Non-compete clauses in distribution agreements
Eurolook and Isea: exclusive distribution of safety curtains on the French market
Eurolook, a Dutch manufacturer of transparent safety curtains, enters into an exclusive distribution agreement in 2013 with the French company Isea for the sale of its ECCS products on the French market. The agreement contains a non-compete clause (Article 9), an active promotion obligation (Article 7) and a term of three years with an option to renew (Article 14).
In 2017 Isea brings its own competing curtains to market under the name MAXILOOK — a name that looks suspiciously like a contraction of Eurolook's trademarks EUROLOOK and MAXIVISION. Isea even uses joint documentation for both product lines. In 2019 Isea terminates the agreement with immediate effect.
Eurolook seeks a declaratory judgment that Isea has breached the non-compete clause. The Zeeland-West-Brabant District Court (ECLI:NL:RBZWB:2023:4633) grants that claim. Both parties appeal.
Court of Appeal: tacit renewal through continued cooperation
The core dispute turns on the term of the agreement. Isea argues that the distribution agreement ended by operation of law after three years — on 20 June 2016 — because Article 14 requires an explicit renewal. The Court of Appeal does not follow that interpretation.
Although Article 14 does indeed refer to the consent of both parties for renewal, that consent "may be given in any form or be implied in conduct". The facts speak for themselves: the parties continued their course of dealing on the same footing after 20 June 2016. In October 2017 Isea responded to a letter from Eurolook about the ongoing cooperation without disputing the existence of the agreement. The winding-up procedure in Article 16 — which prescribes what must happen after termination — was followed by neither party.
The Court of Appeal applies the Haviltex standard and holds that Eurolook was justified in relying on the agreement continuing. The distribution agreement was in force from 20 June 2013 until 17 July 2019 — the moment when Isea's termination letter took effect.
As to the non-compete clause itself, the Court of Appeal makes short work of Isea's defence. Isea argues that the clause is null and void for conflict with Section 6 of the Dutch Competition Act (Mw), but does not substantiate this. The clause is aimed only at products competing with Eurolook's ECCS products — transparent safety curtains — whereas Isea originally traded in metal curtains and sectional doors. There is no question of an unlimited non-compete clause.
The Court of Appeal upholds both judgments. The grounds of appeal of Isea (principal appeal) and of Eurolook (cross-appeal) fail. The damages are to be assessed in separate follow-up proceedings. Isea must produce its sales records for the MAXILOOK products.
What does this mean for parties to a distribution agreement?
The judgment confirms three points relevant to every distribution relationship. First: an agreement that refers to renewal "with the consent of both parties" does not exclude tacit renewal. A party wishing the agreement to end must make that known — remaining passive while the cooperation continues creates reliance on the part of the counterparty. Second: a plea of nullity of a non-compete clause for conflict with competition law requires serious substantiation. A bare assertion does not suffice. Third: a party that develops its own competing product alongside the contract product runs the risk of a damages claim whose size is only determined in the separate proceedings for the assessment of damages.
Prime Law's commercial litigation practice handles distribution disputes, rescission of agreements and contractual liability.
Frequently asked questions
Can a distribution agreement be tacitly renewed?
Yes. Even where the agreement refers to renewal "with the consent of both parties", that consent may be implied in conduct. Continuation of the cooperation on the same footing, without making the termination known, may create justified reliance that the agreement continues.
When is a non-compete clause null and void for conflict with the Competition Act?
A non-compete clause may conflict with Section 6 Mw where it appreciably restricts competition. The party invoking nullity must substantiate this concretely — a bare assertion does not suffice, not even where the clause is broadly worded.
What is the consequence of breaching a non-compete clause in a distribution agreement?
Breach of a non-compete clause is an attributable failure to perform that gives rise to a right to damages. The amount of the damages is usually determined in separate proceedings for the assessment of damages, for which the court may order the production of sales records.
ECLI:NL:GHSHE:2025:2307, 's-Hertogenbosch Court of Appeal, 26 August 2025.
Cited case law
Courts of Appeal: ECLI:NL:GHSHE:2025:2307
District Courts: ECLI:NL:RBZWB:2023:4633