An exclusive Distribution Agreement had existed between the parties. The Contract contained a non-compete obligation for the Distributor during the term of the Contract. Furthermore the Contract provided for a secrecy/non-disclosure obligation pertaining to confidential business information acquired by the Distributor during the term of the Contract. The Distributor at a certain moment terminated the Contract and started selling similar products to the Contractual Products manufactured in China by the same manufacturer from which the Distributor’s former Supplier also obtained its products.
The Supplier considered this line of conduct of its former Distributor to be a breach of the confidentiality obligation to which the latter was bound under the Contract. Accordingly the Supplier claimed for payment of penalties under that specific clause of the Contract. Furthermore the Supplier requested an order from the Court that its former Distributor was to immediately stop its competing activities. The Court ruled that the fact that the Distributor had purchased products similar to the contractual products from the Chinese manufacturer was not to be considered as a breach of the confidentiality clause.
The fact that the products sold by the Supplier were manufactured by that specific Chinese manufacturer was a fact of common public knowledge advertised on the website of the Supplier and also referred to in correspondence between the Supplier and its customers. The claim for payment of penalties under the confidentiality clause was therefore rejected.
As regards the claim based on the non-competition obligation, the Court ruled that whereas the non-competition clause in the Contract only applied to the term of the Contract and not for any period thereafter, the Distributor was in principle free to carry out competitive activities. In relation thereto the Court, however, ruled that it should be considered as an act of unfair competition if the Distributor consistently approached the Customers of its former Supplier which Customer-details had been obtained by the Distributor during the term of the Distribution agreement. Accordingly the the Court ordered the Distributor not to approach any of the Customers of its former Supplier for the purpose of terminating their business relationship with its former Supplier.
Jaap van Till, IDI country Expert for Netherlands
