CA junks P1.5-B suit vs German car manufacturer

THE Court of Appeals (CA) has upheld an earlier ruling issued by a Pangasinan court which junked the P1.5-billion civil suit against German car manufacturer Audi AGI and its local distributor PGA Cars Inc.

In a 27-page decision penned by CA Third Division Associate Justice Elihu Ybanez, the suit filed by local car firm Auto Prominence Inc. (APC) was dismissed due to lack of jurisdiction.

“In summary, in view of improper venue, lack of jurisdiction over the person of defendant Audi and absence of prior arbitration, a condition precedent, resulting in lack of jurisdiction over the subject matter, the trial court acted correctly in dismissing the second amended complaint and in lifting its status quo order. And since the rights, obligations and interests of co-appellee are wholly subsidiary to those of Audi AGI, the complaint is likewise dismissed,” the CA stressed.

Associate Justices Bienvenido L. Reyes and Estela Perlas-Bernabe concurred with Ybanez’s ponencia.

Case records show that on June 1, 2005, APC Proton initiated estafa case against Audi officials — Dr. Martin Winterkorn, Horst Neumann, Andreas Schleef, Erich Schmitt, Rupert Stadler, Jochem Heizmann, Ralph Weyler and Sunil Kaul –- with the City Prosecutor of Alaminos City which, after finding probable cause, subsequently filed the information before the RTC Branch 54.

The case was filed against Audi after it terminated its direct dealership agreement with Proton because it was dissatisfied with the way the latter represented the Audi brand in the Philippines in a letter dated Sept. 27, 2004.

Proton, a domestic corporation engaged in the assembly, importation and sale of foreign cars in the Philippines, and APC entered into three contracts with Audi AGI of Germany — the assembly, license, technical assistance and spare parts supply agreement; the sole distributorship contract; and the license fee agreement.

Under these contracts, Audi commissioned Proton as its exclusive assembler of its cars, parts, distributor of its transport products in the Philippines, and eventual exporter within the ASEAN region, for an indeterminate but reasonable length of time as would allow Proton to recover its capital investment.

In turn, Proton agreed to pay license fees and remit its savings from tax incentives to Audi.

To give effect to the contracts, Proton invested in an assembly plant and building in Alaminos City; in tools and equipment for assembly and distribution; and in showrooms, offices, promotions, and marketing, in the purported amount of P1 billion.

But the German car manufacturer determined that only Malaysia may assemble and sell completely knock down units in the ASEAN region, resulting to its decision to terminate its direct dealership agreement with Proton.

This prompted Proton and APC to institute civil and criminal proceedings against Audi.

The case was subsequently ordered dismissed by the Department of Justice (DOJ) and the CA, leaving the civil aspect of the suit unresolved. PNA

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