No compensation payment in case of business continuity on different distribution level
ECJ 13.10.2022, C-593/21
In a recent decision, the ECJ held that a compensation payment might not be equitable if the sales agent continues his commercial business on a different distribution level. After all, by continuing his business, the sales agent serves the same customers with the same products (and probably continues to use investments that have not yet been amortized). Nevertheless, it remains up to the national court to assess whether the compensation payment is equitable having regard to all the circumstance of the case at hand.
These considerations are also relevant for authorized car dealers, to whom in Austria the provisions on the compensation payment are to be applied analogously. Accordingly, a seamless switch from dealer level to subdealer level or vice versa does not justify a compensation payment.
The ECJ's decision grants general importers/suppliers some flexibility when restructuring their distribution network without automatically becoming liable for compensation. It cannot be completely ruled out, however, that a national court may arrive at a different conclusion within the context of equity.
Please note: This blog merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the blog.