A dispute over the purported termination of a distribution agreement for drinks dispensers designed to cater for “a world without bar staff” has come before the High Court.
US-based Drink Command America LLC has asked the High Court for an order compelling Irish firm Drink Command Limited to mediate their dispute over the purported termination of a distribution agreement for the self-serving dispensers in the US.
At the High Court, Bernard Dunleavy SC, for the plaintiff, said the defendant specialises in the design and manufacture of self-pouring drink towers or dispensers devised to serve beer and other drinks in “a world without bar staff”.
Counsel said the dispute centred around the defendant’s decision last December to “turn off the tap” and terminate the agreement that had been in operation since 2020.
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Counsel said it is his client’s case that the defendant has breached the agreement and has not observed the terms of a dispute mechanism within the agreement.
Counsel said that under the agreement both parties are required to go to mediation should a dispute arises.
There had been some discussions between the parties about the mediation, but that dispute resolution process has not come about.
His client was now seeking an order from the court requiring the defendant to attend mediation in compliance with the terms of the distribution agreement.
The plaintiff further seeks an order restraining the defendant from refusing to discharge its duties under the agreement pending the completion of the mediation process.
Counsel said his client is concerned that his client’s exclusion from the distribution agreement will cause “irreparable damage” among its customers and could leave it open to litigation.
Counsel said that the difficulties, which have resulted in an almost “complete breakdown” of relationships, commenced in 2022 after the current owners of the US based firm acquired that company.
A firm related to the plaintiff’s owners, called Doirt Limited, then acquired a 50 per cent share of Drink Command Ltd.
However, differences emerged between Doirt Limited and the defendant company’s other Irish-based shareholders: Donal Lynch and Gary Clowry, the court heard.
The dispute involves issues including funding of Drink Command Ltd, the appointment of directors, access to IT systems and the retention of intellectual property by those shareholders, it is claimed.
These differences resulted in the defendant company asserting that the plaintiff was not entitled to the benefit of the distribution agreement, it is claimed.
The plaintiff claims the position taken by the defendant is entirely inconsistent with the terms of the agreement, and is incorrect.
The plaintiff also alleges the defendant is acting in a manner aimed at improving the position of the Irish-based shareholders in any negotiations in respect of the differences that have arisen between the shareholders.
The matter came before Mr Justice Mark Sanfey on Wednesday.
The judge accepted the matter was urgent and said he was prepared on an ex parte basis to grant the plaintiff permission to serve short notice of its application on the defendant.
The matter will return before the court later this month.
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