Distribution Newsletter Switzerland: Goodwill indemnity for distributors remains an exception
In a landmark decision of 2008, the Swiss Federal Supreme Court had ruled for the first time that, under certain circumstances, exclusive distributors have a mandatory claim for goodwill indemnity upon termination of the distribution agreement. This had been the first case in which a Swiss court had accepted to apply by analogy the agency law provision regarding goodwill indemnity to distributors, and to award such indemnity to a distributor.
In a recently published decision of 8 October 2019, the Supreme Court confirmed the principles of its case law established in 2008. The Supreme Court however denied a goodwill indemnity to the distributor in the case before it, thereby upholding the decision of the lower court. This new decision once again confirms that a goodwill indemnity for distributors is and remains an exception under Swiss law.