Licensee claims Ben & Jerry’s and its corporate owner broke their contract by conditioning license renewal on a boycott that violates American and Israeli law.
Ben & Jerry’s Israeli manufacturer-distributor is suing the ice cream company to prevent their upcoming divorce. It is also suing Unilever, which owns Ben & Jerry’s.
In July 2021, the ice cream company announced it would no longer sell its ice cream in what it called “Occupied Palestinian Territory.” Ben & Jerry’s Israeli licensee, who brought the ice cream to Israel some 35 years ago when the Vermont company was young, and who currently both manufactures and distributes Ben & Jerry’s ice cream in Israel, refused to comply, so last August the ice cream company announced it wouldn’t renew the license after it expires at the end of 2022.
— Ben & Jerry's (@benandjerrys) July 19, 2021
In other words, Ben & Jerry’s bought into the idea that territory beyond the Green Line – the ceasefire line at the end Israel’s war of independence, when the nascent state was attacked from every side by Arab armies – which Israel seized defensively during the Six Day War, does not belong to Israel but to “Palestinians”. This is wrong on so many levels, most particularly that international law permits a nation to take land in the course of defending itself from attack; and beyond that, the land did not then and does not now legally belong to any other state.
The refusal to sell over the Green Line is all part of the latest lawfare tactic against Israel, the Boycott, Divestment, and Sanctions movement known as BDS. BDS activists were quick to take credit for Ben & Jerry’s boycott decision. The decision didn’t go down well with many Ben & Jerry’s franchisees, thirty of whom sent the company a letter asking it to reconsider.
Ben & Jerry’s owner Unilever hasn’t been thrilled by its subsidiary’s decision, either. Besides losing income from sales in the “occupied Palestinian territories,” its stock has become less attractive as running afoul of state anti-BDS laws. Arizona, New Jersey, New York, Florida, and Illinois all announced they would divest from Unilever.
In February, Unilever announced that it would come up with a workaround arrangement by the end of the year to continue marketing the ice cream in Israel.
That announcement didn’t go down well with current Israeli licensee American Quality Products Ltd., or with Avi Zinger, the guy behind AQP and its self-described “ultimate beneficial owner,” who promptly filed suit in New Jersey federal district court. The complaint, against Ben & Jerry’s and a couple of American subsidiaries of Unilever, claims breach of contract, wrongful termination, bad faith, and false light invasion of privacy (something like defamation, except that instead of the defendants’ statements being factually false, the plaintiff claims that the defendants’ statements imply false things about him). On March 11, Zinger and AQP requested a preliminary injunction.
Ben & Jerry’s Israel Seeks Immediate Court-Ordered Injunction to Maintain Unilever License While Case is Litigated: “It is hard to imagine a clearer case of classic breach” of contract. – https://t.co/NqLW99vk6u pic.twitter.com/WhYdO6tgFg
— The Brandeis Center (@brandeiscenter) March 14, 2022
AQP’s claim is basically that, by demanding AQP stop selling in lands Israel won in 1967, Ben & Jerry’s and Unilever violated their obligations under a 2001 consent decree with Israel’s antitrust authority, entered when Unilever acquired Ben & Jerry’s. It also says that the demand violates both Israeli and American anti-boycott laws (both federal and state). Therefore, AQP argues, defendants’ refusal to renew was improper because it was predicated on a demand that AQP act illegally, and the court should compel Ben & Jerry’s and Unilever to renew AQP’s license.
Even if AQP’s claims are true that Ben & Jerry’s and Unilever violated anti-boycott laws and the Israeli antitrust consent decree, it’s not clear whether it would therefore be entitled to compel them to renew its license. It also has some procedural hurdles to overcome. For example, it named a couple of U.S. subsidiaries of Unilever N.V. It’s not clear that either one may be sued in place of Unilever, N.V., the actual party to the license agreement. Furthermore, the license requires all signatories to submit disputes to arbitration before the American Arbitration Association, in New York City, and under New York law. It also limits the types of damage claims to actual damages, which would seem to exclude punitive damages, for example. Under limited circumstances, the parties may seek injunctive relief, but it’s not clear whether the injunction may be sought from a court, as opposed to from the arbitrator.
But, if nothing else, the suit should get Unilever’s attention, and maybe change its calculus about the “new arrangement” it promised to work out for sales in Israel. That’s doubtless something Zinger and AQP are counting on.DONATE
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