Western Cape, South Africa Apr 3, 2019 (Issuewire.com) - When a conglomerate preys on a small business, bystanders adopt the position of “they [small business] should have seen it coming”. But what if they actually did? What if small businesses did not stand a chance in a world of big players? The case will be dooming the industry, in question, to stagnation. Let’s face it, small businesses are the cradle of creativity, which big players give up in favor of holding senior positions and status as glamorous as their offices.
Wamar International LLC, a supplier of inflight entertainment systems based in Simi Valley, was hired in 2012 by Thales Avionics, Inc. to help carve it a standing in the Middle East market. Over the span of seven years, Wamar has managed to boost Thales market share from Zero to 60%. “Wamar secured over $2 billion in contracts [for Thales] with large airline and transport companies in the Middle Eastern region. Instead of paying outstanding, agreed-upon consulting fees, the defendants have conspired to induce Wamar’s continued performance with no intention of ever paying what is owed.” The lawsuit states.
On March 20, Central District of California Judge David Carter ordered Wamar to agree to an arbitration process. Thales welcomed the judge ruling as a victory. After all, arbitration is private, has a limited evidence process and leaves little to no room for appeal. Unfortunately, the joy of the small win did not seem to last for long. Kuwait Airways declined Thales from its bidding process and Etihad Airways elected Zodiac Aerospace over Thales for supply of its IFE systems.
It did not stop there. “As clients, we're concerned that Thales has gained a reputation of dodging its commitments. Thales bears liabilities and puts its clients at the risk of exposing their business before courts around the world. This situation is intolerable.” Stated a senior executive of a major Gulf aircraft operator.
“We are putting all contracts on hold until the pending cases are properly resolved. We will not be involved in issues between Thales and its business advisors. We will invite other suppliers to submit offers.” Going on to weigh Thales valuation of its business partners, he added, “…Thales failed to meet its obligations, had its business agent work for years then turned its back to it. We must pause and reflect on our partnership with Thales as this is not the kind of business partnership we seek to establish. We reserve the right to proceed to legal action in the event harm befalls our image as a result.”
It is unquestionable that win and loss are part of every business. Then again, to celebrate a small win on the short term while suffering a considerable loss on the long term reflects bad strategy.
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