Court orders payments between Samkaup and Netgengið

Reykjavik District Court has ordered Samkaup to pay Netgengið more than 82.3 million krónur in damages over breaches of an agreement on Nettó’s online shop, mbl.is reported. In a separate case, the court ordered Netgengið to pay Samkaup more than 30.8 million krónur that it had withheld from payments for goods. Both rulings were delivered on Wednesday.

The cases concern the companies’ partnership on online sales and home deliveries for Nettó, which ended in autumn 2022 after disagreements over delivery delays, costs and Samkaup’s plans to develop its own online shop.

In the damages case, the court found that Samkaup had deliberately concealed from Netgengið its work with Danish web agency Vertica to build a new online shop. The court concluded that this was a serious breach of the companies’ agreement and that Netgengið was entitled to terminate it.

The partnership began in 2017, and the companies signed a new agreement in August 2019. Netgengið handled services including technical solutions, payment processing, customer support and home deliveries. Samkaup was responsible for assembling and handing over orders.

Orders surged during the coronavirus pandemic, increasing sixfold in March 2020 compared with the previous month, according to the ruling. That month, online orders were moved from stores to a dedicated warehouse at Klettagarðar in Reykjavík, called Svörtuloft.

The increase led to delays and mistakes. The agreement required the companies to agree on performance measurements for order assembly and delivery, as well as a fee schedule for delays and errors. No such system was established. The court found that Netgengið repeatedly called for the measurements and took the initiative to seek outside help, while Samkaup did not contribute to fulfilling that obligation.

Samkaup opened its own online shop on August 31, 2022, after working with Vertica. Netgengið terminated the agreement on September 12. Samkaup argued that its work with Vertica did not breach the agreement and that the partnership with Netgengið could have continued alongside its own online shop.

The court rejected that argument. The agreement barred either company from working with others on comparable or larger projects in the grocery market while the partnership remained in force and its goals were being pursued. The court found that Samkaup had been working on its own online shop since at least early 2021 and had deliberately kept the plans from Netgengið. Samkaup could have terminated the agreement under its terms but chose to keep it in place while preparing the new shop.

Netgengið’s final damages claim was nearly 312.9 million krónur. The court awarded more than 82.3 million: about 36.5 million for costs caused by delivery delays, nearly 3.5 million for extra trips resulting from errors in assembling orders, and about 42.3 million for lost margin from September 2022 to the end of May 2023. Netgengið had sought about 58 million krónur for lost income over that period; the court said costs the company had saved also had to be taken into account.