Court Case a Warning for Drinks Importers

A beer import deal that turned sour may prove instructive for Australian drinks suppliers, after a local company found itself facing legal proceedings that would have required it to attend an overseas court.

The Supreme Court of WA recently threw out the brand owner’s unusual bid to have a judgment by an overseas court recognised in Australia.

The dispute arose after World Brands Australia withheld payment of an invoice from the world’s largest wheat beer brewery, Erdinger, for stock the Australian company had ordered for Oktoberfest events in 2011.

As reported on Australian Brews News, World Brands claimed the order arrived too late for Oktoberfest and that the beer was approaching its expiry date. The company claimed it was also missing the appropriate keg dispensing equipment.

World Brands Australia (now Westons World Brands) Managing Director Paul Wormley told drinks bulletin that he was caught off guard when he suddenly received a German court judgment in Erdinger’s favour, without any prior warning.

“We received a notice from a German court saying that a judgment had been passed in Germany to proceed through the courts in WA. This is two or three years later,” he said.

“They sent all this information through which was all in German, stating all the steps that had happened in the German court, which we were never privy to or aware of.”

While the WA Court this month found its German counterpart had no jurisdiction in Australia, Wormley said the experience had put him on alert for future contractual dealings with overseas entities.

He said he will in the future ensure he specifies that Australia is the ‘point of law’ for any disputes that may arise.

“You never perceive anything will go bad and you think everything will be hunky dory,” he said.

“But if it does you could suddenly find yourself having to traipse across the globe, standing in a court in a foreign country and not even understanding what they’re saying.

“That’s what they were trying to enforce, that the terms should have been in Germany, which would have entailed me flying to Germany, appointing a German lawyer and going to court in Germany.

“All the trading, all the promotional activity of the brand was undertaken in Australia. The only commercial aspect was their sale to me, but thereafter, all the other activity entailing the brand was in Australia.”

Wormley said his legal representatives were only aware of three cases in the last ten years where a judgment had been passed in another country, to then proceed in the courts here.

“That’s why it went straight to the Supreme Court. If it was a local business dealing with another local business, it might have gone to the Magistrates or the District Court.

“It would never have gone to the Supreme Court. So I really wonder how much they’ve spent on this.”

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