“DMA will endeavour to increase sales year on year. On the expiry of the first five year term of this agreement provided that DMA has discharged its obligations under the agreement and is maintaining a sales level of not less than 5000 units per annum, DMA shall have the right to renew the agreement for another five years on the same basis as herein, except that the amount payable each year under Clause 2 shall be US$20,000 . This right of renewal shall extend to all subsequent five year periods on the same basis for as long as permitted by law.”
“DMA has been trading with Pihsiang for four years …. DMA has enjoyed good success to date in the UK market with Shoprider scooters, although it has suffered from the split distributorship arrangements maintained by Pihsiang. DMA believes that under the exclusive distribution agreement now proposed it will be able to bring greater order to the market and improve its margins. DMA’s objective is to achieve the No 1 position in the European scooter market over time.”
“If parties wish to ask the Court to assist them in restraining those with whom they are dealing from breaking a limited covenant against carrying on a trade they must, in my opinion, themselves fix the limits within which there is no carrying on of the trade, and then they do it at their peril… There is no definite fixed rule as to the limits within which trade can be restrained. That must depend upon the circumstances of each case; and in my opinion it is wrong to make a covenant in this form, and wrong for the Court to enforce it … there are no limits fixed by law which can be regarded as introduced into this covenant. A covenant in this form, indefinite as it is in my opinion, is one which neither a Court of Equity nor a Court of Law ought to enforce. The parties must make up their minds to say what they agree to as regards the limits of time or space within which there is to be no trading.”
“…. If it (the covenant) only means that the covenant in restraint of trade is not to be unlimited, but that the limit is to be found by an appeal to the law, then it seems to me that the obvious answer is that that covenant is too vague for us to deal with. I think myself it would have been too vague even if it had remained in the nature of an executory contract to execute a deed in that shape. The parties would still be asking the law to do for them what they had not made up their minds about themselves. In fact they would be asking the law to make a contract instead of making a contract themselves. But on any view it seems to me that this is too vague. It is said that … we are to ask the law what is to be the restraint imposed upon the generality of the covenant. The law is absolutely incapable of answering a question so put.”
“In 2001 we need to increase our production for the European market by 50,000 either through Shoprider units or through private label units. In 2002, production must increase an additional 50,000. Pihsiang wants to offer DMA the first opportunity to commit to additional units…. To another subject- we have heard a rumor that there is a major management change taking place at DMA. Pihsiang needs to be kept current of all major changes taking place at DMA. We do not want any more situations like the 45% ownership of Merits to take place without prior permission from Pihsiang…. Pihsiang would like to hear back from you within seven days on the above subjects. Pihsiang will increase our volume either through Shoprider units or through private label units, with or without DMA. Pihsiang is giving DMA the first option before we take the next step for the increased volume.”
“Dear Donald, Further to our European SHOPRIDER agency agreement of February 1995, I attach a copy of a bank transfer paid yesterday Pihsiang Machinery Manufacturing, in the amount of USD100,000.00, for the renewal period of the next five years. I look forward to seeing you next week as we discuss our plans to further build on the success of SHOPRIDER with DMA in Europe.”
“In order to have the biggest share in your market you should recalculate your profit margin to 3%, 5%, 10% etc. It is imperative that you reach the growing progress speed of (Pihsiang) as we are a public company now. Unless you can achieve the target we will be forced to take further action so as to increase the sales in your territory.”
“confusion, especially with having several suppliers of the same products has caused problems in the past and we cannot go down that route again. As we have said many times, our emphasis should be on competing with and knocking out other manufacturers from this market and not compete Shoprider against Shoprider”
“all agreements between undertakings…which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to the acceptance by other parties of supplementary obligations which, by their very nature or according to commercial usage, have no connection with the subject of such contracts.”
“contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not; (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.”
“1. Pursuant of Article 81 (3) of the Treaty and subject to the provisions of this Regulation it is hereby declared that Article 81(1) shall not apply to agreements or concerted practices entered into between two or more undertakings each of which operates, for the purposes of the agreement, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services (“vertical agreements”).”
“any direct or indirect obligation causing the seller to sell the goods or services specified in the agreement only to one buyer inside the Community for the purposes of a specific use or for resale.”
“In the case of vertical agreements containing exclusive supply obligations, the exemption provided for in Article 2 shall apply on condition that the market share held by the buyer does not exceed 30% of the relevant market on which it purchases the contract goods or services”
“The exemption provided for in Article 2 shall not apply to any of the following obligations contained in vertical agreements : (a) any direct or indirect non-compete obligation, the duration of which is indefinite or exceeds five years. A non-compete obligation which is tacitly renewable beyond a period of five years is to be deemed to have been concluded for an indefinite duration.”
“the restrictions are indispensable to the attainment of these objectives”
“52. A finding of an abuse requires, first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the Community rules, the purpose of those rules has not been achieved. 53. It requires, second, a subjective element consisting in the intention to obtain an advantage from the Community rules by creating artificially the conditions laid down for obtaining it … 54. It is for the national court to establish the existence of those two elements, evidence of which must be adduced in accordance with the rules of national law.”
“It is natural … to tend to look at what in fact happened under the agreement; but the question of the validity of a contract in restraint of trade has to be determined at the date at which the agreement was entered into and has to be determined in the light of what may happen under the agreement, although what may happen may be and always is different in some respects from what did happen. A covenant of this kind is invalid ab initio or valid ab initio. There cannot be a moment from which it passes from the class of invalid into that of valid covenants.”
“Does the fact that Pihsiang is obliged to supply its products only to DMA remove opportunities to other competing top-tier distributors to such an extent that they are unable to compete effectively in the marketplace?”
“4 … it follows that in principle the national cartel authorities may take proceedings also with regard to situations likely to be the subject of a decision by the Commission. However, if the ultimate general aim of the Treaty is to be respected, this parallel application of the national system can only be allowed in so far as it does not prejudice the uniform application throughout the Common Market of the Community rules on cartels and the full effect of the measures adopted in implementation of those rules. 5. Any other solution would be incompatible with the objectives of the Treaty and the character of its rules on competition. Article 85 of the EEC Treaty applies to all the undertakings in the Community whose conduct it governs either by prohibitions or by means of exemptions, granted – subject to conditions which it specifies- in favour of agreements which contribute to improving the production or distribution of goods or to promoting technical or economic progress. While the Treaty’s primary object is to eliminate by this means the obstacles to the free movement of goods within the common market and to confirm and safeguard the unity of that market, it also permits the Community authorities to carry out certain positive, though indirect, action with a view to promoting a harmonious development of economic activities within the whole Community, in accordance with Article 2 of the Treaty …. 6. The EEC treaty has established its own system of law, integrated into the legal systems of the Member States, and which must be applied by their courts. It would be contrary to the nature of such a system to allow Member States to introduce or retain measures capable of prejudicing the practical effectiveness of the Treaty. The binding force of the Treaty and of measures taken in application of it must not differ from one State to another as a result of internal measures, lest the functioning of the community system should be impeded and the achievement of the aims of the Treaty placed in peril. Consequently, conflicts between the rules of the Community and national rules in the matter of the law on cartels must be resolved by applying the principle that Community law takes precedence. 7. It follows from the foregoing that should it prove that a decision of a national authority regarding an agreement would be incompatible with a decision adopted by the Commission at the culmination of the procedure initiated by it, the national authority is required to take proper account of the effects of the latter decision.”
“A national court is therefore bound not to take decisions which are incompatible with the provisions of an exempting regulation by extending its scope to cover agreements not covered by it or disregarding its scope in relation to the agreements which are covered by the exemption …”
“In the present case it need only be noted that any assessment of compatibility with Article 85(1) would be the subject of the judgment of the Court and, as such, in my view, could not be called into question by the national court or by the competent national authorities. In other words, should the Court come to the conclusion that the conduct here in point, whilst it is liable to have an adverse effect on trade between Member States, does not constitute a threat to competition for the purposes of Article 85(1), it necessarily follows that such an assessment would have the same effect as an exemption, with the result that the national court would not, for the same reasons as those I have already set out with respect to exempted agreements, be able to prohibit the conduct in question. 59. Such an interpretation is fully in accordance with the considerations underlying the judgment in Walt Wilhelm, frequently cited above. It would be inimical to the full effectiveness of Community competition law to accept that a national decision may conflict with and prevail over a judgment of this Court finding that the agreement in point does not fall within the prohibition under Article 85(1) because it does not constitute a restriction of competition. In the result, whenever a particular case does not fall within Article 85(1) because there is no adverse effect on trade between Member States, the competent national authorities may well hold the agreement point to be anti-competitive in view of the harmful effect it has on the domestic market. Conversely a binding finding of the Commission, or a fortiori, a judgment of the Court, to the effect that the agreement does not adversely affect competition, precludes, in my view, its being penalised at the national level. In such a case, in my opinion, the requirements for asserting the primacy of Community law are satisfied.”
“1. Where … national courts apply national competition law to agreements, decisions by associations of undertakings or concerted practices within the meaning of Article 81(1) of the Treaty which may affect trade between Member States within the meaning of that provision, they shall also apply Article 81 of the Treaty to such agreements, decisions or concerted practices …. 2. The application of national competition law may not lead to the prohibition of agreements, decisions by associations of undertakings or concerted practices which may affect trade between Member States but which do not restrict competition within the meaning of Article 81(1) of the Treaty, or which fulfil the conditions of Article 81(3) of the Treaty, or which are covered by a Regulation for the application of Article 81(3) of the Treaty …. 3. Without prejudice to general principles and other provisions of Community law, paragraphs 1 and 2 do not apply when the competition authorities and the Courts of the Member States apply national merger control laws nor do they preclude the application of provisions of national law that predominantly pursue an objective different from that pursued by Articles 81 and 82 of the Treaty.”