At that point, New Balance denied that it had ever finalized the New Agreement with either PSG or Superdeporte and subsequently informed PSG of its intent to end its relationship with both PSG and Superdeporte and work with another distributor, following the Distribution Agreement’s expiration at the close of 2016. PSG informed New Balance that it was ready to transfer operations to Superdeporte and sought New Balance’s consent to modify their agreement to substitute Superdeporte as New Balance’s Peruvian distributor under the Distribution Agreement. In May 2016, Superdeporte laced up and was ready to assume operations in place of PSG. Despite negotiations, neither party went the extra mile to give notice of their intent to let the Distribution Agreement expire, so it was auto-renewed until December 31, 2016. That new entity, Superdeporte Plus Peru S.A.C (“Superdeporte”) was owned by plaintiff Roderigo Ribadeneira (“Ribadeneira”) who, in 2013, was PSG’s majority shareholder. At that time, it was purportedly the parties’ understanding that a new entity would be incorporated that would eventually replace PSG as the distributor of New Balance’s products in Peru. The New Agreement contained a similar arbitration clause to the original Distribution Agreement. In 2015, the relationship began to wear thin when PSG fell behind in its payment of distribution fees owed to New Balance, prompting the parties to exchange a draft of a new distribution agreement (“New Agreement”). The original 2013 distribution agreement (“Distribution Agreement”) had a one-year term but contained a provision that allowed it to automatically renew year-to-year absent any contrary notice by either party. Several key events between 20 before multiple tribunals frame the warm-up to the arbitration. However, the dispute is no ordinary breach of contract action. The agreement, which was signed only by New Balance and PSG, included a choice of law clause mandating Massachusetts law as well as an arbitration clause, which New Balance ultimately invoked in 2018. In January 2013, New Balance entered into a distribution agreement with Peruvian Sporting Goods (“PSG”), whereby PSG would serve as the exclusive wholesale distributor of New Balance products in Peru in exchange for paying distribution fees. As it turned out, the parties’ journey to the Court of Appeals was more of a marathon than a sprint. The Court of Appeals found that the respondents were – contrary to their contentions – subject to the arbitrator’s jurisdiction and bound by the original agreement between the parties to arbitrate their disputes. On April 6, 2023, popular footwear and fitness apparel company, New Balance Athletics (“New Balance”), stepped away with a win as the First Circuit Court of Appeals reversed an earlier Massachusetts district court’s decision to vacate an arbitration award in favor of New Balance arising out of a dispute with its distributor in Peru. Freeman The Other Shoe Drops for Peruvian Distributor After Circuit Court Reinstates Arbitration Award in Favor of New Balance We hope you enjoy this and future issues.Įdited by Robert E. Your feedback, thoughts, and comments on the content of any issue are encouraged and welcome. Kaden for their hard work on these articles. In this issue, we feature contributions from our talented group of summer associates. Three Point Shot brings you the latest in sports law-related news and provides you with links to related materials. Welcome to Three Point Shot, a newsletter brought to you by the Sports Law Group at Proskauer. Circuit Court Puts on Blinders, Refusing to Rehear Ruling on Horseracing Regulation.Snaps Count: High School Quarterback Suspended for Snapchat Post Gets Sacked in Appeals Court.The Other Shoe Drops for Peruvian Distributor After Circuit Court Reinstates Arbitration Award in Favor of New Balance.
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