On December 30 2010 the Zurich Commercial Court rejected interim measures sought by an authorised repairer of motor vehicles. The authorised repairer had requested the continuation of the existing service partner agreement on the grounds that the agreement had been terminated contrary to Section 17 of the Competition Commission Motor Vehicle Notice without cause and without substantiation.

The authorised repairer argued that Section 17 of the notice explicitly states that any termination of a motor vehicle distribution and service partner agreement must be in writing and explain the causes for such termination. Otherwise, the termination will constitute a competition law restraint. In the case at hand, the service partner agreement did not include an obligation to give cause for termination. On several occassions the authorised repairer had asked the supplier to explain the reasons for termination. However, the supplier never did so. As a consequence, the authorised repairer argued that the termination was not valid because it violated the notice and hence Swiss competition law.

The Zurich Commercial Court held that the issue of whether a contract has been validly terminated may be decided only on the basis of civil law and not on competition law. Pursuant to the termination clause of the service partner agreement, either party could terminate the agreement in writing with a term of 24 months. The service partner contract did not impose an obligation to explain the reasons for termination. Because the supplier met all of its contractual obligations, the court concluded that the service partner agreement had been validly terminated.

Therefore, the court held that the issue as to whether an agreement potentially violates competition law has no impact on the validity of a termination.

For more information please contact Judith Bischof at Lenz & Staehelin by telephone (+41 44 204 1212), fax (+41 44 204 1200) or email ([email protected]).