The commercial agent was in this case operating in Germany and the principal was located in Sweden. According to the agency agreement the commercial agent was obliged to market and promote the sales of various computer based tax programs in Germany. Since a time-limited license of computer programs is not regarded as ‘goods’ within the meaning of the Commercial Agents Act or the EC Directive 86/653/EEC the court found that the Commercial Agents Act was not directly applicable on the contractual relationship. However, the court stated that some provisions in the Commercial Agents Act may be applicable by analogy, among them section 28 regarding indemnity (in this respect reference was made to the EC Directive 86/653/EEC article 17.2). Additionally, the court stated that since the Commercial Agents Act was applicable by analogy section 28 lost its mandatory character.
According to a provision in the agency agreement the commercial agent was entitled to specific compensation for support and after sales work towards the customers in the territory. However, according to the same provision this type of compensation should not, in any respect, be regarded as agency commission.
Having concluded that the commercial agent was entitled to indemnity, the main question concerned the calculation of the indemnity. It had to be determined whether the indemnity should be calculated on the basis of the agents’ entire remuneration (including compensation for support and after sales work) or solely on the basis of the agency commission.
When determining the amount of the indemnity the court argued as follows. If the indemnity should be calculated on the basis of the company’s suggestion, i.e. solely on the basis of the agency commission (without including the compensation for support and after sales work) the parties agreed that the agency commission for the last 12 months came to the amount of 23.096 euros. By using the method presented in the Commission report on the application of article 17 of council directive the company estimated the highest amount of indemnity to 51.823 euro. According to the commercial agent (the claimant) the indemnity should be based on the entire remuneration (i.e. including compensation for support and after sales work). Based on this assumption his claims amounted to 133.689 euro (the average annual commission).
Since the court found that the indemnity should be based solely on the agency commission the commercial agent was awarded with the amount of 51.823 euro.
Magnus Nedström, IDI Country Expert for Sweden.
The topic will be discussed more in depth during the 2008 IDI Conference, that will be held in Turin, on 6-7 June 2008.