The Swatch Group and Tiffany & Co. ended their joint marketing agreement in September and now both parties claim damages for the failed partnership. Swatch sued Tiffany & Co. for $4.1 billion (CHF 3.8 billion) in December 2011 for lost revenue and profits related to the agreement and now Tiffany & Co. sued Swatch with a counter claim for $590 million (CHF 542 million). Swatch Group said that this counter claim has no factual or legal basis and will be vigorously contested.
In December 2007, Swatch Group and Tiffany entered into long-term cooperation agreement to design, manufacture and distribute ”Tiffany & Co.” watches worldwide. Based upon that commitment, Swatch Group claims to have invested millions in dollars worth of development through its own stores, its worldwide network of independent retailers and through Tiffany & Co. stores.
But in September, following what Swatch claims was “Tiffany & Co.’s systematic efforts to block and delay development of the business and fruitless attempts of The Swatch Group Ltd. and its affiliate Tiffany Watch Co. Ltd. to solve the dispute amicably, the latter were forced to terminate these agreements.”
Swatch Group and its affiliate Tiffany Watch Co. Ltd. are requesting full compensation for all losses in connection with Tiffany & Co.’s past and ”continuing breaches of its obligations and duties under the agreement,” according to a statement. The relevant damages sought include a claim for lost profits ”conservatively quantified at CHF 3.8 billion” for the term of the agreements to which the parties committed.