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Commercial agency law: ECJ on the compensation claim of commercial agents acting as sub-agents

Distribution law

Commercial agency law: ECJ on the compensation claim of commercial agents acting as sub-agents

According to the ECJ's decision of 13 October 2022 (C - 593/21), the compensation paid by the principal to the principal agent for the customers acquired by the sub-agent may constitute a substantial advantage for the principal agent within the meaning of Article 17(2) of the Commercial Agents Directive. The ECJ interprets the term "substantial advantage" broadly, this can include all advantages received by the principal (in this case the principal agent) after the termination of the contractual relationship, including the compensatory payment received from the entrepreneur.

However, the ECJ pointed out in the case that it had to be determined whether the fact that the sub-agent had himself become the commercial agent of the entrepreneur had an impact on the compensation claim. The commercial agent is only entitled to compensation if and to the extent that the payment of such compensation is equitable, taking into account all the circumstances, in particular the commissions lost from business with customers acquired by him or with customers with whom he had substantially extended the business relationship. However, if the commercial agent - due to the assumption of direct representation - can continue to serve the customers acquired by him, the payment of compensation does not correspond to equity, since the commercial agent does not lose his customers.

Therefore, if the sub-agent continues his activity as commercial agent directly as principal agent with the principal, the termination of the agency agreement does not cause any negative consequences for the sub-agent. According to the ECJ, it is up to the national court to assess whether the payment of the compensatory allowance in such a case is equitable.