes of foreign trade.
Explore →Related Publications
Our insights and guides related to this matter.
The Team on This Matter
Our multilingual team handling the matter.
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First we clarify the commercial objective, risk appetite, timeline, and decision-maker needs. We then break the work into legal analysis, document/contract structure, and implementation steps, and manage the process through a single point of contact.
Because of the attorney's professional duty of confidentiality and client privacy, matters are anonymised. In a meeting, within the limits of confidentiality, we can describe our comparable experience more concretely.
In a short preliminary meeting, we take in the objective, the existing documents, the parties, the time pressure, and the critical risks. We then clarify the scope, team, timeline, and fee model.
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