Judgment of the Supreme Court of 2016-05-12
Distribution agreement, termination of transaction, unremedied breach, positive contractual interest, goodwill indemnity, calculation of compensation, agency contract, analogy, obligation to indemnify, contractual liability
In this decision, the Supreme Court of Justice stated that the fact that the specific wording of the concession agreement reveals the integration of the concessionaire into the concession grantor’s distribution network, “with all that this implies and presupposes in terms of collaboration between the parties and promotion of the goods distributed”, justifies the application by analogy of the Agency Contract Law, accepted by the introduction to that very Law, by legal theory in general and as repeatedly upheld by the Supreme Court of Justice.
There having been unfounded termination of the contract by the grantor in this specific case, this represented a situation of unremedied breach of the contract, the grantor being required to compensate the concessionaire under the general terms of contractual liability, which include compensation for loss of profits (profits that it would have obtained if the contract had been continued until its expiry).
Furthermore, in addition to the compensation referred to above, goodwill indemnity may be granted, with regard to which, since it is not a true compensation for losses, only the regime provided for in stipulated in Articles 33 and 34 of Decree -Law 178/86, of 03 July, are applicable for its recognition and calculation, and not the general regime of the obligation to compensate.
With regard to the calculation of goodwill indemnity, the Supreme Court of Justice highlighted that there has been repeated guidance from the Court that the annual average of the remuneration received shall be calculated from the net profit of the concessionaire. The same Court appears not to exclude, however, the consideration that investments made by the concessionaire also entitle it to compensation, even if under general terms and not in respect of goodwill indemnity.