James Carter, managing director of Carter & Sons Ltd, a Manchester-based manufacturer, instructed Aldwych Legal after its long-standing EU distributor began sourcing competing lines and failed to meet contractual purchase commitments. The dispute involved commercial arbitration under international distribution and contract law.
What Happened
Carter & Sons and EuroTrade BV entered a five-year exclusive distribution agreement covering the UK and select EU territories. The contract set minimum purchase volumes, pricing structures and exclusivity for specified product ranges.
From early 2022, supply-chain pressures reduced deliveries. EuroTrade BV missed several minimum orders and, from mid-2022, started promoting competing products in the agreed territories. Informal approaches and commercial correspondence failed to resolve the matter, with both sides alleging breach and claiming financial loss.
Legal Issues
- Whether EuroTrade BV’s sourcing of competing products and failure to meet minimum purchases amounted to breach of exclusivity and contractual obligations under English law.
- Interpretation and application of the governing law and jurisdiction clause, and the seat of arbitration under the Arbitration Act 1996.
- Quantum of recoverable losses, including lost profits, mitigation duties and contractual penalties.
- Practical issues for enforcement of an arbitral award in EU jurisdictions, including reliance on the New York Convention and national enforcement mechanisms.
Our Approach
Aldwych Legal carried out a detailed contractual review and produced a clear chronology of events and breaches. We compiled contemporaneous commercial correspondence, sales data and supply records to support the claim.
We commenced arbitration under the parties’ agreed institutional rules and instructed experts on valuation and international trade practices. Throughout, we engaged in structured pre-action correspondence in line with the CPR Practice Direction on Pre-Action Conduct and maintained settlement talks to protect commercial options.
Outcome
The arbitral tribunal found that EuroTrade BV had breached the agreement by failing to meet minimum purchase thresholds and promoting competing products in the exclusive territory. The tribunal awarded compensation for lost profits, contractual penalties and costs in favour of Carter & Sons.
Following the award, Aldwych Legal assisted with enforcement strategies under the New York Convention and worked with the client to reassign distribution rights to a compliant partner, restoring market stability for Carter & Sons.
Result / Why It Matters
This matter demonstrates Aldwych Legal’s strength in commercial arbitration and cross-border contract disputes, delivering a practical outcome that protected commercial continuity and recovered losses for our client.
