Local firm sues Grohe Pacific of Singapore over supply dispute

A local supplier and distributor of building materials has sued its longtime foreign supplier of sanitary wares and accessories, Grohe Pacific Pte Ltd., for allegedly reneging on a supply deal for fixtures crucial to completing three major property developments.

At the same time, Dexterton Corp.—which also supplies lighting fixtures and furniture—has alleged that Singapore-based Grohe Pacific also “interfered” with agreements and business dealings related to these three projects.

In a 32-page complaint filed with the Regional Trial Court of Quezon City, Dexterton said that Grohe Pacific has reneged on its commitment to supply Grohe products for the former’s contracts with an Ayala Land Premiere project of Ayala Land Inc., Edades Tower and Garden Villas projects of Rockwell Land Inc. and Marco Polo Hotel-Ortigas project, “without any justifiable cause.”

Dexterton said that it has held the exclusive distributorship for Grohe products in the country since 1986.

According to Dexterton’s complaint, it was informed last year by Grohe Pacific that its exclusive distributorship contract was ending on Dec. 31, 2010. Despite its appeals, Grohe Pacific only made a counter-offer of appointing it as a “non-exclusive” distributor while raising its annual sales target to $2.5 million (from the old level of $1.6 million) and  “unnecessarily interfering” in its operations—an offer it did not take.

Dexterton said that Grohe Pacific then misled it into using its money and manpower in trying to supply Grohe products to these three major property development projects, as well as other marketing and promotional activities for Grohe products.

This was made with the assurance that Dexterton would keep its exclusive distributorship of Grohe products in the Philippines.

According to Dexterton, however, Grohe Pacific has since refused to supply it with products for these projects “and is now trying to deal with the developers of these major property developments directly.”

Dexterton has asked the court to award it some P50 million in damages against Grohe Pacific, saying that the actions of Grohe Pacific have caused it financial losses and irreparable damage to its reputation.

Dexterton has also asked the court to prevent Grohe Pacific from dealing directly with these major developers and from undertaking acts that would interfere with Dexterton’s agreements, commitments or business relationship with them.

According to Dexterton, Grohe Pacific informed it that its services as exclusive distributor were being terminated last September. The fixtures manufacturer has since entered into another exclusive distributorship with Wilcon Builders, the complainant said.

Dexteron’s complaint was filed by its vice president Michael So.