Date Set for Famanet-Thomson Reuters Lawsuit

The Nicosia District Court has set Nov. 22 as the date to hear a lawsuit brought against Thomson Reuters by Cyprus-based market data sales and support company Famanet, alleging that Reuters unlawfully terminated its contract as a Telerate sales agent (IMD, Jan. 23, 2006).

The legal battle has been drawn out over almost five years. Reuters originally argued that the case should be heard in New York, in accordance with terms specified in its contract, although Famanet's lawyers - Georgiades & Mylonas - objected, claiming that the Cypriot Courts should have jurisdiction over the case.

Famanet first entered into a relationship with Telerate in March 2002, acting as a sales and support agent for the vendor's products in Cyprus, Greece, Spain and Portugal. Argyris Mantzalos, principal at Famanet, says that by the time its contract was cancelled on Jan. 6, 2006, the company supported 199 Telerate clients in the region, including more than 500 data terminal subscribers, and was generating roughly 5 million euros in annual turnover on those contracts.

Reuters terminated the reseller agreement as it prepared to retire the legacy products it acquired via its purchase of Telerate (IMD, April 3, 2006). However, Famanet officials claim this breached European Union and Cyprus laws, which outline specific conditions governing the termination of any agreement between a principal and its sales agent, and that Reuters failed to meet these contractual obligations in several ways.

"First, the action to stop the client feed went outside their contract. At the time that they ceased distributing the feed, there were rules implied in our contract that should have been honored," Mantzalos says. The legal directives in question-EU directive 86/653/EU and Cyprus Directives 51(1)/92 and 149(1)/00-state that sales agents are entitled to financial compensation if their contract is terminated.

In total, Famanet is claiming more than 60 million euros in compensation - 54 million euros in business opportunity losses, 4.4 million euros in lost subscriber income, around 1 million euros in lost outstanding receivables, roughly 500,000 euros in staff compensation and 350,000 euros in asset and other operating deposit losses.

Mantzalos says Famanet was forced to cease trading as a result of Reuters cancelling the Telerate contract, and - though it remains a legal entity - has since existed only as a shell company. A spokesperson for Thomson Reuters says the vendor believes that the case "has no merit," and "intends to vigorously defend it."