Dinli Metal Ordered To Pay U.S. Distributor $45.6 Million

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A Federal Judge ruled in favor of U.S. powersports distributor, Dinli USA, LLC, awarding $45.6 million in damages against Dinli Metal Industrial Co., Ltd. in Taichung, Taiwan, according to a notice posted on Dinli USA's website.

The U. S. District Court for the Northern District of Texas ruled that Dinli Metal breached its distribution agreement; made false representations when negotiating the distribution agreement and asset purchase agreement; committed fraud when negotiating the distribution agreement and was negligent in the performance of its duties, according to Dinli USA's press release.

The court found that Dinli Metal breached the distribution agreement by failing to obtain compliance certifications from the Environmental Protection Agency; failing to notify Dinli USA of its inability to deliver products as provided for in the contract; and failing to provide warranty parts and services under the contract, according to the release.

The Court found that Dinli Metal's refusal to satisfy dealer warranty claims for units sold before and after the closing of the transaction with Dinli USA adversely affected Dinli USA. Dinli Metal made a number of all allegations against Dinli USA. The court ruled in Dinli USA's favor on all allegations lodged by Dinli Metal, finding that Dinli Metal did not present any genuine issue of material fact regarding its claims against Dinli USA.

While collection of the judgment is uncertain, Dinli USA still holds exclusive distribution rights for any products made by Dinli Metal Industrial Co., Ltd. for the U.S. market. Dinli Metal manufactures products for its own brand as well as other brand names. Dinli USA cautioned U.S. dealers and distributors against obtaining Dinli Metal manufactured products from any source other than Dinli USA.