Aldwych Legal represented James Carter, director of Carter Distributions Ltd, a Manchester-based UK distributor, in a commercial arbitration against a major EU manufacturer after repeated supply reductions, diversion of stock to competitors and unilateral pricing changes under a long-term distribution agreement.
What Happened
The parties had a written exclusive distribution agreement, in place since 2017, covering the UK market. Carter Distributions relied on minimum-supply commitments and fixed pricing schedules to meet retail orders across Manchester, Leeds and Bristol.
From late 2022 the manufacturer reduced agreed supply volumes, redirected allocations to competing distributors and attempted to vary prices outside the contract. Carter Distributions faced stock shortages, lost sales and emergency purchasing costs to fulfil key accounts in Birmingham and Nottingham.
Attempts to resolve the dispute by direct correspondence and commercial meetings failed, and Aldwych Legal advised arbitration under the contract’s dispute resolution clause.
Legal Issues
- Whether the manufacturer’s conduct amounted to repudiatory breach of contract and breach of any implied duties under English contract law (Sale of Goods Act 1979 and general contract principles).
- Interpretation and scope of exclusivity, minimum-supply and pricing clauses, including construction of contractual terms and admissible commercial background evidence.
- Calculation of damages for lost profits, mitigation obligations and recoverability of emergency sourcing costs.
- Arbitration jurisdiction and procedure under the contract and the Arbitration Act 1996; enforceability of any arbitral award cross‑border (New York Convention considerations).
Our Approach
We opened arbitration proceedings under the contract’s designated rules after thorough pre-action correspondence and formal demand letters in line with good practice and CPR principles where relevant.
Our team compiled contemporaneous supply records, internal sales reports and supplier correspondence. We instructed a commercial damages expert to quantify lost profits and emergency sourcing costs and produced targeted witness statements from James Carter and key operations staff.
Submissions addressed breach, contractual construction and remedies; we sought interim relief where necessary and engaged in focused settlement discussions prior to the final hearing.
Outcome
The arbitral tribunal concluded the manufacturer had breached core contractual obligations by diverting stock and altering prices outside the agreement. Liability was established for repudiation of minimum-supply commitments.
The award provided compensation for lost profits, reimbursement of emergency sourcing costs and a declaratory reaffirmation of the distributor’s exclusivity schedule, preserving Carter Distributions’ commercial position in the UK market.
Result / Why It Matters
This matter demonstrates Aldwych Legal’s practical experience in managing complex cross‑border commercial arbitrations, securing both financial recovery and contractual certainty for UK distributors operating against larger EU suppliers.
