B&Q Brand Company May Face Overlord Clause Litigation

On the 28th, B & Q China confirmed that some suppliers "reported" OBI's case and are currently responding. A person familiar with the situation revealed that B&Q may also face similar lawsuits from some of its suppliers if the supplier “claims” OBI to win.

On the 27th, a person familiar with the matter disclosed that due to O.B.’s procurement contracts, there were many overlord clauses, and some suppliers had previously formed disputes in cooperation with them. Some suppliers then filed laws against O.B.

B&Q China stated that since July 1 this year, B&Q China has completed the merger and acquisition of OBI China's business from legal process, so OBI China's all matters are handled by B&Q, including the supplier's “prosecution” of Europe. Times Germany and so on.

"For the suppliers to pursuing the incident of OBI, we are dealing specifically with the specific issues. We generally conduct friendly consultations first. If we can't negotiate, we will resolve it through the arbitration agency," said Bai Qianju, China's public relations department.

B&Q China has not disclosed how many suppliers have filed suit against OBI. However, the above-mentioned sources said that suppliers have more lawsuits against OBI and some of them have already passed the arbitration of the arbitration department and some are still under way.

It is understood that disputes between OBI and suppliers due to procurement contracts are to be arbitrated by arbitration institutions rather than through the courts. This is mainly because both parties have negotiated properly in the procurement contract. If the dispute between the two parties cannot be resolved through friendly negotiation, it will be submitted to the China International Economic and Trade Arbitration Commission Shanghai Branch for arbitration.

The person familiar with the matter also stated that since the summer of this year, suppliers have “fought” O'Brien’s case with less wins and losses, but suppliers still spare no effort to find favorable evidence. “A recent supplier’s lawsuit has been found in OBI's case. The supplier has found relatively favorable evidence. If the case wins, then the supplier will cooperate with some other suppliers and initiate similar lawsuits against B&Q.”