COLOMBIA: Hyundai’s Controversy in Colombia.

Juan Carlos URIBE | COLOMBIA | 2016-12-19

Juan Carlos URIBE

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The conflict goes back to September 15, 2015 when Hyundai Motor Company addressed a letter to Mr. Mattos, informing him that the agreement that conferred his company the distribution of Hyundai cars in Colombia was not going to be renewed, therefore, in January, 2016 the 23 years’ successful relationship between them, in which Hyundai went from being an un-familiar brand, to being the third-largest selling brand in the country, with 90 concession points in the country, was going to be terminated. Such determination from Hyundai Motors Company gave rise to a huge legal dispute regarding the existence of a commercial agency agreement, among other legal claims.

For such reason, Mr. Mattos alleged that his Company, as commercial agent of Hyundai in Colombia, was entitled to receive a millionaire compensation for the unilateral termination of the agreement. Furthermore, he filed a request of precautionary measures before a civil judge seeking that neither the Neocorp nor any other vendor could sell Hyundai cars in Colombia.

In a very controversial decision, due to allegations of corruption and bribery, a civil judge granted the measures and paralyzed the Hyundai’s market in Colombia. Afterwards, the Supreme Court of Justice confirmed such judicial decision, notwithstanding, the first judge is still under investigation.

It is worth mentioning that settled case law of the Supreme Court of Justice has stated that there is no commercial agency when the distributor purchases products for resell, since it bears the risks in connection with the purchased goods and develops its own clientele. For such reason, given that Hyundai Colombia Automotriz purchased cars for resell, this unexpected decision has started a discussion among experts that question the lawfulness of the judicial resolutions.

In any case, in recent days the parties in dispute conclude an agreement in which Hyundai Colombia Automotriz received a very large sum of money due to the unilateral termination of the contractual relation with Hyundai´s head office. 


Juan Carlos Uribe, IDI franchising country expert for Colombia and Laura Santos, Triana, Uribe & Michelsen


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