Q: I have exclusive distributor with manufacturer. How can I legally stop him from selling his product to another company?
I am in discussion with a manufacturer in China to become his distributor in UAE. We agree to take exclusive distribution meaning that they should not supply their products or brand to another distributor in UAE. We will be signing a contract for exclusive distribution.
How can I legally stop their products entering UAE market?
And if we see some other company selling the product in UAE what legal action can we take?
Thanks
A: This is a question about the international law for the sale of goods, UAE law, and China law. A United States attorney trying to answer this question would need to study all three sets of laws before even taking a guess. I hope that you'll understand that is not an effort that would happen for free.
A:
Ensure that the Choice of Law provisions in the contract you are executing are subject to the laws of the jurisdiction where you are seeking to distribute the product, namely the UAE, otherwise it may be harder to enforce the terms of the agreement or license in that country.
Ensure any method of resolving a dispute under the contract can be heard in a forum that is subject to the jurisdiction or country of where you are distributing the product.
Other remedies may be available outside the terms of the contract.
In the US the usual remedy to stop an action is to seek an injunction through the courts. You would seek advice of the remedies available to you in the UAE, where you seek to exclusively distribute.
A:
To prevent the manufacturer from selling their products to other companies in the UAE, ensure your exclusive distribution contract clearly defines the exclusive territory and the obligations of both parties. Include clauses that explicitly prohibit the manufacturer from engaging with other distributors within the UAE. Additionally, outline the consequences for any breach of this agreement, such as financial penalties or termination of the contract.
Once the contract is signed, actively monitor the UAE market for any unauthorized sales of the products. Use tools like market research, online monitoring, and customer feedback to identify potential infringements. If you discover another company selling the product, first review your contract to understand the specific legal remedies available.
You can then take legal action by sending a cease and desist letter to the offending party, citing the exclusive distribution agreement. If the issue persists, consider pursuing legal action through the appropriate courts or arbitration channels as specified in your contract. Consulting with a legal professional experienced in UAE commercial law can also help you enforce your rights effectively.
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