Bp Philippines v. Clark Trading Corporation

Summary

BP Philippines filed for injunction against Clark Trading Corporation, claiming violation of exclusive distribution rights for Castrol products in the Philippines under agreements with Castrol Limited UK. Clark Trading operated a duty-free shop in Clark Special Economic Zone selling imported Castrol products not sourced from BP Philippines. The Regional Trial Court dismissed the complaint, finding no violation since Clark Trading operated legally within the special economic zone with limited customer scope. The Court of Appeals affirmed, distinguishing the Yu precedent case due to absence of deceptive schemes and business relationships. The Supreme Court denied the petition, holding that injunction requires proof of clear legal right and violative acts, which BP Philippines failed to establish. The case clarifies that exclusive distribution agreements cannot bind third parties absent proof of inducement to violate contractual obligations, and that duty-free operations within special economic zones may fall outside exclusive distribution territories depending on specific circumstances and legal authority.