Red Bull can now choose local distributor

MANILA, Philippines -  The Court of Appeals, in a 14-page decision penned by Fourth Division Associate Justice Amy C. Lazaro-Javier on Sept. 16, nullified the writ of preliminary injunction issued by a Quezon City regional trial court that stopped Thai manufacturer T. C. Pharmaceutical Co. Ltd. from choosing a new distributor of Red Bull products in the Philippines.

Associate Justice Javier voided the orders issued by Quezon City Regional Trial Court Branch 217 Judge Santiago M. Arenas on Jan. 19 and May 16, against the termination of exclusive distributorship agreement between T. C. Pharmaceutical and the now defunct Energy Food and Drinks Inc.

The CA ruling effectively removed the confusion caused by the RTC injunction, with respect to the right of T.C. Pharmaceutical to choose its local distributors.

The appellate court, in justifying its decision, said Judge Arenas committed grave abuse of discretion and appears to have applied “double standards” in refusing to consider the grounds of T.C. Pharmaceutical in terminating its exclusive distributorship agreement with Energy Food and Drinks.

T.C. Pharmaceutical terminated its distribution agreement with Energy Food and Drinks on Oct. 31, 2008.  Energy Food and Drinks has already ceased business operations since Dec. 31, 2009, as shown by its manifestation filed before the court. 

The CA said there appears to be double standards when the Quezon City court granted Energy Food and Drink’s petition for writ of injunction on the grounds of “irreparable damage”, but rejected the motion for reconsideration filed by T. C. Pharmaceutical on the grounds that it did not succeed it proving irreparable damage to its interests.

Javier said the Quezon City RTC “misread and misapplied in a strained manner elementary precepts on the issuance or non-issuance of a writ of preliminary injunction which ironically it even cited.”

She said that if the Quezon City court had only sampled the evidence, it would have discovered that Energy Food and Drinks admitted being remiss in its obligations under the distributorship agreement, when it defaulted in the payment of its obligations despite profitable returns, failed to meet its sales target and reduced its marketing efforts.