According to the Court of Milan, a notice of termination issued by a party using an express termination clause is invalid if, although it refers to all contractual obligations, it ultimately becomes a style clause because the breaches giving rise to termination are not specifically named.

The court then dealt with antitrust law, as the retailer was accused of selling contract products outside the contract territory. EU Regulation no. 330/2010 on vertical agreements between suppliers and distributors is relevant here. According to Article 4(b)(i) of this regulation, restrictions imposed by the licensor on its customers to protect the exclusivity of the distributor in a given territory are only compatible with the principles of free competition to the extent that they relate to ‘active’ sales; no restrictions may be imposed on ‘passive’ sales. Therefore, if the parties agree on territorial restrictions for the resale of the products outside the exclusive territory, ‘passive sales’ cannot be prevented. Following Art. 51 of the European Commission's ‘Guidelines on Vertical Restraints’ (2010/C 130/01), ‘passive’ sales are (1) the response to unsolicited orders from individual customers, including the supply of goods or the provision of services to those customers, and (2) general advertising or promotion that reaches customers in the (exclusive) territories or customer groups of other distributors.

The court therefore concluded that there was no breach of contract and/or unfair competition as passive sales by the distributor outside its assigned territory could not be contractually prohibited.