REPUBLIC OF THE PHILIPPINES

NATIONAL CAPITAL JUDICIAL REGION

REGIONAL TRIAL COURT
___________ CITY
BRANCH ______

COMPANY A and COMPANY B,

Plaintiffs,

Civil Case No. _______________

- versus - For: Specific Performance and
Damages with Prayer for
Temporary Restraining Order,
Preliminary Injunction and
Permanent Injunction

COMPANY C, COMPANY D, and

PARTY A,
Defendants

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

COMPLAINT

Plaintiffs Company A and Company B collectively the “Plaintiffs”,

by and through undersigned counsel, unto this Honorable Court,

respectfully state that:

1. Plaintiff Company A is a domestic corporation duly organized

and registered under the laws of the Republic of the Philippines with

principal office at _____________________, Quezon City. Its primary

purpose is to engage in the business of purchasing, selling, importing,

exporting and dealing, generally, in drugs and pharmaceutical products,

druggist, sundries, chemical extracts, toilet articles, surgical and medical

apparatus, physician’s and hospital supplies, and general merchandise

and engage in any business incidental thereto. It may be served with

notices, orders and other court processes at the address of undersigned

counsel.

2. Plaintiff Company B is a domestic corporation duly organized

and registered under the laws of the Republic of the Philippines with

principal office at _____________________________, Quezon City. Its

primary purpose is to market, trade and distribute local/imported

personal care, natural, and pharmaceutical products. It may be served

with notices, orders and other court processes at the address of

undersigned counsel.

3. Defendant Company C (“Company C”) is a domestic

corporation duly organized and registered under the laws of the Republic

of the Philippines with principal office at _________________________, Pasig

City. Its primary purpose is to engage in the business of trading of goods

such as Pharmaceutical (branded & generic) on wholesale/retail

basis/distributor/Importation Parental, Herbal, Medical & Dental

Supplies & Equipment, Diagnostic, Genelicals, Optical etc.. It may be

served with notices, orders and other court processes at the aforesaid

principal office and business address.

4. Defendant Company D (“Company D”) is a domestic

corporation duly organized and registered under the laws of the Republic

of the Philippines with principal office at ______________ Manila City. Its

primary purpose is to __________________________. It may be served with

notices, orders and other court processes at the aforesaid principal office

and business address.

5. Defendant Part A (“Party A”) is Filipino, of legal age, with

residence address at ______________________, Quezon City. He is the CEO

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and CFO of Company C. He may be served with notices, orders and other

court processes at the aforesaid residence address.

FACTS

6. Sometime in April 2008, Defendant Party A of Defendant

Company C accompanied by Mr. Michael Mariano came to the offices of

Company A to offer the distributorship of their products, MEGA MEDS

and ULTRA LIFE, with Mariano’s group as the marketing arm.

7. During that meeting, Company A through its officers advised

Mr. Party A that it will look into their proposal and discuss it with the

management group at Company A.

8. In the succeeding visits, Mr. Party A even brought his wife to

convince Company A to accept Defendant Company C’s proposal.

9. After several meetings and after studying the marketability of

Defendant Company C’s products, Company A decided to accept the

distributorship of MEGA MEDS and ULTRA LIFE provided it can agree

with Defendant Company C on pricing, terms of payment, contract

period and who would be the marketing arm among others.

10. Defendant Company C and Company A ultimately agreed to

form a marketing company which was later named Company B, Inc. to

be the marketing arm for MEGA MEDS and ULTRA LIFE with an initial

capitalization of at least Three Million Pesos (P3,000,000.00) to take care

of launching advertising campaigns for the aforesaid products.

11. Defendant Party A however confided that he has no money to

subscribe to the new company which he wanted to be at least thirty

percent (30%) owner thereof.

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 12. Company A accordingly arranged a loan of Nine Hundred

Thousand Pesos (P900,000.00) for Defendant Party A to fund his 30%

share in Plaintiff Company B under the understanding that said amount

will be deducted from his future collections from Company A.

13. Even before the formalization of any distributor agreement

and to show our good faith, on 05 May 2008, Company A ordered from

Defendant Company C 1,000 boxes of MEGA MEDS and 1,000 boxes of

ULTRA LIFE costing Seven Hundred Twenty Thousand Pesos

(P720,000.00) for test marketing.

14. Subsequently, in May 21, 2008, Company A made orders for

1,000 boxes ULTRA LIFE and 3,000 boxes MEGA MEDS from Defendant

Company C amounting to One Million Three Hundred Sixty Thousand

Pesos (P1,360,000.00).

15. Upon Defendant Mr. Party A’s prodding and to isolate him

from possible raw-material procurement problems, on 09 July 2008,

Company A ordered an additional Ten Thousand (10,000) boxes of MEGA

MEDS and Ten Thousand (10,000) boxes of ULTRA LIFE amounting to

______________________(P______________).

16. Delivery of this bulk order by Defendant Company C however

were only completed in 14 November 2008. As per Company A’s ledger,

Defendant Company C delivered and completed these products after

four (4) months from date of purchase order allegedly due to

_________________.

17. This delay resulted in cost of money for amounts already

advanced on products that had not been delivered and cost of

inventorying these products.

18. It must be noted that at this point in time Company A was

not yet able to distribute MEGA MEDS and ULTRA LIFE to major outlets

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due to needed corrections or amendments to the certificates of product

registration of Defendant Company C’s products to include the name of

distributor Company A therein and removal of Defendant Company C’s

company name from the brand name previously indicated.

19. On 09 May 2009, Defendant Company C executed two (2)

Contracts for Exclusive Distributorship appointing Plaintiff Company A

as its exclusive distributor and Plaintiff Company B as its marketing

agent for:

a. MEGA MEDS 100mg, and

b. ULTRA LIFE 125 mg Capsule,

Attached as Annexes A and B and made integral parts hereof are

copies of the foregoing contracts for easy reference.

20. According to the express terms of the exclusive

distributorship contract for MEGA MEDS, Defendant Company C as the

PRODUCT OWNER had agreed that:

“2. PRODUCT OWNER will transact business directly to

the DISTRIBUTOR in terms of MEGA MEDS 100mg Capsule
– Purchase Order, Product specifications and payment. Upon
receipt of the agreed terms the DISTRIBUTOR shall make a
50% down payment and full payment of balance upon
delivery.”

21. By the same agreement, Company C had also undertaken

that:

“4. PRODUCT OWNER shall give the next priority to the

DISTRIBUTOR to exclusively distribute other products of the
PRODUCT OWNER provided that the DISTRIBUTOR shall
make its initial purchase in a quantity agreed by both
parties in any form of packaging within one (1) month of a
written notice. Otherwise, the PRODUCT OWNER can now
decide on what to do with the new product.”

22. Similarly, with respect to ULTRA LIFE, Defendant Company

C as the PRODUCT OWNER had agreed that:

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 “2. PRODUCT OWNER will transact business directly to
the DISTRIBUTOR in terms of ULTRA LIFE 125 mg Capsule
– Purchase Order, Product specifications and payment. Upon
receipt of the agreed terms the DISTRIBUTOR shall make a
50% down payment and full payment of balance upon
delivery.”

23. By the same agreement, Company C also undertook that:

“4. PRODUCT OWNER shall give the next priority to the

DISTRIBUTOR to exclusively distribute other products of the
PRODUCT OWNER provided that the DISTRIBUTOR shall
make its initial purchase in a quantity agreed by both
parties in any form of packaging within one (1) month of a
written notice. Otherwise, the PRODUCT OWNER can now
decide on what to do with the new product.”

24. These contracts are good for ten (10) years to take effect on

August 08, 2008 until August 08, 2018, to wit:

“This contract is for a period of Ten (10) years to take effect on

August 08, 2008 and expires on August 08, 2018, and shall be
binding only upon satisfactory yearly performance review by the
PRODUCT OWNER and renewable upon option of all parties
concerned. “

25. For said period therefore, Defendant Company C as the

PRODUCT OWNER is contractually bound to transact business only with

Plaintiff Company A as the exclusive distributor and Plaintiff Company B

as the marketing agent for the products MEGA MEDS and ULTRA LIFE.

26. Any act of Defendant Company C therefore directly

distributing MEGA MEDS and ULTRA LIFE to other parties is a blatant

and malicious breach of its contractual undertakings to Plaintiffs.

27. In May 2009, Plaintiffs discovered that Company C thru

John Erwin Party A its CEO and CFO approached Red Drug Corporation,

a known sub-distributor of Company A, to directly distribute MEGA

MEDS and ULTRA LIFE contrary to the express stipulations of their

contracts.

Attached as Annex C and made an integral part hereof is a copy of

an Affidavit to this effect.

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 28. Plaintiffs, thru ________________ orally warned Defendant

Company C against committing such violations of their contracts for

exclusive distributorship.

29. Subsequently, in June 2009, Defendant Company C issued a

notice of termination dated 03 June 2009 against Plaintiff Company A for

allegedly having poor sales performance. Aside from bare assertions,

Defendant Company C did not support said charge of poor sales

performance nor attach any document to its notice to support such

claim.

Attached as Annex D and made an integral part hereof is a copy of

the foregoing notice for easy reference.

30. There is also no basis for such charge of poor performance.

It is well to note that the contracts for exclusive distributorship with

Plaintiffs for MEGA MEDS and ULTRA LIFE does not provide for any

sales quota at all. Accordingly, there is no standard from which to base a

claim of poor sales performance.

31. Nevertheless, within one (1) month from the execution of the

aforesaid contracts, Plaintiff Company A has already purchased and fully

paid Fourteen Thousand Four Hundred Sixty Nine (14,469) boxes of

MEGA MEDS and ULTRA LIFE. This is valued at Php

___________________. It should be noted that this figure makes up __% of

last year’s sales record for 2008. Plaintiff Company C cannot therefore

complain that there was supposedly poor sales performance.

Attached as Annex E and made an integral part hereof is

evidence of the aforementioned purchase for easy reference.

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 32. In addition, Company A has taken the following actions in

accordance with its role as the exclusive distributor for MEGA MEDS and

ULTRA LIFE, to wit:

a. Set up storage facilities;

b. xxx
d. xxx
e. xxx

33. At present, Plaintiff Company A is in fact distributing MEGA

MEDS and ULTRA LIFE through its numerous networks and accredited

establishments, to wit:

a. Red Drug Corporation

b. Wilkins
c. Sapphire Drug
d. xxx
e. xxx

34. With respect to Plaintiff Company B, it has rendered

genuine and innovative marketing services to enhance the sales of MEGA

MEDS and ULTRA LIFE as follows:

a. conceptualized and implemented various marketing

activities to promote the brand and gain share in the
market when it comes to food supplement for slimming
and silymarin capsules.
b. worked hand-in-hand with 40 Company A
Pharmaceutical, Inc. Med Reps in its various
marketing sorties for the realization of various
marketing projects and activities.
c. xxx launched a TV advertising campaign last January
26, 2009 at morning shows of ______________ and
________________to broadcast every weekday one (1) TV
commercial for MEGA MEDS and one (1) TV
commercial for ULTRA LIFE for both shows. The ad
campaign had run until April 18, 2009.
d. as support to the implemented ad campaign, Company
B, Inc. conceptualized marketing plan from 2 nd to 4th
Quarter of the year for MEGA MEDS and ULTRA LIFE
to sustain the initial campaign and presented it to the
management
e. marketing activities that were conducted are flyering /
leafletting, sampling and product information
campaign at various trade areas and other related
venues nationwide
f. came up for the implementation of 20% Discount for
MEGA MEDS and ULTRA LIFE.

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 g. held activities at various branches / outlets of
drugstore to promote the promo, conduct promo
detailing, give away samples and distribute flyers /
leaflets in selected branches of Red Drug and Wilkins
h. hired personnel to monitor and effectively implement
aforementioned activities, and generate additional
sales for MEGA MEDS and ULTRA LIFE.

35. The foregoing includes the development of marketing

assistance and strategies, such as economical distribution of samples,

display of convincing posters, merchandising and other promotional

materials, radio and TV ads to boost the sales of MEGA MEDS and

ULTRA LIFE.

36. Currently, Company B has accomplished the following

exceptional milestones as marketing agent of Company C, to wit:

a. xxx
b. xxx
c. xxx
d. xxx
e. xxx

37. Overall, as proof of its commitment to distributing the

products MEGA MEDS and ULTRA LIFE, Plaintiffs have made a total

initial investment of Php16 Million to cover __________ expenses,

____________, production and marketing costs.

38. Considering the foregoing, the unilateral and baseless

termination by Defendant Company C of the exclusive distributorship

contracts is unwarranted.

39. It should be pointed out that the exclusive distribution

contracts does not contain any provision for termination by mere notice.

There is therefore no basis for Defendant Company C to claim poor sales

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performance and terminate the contracts for exclusive distributorship

barely one (1) month from execution of said contracts.

40. Accordingly, through letters both dated 10 June 2009,

Plaintiff Company A rejected Defendant Company C’s fax termination

notice and warned it against violating its undertakings under their

contracts for exclusive distributorship.

Attached as Annexes F and G and made integral parts hereof are

copies of the foregoing letters for easy reference.

41. Plaintiff Company A also sent a letter dated 16 June 2009 to

RED DRUG regarding Defendant’s ten-year contract with defendant

Company A for exclusive distributorship.

Attached as Annex H and made an integral part hereof is evidence

of the aforementioned letter for easy reference.

42. Despite said warnings however Defendant Company C

committed the following illegal acts:

a. continued to approach various subdistributors of Plaintiff

Company A such as Red Drug and other establishments
in order to directly distribute MEGA MEDS and ULTRA
LIFE, and
b. appointed Defendant COMPANY D Marketing as the
exclusive distributor for Defendant Company C for MEGA
MEDS and ULTRA LIFE.

Attached as Annexes I and J and made integral parts hereof are

copies of ______________ showing that Defendant Company C approached

various subdistributors of Plaintiff Company A and the appointment of

Defendant Company D as the exclusive distributor of Defendant

Company C for easy reference.

43. The foregoing actions caused confusion with Plaintiffs’

subdistributors and clients to the prejudice of the Plaintiffs as Defendant

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Company C and Company D actively worked against and sought to

destroy the rightful standing and business reputation of Plaintiffs as the

exclusive distributor and marketing agent for the products MEGA MEDS

and ULTRA LIFE.

44. In July 2009, Plaintiff Company A received a BFAD letter

dated 22 July 2009 informing it that with respect to its request for a

permit to conduct a promotion for products MEGA MEDS and ULTRA

LIFE BFAD received a letter dated 20 July 2009 from COMPANY C

informing BFAD that it had terminated its contract with MR PRIME as

exclusive distributor.

Attached as Annexes K and L and made integral parts hereof are

copies of the aforementioned 22 July 2009 BFAD letter and the 20 July

2009 Defendant Company C letter for easy reference.

45. In the same 20 July 2009 letter, Defendant Company C

unjustifiably and without lawful cause requested BFAD to refrain from

entertaining and approving any request nor releasing any document or

information to Company A and Company B concerning MEGA MEDS and

ULTRA LIFE.

Attached as Annex M and made an integral part hereof is copy of

the aforementioned letter for easy reference.

46. Plaintiff Company B also received a BFAD letter dated 23

July 2009 making reference to the same 20 July 2009 letter of Defendant

Company C and informing it that the BFAD Products Services Division

(PSD) confirmed that the CPR of both MEGA MEDS and ULTRA LIFE

has already been reconstructed on 21 July 2009 deleting Plaintiff

Company A as COMPANY C’s exclusive distributor. In the same letter,

due to the false and misleading representations of Defendant Company

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C, BFAD suspended Plaintiff Company B’s sales promotion permit

(DOH-BFAD Permit No. 1004 s. 2009).

Attached as Annex N and made an integral part hereof is copy of

the aforementioned letter for easy reference.

47. Plaintiffs sought to confirm the cited reconstruction of the

CPR with BFAD but BFAD refused to provide them with any

documentation to this effect.

48. On 03 August 2009, Plaintiff Company A sent BFAD a letter

reply dated 30 July 2009 rejecting Defendant Company C’s false and

misleading claims that it breached any of its contractual obligations. A

copy of the contracts for exclusive distributorship were attached thereto

for better appreciation and reference of BFAD.

Attached as Annex O and made an integral part hereof is copy of

the aforementioned letter for easy reference.

49. In the same letter, Plaintiff Company A reiterated that it had

already rejected Defendant Company C’s notice of termination dated 03

June 2009. A copy of COMPANY A’s letters to COMPANY C to this effect

were attached thereto for easy reference.

50. Plaintiff Company A also manifested therein that:

(1) it is obvious that Defendant Company C as the PRODUCT

OWNER is unlawfully trying to renege on its contractual
commitment to Plaintiff Company A as the exclusive
distributor of MEGA MEDS and ULTRA LIFE;

(2) these contracts are good for ten (10) years to take effect
on August 08, 2008 until August 08, 2018.

(3) for said period, Defendant Company C as the PRODUCT

OWNER is contractually bound to transact business only
with Plaintiff Company A as the exclusive distributor.

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 51. Accordingly, Plaintiff Company A asked BFAD for its

continuing recognition as the exclusive distributor of MEGA MEDS and

ULTRA LIFE.

52. On August 3, 2009, Plaintiff Company B sent a similar letter

dated 31 July 2009 to BFAD. In said letter, Plaintiff Company B

categorically stated that Defendant Company C’s termination of Plaintiff

Company A’s exclusive distributorship for MEGA MEDS and ULTRA LIFE

is illegal. Thus, Plaintiff Company B declared that the reconstruction of

the CPR of both products on July 21 2009 is also illegal and a violation

of Defendant Company C’s contractual obligations to Plaintiff Company

A. Plaintiff Company B attached to this letter a copy of Defendant

Company A’s letter to BFAD dated 30 July 2009.

Attached as Annex P and made an integral part hereof is copy of

the aforementioned letter for easy reference.

53. Plaintiff Company A also sent a letter dated 30 July 2009 to

Defendant Company C warning the latter that its act of amending the

CPR to delete COMPANY A as exclusive distributor and request for BFAD

to refrain from entering or approving any request of Plaintiffs Company A

and Company B are direct violations of its contracts for exclusive

distributorship. In the same letter, Plaintiff Company A demanded that

Defendant Company C withdraw its request for amendment of the CPR.

Attached as Annex Q and made an integral part hereof is copy of

the aforementioned letter for easy reference.

54. Despite Plaintiffs’ explanations however and due greatly to

the false and misleading representations and actions of Defendant

Company C, BFAD issued an Order dated 14 August 2009 to the effect

that:

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 “Earlier, on 06 July and 13 July 2009, Company C
requested for the reconstruction of the Certificate of Product
Registration (CPR) of the subject products to reflect the
change in their packaging from 100s to 30s per box and
deleting Company A as “Distributor” thereof. The CPRs were
subsequently amended on 22 July 2009. Accordingly, this
Office gives credence to the express manifestation of
Company C that it did not authorize Company A and
Company B to promote the subject products. The above
amendments made on the CPR of MEGA MEDS and ULTRA
LIFE render the sales promotion permit issued to Company
B INVALID and the selling thereafter of Company A of these
products in the packaging of 100s per box becomes
UNATHORIZED.

WHEREFORE, the sales promotion permit issued to

Company B under DOH-BFAD Permit No. 1004 s.2009 is
hereby REVOKED. Likewise, Company A’s request for a
permit to a similar promotion is DENIED. Respondent
Company B is thus, directed to CEASE and DESIST from
further implementing the said promotional activity. In the
meantime, Respondent Company A is advised to refrain from
selling and/or offering for sale the subject products pending
settlement of the issue with Company C.

SO ORDERED. 14 August 2009, BFAD, Alabang,

Muntinlupa City

Attached as Annex R and made an integral part hereof is copy of

the aforementioned order for easy reference.

55. Thereafter, it has come to the attention of Plaintiffs that

Defendant Company C had gone to Plaintiffs’ subdistributors and clients

and sought to (a) bar the further transactions with Plaintiffs, and (b)

directly distribute the products MEGA MEDS and ULTRA LIFE.

56. Case in point is Red Drug. We have been informed that

Defendant Company C had already closed and/or acquired a

commitment from the former to distribute MEGA MEDS and ULTRA LIFE

directly.
57. Also, another example is _______________ who _____________.
58. All of the foregoing actions created a damaging impact on

Plaintiffs’ business reputation with the public and business relationships

with subdistributors and clients in the pharmaceutical industry.

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 59. All their efforts and sums spent to establish their position

and standing as Defendant Company C exclusive distributor for MEGA

MEDS and ULTRA LIFE have been put to naught.

60. In light of the foregoing factual circumstances, Plaintiffs have

filed this Complaint with prayer for Preliminary Injunction and/or

Temporary Restraining Order based on the following causes of action:

CAUSES OF ACTION

FIRST CAUSE OF ACTION

I. Specific Performance to Compel

the Defendant Company C to comply
with the express terms of its contracts
of exclusive distributorship with the
Plaintiffs.

61. Plaintiff re-pleads and incorporates by reference all of the

foregoing allegations as they may be applicable herein.

62. It is clear in the instant case that Defendant Company C as

the PRODUCT OWNER agreed and contractually bound itself to:

a. transact business directly with Plaintiffs Company

A and Company B for the distribution of the
products MEGA MEDS and ULTRA LIFE, and

b. give the next priority to Plaintiffs Company A and

Company B to exclusively distribute other products
of the PRODUCT OWNER.

63. According to the express terms of the exclusive

distributorship contract for MEGA MEDS, Defendant Company C as the

PRODUCT OWNER had agreed that:

“2. PRODUCT OWNER will transact business directly to

the DISTRIBUTOR in terms of MEGA MEDS 100mg Capsule

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 – Purchase Order, Product specifications and payment. Upon
receipt of the agreed terms the DISTRIBUTOR shall make a
50% down payment and full payment of balance upon
delivery.”

64. By the same agreement, Company C had also undertaken

that:

“4. PRODUCT OWNER shall give the next priority to the

DISTRIBUTOR to exclusively distribute other products of the
PRODUCT OWNER provided that the DISTRIBUTOR shall
make its initial purchase in a quantity agreed by both
parties in any form of packaging within one (1) month of a
written notice. Otherwise, the PRODUCT OWNER can now
decide on what to do with the new product.”

65. Similarly, with respect to ULTRA LIFE, Defendant Company

C as the PRODUCT OWNER had agreed that:

“2. PRODUCT OWNER will transact business directly to

the DISTRIBUTOR in terms of ULTRA LIFE 125 mg Capsule
– Purchase Order, Product specifications and payment. Upon
receipt of the agreed terms the DISTRIBUTOR shall make a
50% down payment and full payment of balance upon
delivery.”

66. By the same agreement, Company C also undertook that:

“4. PRODUCT OWNER shall give the next priority to the

DISTRIBUTOR to exclusively distribute other products of the
PRODUCT OWNER provided that the DISTRIBUTOR shall
make its initial purchase in a quantity agreed by both
parties in any form of packaging within one (1) month of a
written notice. Otherwise, the PRODUCT OWNER can now
decide on what to do with the new product.”

67. These contracts are good for ten (10) years to take effect on

August 08, 2008 until August 08, 2018.

68. For said period therefore, Defendant Company C as the

PRODUCT OWNER is contractually bound to transact business only with

Plaintiff Company A as the exclusive distributor and Plaintiff Company B

as the marketing agent for the products MEGA MEDS and ULTRA LIFE.

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 69. Accordingly, the following acts are in clear violation of

Defendant Company C’s lawful obligation under the aforementioned

contracts.

a. approaching various subdistributors of Plaintiff Company

A such as Red Drug and other establishments in order to
directly distribute MEGA MEDS and ULTRA LIFE;
b. issuing a notice of termination dated __________ of the
contracts for exclusive distributorship;
c. appointing Defendant COMPANY D Marketing as the
exclusive distributor for Defendant Company C for MEGA
MEDS and ULTRA LIFE;
d. filing a letter request dated 20 July 2009 letter, for BFAD
to refrain from entertaining and approving any request
nor releasing any document or information to Plaintiffs
Company A and Company B concerning MEGA MEDS
and ULTRA LIFE;
e. filing a letter request dated 20 July 2009 letter, for BFAD
to reconstruct the CPR of both MEGA MEDS and ULTRA
LIFE and delete Plaintiff Company A as Defendant
Company C’s exclusive distributor; and
f. going to Plaintiffs’ subdistributors and clients and seeking
to (a) bar the further transactions with Plaintiffs, and (b)
directly distribute the products MEGA MEDS and ULTRA
LIFE.

70. It bears stressing that Article 1475 of the New Civil Code

equally provides that:

“From that moment, the parties may reciprocally

demand performance, subject to the provisions of law
governing form of contracts”

71. In connection thereto, Plaintiffs pray that Defendant

Company C be compelled to observe strictly and comply with the

exclusive distributorship contracts (Annex ___ and ____).

SECOND CAUSE OF ACTION

Plaintiffs are entitled to actual

damages

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 72. Plaintiffs replead, reproduce and incorporate all of the

foregoing allegations as they may be applicable herein.

73. Plaintiff Company A was induced to open, promote, develop

and sell MEGA MEDS and ULTRA LIFE in the Philippines upon

Defendant Company C’s representations that Plaintiff Company A will be

the exclusive distributor of these products for a period of at least twelve

(12) months and, thereafter, for an indefinite period upon the

establishment of the distributorship network.

74. Plaintiff Company A, relying upon Respondent Company C's

representations, was enticed to: (a) borrow money to establish the

______________ and _________________ for MEGA MEDS and ULTRA LIFE;

(b) buy __________ and equipment for its distributorship; (c) hire

_________ additional number of employees; (d) spend for showrooms and

offices; and (d) pay its license fees, technical brochure and other

expenses.

75. It turned out that Respondent Company C had no intention

to honor the exclusive distributorship contracts ( Annex ____ and ____),

thus frustrating Plaintiff Company A’s distributorship efforts and

preparations.

76. With evident bad faith, Defendant Company C and Party A

has committed the following acts in clear violation of Defendant

Company C’s exclusive distributorship contracts with Plaintiffs:

a. approaching various subdistributors of Plaintiff

Company A such as Red Drug and other
establishments in order to directly distribute MEGA
MEDS and ULTRA LIFE;
b. issuing a notice of termination dated __________ of the
contracts for exclusive distributorship;

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 c. appointing Defendant COMPANY D Marketing as the
exclusive distributor for Defendant Company C for
MEGA MEDS and ULTRA LIFE;
d. filing a letter request dated 20 July 2009 letter, for
BFAD to refrain from entertaining and approving any
request nor releasing any document or information to
Plaintiffs Company A and Company B concerning
MEGA MEDS and ULTRA LIFE;
e. filing a letter request dated 20 July 2009 letter, for
BFAD to reconstruct the CPR of both MEGA MEDS
and ULTRA LIFE and delete Plaintiff Company A as
Defendant Company C’s exclusive distributor; and
f. going to Plaintiffs’ subdistributors and clients and
seeking to (a) bar the further transactions with
Plaintiffs, and (b) directly distribute the products
MEGA MEDS and ULTRA LIFE.

77. As a result, BFAD had amended of the Certificates of Product

Registration for MEGA MEDS and ULTRA LIFE deleting Plaintiff

Company A as Defendant Company C’s exclusive distributor

78. All these acts resulted in damage to Plaintiff because of the

(a) tarnishment of its business reputation, (b) negative impact on its

marketing, advertising and distributing efforts, and (c) loss of sales,

amounting to ________________ (_____________).

79. Accordingly Plaintiff Company A is entitled to actual

damages under the Civil Code, to wit:

“Art. 2199. Except as provided by law or by stipulation, one

is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory
damages.”

THIRD CAUSE OF ACTION

Plaintiffs are entitled to moral

and exemplary damages,
attorneys fees and litigation
expenses.

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 80. Plaintiffs replead, reproduce and incorporate all of the

foregoing allegations as they may be applicable herein.

81. As a direct result of the unjust, unlawful and unwarranted

actions of Defendant Company C and Party A, Plaintiff corporations’ good

name and reputation, has been debased and tarnished, resulting in its

humiliation before its sub distributors, in the industry and the business

realm in general. Accordingly, Defendants Company C and Party A

should be held liable to pay the amount of One Million Pesos

(PhP1,000,000.00) by way of moral damages.

82. To deter others from committing similar acts, and by way of

example and correction for the public good, Defendants Company C and

Party A should pay Plaintiffs the amount of Five Hundred Thousand

Pesos (PhP500,000.00) by way of exemplary damages.

83. As a direct result of Defendants Company C and Party A’s

breach of and/or interference with the provisions of the distributorship

contracts Plaintiffs were constrained to engage the services of the

undersigned law firm and to incur expenses in an amount of not less

than Five Hundred Thousand Pesos (PhP500,000.00) as attorney’s fees

and litigation expenses for which Defendants should be held liable.

ALLEGATIONS IN SUPPORT OF THE APPLICATION FOR A

TEMPORARY RESTRAINING ORDER
AND A WRIT OF PRELIMINARY INJUNCTION

84. Plaintiffs replead, reproduce and incorporate all of the

foregoing allegations in support of its application for the issuance of a

temporary restraining order and a writ of preliminary injunction.

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 85. With evident bad faith, Defendant Company C and Party A

had committed the following acts in clear violation of Defendant

Company C’s exclusive distributorship contracts with Plaintiffs:

a. approaching various subdistributors of Plaintiff Company A

such as Red Drug and other establishments in order to directly
distribute MEGA MEDS and ULTRA LIFE;
b. issuing a notice of termination dated __________ of the contracts
for exclusive distributorship;
c. appointing Defendant COMPANY D Marketing as the exclusive
distributor for Defendant Company C for MEGA MEDS and
ULTRA LIFE;
d. filing a letter request dated 20 July 2009 letter, for BFAD to
refrain from entertaining and approving any request nor
releasing any document or information to Plaintiffs Company A
and Company B concerning MEGA MEDS and ULTRA LIFE;
e. filing a letter request dated 20 July 2009 letter, for BFAD to
reconstruct the CPR of both MEGA MEDS and ULTRA LIFE
and delete Plaintiff Company A as Defendant Company C’s
exclusive distributor; and
f. going to Plaintiffs’ subdistributors and clients and seeking to (a)
bar the further transactions with Plaintiffs, and (b) directly
distribute the products MEGA MEDS and ULTRA LIFE.

86. As a result, BFAD had amended of the Certificates of Product

Registration for MEGA MEDS and ULTRA LIFE deleting Plaintiff

Company A as Defendant Company C’s exclusive distributor

87. Respondents continue to declare and spread word in the

industry and among the subdistributors and customers of Plaintiffs that

the latter is allegedly no longer its exclusive distributor and marketing

agent.

88. Plaintiffs have contested the termination of the exclusive

distributorship contracts and the blatant acts of Respondents to directly

distribute MEGA MEDS and ULTRA LIFE in violation of the same on

valid and legal grounds.

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 89. Consequently, only after trial on the merits of the instant

case can the validity and continuing efficacy of aforementioned exclusive

distributorship contracts be determined.

90. The continuance of the questioned acts herein would work

untold injustice and irreparable damage on the Plaintiff Mortgagors.

91.1. Plaintiffs efforts to continually market and distribute

MEGA MEDS and ULTRA LIFE would be blocked, hindered and

prejudiced by the continuing acts of Respondents to the contrary.

91.2. Plaintiffs would lose the total value of all amounts

spent to market and distribute MEGA MEDS and ULTRA LIFE.

91.3. Plaintiffs would lose the value of and realizable profit

on the stocks of MEGA MEDS and ULTRA LIFE already bought

from Respondents and still for distribution.

91.4. The continuance of said acts would tend to render the

issues raised by Plaintiffs in the instant case and any judgment

herein, moot and academic and/or ineffectual.

91. All told, Plaintiffs seek to enjoin and restrain Defendants

from proceeding with or continuing the (a) direct distribution of MEGA

MEDS and ULTRA LIFE, (b) distribution of MEGA MEDS and ULTRA

LIFE through any other party except the Plaintiffs, and (c) commission of

any act to disseminate and / or implement Plaintiffs unilateral

termination notice dated ____________, in order to protect the right of

herein Plaintiffs to due process and their exclusive distributorship

contracts.

92. Plaintiffs are entitled to the relief demanded, and the whole

or part of such relief consists in restraining the commission or

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continuance of the acts complained of or the performance of an act or

acts, either for a limited period or perpetually.

93. The commission and/or continuance of such acts

complained of during the litigation of the instant case would work

injustice to the Plaintiffs who are entitled to have their rights to the

exclusive distributorship contracts respected.

94. Defendants are threatening, attempting, and/or doing such

acts complained of in violation of Plaintiffs’ rights and with respect to

this action which would tend to render any judgment herein ineffectual.

95. Such relief is expressly sanctioned under Section 3, Rule 58

of the Rules of Court, as quoted:

“Section 3. Grounds for issuance of preliminary

injunction…

a. That the applicant is entitled to the relief

demanded and the whole or part of such relief consists in
restraining the commission or continuance of the acts
complained of …..

b. That the commission, continuance .. of act or acts

complained of during the litigation would probably work
injustice to the applicant.

c. That a party… or a person is doing, threatening,

or is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.”

96. Plaintiffs stands to suffer serious, grave and irreparable

damage and injury unless the acts complained of are enjoined for being

violative and oppressive of Plaintiffs’ rights.

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 97. There is no other relief, speedy and adequate remedy in the

ordinary course of law available to the Plaintiffs under the

circumstances.

98. Plaintiffs are ready, able and willing to post a bond in

connection with the issuance of a temporary restraining order and writ of

preliminary injunction herein applied for, as may be fixed by this

Honorable Court.

PRAYER

WHEREFORE, premises considered, it is respectfully prayed of this

Honorable Court that:

a. Upon summary hearing, a Temporary Restraining Order be

issued requiring Defendants, their subsidiaries and assigns to

cease and desist from proceeding with or continuing the (i) direct

distribution of MEGA MEDS and ULTRA LIFE, (ii) distribution of

MEGA MEDS and ULTRA LIFE through any other party except the

Plaintiffs, and (iii) commission of any act to disseminate and / or

implement Plaintiffs unilateral termination notice dated

____________, or any other act that may tend to render any

judgment herein ineffectual.

b. After due notice and hearing, a Writ of Preliminary

Injunction be issued to the same effect as above-stated upon such

bond as may be reasonably fixed by this Honorable Court; and

c. After trial on the merits, judgment be issued:

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 1. rendering the injunction permanent;

2. ordering Defendants to pay Plaintiffs the sum of at

least PESOS: ____________ (P____________________), by way of

actual damages;

3. ordering Defendants to pay Plaintiffs the sum of at

least PESOS: One Million (Php1,000,000.00), by way of

moral damages;

5. ordering Defendants to pay Plaintiffs the sum of at

least PESOS: FIVE HUNDRED THOUSAND (P500,000.00), by

way of exemplary damages; and

6. ordering Defendants to pay Plaintiffs the sum of at

least PESOS: FIVE HUNDRED (Php500,000.00), by way of

attorneys fees and other expenses of litigation and costs of

suit.

Other reliefs just or equitable under the premises are likewise

prayed for.

Pasig City for Makati City, 08 September 2009.

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