Commercial concession contract – “Autostrada S.A. v. Sevel Argentina S.A.”

On October 2, 2002, Division E of the Commercial Court of Appeals, presided over by Judges Martín Arecha, Rodolfo A Ramírez and Helios A Guerrero, confirmed the ruling handed down in the first instance by Dr Matilde Ballerini, Commercial Court No 24, and rejected the claim filed by the former dealer against the manufacturer and the savings company, covering three different complaints. Marval, O’Farrell & Mairal acted as counsel for the defense in this case.

The former dealer filed a claim against both defendants for a rendering of accounts (as per section 652 of the Procedural Code) covering all commercial transactions performed with them during the last 10 years of the dealer relationship.

In addition, the dealer claimed damages from the defendants for losses allegedly caused to it during the term of the concession.

Lastly, the plaintiff filed a claim for compensation, in an unspecified amount, for damages and loss of earnings as a result of the arbitrary decision by the vehicle manufacturer to rescind the concession without due notice.

In addition to the outcome of the case, one of the notable features of the ruling by the Court of Appeal was the firm and well-grounded arguments that led to the dismissal of each of the complaints brought. This sort of complaint is common in lawsuits filed by vehicle dealerships in the city of Buenos Aires which cite the still valid ruling by the Supreme Court issued in the case of “Automóviles Saavedra S.A. v. Fiat S.A.”.

The first aspect of the claim dealt with by the Court of Appeals was the demand by Autostrada for a rendering of accounts. At the beginning of the lawsuit the former dealer stated that the accounts for the relationship were carried by the manufacturer alone, and that the account statements the dealer received periodically from the manufacturer were not sufficiently explanatory and contained codes and items that were never explained by the manufacturer. The grounds given by the Court of Appeals for dismissing this claim were simple and conclusive:

(a) The rendering of accounts should always precede and never come after the settlement of transactions.

(b) Even while it may be hypothetically possible to admit the validity of a rendering of accounts already settled, which would imply a challenging of the accounts, the claim cannot prosper because of the assumption established by section 73 of the Code of Commerce, as the former dealer made no observations within the legal term calculated from the moment of presentation of the accounts.

(c) In addition to the matter of the timing and method for objecting to accounts, a court challenge to such accounts cannot be made on a blanket basis, as the challenging party must specify the objections under each heading.

The second injury alleged by the plaintiff that was dealt with by the Court of Appeals was the claim for damages arising during the time the concession relationship was in force. Briefly, according to the former dealer these damages were a consequence of the delay by the manufacturer in delivering the vehicles covered by the dealership, and the crediting or late payment of the commissions accrued in its favor from the sale of vehicles through the prior saving mechanism.

In addition to pointing out that the former dealer had not demonstrated the actual existence of the mentioned delays, the Court of Appeals stated that this part of the claim was inadmissible because of the dealer’s failure to make reservation of rights at the moment of the late receipt, of the contractual service (delivery of the vehicles or payment of commissions). The court determined that in such conditions the right invoked by the former dealer should be considered to have been extinguished by application of the provisions of sections 525 and 624 of the Civil Code, in view of the general principle that establishes that once the principal obligation has been fulfilled without reservation in relation to ancillary matters, whether the obligation to repair damages or to make payment of interest, the ancillary obligation is therefore also extinguished without more ado. This ruling by the Court of Appeals innovates on this matter in relation to the precedent established in the case concerning “Automóviles Saavedra”, where an interest claim was admitted. In that case, when the complaint was answered it was not alleged that the ancillary obligation to pay such interest had been extinguished following the dealer’s failure to reserve rights to claim them.

The last item for which the former dealer claimed compensation derived from the rescission of the concession contract. The former dealer claimed to have had a relationship with the manufacturer and its predecessor for over 20 years. The former dealer had signed a concession contract with the manufacturer similar to that analyzed by the Supreme Court of Justice in the case of “Automóviles Saavedra”. As the contract was for an indeterminate period, it included the possibility of either of the parties terminating the concession relationship, granting the other party 30 days’ notice. The defendant notified the former dealer of its decision to terminate the contract with a notice of almost seven months. The Court of Appeals considered that the notice given was sufficient, and that thus no injury had been caused to the former dealer susceptible to compensation.

All costs were awarded against the former dealer.