A group of Australian Mercedes-Benz dealers have appealed their $650 million legal action against German parent Mercedes-Benz AG, following the Federal Court decision handed down in August last year.
“This appeal is a watershed moment for Australia’s $170 billion franchise sector and will be a major test of the rights of franchisees where a substantial power imbalance exists between franchisor and franchisee,” AADA chief executive James Voortman says.
“We are optimistic that a successful appeal will set clear boundaries for what is acceptable behaviour by franchisors.
“It is also a line in the sand for the automotive industry which has seen other manufacturers considering following the lead of Mercedes-Benz and forcing dealers to transition to an agency model.
“Significantly, the presiding Judge when handing down his judgment flagged the need for further consideration of the terms of the Franchising Code and possible reform due to inadequate protections in the Franchising Code of the investment Dealers make in the goodwill of their dealership businesses,” he says.
The appeal was filed by HWL Ebsworth lawyers on behalf of the dealers.
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