The dealer is alleged to violate his obligation of non competition and sell competing products. For this reason the supplier seeks for indemnification of the amount indicated in the agreement as penalty for violating the non competition obligation. The Court of First Instance accepted the claim and the dealer appealed the decision.
However, a decision of the Competition Board which has been presented to the Court during the trial indicated that ‘the non competition clause in the dealer agreement such as prohibition of placing competing products in the fridge impedes and restricts effective competition within the market’. Thus the Competition Board ruled that the afore mentioned restrictions in the dealer agreement shall be excluded and subtracted from the agreement.
However during the stage of appeal, the plaintiff has presented to the Court of Appeal that the dealer agreements has been modified unilaterally by the supplier in accordance with the above mentioned Competition Board decision.
Nevertheless, the 19th Chamber of the Supreme Court has reversed the decision on the basis that the effect of the Competition Board decision on the agreement, thus the validity of the non competition clause which forms the essence of the claim has not been analyzed by the Court of First Instance thoroughly.
In its re-examination the Court of First Instance with its decision no 2007/292, ruled that in consideration of the notification of the supplier regarding the unilateral modification of the dealer agreement; the compensation is still claimable and in place, thus insisted on the decision.
However the Supreme Court with its decision dated 23/07/2008 again reversed the verdict of the Court of First Instance on the basis that ‘the dealer has sold products which are her own production and from this perspective the dealer has not violated its obligation of non competition that exists in the dealer agreement’. The Court of First Instance has ruled in line with this finding and the Supreme Court has approved such decision on 08/12/2009.
The significance of the pending file is the findings of the Turkish Supreme Court, with regards to the correlation between the Competition Board Decision and a private law suit involving an exclusive dealer agreement. The private enforcement of Competition law is not a widely used legal instrument currently in Turkey and in most of such private law cases the inter relation and the effect of the Competition Board decisions have not been deeply dealt or recognized. This is important especially when the relevant provision of the Act on the Protection of Competition is taken into account which regulates that the compensation amount shall be three times the actual damage in case the one breaching the Act on the Protection of Competition and causing damage is not acting in line with the principles of bona fides.
However in the case mentioned above the Supreme Court, with its second ruling, has chosen another direction and finished the judging without waiting for the Competition Board Decision becomes definite as a result of another finding.
Hikmet Koyuncuoglu, franchising country expert for Turkey.