Deals & Cases
MLL Legal successfully defended Allianz against goodwill indemnity claims
MLL Legal has successfully defended Allianz Suisse Versicherungs-Gesellschaft AG and Allianz Suisse Lebensversicherungs-Gesellschaft AG in proceedings before the Commercial Court of the Canton of Zurich and the Swiss Federal Supreme Court against two former general agents who asserted claims for goodwill indemnity.
Article 418u of the Swiss Code of Obligations (CO) provides an agent with an inalienable entitlement to a goodwill indemnity if the agency agreement is terminated. The goodwill indemnity under Swiss law is comparable to the indemnity pursuant to Article 17 paragraph 2 of the European Commercial Agents Directive 86/653. An entitlement to a goodwill indemnity requires, first, that the agent’s activities have resulted in a substantial expansion of the principal’s customer base. Second, the expanded customer base respectively the business relations with clients acquired by the agent must result in considerable benefits to the principal even after the end of the agency relationship. Third, a goodwill indemnity must not be inequitable.
After their retirement, two former long-standing general agents of Allianz Suisse filed lawsuits against the insurance company before the Commercial Court of the Canton of Zurich for the payment of goodwill indemnities under Article 418u CO.
Since court decisions on goodwill indemnity claims are very rare in Switzerland, the Commercial Court was confronted with numerous questions which are likely to be of importance for future court practice. For example, it was disputed what growth rate is required for a considerable expansion of the customer base and how this should be calculated. It was furthermore contested whether the claim of the general agents, who had been active for the insurance company for several decades, was inequitable, e.g. in view of the long duration of the agency relationship.
In both cases, the Commercial Court as a first instance dismissed the actions of the general agents entirely. One general agent appealed the Commercial Court’s judgment before the Swiss Federal Supreme Court, which dismissed the appeal against the judgment as well.
Link to the judgments (in German):