CL-2024-000678 - [2025] EWHC 2531 (Comm)

I have dealt above with the primary arguments made by each side. They both also raised a number of supplementary arguments.

AMMENA argued that the ITPs charged by AML to AMLNA and AML China were, in fact, at market levels. Mr Chapman KC referred to the Award at paragraphs 193 and 194:

“193.

Subject to what follows, the Tribunal would not therefore regard the ITP to AMLNA as a valid comparator. It may have been set at 85% of the US DNP but it was not a price agreed at arm's length. AML could have set the price at any level it chose.¹⁵⁹

¹⁵⁹Although an off market price might have consequences under the applicable tax and transfer pricing rules.

194.

AMMENA relies on the statement in the 2023 annual accounts of the Aston Martin parent company that "sales and purchases between related parties were made at normal market prices unless otherwise stated." That does not change the analysis, since AML could sell cars to AMLNA at an off market price if it wanted.”

This is not a finding that the ITPs were, in fact, at market levels. Strictly, it is only a finding that AML said in one set of accounts, covering one year, that sales and purchases in that year were made at normal market prices. Whether the statement was true, either for 2023 or for any other years, is not something on which the Tribunal made any finding. The Tribunal’s point – with which I agree – was that, even if this could be shown in fact to have been the case for that year (and perhaps for other years), that was not prospectively foreseeable in April 2018 and cannot have represented the parties’ mutual expectations.

Mr Chapman KC added that if an ITP did not properly reflect the market price, it would be possible to object to the use of that particular ITP as a comparator. This seems to me an unlikely way for the parties to have intended their contract to work. It would be a recipe for uncertainty and disputes. It also strikes me that this submission, and the underlying statement in the 2023 accounts, lacks meaning. There are no market prices for sales by AML to any distributors, because there is no open market in which such sales occur.

AMMENA’s next point was that the Tribunal’s view is not consistent with the admitted commercial purpose of Article 4(A)(1), i.e. to ensure a roughly level playing-field, because it would result in the price charged to AMMENA not being compared to a distributor’s price. However, the agreed position between the parties as to commercial purpose, as recorded in the Award, was to ensure “a roughly level playing field between different territories” and to require “a like-for-like comparison at a reasonably high level of generality.” This does not require AMMENA’s prices to be compared with the prices of some entities in other territories (captive distributors), but not with the prices of others (commercially independent retail dealers).

AMMENA’s next point was to object that the Tribunal’s approach involved reading a considerable number of additional words into the provision. This point has no force. This is a contractual interpretation case, not an implied term case, so it is not strictly correct to say that any words are being read in. Furthermore, both parties’ cases involve an explanation of the meaning of Article 4(A)(1), which has to be set out in additional text. I cannot decide the case by challenging them to reduce their respective formulations to the smallest number of words, so that I can find in favour of the most succinct.

AMMENA’s next point referred to Article 3(A)(3) of the Distribution Agreement, which entitles AML to reduce AMMENA’s margin, in some circumstances. It could only do this by increasing the prices paid by AMMENA, relative to the existing margin. Mr Chapman KC said that this provision necessarily assumes that AMMENA’s prices will reflect the prices paid by other distributors (i.e., ITPs), because otherwise there can be no proper distributor’s margin to be the subject of the Article 3(A)(3) reduction. The fallacy in this point is that Article 3(A)(3) operates irrespective of the magnitude of AMMENA’s margin. Its effect is to impose a specified percentage reduction. Mr Chapman KC did not suggest that AMMENA does not make any margin at all on its sales, and in fact it is clear from the Award that it has done; this emerges from a section in the Award concerned with allegations of bad faith, which were not directly relevant to this appeal. Article 3(A)(3) does not require AMMENA to be making what Mr Chapman KC referred to as a “distributor’s margin” – another term that is not used or acknowledged in the Distribution Agreement.

AMMENA’s next point concerned a separate agreement that AML and AMMENA entered into at the same time as the Distribution Agreement – the Agency Agreement. AMMENA noted that the remuneration structure under the Agency Agreement was set as a percentage of the wholesale prices in AMMENA’s Territory – i.e., the prices charged to retail dealers. AMMENA argued that this supported the case that the prices charged to AMMENA under the Distribution Agreement should be a percentage of that wholesale price, not at the same level. I accept that, in order to have any margin for profit, AMMENA must buy at a lower price than the price at which it sells. However, this point goes no further than that. The Agency Agreement does not presuppose that the prices paid by AMMENA under the Distribution Agreement must be comparable to the ITPs paid by AMLNA and/or AML China.

AMMENA’s final point related to a comfort letter that AML provided to AMMENA, at the same time as the Distribution Agreement and the Agency Agreement, in April 2018. Like the Agency Agreement, this proceeds on the basis that AMMENA should have a profit margin. It indicates (without guarantee) that this margin is assumed to be about 15%. However, the fact that AML encouraged AMMENA to assume that it would be able to sell to retail dealers at a wholesale price that would give a margin of 15% says nothing whatsoever about whether the prices payable by AMMENA to AML should be comparable to the ITPs paid by AMLNA and/or AML China.