In the long-standing dispute between VW and its former supplier Prevent, the Higher Regional Court of Celle has steered the dispute in a new direction with its judgment of 8 December 2020 – 13 U 65/19 (Kart).
The ruling was based on the following: the automotive supplier Prevent demanded a 25% price increase from VW for the products it supplied. After VW unsuccessfully attempted to find out from Prevent what consequences it could expect if it rejected this demand, VW initially agreed to the price adjustment and then terminated the contractual relationship after a few months. Until now, VW had mostly been successful in court. Most recently before the Higher Regional Court of Düsseldorf (judgment of 5 February 2020 – U (Kart) 4/19), which considered extraordinary termination by VW to be lawful after such a price increase.
Before the Higher Regional Court of Celle, VW sought confirmation of the validity of the termination vis-à-vis TWB, a subsidiary of Prevent. Contrary to what previous rulings on the matter had suggested, however, the Higher Regional Court of Celle considered VW’s unilateral termination to be unlawful.
Extraordinary termination: is silence in the supply relationship an important reason or not?
According to the Higher Regional Court of Celle, extraordinary termination is invalid. Such termination would have required good cause within the meaning of Section 314 of the German Civil Code (BGB), which is not present in this case. Unlike the Higher Regional Court of Düsseldorf, the Higher Regional Court of Celle found that Prevent’s silence in particular cannot be considered good cause. This is because it does not constitute an implied threat to stop deliveries if VW did not accept the price increase demand.
No right to ordinary termination
There was also no right to ordinary termination. Such a right does not arise from the framework supply agreement or from the other contractual provisions; on the contrary, a right of ordinary termination is expressly excluded in section 2.1.1 of the specifications. According to this, the premature termination of the contractual relationship requires an agreement between the parties, i.e. a consensus. In the opinion of the Higher Regional Court of Celle, this also follows from the interests of the parties expressed in the nomination letter.
Compensation and outlook
In response to the counterclaim filed by the Prevent subsidiary, the Higher Regional Court of Celle further ruled that VW must pay damages.
It remains to be seen whether the ruling of the Higher Regional Court of Celle will have a precedent-setting (supplier-friendly) effect on ongoing and future proceedings.
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