close
ITALY

ITALY: Two recent Court decisions on selective distribution of vehicles.

The Court of Turin and the Court of Milan recently issued two interesting decisions in the field of selective distribution of vehicles.

Silvia BORTOLOTTI - 16.10.17
Country expert

The decision issued by the Court of Turin (Trib. Torino, ord. 22/03/2017) was related to a case where the claimant, a dealer in the resale of vehicles, spare parts and supply of assistance, asked the judge to order its former supplier - which terminated the contract in compliance with the 24 months notice provided by the contract - the performance of new audits for verifying the compliance with the contractual standards; in case of a positive finding, the claimant asked to be re-admitted to the selective distribution network of the former supplier. Indeed, the dealer stated that the termination by the supplier had to be considered  abrupt and unjustified and grounded its request on (i) EU Regulation No. 461/2010  (on the application of Article 101(3) of the TFEU to categories of vertical agreements and concerted practices in the motor vehicle sector) and (ii) on Article 70 of the Commission guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles (where the Commission affirms the that access to the authorised repair networks should generally remain open to all firms that meet defined quality criteria since a quantitative selection of the members could fall within the scope of par. 1 of Article 101 of TFEU).

The judge dismissed the dealer’s complaint by stating that the termination was compliant with the relevant contractual provision and that neither EU Regulation No. 461/2010 nor the aforementioned Article 70 provide for an obligation for the supplier to conclude contracts with all possible companies matching the qualitative standards of its selective distribution network.

The decision issued by the Court of Milan (Trib. Milano, n. 13370 of 2/12/2016) was related to a case where the claimant, a dealer in the resale of spare parts and supply of assistance, asked the judge to confirm (i) that the termination of the contract by the former supplier was unlawful, (ii) the breach of EU antitrust rules on selective distribution and (iii) the abuse of rights and (iv) the abuse of economic dependence by the former supplier to the dealer’s detriment. Furthermore, the dealer claimed for damages caused by the former supplier’s conduct.

The judge has dismissed the dealer’s complaint. Namely, the Court stated that (i) the supplier had rightfully terminated the contract because the dealer repeatedly had not passed the compliance audits, nor conform to the qualitative standards provided by the contract and that (ii) none of the restrictions set forth in EU Regulation 330/2010 and EU Regulation 461/2010 were provided in the contract between the parties. Furthermore, the judge stated that (iii) neither the abuse of right nor the abuse of economic dependence could be invoked against the former supplier, also because the contract did not provide for the exclusivity: the claimant could continue operating as an authorised repairer for other brands and even work as an independent repairer of the former supplier.

The reasoning behind the decisions of the Courts of Turin and Milan is certainly correct.

Indeed, as far as the judgement of the Court of Turin is concerned, It must be pointed out that the purpose of the antitrust rules quoted by the claimant is certainly not to regulate specific contractual relationships; nor the violation of such rules could give rise to the right of a candidate to be accepted as a member of a network or to an obligation for the supplier to enter into a contractual relationship. Moreover, Art. 70 of the Commission's Guidelines (which, in any case, do not have any legally binding effect), merely confirms that a fully open qualitative selective network does not even fall under the prohibition laid down in Art. 101(1) TFEU, while "it is probable" that agreements containing quantitative selection criteria would fall; however, they could well fall into the exemption provided for by the above-mentioned Regulations, as has also been recently confirmed by the European Commission in its Final Report on the E-Commerce Sector Inquiry of 10/5/2017, with reference to Regulation 330/2010.

With reference to the decision of the Court of Milan, it appears to be particularly well balanced in the assessment of the lawfulness of the termination by the former supplier considering the proven and repeated failures of the dealer to comply with the contract; furthermore, the Court has correctly excluded the breach of EU antitrust rules after having verified that none of the contractual clauses was in breach of EU Regulation 330/2010 or EU Regulation 461/2010. Finally, the reasoning of the judge is noteworthy when - by excluding the abuse of right and the abuse of economic dependence by the former supplier for clear lack of legal grounds – it overcomes unfounded allegations on the matter which are increasingly submitted to courts without any knowledge of their juridical meaning.

 

Silvia Bortolotti, IDI country expert for Italy and Giulia Levi, Buffa Bortolotti & Mathis, Torino

 

RELATED