Following the termination of long-term cooperation agreements with Tiffany & Co., Swatch Group and its affiliate Tiffany Watch Co. Ltd claimed CHF 3.8 billion in damages from Tiffany & Co. at the end of December 2011. Now, Tiffany & Co. responded with a so-called counterclaim of CHF 541.9 million.

In December 2007, Swatch Group entered into long-term cooperation agreements with Tiffany & Co. to design, manufacture and distribute «Tiffany & Co.» watches worldwide. Based on the long-term commitments of Tiffany & Co., Swatch Group invested millions to develop, distribute and sell «Tiffany & Co.» watches through its own stores, its worldwide network of independent retailers and through Tiffany & Co. stores.

In September 2011, following Tiffany & Co.’s systematic efforts to block and delay development of the business and fruitless attempts of The Swatch Group Ltd and its affiliate Tiffany Watch Co. Ltd to solve the dispute amicably, the latter were forced to terminate these agreements.

Swatch Group and its affiliate Tiffany Watch Co. Ltd requested full compensation for all losses in connection with Tiffany & Co.’s past and continuing breaches of its obligations and duties under the agreement. The relevant damages sought include a claim for lost profits conservatively quantified at CHF 3.8 billion for the term of the agreements to which the parties committed.

Tiffany & Co. have responded by filing a so-called counterclaim in the amount of CHF 541.9 million. This counter-claim has no factual or legal basis and will be vigorously contested by Swatch Group and Tiffany Watch Co. Ltd.