Dispute over semi-conductor supplies ends up in Commercial Court

German firm Ineltek GmbH is suing Microchip Technology Ireland (MTI) Ltd for specific performance of a contract to supply semi-conductor components
Dispute over semi-conductor supplies ends up in Commercial Court

High Court reporters

A dispute between two companies over a delay in supplying more than €6 million worth of semi-conductor components for use in various devices and machines has come before the Commercial Court.

German firm Ineltek GmbH is suing Microchip Technology Ireland (MTI) Ltd, of East Point Business Park, Dublin, for specific performance of a contract to supply the components which are used in a wide range of products including motor vehicles, industrial machines, electronic products and white goods.

MTI says the delay is not the result of any wrongdoing on its part but because of global demand problems since the pandemic. There was also the fact that customer demand has increased by 100 per cent, affecting the entire industry, it says.

Ineltek says it entered into a distribution agreement with MTI making it a non-exclusive distributor of the components.

MTI sought to terminate that agreement in January last year but following negotiations the two firms came to a settlement agreement whereby the distribution agreement would not be terminated until it (Ineltek) received the final batch of products it says it was due.

It says the overall value of the contract was for some €28 million ($29.9 million) while the value of the outstanding components was €6.4 million ($6.8 million).

In breach of the settlement agreement, Ineltek says, the defendant has failed, refused and/or neglected to supply the outstanding products.

Despite receiving payment for the final shipment, the shipping date has been postponed and, in some instances, put back to 2023, it says.

It also says a number of the products are available from MTI's US parent, Microchip Technology Inc. However, Ineltek says MTI has insisted Ineltek is prohibited from placing orders through the US parent's online sales platform.

Paul Coughlan BL, for Ineltek, applied to have the case admitted to the fast track commercial list on Monday but this was opposed by Andrew Fitzpatrick SC, for MTI.

Mr Fitzpatrick said the global supply problem point had been made to Ineltek a number of times and it now looked like the only way to resolve it is through the court.

The case was admitted to the Commercial Court by Mr Justice Denis McDonald who approved directions for how it is to proceed. It comes back in November.

More in this section

Sponsored Content

Add Echolive.ie to your home screen - easy access to Cork news, views, sport and more