A federal court has upheld a $5 million arbitration award against Tranax Technologies, ordering it to pay Nautilus Hyosung for ATMs and parts it received but did not pay for in 2006 and 2007.
The case stemmed from the contract dispute between Hyosung and Tranax that led to Hyosung dropping Tranax as it’s U.S. distributor and Tranax becoming an ATM manufacturer in its own right.
Starting in 1998, Tranax was the U.S. distributor for Hyosung ATMs. Then in 2006, Hyosung discovered that Tranax was substituting another manufacturer’s cash dispensers in some Hyosung models. Hyosung suspended shipment of the models in question; Tranax responded by suspending payment on all outstanding invoices.
Hyosung ended Tranax’s distribution contract in January 2007 and filed an arbitration grievance over the unpaid invoices later that year, alleging Tranax had breached the terms of its distribution contract.
In February, the arbitration panel ruled in Hyosung’s favor and ordered Tranax to pay the full amount of the unpaid bills, plus interest. On Wednesday, a federal court upheld the ruling.
Tranax did win one small victory: it had long sold Hyosung ATMs using the “Mini-Bank” trademark, and the arbitration panel ruled that Tranax owned that trademark. So Hyosung has stopped using the term in its advertising.
The story isn’t over yet. In 2008 Tranax was acquired by Hantle USA. This year, the company announced that Hantle would take over ATM marketing, while Tranax would focus on kiosks, scanners and ATM components. Hyosung is now suing Hantle USA, alleging that Hantle USA has taken over many of Tranax’s assets, making it difficult for Hyosung to collect the judgement.
Stay tuned.
