Alert: Conflicting termination rights?(Ilkerler Otomotiv Sanayai Ve Ticaret Anonim Sirketi and another v Perkins Engines Company Ltd)

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Commercial analysis: The Court of Appeal has dismissed an appeal against a decision by Knowles J that a termination notice was effective. In 2012, Perkins served notice to terminate a distribution agreement originally entered into in 2000. That notice was given under a provision which provided for the agreement to continue for an initial period of three years and thereafter until terminated on at least six months prior written notice (Article 2.3). The first claimants argued the notice was ineffective since Perkins had been dissatisfied with its performance, so Perkins should have given them the opportunity to take remedial action under a different provision (Article 19.3), which specifically contemplated (following a remedial period) termination because of dissatisfaction. The first claimant also argued: (a) the agreement had been impliedly varied such that notice to terminate could not be given until a further period had elapsed because the parties had agreed multi-year strategic plans in 2010 and...