Vt. arms dealer sues over Romanian semiauto weapons
At a time when talk of gun control has led to a run on weapons and ammunition sales at gun shops around the country, a Vermont company that’s the largest importer and wholesaler of surplus weapons in North America, is engaged in a legal battle with a Colorado company for allegedly siphoning off as much as $4 million in profits.
Century International Arms of Georgia alleges in its federal lawsuit that M+M Inc. of Eastlake, Colo., solicited business from C.N. Romarm S.A., the Romanian government-owned weapons company, in violation of what the company says is tantamount to an exclusivity contract to import and sell certain Romarm weapons in the U.S.
On Tuesday, eight months after the lawsuit was filed in U.S. District Court in Vermont, M+M Inc. filed a response denying all of Century International’s allegations while seeking dismissal of the case.
Century International Arms (www.centuryarms.com), which operates a manufacturing and distribution center in the Arrowhead Industrial Park in Georgia, imports a variety of surplus weapons, including the popular Romanian WASR-10 semiautomatic rifle.
Century takes the imported weapons and makes modifications at its Georgia facility to meet U.S. gun laws. The modified firearms are then sold to gun dealers as the GP/WASR 10/63 KR.
Century’s corporate address is in Delray Beach, Fla.
“As a result of M+M’s interference with its contracts with Romarm/FAC, Century has been unable to fill its customers’ orders, harming Century’s reputation and crippling its ability to meet demand,” according to the company’s June 2012 lawsuit.
FAC (S.C. Fabrica De Arme Cugir) is Romarm’s manufacturing subsidiary.
Century and Romarm have been doing business for 10 years. The latest contract dated March 2011 requires Romarm to sell a specified number of weapons each month.
“In exchange, Century agreed to pay Romarm, on average, a minimum of $1.35 million per quarter and a minimum of $350,000 a month,” the eight-page lawsuit stated.
But Century said while it has lived up to its part of the agreement, “Romarm/FAC has failed to deliver the required quantity of firearms to century under the 2011 contract.”
In addition to the contract, Century points out that the companies also signed a Business Promotion and Protection Agreement. The companies agreed to “be loyal to each other” and to work jointly “to promote the sales of Romanian firearms and accessories in the United States.”
Century is barred from filing suit against Romarm because the contracts are subject to arbitration.
The lawsuit points out that the agreements require both Century and Romarm “to participate in arbitration in Paris under international rules.”
Century alleges that its inability to meet demand is based in part on Romarm selling surplus weapons to M+M Inc (www.cogunsales.com). At the time the lawsuit was filed, Romarm had already supplied M+M with 12,405 firearms and accessories in the previous 18 months and agreed to supply the Colorado wholesaler with “an additional 24,000 firearms and accessories from August through February 2013.”
Century argues that it is entitled to all weapons and accessories sold to M+M.
“M+M’s usurping of those firearms and accessories has deprived Century of millions of dollars in revenue and close to $2 million on profit in the last twelve monthsm,” the lawsuit said. “If M+M receives shipment of the remaining 24,000 firearms and accessories through February 2013, Century’s lost profits will more than double.”
In a letter dated Sept. 2, 2011, Century notified M+M of its exclusive contract with Romarm. M+M replied in a letter five days later that it would take Century’s letter “into consideration.”
Century’s lawsuit alleges that since at least May 2011, M+M has taken action to “disrupt Century’s relationship with Romarm and advising Romarm to violate its agreements with Century.”
The lawsuit further alleges that two foreign companies, InterOrdinance Austria and CIT Bahamas are helping M+M in its dealings with Romarm.
In its eight-page response filed with the court, M+M alleged that whatever damages Century incurred were “caused by the acts or omissions of third parties (Romarm)” beyond its control. The Colorado arms wholesaler also argued that the contracts in question expired prior to M+M doing business with Romarm. In addition, M+M alleged that the exclusivity provision violate “the laws of Romania and the European Union.”
Century is asking the court to award damages of at least $4 million, plus punitive damages and attorney’s fees.
M+M is represented by Pamela Moreau of the Burlington law firm of Murphy Sullivan Kronk and John Zakhem of Denver, Colo.
Century International Arms is represented by Andrew Manitsky of Gravel & Shea in Burlington.
Attorneys representing Century and M+M declined to comment for this story.
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