Cortina sued by Sincere Brand Management to stop selling Franck Muller watches in Hong Kong
LUXURY watch dealer Cortina Holdings has received a writ of summons from Sincere Brand Management requesting that the Hong Kong High Court restrain the former’s Hong Kong subsidiaries from selling Franck Muller watches.
In a bourse filing on Wednesday (Jun 28), Cortina said that the group was given the exclusive right to distribute, promote and sell watches, accessories and spare parts bearing the “Franck Muller” and “Franck Muller Geneve” trademarks in Hong Kong, Macau, Taiwan and mainland China by GFM Watchland.
The company understands that GFM has been granted the sole mandate for the worldwide distribution rights for Franck Muller watches and has the right to mandate sub-distributors like itself.
However, Sincere alleges that it had signed an exclusive distributorship agreement with Multicontinental Distribution Asia (MDA).
MDA then wrote to Sincere “purporting to terminate” the agreement, although Sincere alleges the grounds of termination that MDA relied on were invalid.
Cortina said that Sincere claims to have commenced arbitration proceedings in Switzerland against Shanghai Franck Muller Fine Watch Company, MDA, GFM and Franck Muller Watchland.
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According to consultancy Dun & Bradstreet, Sincere Brand Management is linked to Hong Kong-listed Sincere Watch (HK). In March 2021, Cortina announced it would purchase Sincere Watch Ltd for S$84.7 million to give it exclusive distributorship rights to the Franck Muller brand in about a dozen Asia-Pacific countries.
The acquisition was completed on the condition that Sincere Watch Ltd would dispose of its entire legal and beneficial interests in Sincere Watch (HK) to the vendor, which is wholly-owned by Chu Yuet Wah, non-executive director of Sincere Watch (HK).
In its writ, Sincere is asking the Hong Kong High Court for an interim injunction to restrain Cortina’s Hong Kong subsidiaries and employee, Phua Cheng Kee, from selling Franck Muller products, including accessories and spare parts.
Cortina said that Sincere has applied to the court by an originating summons to restrain the former from distributing the products and taking any action to disturb Sincere’s alleged position as exclusive distributor pending the results of the Swiss arbitration.
In addition, Sincere is also claiming damages, equitable compensation and account as to profits for allegations such as procuring breach of contract, interference with business, conspiracy and passing off in respect of its rights as the alleged exclusive distributor.
The interlocutory application for the interim injunction was to be heard on Jun 23, but has since been adjourned till Jul 13.
Cortina said that it intends to “vigorously” defend the writ, originating summons and the interlocutory application, and that it will make further announcements when there are material developments on the matter.
Cortina shares closed flat at S$3.80 on Wednesday, before the announcement was made.
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