Damages claimed for Caltex brand use swap
A chain of petrol stations has lobbed a legal bomb at Ampol, saying it wouldn’t have signed a deal if it knew the Caltex brand was being dumped.
Lawyers for EG Fuel, owners of a chain of petrol stations, have lobbed a legal bomb at Ampol alleging the company would not have entered into a deal with the fuel supplier had it known the end was near for the Caltex brand in Australia.
EG, which took over Woolworths petrol station business, entered into a fuel supply deal with Caltex Australia in April 2019.
That deal included the use of Caltex branded fuels across EG sites.
But only months later, in December 2019, Caltex pulled the plug on Australian use of the brand after years of difficulties between the American fuel giant and its antipodean cousin trading in its name.
In the case filed on Thursday in the NSW Supreme Court, EG alleges Caltex Australia had been developing a plan to transition away from the Caltex brand since 2018.
This came after complaints in 2017 and 2018 from Chevron about the failure of Caltex Australia to comply with the terms of the trademark license agreement between the two.
“If the agreement with Chevron was to end, there was not a formal process which allowed EG to have the right to use the Caltex brands for several years as the Work Out Period only consisted of two and a half years following the termination of the Chevron TMLA (only 18 months of which comprised an exclusive right to use the Caltex brands),” EG said in its court filing.
Caltex Australia’s failure to disclose the issues and likely end of the use of the trademark is alleged by EG to constitute potential misleading or deceptive conduct.
Lawyers for EG said the business has “suffered loss” due to the end of the trademark deal with Caltex and is seeking the court to order “that the fuel supply agreement and the trademark licence deed are void and of no effect” or alternatively award EG damages.
“EG also seeks damages for Caltex Australia’s breach of the trademark licence deed,” the company said.
Ampol, in its update to the market, said it “considers the claims made by EG to be baseless and the proceedings will be vigorously defended”.
EG is also seeking “declaratory relief in relation to a related aspect of the fuel supply agreement”.
Under the terms of the fuel supply deal EG must pay a premium for sales of all Caltex branded Vortex or similar fuel products.
The termination of the deal between Caltex and Australia cut EG’s rights to use the trademarks or the Caltex brand after 31 December 2022.
It also loses exclusive rights to the Caltex brand after 31 December 2021.
Ampol intends to substitute its own branded products to replace Caltex’s Vortex products.
But EG alleges the Ampol-branded fuel products “are not products in respect of which EG considers it is contractually obliged to pay the proprietary product premium under the fuel services agreement and EG seeks declaratory relief to that effect”.
EG said if it had known of the issues with Caltex it should have renegotiated the terms of the fuel supply deal with Caltex Australia “so that they were more favourable” or negotiate its own supply agreement and trade mark licence arrangements with an alternative supplier.