Eco Swiss China Time Ltd v. Benetton International NV

Case No. C-126/97, [1999] E.C.R. I-3055 (1999)

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Eco Swiss China Time Ltd v. Benetton International NV

European Court of Justice
Case No. C-126/97, [1999] E.C.R. I-3055 (1999)

Facts

In July 1986, Eco Swiss China Time Ltd (Eco Swiss) (defendant) and Benetton International NV (Benetton) (plaintiff) entered a licensing agreement that granted Eco Swiss the rights to manufacture watches and clocks bearing Benetton’s name. Article 26 of the licensing agreement provided the parties would settle all disputes arising between the parties in arbitration under the rules of the Netherlands Institute of Arbitrators. In June 1991, Benetton gave notice of termination of the agreement, and the parties engaged in arbitration on the termination of the agreement. In February 1993, the arbitral tribunal entered a preliminary award directing Benetton to compensate Eco Swiss for the damages Eco Swiss suffered as a result of Benetton’s termination of the licensing agreement. When the parties failed to come to an agreement on the quantum of damages, the arbitrators entered a final arbitral award with the Rechtbank, the relevant Dutch District Court. Benetton applied to the Rechtbank for the annulment of the final arbitral award, arguing the arbitration awards were contrary to public policy because the licensing agreement was null under Article 85 of the European Community Treaty (EC Treaty). The Rechtbank dismissed Benetton’s application, and Benetton appealed to the appropriate Dutch appellate courts. The Dutch appellate courts referred the matter to the European Court of Justice (ECJ), asking the ECJ to determine the validity of Benetton’s motion for the annulment of the arbitration award.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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