Privately buttoned military camouflage cloth to share the profit! The Tainan District Court ruled that Company B must compensate Company A more than 1.12 million yuan

The case of military camouflage cloth labels turned into a joint robbery war! Two companies jointly contracted orders from the Ministry of National Defense, but one party took away the entire batch of fabrics and hid them before delivery, causing the partners to spend a lot of money to redo them. The Tainan District Court held that Company B, which withheld fabrics privately, should pay Company A NT$1,125,457.

Company A and Company B previously agreed verbally to each contribute 1.5 million yuan to jointly bid for the nylon camouflage fabric bid from the 205th Factory of the National Defense Armament Administration. The two parties agreed that Company A would bid, manage the joint venture account and pay all payments, while Company B would be responsible for contacting the OEM for production and delivery. The first four batches of orders were all successfully closed. When the fifth batch of orders was accepted, Company B reminded that it might suffer losses due to a sharp increase in raw material costs, but Company A still decided to continue accepting orders and fulfilling the contract after evaluation.

Unexpectedly, after the fabric was completed, a financial dispute broke out between the two parties. Company B accused Company A of refusing to pay the processing factory 150,696 yuan for goods and delaying profit distribution. In order to avoid losses, it advanced the money and brought the fabric back for safekeeping. It insisted that it would only deliver the goods after the payment was paid in full. Company A countered that Company B took away the fabric without authorization and hid it, suspected of using it for its own use. In order to avoid being fined by the military for delayed delivery, Company A was forced to urgently spend 2,129,431 yuan to find another manufacturer to rush to redo the work. However, it was still fined 275,880 yuan by the military for delayed delivery, and it angrily filed a lawsuit for compensation.

The Tainan District Court pointed out that the purpose of the joint venture was to complete the tender, and even though the internal accounts were disputed, both parties had the obligation to make advances before stopping performance of the contract without an agreement. Company B has no right to withhold the fabric without authorization, which violates its duty of care and infringes upon the interests of the joint venture. After a detailed accounting of the joint venture's accounts, the judge determined that Company B's private deduction of fabrics caused losses to the joint venture and should be compensated for redo costs and overdue fines. After deducting the profits and advances, the judge ruled that Company B should still pay Company A 1,125,457 yuan, and all counterclaims were dismissed.