Deminor’s client had a distributorship agreement in place with the Defendant and had been distributing the Defendant’s products exclusively in Germany since 2004.
As from 2022 the Defendant decided not to renew the contractual relationship with the Client and the agreements expired, whereas the actual expiry date is disputed between the parties. The Client is claiming (i) compensation as a result of the obligations under the agreement as well as (ii) lost profits due to an unlawful early termination. The arbitration proceedings are governed by the German Arbitration Institute (DIS) arbitration rules.
The Client and the Defendant had already exchanged legal arguments in two rounds of letters prior to Deminor being involved. Although the Defendant fully rejected the claims on the merits, the Defendant made a verbal settlement offer, which however the Client believed to be much too low. The Client originally was looking to sell the claims due to its financial situation. However, for various reasons, the funding was finally structured in a way that saw the Client receive an upfront payment.
Deminor and the Client were able to find a funding solution that allowed the Client to continue its business operations after the Client’s financial situation seriously deteriorated after the unlawful early termination. Therefore, with the help of Deminor, the Client was not only able to pursue the claims but also in a position to find a new distributor to continue distributing machine tools to its customers in Germany. Also, during the process of negotiating the funding agreement the Client’s attorneys had to drop out. Deminor was able to help the Client find new counsel to represent them in the proceedings by tapping its broad Network.
"This funding demonstrates that sometimes thinking outside of the box is necessary. The process was not always straightforward but we were very happy to get this deal over the line and to be able to help the Client access the justice system."