Tiffany & Co. New York has filed a counter-claim of CHF541.9M against Swatch Group and its subsidiary Tiffany Watch Co., Ltd's damage claim of CHF3.8B in December 2011.
The claim and counterclaim are the result of a breakdown of supposedly "long-term cooperation agreements" between Swatch Group and its subsidiary Tiffany Watch Co., Ltd. with Tiffany & Co. to design, manufacture and distribute “Tiffany & Co.” watches worldwide. Based on the long-term commitments of Tiffany & Co., Swatch Group invested millions to develop, distribute and sell “Tiffany & Co.“ watches through its own stores, its worldwide network of independent retailers and through Tiffany & Co. stores.
According to Swatch Group, the Group is forced to terminate the agreement In September 2011 "following Tiffany & Co.’s systematic efforts to block and delay development of the business" despite "fruitless attempts of The Swatch Group Ltd and its affiliate Tiffany Watch Co. Ltd to solve the dispute amicably".
The counter-claim is in response to Swatch Group and its affiliate Tiffany Watch Co. Ltd's requested for "full compensation for all losses in connection with Tiffany & Co.’s past and continuing breaches of its obligations and duties under the agreement. The relevant damages sought include a claim for lost profits conservatively quantified at CHF 3.8 billion for the term of the agreements to which the parties committed" according to a statement issued by Swatch Group.
Swatch Group says that the counterclaim of CHF541.9M byTiffany & Co. "has no factual or legal basis and will be vigorously contested by Swatch Group and Tiffany Watch Co. Ltd".
It will be interesting to see how the story develops.
Jaw