EU justice settles partner war at iconic Café del Mar in Ibiza

It is not just the failure of a business that can lead to a war between its owners. Café del Mar has been one of the most iconic establishments in Ibiza for the past 30 years, and its success was such that it branched into music, fashion and food, all of which was sold under the Café del Mar brand after one of the partners registered it in his name without first consulting the other owners.

The move led to a legal battle that has just been resolved in Luxembourg by the Court of Justice of the European Union, which ruled that the partner in question acted in bad faith, departing from “the ethical principles of behavior than are commonly acceptable” and “honest business practices.”

The Café del Mar opened in 1980 in Sant Antoni de Portmany, a town in Ibiza, in Spain’s Balearic Islands. Its three owners – Ramon Guiral, José Les Viamonte and Carlos Andrea – turned it into one of the island’s most popular chillout bars with its unique combination of décor and music.

Two decades later, with the café thriving, Guiral went down to the European Union Intellectual Property Office (EUIPO) to register the Café del Mar brand in order to sell other products, from music to fashion and even advertising services, under the brand name.

The owners at the time had three business in which they had equal shares: Café del Mar, Variedades and Can Ganguil. Regarding the latter, Guiral had been given power of attorney. However, the other shareholders maintain that Guiral, who lives in Marbella, abused this role by registering several brands in his name at the EUIPO office between 1999 and 2000. Five years ago, Les Viamonte and Andrea asked the EUIPO to reverse the registration on the grounds that Guiral had acted in bad faith. But the EUIPO sided with Guiral, stating that the other shareholders had profited from the commercial activities that ensued.

Pulling the plug on profits

The battle for the rights of the brand ended up in Luxembourg, and the General Court at the Court of Justice of the EU has taken a different view. These judges note that, as a shareholder of the other companies that used the brand, Guiral could not be ignorant about the risk to the other shareholders of registering it in his name.

The court also said there was no evidence to show that the other shareholders had any knowledge of the brand’s registration, which was paid for with funds from the Can Ganguil company.

Thirdly, Guiral did put the profits from the brand into the company’s accounts, but only until 2009. When the war between the partners was waged, he pulled the plug. This, the court ruled, highlights the damaging nature of registering the controversial brand exclusively in the name of this partner who could then benefit exclusively from its exploitation.

The ruling means that the EUIPO registration has been annulled, and Guiral and the EUIPO ordered to pay litigation costs.

English version by Heather Galloway.