§ 3-13-7 — § 3-13-7. Damages for improper cancellation, termination, or failure to renew — Arbitration.

§ 3-13-7. Damages for improper cancellation, termination, or failure to renew — Arbitration.

(a) Any supplier which without good cause cancels, terminates or fails to renew any agreement, or unlawfully causes a wholesaler to resign from an agreement or unreasonably denies or withholds consent to any assignment, transfer or sale of business assets or capital stock or other equity securities of a wholesaler with whom that supplier has an agreement pursuant to § 3-13-5(6), is subject to compensatory damages, equitable relief, or both. Compensatory damages include reasonable compensation for the value of the wholesaler's business with relation to the affected brand or brands and the wholesaler's goodwill, if any.

(b) The supplier and the wholesaler may, by the terms of an agreement or otherwise, submit the disputes set forth in subsection (a), including the compensation, if any, to be paid for the value of the wholesaler's business, to a neutral arbitrator to be selected by the parties, or if they cannot agree, by the presiding justice of the Rhode Island superior court. The arbitration proceeding shall be held within the state and shall be governed by chapter 3 of title 10. Arbitration costs shall be paid one-half (½) by the wholesaler and one-half (½) by the supplier. The award of the arbitrator is final and binding on the parties.

(c) Unless otherwise ordered by the superior court, all of the terms and conditions of an agreement between the parties shall remain in full force and effect for a period not to exceed one year during the course of any arbitration or judicial proceedings brought to enforce any rights under an agreement or under this chapter. No supplier who, pursuant to an agreement with a wholesaler, has designated a sales territory for which the wholesaler is primarily responsible or in which the wholesaler is required to concentrate its efforts, shall enter into an agreement with any other wholesaler during that one year period for the purpose of establishing an additional wholesaler for any of its brands or products. Notwithstanding any pending arbitration proceeding, a party may petition the superior court in accordance with § 3-13-11 to obtain any relief as may be necessary to enforce this section.

Legislative History

P.L. 1982, ch. 415, § 1.