Shares in DCC climbed by 3 per cent yesterday after the firm was awarded damages of £10.2 million sterling (€14.8 million) in a legal dispute with a Taiwanese supplier of mobility products.
The award was made in London's High Court yesterday when it was ruled that Taiwanese plc Pihsiang Machinery Manufacturing Company and its owners had breached a long-term supply contract with a DCC subsidiary.
DCC initiated legal proceedings against Pihsiang in 2002 when the mobility product supplier failed to honour an agreement to renew a contract with DCC's UK subsidiary, DMA.
DCC had been the appointed European supplier of Pihsiang's Shoprider powered mobility scooter five years previously and had been expecting the contract to be renewed in line with the initial agreement.
The High Court heard that Pihsiang's breach had had a severe impact on DCC's mobility business.
The company said it had contributed to a 41 per cent drop in operating profits to €6.3 million within DCC's healthcare division for the first half of 2002.
In yesterday's judgment, Mr Justice Langley found that the defendants, who included Pihsiang's major shareholders, Mr Donald Wu and Ms Jenny Wu, had wrongfully repudiated the contract.
The judge said the evidence of the Taiwanese couple had been "evasive and untruthful on a number of matters of importance".
DCC's chief executive and deputy chairman, Mr Jim Flavin, yesterday described the judgment as "an endorsement of the strategy, marketing and distribution expertise" of DCC and its healthcare subsidiary.
He said DCC's efforts had seen Shoprider's share of the European mobility scooter market grow from 12 per cent to 19 per cent over the five years of the distribution agreement.
DCC had paid $1.2 million (€0.96 million) to Pihsiang over the course of the contract.
Mr Flavin declined to comment on how well the £10.2 million award reflected losses caused by Pihsiang's breach but remarked that financial awards in legal proceedings rarely compensate for losing a piece of business.
The High Court is due to rule on costs on February 13th.
DCC shares closed at €12.25, up 35 cents.
