Ballas Pelecanos Law represented a leading multinational company in the home-appliance sector with a long-standing commercial presence in Greece in a dispute brought by a former exclusive distributor. The case called for a detailed analysis of contractual freedom, EU rules on commercial agency, Greek protections for distributors and the applicable law governing cross-border agreements.
The matter was handled, primarily, by Gregory Pelecanos, Senior Partner, and George Moukas, Senior Associate. The central issue was whether, in the context of a dispute arising from the termination of an exclusive distribution agreement governed by Italian law and providing for arbitration in Venice, Italy, claims for clientele indemnity and further damages under Greek law, which allegedly was compulsory law and indeed with overriding direct effect, could displace the parties’ negotiated choice of Italian law and arbitration in Venice. Our team’s work focused on defending those clauses and on the distinction between commercial agents and exclusive distributors who operate in their own name.
A key argument advanced by our team, drawing on the CJEU’s Mavronas judgment, was that although under Eaton the EU rules governing goodwill indemnity claims for commercial agency are compulsory law, when applied to exclusive distributors the rules are not compulsory law and cannot override properly negotiated and valid governing law and jurisdiction arbitration clauses. The Supreme Court’s decision upheld that distinction and ruled that the relevant Greek-law claims were not overriding mandatory provisions under Article 7(2) of the Rome Convention, nor matters of public policy that would invalidate the parties’ agreed terms which were properly and lawfully negotiated.
The ruling addresses a range of connected issues, including the validity of the arbitration agreement, applicable law, res judicata and the grounds for cassation. It concludes a demanding dispute and offers useful guidance for businesses entering into cross-border distribution arrangements.
From product claims and warranties to advertising, e-commerce and distribution arrangements, consumer law touches many parts of a business. If you are weighing a particular issue or responding to a claim, Gregory Pelecanos and Anthony Mavrides can help you work through the legal questions and practical next steps. Learn more about our Competition & Distribution and Consumer Rights & Product Liability practice groups.
