Under local law, if the distribution agreement is registered with the Ministry of Economy, each party has the right to claim compensation for any damage caused by termination. In practice, claims for damages by manufacturers against their distribution partners are generally irrelevant. Instead, in case of a registered distribution agreement, termination by the manufacturer is usually only possible against comparatively high compensation payments to the distribution partner. Even in case of an unregistered distribution relationship, local courts have tended to oblige manufacturers to make compensation payments upon termination. It remains to be seen to what extent this aspect will change as a result of the new commercial agency law, which came into force in mid-June 2023.
