Waiver of non-competition clause by franchisee

On 22 June 2015, the Interim Relief Judge of the District Court of The Hague (ECLI:NL:RBDHA:2015:7353) penalized a franchisee because he brought a second interim injunction about the same proceedings, namely whether the non-compete clause was valid.

A franchisor had terminated the franchise agreement prematurely because the franchisee would disrupt the cooperation. The franchisee had also demanded compliance with the franchise agreement in preliminary relief proceedings. In addition, the franchisee had also claimed that it could continue to serve its existing relations and demanded that the franchisor be prohibited from having direct or indirect contact with the relations of the franchisee. The franchisor pointed to the non-competition clause contractually agreed with the franchisee. The franchisee then argued that it could not invoke the post-non-compete clause because it had already transferred the rights under the franchise agreement to another party. The preliminary relief judge had rejected the franchisee’s claim in that interlocutory proceedings, partly because the case was not suitable to be assessed in interlocutory proceedings. 

In the present proceedings, the franchisee is claiming suspension and cancellation of the post-non-compete clause. In the present proceedings, the preliminary relief judge rules that the franchisee has not made it sufficiently plausible that there are new facts and/or circumstances that do make it possible to reach a judgment in this matter in preliminary relief proceedings. The conclusion is that the present claims of the franchisee in interlocutory proceedings are also not allowable.

The franchisor’s legal costs must be fully reimbursed by the franchisee due to abuse of procedural law and are estimated at € 4,750, of which €  4,137 in lawyer’s salary, plus 6% office costs and VAT, and € 613 in court fees.

This judgment illustrates that abuse of procedural law can be punished with a hefty cost order by way of compensation for damage to the other party for having to litigate needlessly. 

Mr AW Dolphijn – Franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Mail to dolphijn@ludwigvandam.nl