A Qatari firm that claimed it lost more than US$11m when British carmaker Jaguar terminated its contract to distribute the luxury vehicles in the Gulf state has seen its case dismissed by a London High Court judge, Arabian Business has learned.
Doha-based conglomerate Ghanem Al-Thani Holdings (GATH) paid approximately QAR12m (US$3.2m) in 1998 to take over the Qatar distribution of Jaguar cars from Doha Motors & Trading Company.
Jaguar had described sales of cars in the country as “disappointing”, with Doha Motors on average selling only five or six of the vehicles per year.
GATH aimed to increase sales to 50 vehicles in the first year and to 200 by the fifth year. In doing so, it spent GBP£400,000 (US$646,690) refurbishing a showroom near the Ramada Hotel Doha, which the group also owned, and spent nearly US$2m building Qatar’s first air conditioned workshop.
Under an open-ended agreement, Jaguar could terminate the contract by giving 12 months notice.
With sales failing to hit the targets set out in GATH’s business plan, Jaguar initiated this clause in November 2006.
GATH claimed that during initial negotiations in May 1998 Jaguar’s regional manager Barrie Felton had promised “until the claimant [GATH] had recouped its investment into the venture, the defendant [Jaguar] would not terminate the agreement without cause".
Under cross examination in the London High Court of Justice, Felton denied giving such assurances and pointed to a clause in the contract which stated that "upon the expiration or termination of this agreement for whatever reason…. the distributor shall…. have no claim against Jaguar for compensation for loss of distribution rights, loss of goodwill or any similar loss".
In court documents, GATH stated that over the eight-and-a-half year period of the contract it had never turned a profit and had suffered total losses of approximately GBP£7m (US$11.3m) as a result of its investment in the venture.
In a ruling on April 4, the court ruled in favour of Jaguar and GATH’s case was dismissed.
A spokesperson for HE Sheikh Ghanem Bin Ali Al-Thani, chairman and main shareholder of GATH, declined to comment on the matter when contacted by Arabian Business.
Yash Kulkarni from Quadrant Chambers in London, GATH’s legal representative, told Arabian Business he was unsure whether GATH planned to appeal. “As they are still within time to appeal, it is probably safest not to rule out such a possibility yet,” he stated.
Business.com
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