SOUTH AFRICA: Seagram wins Martell sales dispute
Martell has been part of the SFW portfolio in South Africa since the mid-1960s. The current deal is a five-year rolling contract with an automatic annual extension if the annual sales objectives are achieved. It also makes provision for Seagram to renegotiate the contract if the agreed sales figures fall below 80%.
Seagram Africa claims that SFW had not met 80% of sales figures for the 1997-1998 financial year. SFW countered, saying the agreed figure was lower.
South Africa's new deputy judge president, Justice Janette Traverso was severe in her judgement.
With regard to communication between two executives, Pawm Msiza (defendants) from SFW, and Marais Kikillus (plaintiffs), she said: "The constant refrain throughout the evidence on behalf of the defendants that the figure that was reflected was the internal budget figure is absurd.
"The defendant's internal figures would not be of any interest to the plaintiffs. On this aspect Mr Msiza's evidence is equally absurd. He testified that when Mr Kikillus requested the annual sales objective to be included in the monthly report, he told Mr Kikillus that this was not possible, but agreed to send him the budget figures.
"I cannot imagine a more bizarre scenario - two businessmen, who hold senior positions in large companies, sending each other totally useless and irrelevant information over a period of some time, while both of them are aware of the fact that the information supplied to the plaintiffs for purposes of the report to the president of the Group, contained agreed figures in respect of advertising and marketing.
"Why then would Mr Msiza supply figures that were not agreed to in respect of the annual sales objective?"
Justice Traverso declared that the agreement should be terminated as of 30 June 1999.
Distell (formerly SFW) said it would lodge an application to appeal.
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