Under certain conditions, German law provides that the distributor has a claim for indemnity under Section 89b of the German Commercial Code (a legal provision that actually applies to commercial agents) upon termination of the distribution agreement. The legal systems of most countries within and outside the EU, however, do not recognise such a claim for distributors. Foreign manufacturers who use distributors in Germany will generally want to agree their own law, simply because they are familiar with it and because they have an interest in concluding similar contracts with all distributors worldwide. The prospect of one day having to pay indemnity if German law is applied will make the agreement of a different (non-German) legal system appear even more attractive.
But is this actually possible without restrictions? The ‘Ingmar’ ruling by the European Court of Justice and subsequently also by German courts may give rise to doubts in this regard. In the ECJ's Ingmar decision of 9 November 2000 (Case C-381/98, confirmed by the "Unamar" decision of 17 October 2013, Case C-184/12), the ECJ ruled that the commercial agent's right to indemnity was a matter of (overriding) mandatory international law (. This mandatory claim may not be circumvented by deviating rules on jurisdiction or choice of law. In a nutshell: If the commercial agency agreement provides that a non-European law is applicable and a non-European court has jurisdiction, the commercial agent may, under certain conditions, be able to ignore this if it is to be expected that he will therefore not be awarded an indemnity claim and nevertheless sue in the EU and invoke European law.
Whether this Ingmar ruling also applies to distributors is disputed in legal literature. I believe (and others believe) that it does not (Westphal/Korte, Vertriebsrecht [Distribution Law], 2nd ed. 2023, ch. 27 margin no. 32). And this is how the Berlin Court of Appeal has now seen it in a recent decision (reference order of 1 July 2025, file no. 2 U 37/22). It is probably the first published court statement on this issue. In this specific case, a service agent (i.e. a commercial agent who brokers service contracts for a third company) was involved, not distributor. However, the decision also applies without restriction to distributors - these are also expressly mentioned. The court argued that it could be assumed that Delaware law, as applicable under the contract, did not recognise a claim for indemnity. However, the Ingmar case law was still not applicable as the content of the contractual relationship between the parties was not covered by the EU Commercial Agents Directive. This was because the object of the business was the provision of services while the EU Directive is limited to agents brokering contracts relating to the sale of goods. It is not applicable to service agents or distributors. In this respect, there are no standardised regulations in the EU anyway: In some EU states, distributors are entitled to indemnity, in others not. Hence, a lower level of protection in this respect is permissible under European law. Accordingly, a foreign manufacturer may agree with the European distributor or service representative that a non-European court has jurisdiction and that non-European law is applicable. Of course, the final word has not yet been spoken until the ECJ has had the opportunity to rule on the issue.
Oliver Korte
