American Electrical Components International (ECI) and the British-Colombian company Promark Electronics are seeking damages totaling CA$9.5 million because they were injured in their business dealings with BRP. This amount represents their estimate of lost sales and labor costs incurred, as well as the value of equipment that would have been purchased expressly to meet BRP’s needs.
We would like to point out that the alleged facts have not yet passed the scrutiny of the courts. Asked by La Tribune about the lawsuit, BRP said it was a commercial dispute and that the lawsuit was running its course. “We have every intention of denying these allegations and defending ourselves vigorously,” it said in writing.
For their part, lawyers for Promark and ECI explained in writing to La Tribune that “an agreement was reached between the parties whereby BRP Électroniques would choose Promark, a leader in the wiring harness industry, as a supplier for certain of its vehicles” and that “although the plaintiffs invested significant sums of money to ensure the success of this project, but BRP unilaterally decided to abruptly terminate the agreement.” »
“Although our clients are disappointed with BRP’s actions, they do not wish to comment further on the cases pending before the Supreme Court out of respect for the legal process,” we added.
“Unexpected twist”
According to the original application, written in English, the three companies had reached an agreement in June 2022 that provided that Promark would become the exclusive supplier of electrical wiring harnesses for the production of BRP Spyders in 2023, subject to “the conditions and key “Conditions” of the agreement are met. ECI, a provider of electrical distribution systems, switch box assemblies and other engineering components, would have partnered with Promark under this agreement.
Subsequently, orders were drawn up by BRP, in particular for the purchase of the materials and equipment necessary for this production, as well as for the official order of 38 types of parts from Promark. The amount committed to producing the parts would have been more than $8.5 million, while the equipment and materials costs would have been $479,000 before taxes.
According to Promark and ECI, they “duly complied with the material terms of the agreement at all relevant times, without mentioning any other agreed terms.”
Nevertheless, according to the plaintiff parties, on December 23, 2022, “in an unexpected turn of events and to the great surprise of the plaintiffs,” BRP notified Promark and ECI “without any formality” that it had called the largest bond order pursuant to a specific section of its general terms and conditions Terms and Conditions.
ECI and Promark strongly opposed this and a few weeks later received a letter from BRP requesting that they “make a commercial proposal” in connection with this termination.
In what the persecutors call an “experiment”. [BRP] “illegally changing the terms and conditions set out in the agreement,” this proposal would have indicated that ECI was unable to meet the terms of the agreement because 32 of the 38 types of parts produced had not completed their successful homologation process as they were supposed to in October To be delivered in 2022, with a view to the start of production of the Spyder in January 2023.
Rather, ECI and Promark emphasize that the agreement stated that “Promark and BRP are working diligently and in good faith to achieve a successful pilot test by October 17, 2022, or as soon as possible, subject to ongoing communication between the two Sharing exists.” [traduction libre] “.
According to the plaintiffs, BRP has so far only paid $102,570 to purchase materials and equipment.
BRP version
In BRP’s summary statement of amended defenses, a copy of which was obtained by La Tribune, the company claims that certain terms of the agreement were not met and that “it was clear and agreed that the electrical harnesses were required from the outset.” Production of the first MY23 Spyder will begin on January 5, 2023 at the latest.
The consent letter also states that Promark must “meet or exceed BRP’s requirements.” [termes] Capacity, implementation time, delivery location, quality and technical competitiveness [traduction libre] » and that BRP would provide Promark with a formal written notice of non-compliance if one or more objectives were not met, with ten days’ notice to remedy the non-compliance. BRP therefore felt entitled to terminate the contract.
“Promark couldn’t even supply one of the PPAP parts [NDLR homologuées] targeted […] insight [de l’essai pilote du 17 octobre 2022] “, we can read in the document written by BRP’s lawyers.
“Promark and ECI’s claim is without merit; “The damages claimed are grossly exaggerated and indirect,” they also conclude.
The last time this case was heard in court dates back to September 8, when the file was transferred from the District of Montreal to the District of Bedford at the request of BRP. The date the proceedings will resume is unknown.
BRP reported annual revenue exceeding $10 billion for the first time in its fiscal year ending January 31, 2023.