Jaguar Land Rover Schweiz AG terminated a service contract with an authorised garage. The authorised garage filed for preliminary relief with the Zurich Commercial Court, requesting that the court order Land Rover to continue the service contract after termination. The court rejected the authorised garage's request for interim relief.

The service contract entitled the authorised garage to provide repair and after sales services and to sell spare parts for Land Rover-branded motor vehicles. According to the authorised garage's allegations, Land Rover infringed Swiss competition law when it terminated the service contract. The authorised garage requested that the court order Land Rover to continue the service contract after termination.

The court rejected the request for preliminary relief. It concluded that the sale of new motor vehicles and downstream sales of spare parts and services were part of one market system. In this market system, Land Rover's market share was less than 5% of the premium sport utility vehicle segment. According to the court, a single brand (eg, Land Rover) could not constitute the relevant market. Accordingly, Land Rover did not have a dominant position at the after-sales level. Consequently, the court ruled that Land Rover was not obliged to enter into a contract (Article 7 of the Cartel Act).

In addition, the court prima facie did not find infringement of Article 5 of the Cartel Act on unlawful agreements to restrict competition because Land Rover's refusal to supply the authorised garage was a unilateral decision. Further, neither the Motor Vehicle Communication of the Swiss Competition Commission nor the fact that Land Rover maintained a selective distribution system required Land Rover to enter into a contract with the garage. It remains to be seen what impact this decision will have on the revised Motor Vehicle Communication which the Competition Commission is drafting.

For more information please contact Marcel Meinhardt or Benoît Merkt at Lenz & Staehelin by telephone (+41 58 450 80 00) or email (marcel.meinhardt@lenzstaehelin.com or benoit.merkt@lenzstaehelin.com). The Lenz & Staehelin website can be accessed at www.lenzstaehelin.com.

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