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Court asks claimant to pay

The court dismissed Al Mustaqbal's case and ordered it to pay Dh889,261 plus an annual interest of 9 per cent. The courts of Appeal and Cassation upheld the verdict.

According to the court records, Al Mustaqbal Marketing Company entered on May 24, 1999 into three agreements with Turki Mohammed, owner of Turki Establishment and Al Sawani Group, under which the former was given the exclusive franchise to sell Guess U2 Aid products in Qatar through retail shops it should set up.

The company had rented the shops, fitting them and recruited the staff in order to launch the business, but was surprised when Turki and Sawani imposed conditions that were different from those stated in the agreement. They also refused to supply it with goods and terminated the agreement without prior notification and justification. These measures resulted in the company sustaining heavy losses in terms of rents, staff salaries and decoration works plus Dh10,000 commission for the licence of each agreement paid upon signature of the three agreements and Dh4,192,000 as profit for the five-year tenure of the agreement.

The first defendant (Turki) filed a counter case demanding that Al Mustaqbal pay him Dh4,597,909 and the interest on the ground that the company (Al Mustaqbal) forwarded purchase orders for goods worth $343,214 which were imported from the US and stored at Jebel Ali storehouses. But the claimant company had breached the agreement as it had not prepared the required showrooms to display the goods despite being informed of the urgency of the same. It has also not paid the value of goods and dumped them in the store for a long time thereby reducing their value. The defendant was then forced to sell the ready-made garments at less price, causing him heavy losses.

Acting on a report compiled by an expert, the court dismissed the case of Al Mustaqbal and accepted the other case filed by Turki and ordered the former company to pay Dh889,261 plus 9 per cent interest a year.

But Al Mustaqbal contested the verdict at the Court of Appeal which upheld the ruling. At the Court of Cassation, it argued that the report prepared by the expert delegated by the court was not signed. The court considered it useless and assigned the same expert. The company objected to this point.

The company said the expert should have started from scratch in his second report. It also objected to some parts of the report. However, the court refuted all the company's reasons for objection and accepted what had been stated in the agreements that Turki has the right to terminate it if Al Mustaqbal failed to respect its commitments including the opening of the showroom in Qatar by December 1999 without mentioning the duration of the notice or ultimatum, which means the termination of the agreement was legal. The company also dragged its feet on paying the value of goods imported by Turki from the US for it, inflicting heavy losses to him.

The court found that it was not true that Turki had not notified Al Mustaqbal with regard to cancellation of the distribution agreement. Turki served two notices to the company. Accordingly, the court rejected its appeal.

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