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July 26, 2016 02:00 AM

Semperit takes JV case to Austria's Supreme Court

Mike McNulty
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    VIENNA—A legal battle over Semperit A.G.'s right to continue selling and distributing rubber examination gloves in Europe produced by its Thailand-based joint venture is headed to Austria's Supreme Court.

    Semperit and its venture partner, Sri Trang Agro-Industry Public Co., have been at odds over several issues involving Siam Sempermed Corp. Ltd., their JV. Semperit said a number of contentious proceedings were held before arbitration tribunals and state courts involving the Thai company and the joint venture, adding that “in these arbitration proceedings, all partial and final awards have passed in favor of Semperit.”

    It said the arbitral tribunal decided that the JV must comply with Semperit's request for restoration of transparency, access to books of accounts, as well as to premises and factories.

    Ultimately Semperit took Sri Trang to court for breach of contract, Sri Trang said in a statement.

    Sri Trang said a key issue that surfaced was Semperit's right to exclusively distribute rubber examination gloves made by Siam Sempermed throughout the European Union.

    Austria's Cartel Court ruled on June 27 that an agreement signed between Sri Trang and Semperit giving Semperit exclusive distribution rights in Europe was an infringement of competition law in the EU.

    Semperit said it plans to appeal the decision before the Austrian Supreme Court “in order to defend its exclusive distribution rights that had been contractually agreed (to by) its Thai JV partners when the joint venture was established in 1989,” according to a Semperit statement.

    It said it has asked the Cartel Court to address its request “for a preliminary ruling to the European Court of Justice to clarify the legal question, and Semperit will maintain this proposal in the upcoming proceedings before the supreme court.”

    In the company's view, relevant contract clauses “constitute customary and legally uncritical agreements that are (an) indispensable prerequisite for the establishment and functioning of such joint ventures outside Europe between European technology companies and non-European raw material suppliers.”

    Thus far, the firm continued, there have been no public decisions made by a European competition authority or a court that prohibited sales of products in similar cases.

    It noted that the company's JV partners had respected the selling arrangements for 25 years “before they violated their contractual obligations, following Semperit's commercial success in Europe,” and chose to run the business independently without the involvement of a parent company.

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