GEFEG-NEKAR is a German company that manufactures electric engines (the “German Company”). “Maytronics” is an Israeli company that manufactures swimming pool cleaning robots. On December 21, 2005, the parties entered into a framework agreement for Maytronics to purchase engines from the German Company. Maytronics stopped buying engines from the German Company in 2008. Hence, the German Company lodged a lawsuit for ILS 5,522,200 against Maytronics with the court in Israel.

The German Company claims that Maytronics violated its undertaking to buy engines as specified in the purchase forecast Maytronics submitted to the German Company, as it started buying engines from Chinese companies without giving advance notice. The German Company also claimed it was left with a stock of spare parts and assemblies it prepared for Maytronics. It also claimed that it incurred storage expenses and damages due to pricing differences due to the small number of engines Maytronics bought in the relevant period.

The German Company also claimed that at the same time as executing the agreement with it, Maytronics started training Chinese suppliers to replace the German Company, but it concealed this from the German Company. In doing so, Maytronics deliberately misled the German Company and created a false representation that it intends to increase the volume of purchases from the German Company in the parties’ agreement.

Maytronics lodged a counterclaim against the German Company, claiming that on November 2006, the German Company notified Maytronics that due to the increase in raw materials prices, it can no longer sell engines to Maytronics at the agreement prices and it asks to raise all engine prices starting on January 1, 2007. Maytronics claimed that in doing so, the German Company violated its duty to sell Maytronics engines at agreement prices, and hence Maytronics was forced to deal with Chinese companies that supplied it with approximately 31,000 faulty engines. Hence, Maytronics incurred ILS 2,100,000 in costs, and it is suing the German Company for this amount.

The court determined that the parties’ engagement was long-term and very costly. The court also determined that Maytronics neglected and effectively violated the parties’ agreement, starting on October 2008, and it also failed to give the German Company any advance notice.

The court determined that the German Company’s November 2006 notice was a legitimate request to raise engine prices due to the increased cost of raw materials, rejecting Maytronics’s claim that this is breach of agreement.

In summary, the court determined that Maytronics is the one who violated the parties’ agreement and went on to examine the damages the German Company ought to receive as a result.

As for the advance notice Maytronics had to make to the German Company before terminating the purchases under the agreement, the court determined that the advance notice period is one year, and that the German Company is entitled to damages for the entire advance notice period.

In summary, the German Company’s lawsuit was granted, for the most part, and Maytronics was charged with ILS 4.7 million plus ILS 350,000 in attorneys’ fees. Maytronics’s counterclaim was denied.

• Case 1593/09 GEFEG-NEKAR antriebssysteme GmbH v. Maytronics Ltd., issued on January 11, 2016 by the Tel Aviv District Court.