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SPCG Successful for Tesco Poland in Arbitration Against Supplier

SPCG Successful for Tesco Poland in Arbitration Against Supplier

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Studnicki Pleszka Cwiakalski Gorski Limited Partnership has successfully represented the Tesco Poland retail chain in an arbitration dispute before the Court of Arbitration at the Confederation of Lewiatan. The dispute involved the admissibility of turnover-based bonuses by the retail chains of use in trade.

A former supplier sued Tesco Poland for reimbursement of annual and monthly turnover-based bonuses in the amount of almost PLN 8 million. According to SPCG, the supplier claimed that such bonuses "are deprived of any actual equivalent and in fact constitute fees for admission of the supplier's goods for sale within the meaning of provisions of the Act on Suppression of Unfair Competition ('the Act): so-called shelf fees. At the same time, their collection obstructs the supplier’s access to the market within the meaning of Article 15 section 1 (4) and Article 3 of the Act."

In opposition, according to SPCG, Tesco Poland "claimed that any discounts granted by the supplier, including bonuses, which depend on the value of turnover between the parties in a given period, are commonly known in turnover as price-setting factors, determined by the parties during the price negotiations, which constitute component of the trade margin for each party. They reduce the supplier’s margin and at the same time increase the margin of the retail chain as a buyer. The trade margin, according to the Article 15 section 1 (4) of the Act does not constitute a fee for admission goods for sale. In addition, obtainment of discounts and bonuses depending on a certain level of turnover in a given settlement period by the recipient of the goods is fully compliant with the market customs established in this regard."

The Court of Arbitration at the Confederation of Lewiatan agreed with Tesco Poland that a bonus due to achieving a set level of sales, constitutes in essence a discount, constituting a component of a trade margin within the meaning of the Act. As a result, the Court of Arbitration dismissed the supplier’s demand for reimbursement of the turnover-based bonuses that were granted to the retail chain.

The SPCG team consisted of Partner Jakub Gorski and Senior Associate Pawel Wec.

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