The Supreme Court of New South Wales has ordered Michael Hill International (MHI) to pay $2.25 million in damages in a dispute with a packaging supplier.
The case concerned sales agreements between MHI and Australian paper bag manufacturer Gispac Pty Ltd between 2014 and 2018.
Gispac alleged that MHI violated clauses such as a ‘take or pay’ obligation during the second term of 24 months of the sales agreements and an obligation to purchase the annual quantity over the four years of the agreements.
The supplier also contended that MHI violated a clause relating to exclusively obtaining the products specified in the agreements for its Australian and New Zealand stores.
The NSW Supreme Court ruled that MHI would pay Gispac $2,259,971.40, plus interest and costs. On 1 February, MHI published a brief statement acknowledging the judgement.
“The Company is considering the judgement and its appeal options,” the statement reads.
The retailer recently announced job cuts and store closures after a sharp decline in first-half earnings. Six underperforming Michael Hill stores have been closed – five in Australia and one in Canada.
MHI operates more than 300 stores worldwide.
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