Habib Al Mulla & Partners Achieves Major Win in Tough Distribution Dispute: Demonstrating Unmatched Dedication to Client Interests
November 17, 2023
In the world of commercial litigation, understanding the nuances and intricacies of complex relationships can make the difference between success and failure. A recent case handled by Habib Al Mulla & Partners exemplifies how a comprehensive understanding of distribution networks, coupled with meticulous legal strategy, can produce outstanding outcomes, even in the absence of written documentation.
Background: Our client, a prominent family business in the distribution industry, maintained a long-standing association with a renowned Indian biscuit company. This association began in 1993, with an agreement set for a modest four years, covering a limited range of products. While the written contract expired without renewal, the partnership flourished, extending for over 21 years and encompassing the entirety of the supplier’s product line. This thriving relationship faced an abrupt end when our client received an unexpected termination notice, leaving them with significant unsold stock.
The subsequent dispute revolved around the nature of their relationship. The supplier, refusing to recompense our client for the unsold stock at its purchase value, contended that their relationship was purely wholesale, thus rejecting its characterization as a distribution partnership.
Challenges: Legal disputes are rarely straightforward, and Habib Al Mulla & Partners grappled with several challenges:
- No written agreements existed beyond the 1993 contract.
- Concrete proof was lacking to categorically classify the relationship as distribution rather than wholesale.
- Exclusive partnership evidence was limited to a photocopied 2005 letter that ambiguously labelled our client as the “sole representative”.
- Written correspondence agreed upon returning the stock to the supplier with a 50% discount.
Turning the Tide: Despite these hurdles, our team formulated a compelling argument:
- The sustained and expanded relationship post-agreement indicated an implicit continuation of the partnership.
- The inherent nature of the relationship, deduced from historical transactions, clearly pointed to distribution.
- The supplier couldn’t demonstrate any alternative distributor relationships within the UAE.
- On the issue of stock returns, we demonstrated that our client had been under duress, having been left with no choice but to accept the supplier’s terms due to the circumstances.