argomento: News del mese - Diritto Internazionale e Comunitario

Articoli Correlati: U.K. - non-payment - service suspension

If a company manufactures products that are essential to a customer’s business, to make sure that the invoices are paid, we wonder if they can always threaten to withhold the goods. On this point, the recent first instance decision in Medina Dairy Ltd v/Nampak Plastics Europe Ltd reminds that this is not always the case. While the refusal to supply the product to the customer in these circumstances could easily translate into a contractual breach which configures a potential liability for damages, examples of manufacturers who have been forced to continue the supply against their will (and, consequently, lose the possibility of threatening the interruption of supplies in the absence of payment of invoices) are quite rare. Even more rare is the order of “specific performance” where the products sold are unique and difficult to find on the market.
However, in the Medina Dairy case, the Court granted an injunction to force a bottle manufacturer to continue supplying a customer who produced dairy products, despite the fact that the latter had not paid numerous invoices. The customer convinced the judge that he had no other possible sources of supply and that the damages due to non-fulfillment could not adequately compensate the losses that he would have suffered in case of suspension of the supplies. For manufacturers, the purpose of an express term that allows to suspend services, if not even to terminate the contract, where invoices are not paid; and/or for an express exclusion of a specific execution clause as a remedy against any breach, or threat of breach, contractual. The buyer will want to avoid including these clauses in the contract.