Timberland takes distributor to court

The Timberland Company is trying to avoid getting bogged down in foreign courts in an international dispute with a former distributor in Latin America.

The Stratham-based shoe and apparel manufacturer has gone into U.S. District Court in Concord to seek an emergency injunction against Sportzone, a Panama company that threatened to sue Timberland in a foreign country that doesn’t recognize U.S. law and ask them to prevent them from selling their products in the region.

Timberland insists that Sportzone abide by its contract to bring the dispute to an international arbitrator of the American Arbitration Association.

Timberland contracted with Sportzone to distribute its products in 1998, but the two parted ways in December 2003. Timberland said that Sportzone still owes it $116,000, according to Timberland’s Manchester attorney, Steven Grill.

For its part, Sportzone claims that Timberland seized assets belonging to it and owes it at least $7.5 million.

In December, Sportzone attorney wrote Timberland to urge it to attempt to work out the disagreements through mediation rather than arbitration, and warned that it could bring the dispute for an even larger amount in countries “in which local legislation does not allow application of foreign law on matters such as this one.” He also wrote that the judicial remedies could include “prohibition from selling products in general as soon as the claim is filed.”

Timberland went to federal court on Jan. 18 to seek a temporary restraining order to prevent such an action by Sportzone. While foreign courts may not recognize a contract clause, “our view is that if any party foreign violated the orders of a us federal judge, the court would have powers to enforce those orders,” Brill said.

Sportzone apparently agreed, because it yielded to a temporary court-ordered agreement filed Jan. 25 to hold off on any foreign suits until the parties had more time to negotiate.

The Panama company said it reserves the right to challenge the restraining order at a future date. – BOB SANDERS

Categories: News