April 2021

Decision of the Athens Court of Appeal on the Dismissal of a Customer Compensation Claim

The Athens Court of Appeal issued decision No. 1996/2021, which dismissed the claim of our client's opposing party for compensation for clientele and lost profits. Specifically, while the amount of damages awarded at first instance was in excess of EUR 500,000, the Court of Appeal allowed the appeal and dismissed the claim in part as indefinite and in part as unfounded. The main points of the judgment which deserve comment are as follows: (a) in order for the court to determine the amount of the customer compensation, it should start with a quantitative calculation of the amount of the loss of commissions by estimating the period of time during which after the termination of the contract the customer relationships built up by the commercial agent's actions; and (b) the affirmation of good cause deprives the agent of the claim for compensation for loss of profit, irrespective of whether or not the good cause is ultimately attributable to the fault of the person terminated. In particular, the judgment of the Court of Appeal states: 'In particular, the applicant calculates the damages sought by setting out in detail in the application only the total monthly fees of all kinds received for the entire period of its cooperation with the first defendant ... without even specifying whether the above amounts include VAT. In accordance with what is stated in the above-mentioned legal reasoning, the starting point for the calculation of the amount of the requested customer compensation should not be the above-mentioned compensation limit alone, but two measurable values, namely the benefits retained by the principal after the termination of the contract on the one hand and the loss of commissions of the agent on the other, since the customer compensation cannot exceed the lesser of the two amounts mentioned above. [...] However, this court considers that good cause and exceptional circumstances justify such termination. This is because it was proved with certainty that after the withdrawal of the above significant partner ... from the plaintiff and the already reduced performance of the latter in new connections ... reasonable suspicion arose about the possible cooperation of other partners of the plaintiff with the above competing company (as it did, even after the termination) and certainly distrust about the plaintiff's ability to cooperate in the future with the first defendant."

(For more see here)