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Alfa Romeo Nederland v. Multicar

2010 January 11
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: January 8, 2010

LJN Number: BJ9352

Case: Under Commission Regulation (EC) No 1400/2002 of 31 July 2002 car dealers within a selective distribution system must be able to sell actively to any end user resident in an area within the European Union where selective distribution is used. Suppliers are however allowed to impose an obligation on the dealer not to sell new vehicles to independent resellers in areas where selective distribution is used.

Alfa Romeo Nederland decided to ask the District Court of Dordrecht for an injunction, when it noted that Anonymous, an independent reseller, sold new Alfa Romeo’s to the public. Alfa Romeo Nederland alleged that Anonymous committed a tort (an unlawful act under Dutch law), by consciously making use of a breach of obligation by car dealers, who under the selective distribution system are under an obligation not to sell new vehicles to independent resellers, like Anonymous. By acting in this manner, Anonymous brought itself in a better position than genuine Alfa Romeo car dealers, who are bound to act fully in accordance with the distribution agreement and who are expected to invest in marketing and sales of the Alfa Romeo brand.

Both the Court and the Court of Appeal ruled against Alfa Romeo Nederland. It was held that the sole breach of obligation did not necessarily lead to the conclusion that Anonymous committed a tort towards the Dutch dealers of the Alfa Romeo Network. Alfa Romeo Nederland decided to bring the case before the Netherlands Supreme Court.

Held: The Netherlands Supreme Court rules that, if an independent reseller:
(a) resells products that have been obtained by consciously using the fact that a reseller bound by a selective distribution system breached its contractual obligation towards the distributor, and;
(b) by selling the thus acquired products directly competes with other merchants who are tied a similar contractual obligation, and;
(c) this reseller benefits from the fact that these bound resellers are in a less favorable position because of the contractual obligation;
this can constitute a tort or unlawful act under Dutch law towards these other merchants.

Furthermore, the circumstances described under (a) to (c) can constitute a tort towards the distributor, if the unfair competition as described undermines the distribution system, for example where this invites bound resellers to similar strategies or where this would lead to a situation where third parties might not want to join the selective distribution system. The decision of the Court of Appeal is quashed and the case is referred back to another Court of Appeal.

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