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

In this section, I essentially rely on the facts found by the Tribunal and set out in the Award. However, where appropriate, I also draw upon the Distribution Agreement itself. I should say that the facts set out in the Award are of course considerably more extensive than the summary that follows. Similarly, the Award itself states in terms that it does not refer to all the arguments, evidence and authorities that were advanced by the parties; although they were all taken into account by the Tribunal.

AML is a manufacturer of luxury cars, with an address in Warwickshire. Thus, while the Award does not state this directly, it is self-evident that AML operates the UK factory referred to in Article 4(A)(1). It is also apparent from the Award that AML is one of a number of companies within the Aston Martin group, which is headed by Aston Martin Holdings (UK) Limited.

AMMENA is not part of the Aston Martin group and is commercially independent of AML. It is AML’s exclusive distributor in the Middle East and North Africa (defined in the Distribution Agreement as “the Territory”). It sells to retail dealers, who then sell to retail customers.

There are two other territories where AML sells to a distributor, which then sells to retail detailers – North America and China. However, in both cases the distributor is a captive distributor, i.e. an associated company within the Aston Martin group.

In North America, AML sells to Aston Martin Lagonda North America Inc. (“AMLNA”), which then sells to retail dealers. In China, it sells to Aston Martin Lagonda (China) Automotive Distribution Co. Ltd. (“AML China”), although a state-owned company, China Automotive Trading Co. Ltd. (“CATC”), sits between AML and AML China, providing import and customs clearance services.

In all other territories, AML manages retail dealerships itself, through its own regional team. Each regional team in effect acts as the distributor, but does not itself buy or sell cars. AML sells directly to the retail dealers, which are not within the Aston Martin group.

AML refers to any price at which a sale takes place within the Aston Martin group as the “Internal Transfer Price” (“ITP”). Thus, the price paid by AMLNA for any specific model at any particular time is an ITP; and the price paid by AML China (which will not necessarily be the same as the price paid by AMLNA for the same specific model at the same particular time) is also an ITP.

The Award says of ITPs:

“AML fixes the ITPs. It calls them a "technical price" because they are "akin to accounting tools; they are not set through a commercial arm 's length arrangement, but instead are subject to transfer pricing rules and jurisdiction-specific tax and regulatory requirements."”

In other territories, where AML sells directly to retail dealers (via its own regional team), AML refers to the price paid by any such retail dealer as the “Dealer Net Price” (“DNP”). The Award notes that the DNP is also sometimes referred to as the wholesale price.

The Award does not state this directly, but it is apparent that DNPs in those other territories are set through commercial arm’s length arrangements, in that the retail dealers which pay DNPs are commercially independent of the Aston Martin group. DNPs are fixed by AML, in that a single DNP will be applicable to a specific model at a particular time in a given region. However, it is clear from the Award that the Tribunal regarded the process that gives rise to DNPs as qualitatively different from that which gives rise to ITPs, because the relationship between AML and retail dealers, in regions such as Europe and countries such as Germany, is one at commercial arm’s length.

It is self-evident that, for AMMENA to make a profit, there must be a margin between the price that it pays AML under Article 4(A)(1), and the wholesale price that it receives from the retail dealers in the Middle East and North Africa to which it sells. It follows that, for AMMENA to make a profit, either (i) the price that it pays AML under Article 4(A)(1) must be lower than the DNPs in other territories or (ii) the wholesale price that AMMENA receives from the retail dealers in the Middle East and North Africa must be higher than the DNPs in other territories or (iii) some combination of the foregoing.