Defendant, a U.S. company, appointed Claimant, an Italian company, as its non-exclusive agent in Italy for the purchase and exportation of goods. Their contract, which was governed by Italian law, was for an initial term of six months, automatically renewable unless notice of termination were given four months in advance. Two months into the contract, Defendant announced its intention to terminate the contract at the end of the second six-month term, or before if agreeable to both parties. It stated its intention meanwhile to use another agent, since it was not under any obligation of exclusivity towards Claimant. Alleging breach of contract, Claimant initiated arbitration proceedings, seeking damages for loss of profit, loss of clientele, breach of contract and equitable compensation for harm to its reputation due to the fact that Defendant had immediately informed Italian manufacturers of the termination of its agency agreement with Claimant.

'5. Subject of the dispute

5.1. The Arbitral Tribunal has been called on to rule on the following points of contention:

1) Has [Defendant] exercised the right to withdraw correctly and within the stipulated deadline?

2) Has there been a de facto withdrawal from the Contract?

3) Is [Claimant] entitled to damages of 400,000,000 lire, or of another amount?

. . .

5.2. On the first question, the Contract provides for [Defendant's] discretionary right to rescind the Contract within the stipulated deadline, subject to the withdrawal's being notified four months before that date. [Defendant] notified [Claimant] on 13 June 1991 that it would withdraw from 1 April 1992 - well within the deadline, therefore.

The Arbitral Tribunal therefore holds that [Defendant] has exercised the right to withdraw within the deadline.

5.3. As regards the question of whether the right to withdraw was exercised correctly, and the claim that there has been a "de facto withdrawal", two circumstances should be stressed: (i) the Contract does not stipulate a dies a quo for exercising the right to withdraw; and (ii) the Contract does not grant [Claimant] the exclusive right to act on behalf of [Defendant], but regulates the actions of [Claimant] on behalf of [Defendant] carried out on the latter's instructions.

It follows that, in point of fact, [Defendant] was entitled to exercise the right to withdraw even a long time before the expiration of the Contract, and that [Defendant] could also not have used [Claimant] as its agent by purchasing in Italy through other means (or by not purchasing at all).

The consequences of the above for the issues now in dispute are obvious. The right to withdraw was exercised more than ten months before the expiration of the previously stated deadline, on 13 June 1991, to take effect from 1 April 1992, and thus with advance notification that was particularly long but that was not, thereby, illegitimate under the contractual regulations . . .

Declaring such a fact [the withdrawal from the Contract] so far in advance, making clear that the services of [Claimant] are no longer desired, undoubtedly leads to the assumption that the withdrawal occurred not as a result of normal, legitimate events, but due to events of an exceptional nature, which certainly does no good to the reputation of [Claimant] which, being a serviceprovider, relies for its survival on its market image. In this light, the needlessness of the letters of 18 June 1991 sent by [Defendant] to its clients (documents 27, 28 and 29 [Claimant]) renders them pointless, and adversely reflects on the propriety with which the rescission was carried out.

The harm to [Claimant's] reputation does not lend itself to concrete quantification; nor is the Arbitral Tribunal given to understand, from its reading of the pleadings, that the parties wish to conduct expensive consultancy investigations in order to arrive at a concrete quantification. The Arbitral Tribunal, on the basis of the evidence and the parties' statements, holds that the harm to [Claimant's] reputation may be estimated at 30 million lire. Since this is a question of a lumpsum quantification, no interest is due. However, interest shall accrue, to the extent allowed by law, from the day the arbitration award is served until it is complied with.'