25. BP Philippines v. Clark Trading Corporation
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BP Philippines (Burmah Castrol Philippines) v. Clark Trading Corporation G.R. No. 175284; September 19, 2012 Facts: - In 1994, BP Philippine !Bp" entere# into $ %$r&etin' $n# (e)hni)$l *it *'reement $n# $ %$r&etin' $n# itrib tion *'reement !$'reement" ith /$trol +imi to be the e )l i3e importer $n# e )l i3e #itrib tor o )h pro# )t. - BP )l$im th$t /l$r& (r$#in' /orpor$tion !/l$r&" 3iol$te# the ormer e )l i3e ri /$tro pro# )t not o r)e# rom it. - epite $ )e$e $n# #eit letter $ ent to /l$r&, /l$r& )ontin e# to #itrib te pro# )t in it # t6- ree hop. - BP $pplie# or $ (R $'$int the /l$r&. BP, )itin' 3. /o rt o *ppe$l $ b$i )onten#e# th$t the n$ thori e# #itrib tion $n# $le o /$trol pro# )t b6 repon )$ e 'r$3e $n# irrep$r$ble #$m$'e to it 'oo# ill $n# rep t$tion. - (o pport the $ppli)$tion or (R , petitioner preente# the tetimon6 o $ )ert$in one o the people ho )on# )te# $ tet-b 6 on )tober =0, 1998 $t P$r&on t6 <ree - n *pril 15, 1999, the R(/ #enie# petitioner pr$6er or the i $n)e o $ rit o in> n)tion, there bein' no i)ient > ti i)$tion or the relie . - /l$r& $n er the )ompl$int b6 t$tin' th$t BP h$ no )$ e o $)tion $'$int $ it to the $'reement. nl6 p$rtie to $ )ontr$)t $re bo n# b6 it. (h , )o l# not be he )h. - ?hile /l$r& $#mitte# th$t it #itrib te# $n# ol# /$trol pro# )t, it $lo poite# )on# )te# it b ine ithin the )on ine o the /l$r& Spe)i$l @)onomi) $))or#$n)e ith @ e) ti3e r#er No 140, 250 $n# 250-*. - Sin)e petitioner $ not $ thori e# to oper$te, #itrib te $n# ell ithin the /S@ #i# not 3iol$te the $'reement be)$ e it e i)$)6 onl6 )o3er $n $re$ here petit b6 l$ to #itrib te. - (he R(/ r le# th$t th$t /l$r& )$nnot be hel# li$ble or the 3iol$tion o the e )l the pro# )t. It note# th$t :the /$trol pro# )t ol# b6 repon#entC t pro3i#e# th$t the6 onl6 ol#C the $me in their tore ini#e /l$r& $n# to ) tomer m$&e $i# p r)h$e $n# or their )on mption. - (he /* $ irme# the R(/ r lin'. - BP $r' e th$t the $)t th$t /l$r& $ oper$tin' ini#e the /S@A $ in)oneD enti $'reement pe)i i)$ll6 )o3ere# the hole Philippine, in)l #in' # t6- ree one p $'reement. - (h , repon#ent )ontin e# n$ thori e#, ille'$l $n# ille'itim$te $le o /$trol h$ )$ e# petitioner to er #$m$'e to it 'oo# ill $n# b ine rep t$tion $n loe in b ine opport nitie. - /l$r& )onten# th$t it i not $ p$rt6 to the $'reement $n# $ )h, n#er *rti)le /o#e, it )$nnot be bo n# to the )ontr$)t. It $lo $r' e th$t the )$e i in$pp nli&e in th$t )$e, n $ir )ompetition $ #e ine# n#er *rti)le 28 o the /i3il /o in it )$e. CIVIL L! Issue: ? N /l$r& h$# 3iol$te# BP e )l i3e ri'ht to ell /$trol pro# )t. "eld#$atio: N . In the preent )$e, neither the R(/ nor the /o rt o *ppe$l o n# $n6 ne )heme b6 repon#ent to in# )e either p$rt6 to )ir) m3ent, rene'e on or 3iol$te it n#er m$r&etin' $n# #itrib tion $'reement. ?e note th$t no $lle'$tion $ m$#e on the $ thenti)it6 o
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Transcript of 25. BP Philippines v. Clark Trading Corporation
BP Philippines (Burmah Castrol Philippines) v. Clark Trading CorporationG.R. No. 175284; September 19, 2012
Facts: In 1994, BP Philippines (Bp) entered into a Marketing and Technical Assistance Licensing Agreement and a Marketing and Distribution Agreement (agreements) with Castrol Limited, U.K. to be the exclusive importer and exclusive distributor of such products. BP claims that Clark Trading Corporation (Clark) violated the formers exclusive right by selling Castro products not sourced from it. Despite a cease and desist letter was sent to Clark, Clark continued to distribute and sell Castro products in its duty-free shop. BP applied for a TRO against the Clark. BP, citing Yu v. Court of Appeals as basis for its claim, contended that the unauthorized distribution and sale of Castrol products by respondent will cause grave and irreparable damage to its goodwill and reputation. To support the application for TRO, petitioner presented the testimony of a certain Farley Cuizon, one of the people who conducted a test-buy on October 30, 1998 at Parkson Duty Free. On April 15, 1999, the RTC denied petitioners prayer for the issuance of a writ of preliminary injunction, there being no sufficient justification for the relief. Clark answers the complaint by stating that BP has no cause of action against as it was a stranger to the agreement. Only parties to a contract are bound by it. Thus, could not be held liable to such. While Clark admitted that it distributed and sold Castrol products, it also posited that it only conducted its business within the confines of the Clark Special Economic Zone (CSEZ) in accordance with Executive Order Nos 140, 250 and 250-A. Since petitioner was not authorized to operate, distribute and sell within the CSEZ, respondent did not violate the agreements because its efficacy only covers an area where petitioner is allowed by law to distribute. The RTC ruled that that Clark cannot be held liable for the violation of the exclusive rights to sell the products. It noted that the Castrol products sold by [respondent] therefore [was] legal provided that they only [sold] the same in their store inside Clark and to customers allowed to make said purchase and for their consumption. The CA affirmed the RTCs ruling. BP argues that the fact that Clark was operating inside the CSEZ was inconsequential since the agreements specifically covered the whole Philippines, including duty-free zones pursuant to the agreements. Thus, respondents continued unauthorized, illegal and illegitimate sale of Castrol GTX motor oil has caused petitioner to suffer damages to its goodwill and business reputation and resulted to losses in business opportunities. Clark contends that it is not a party to the agreements and as such, under Article 1311 of the Civil Code, it cannot be bound to the contract. It also argues that the Yu case is inapplicable here since, unlike in that case, unfair competition as defined under Article 28 of the Civil Code is not present in its case.
CIVIL LAW
Issue: WON Clark had violated BPs exclusive right to sell Castrol products.
Held/Ratio: NO. In the present case, neither the RTC nor the Court of Appeals found any nefarious scheme by respondent to induce either party to circumvent, renege on or violate its undertaking under the marketing and distribution agreements. We note that no allegation was made on the authenticity of the Castrol GTX products sold by respondent. Thus, there is nothing in this case that shows a ploy of the character described in the Yu case, so this is clearly distinguishable from that case.
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