Kalina Concern JSC must pay Nefis Cosmetics JSC 10.5 million RUR in compensation for the damage done to the business image of Nefis Cosmetics JSC by Kalina counterfeiting the company’s washing powder brand with its TriMax. This was the decision made by the Court of Appeals of Tartar Republic. (The verdict coincided with that of the Court of Arbitration.) This verdict has come into effect since the day it was announced in court and, if Kalina does not pay this sum voluntarily, it will be recovered by the law-enforcement officers.

According to Legal Department Director of Nefis Cosmetics JSC Yulia Blaginikh, Kalina has the legally provided five days to pay the compensation. Yet given the company’s notorious unwillingness to comply with the court decisions, the debt recovery may last at least until the end of December.

The compensation sum is twofold. 7 million RUR has to be paid in compensation for the non-material damage: the representatives of Nefis Cosmetics managed to prove it to the Court that Kalina’s low quality TriMax washing powder negatively affected the customer loyalty to Nefis Cosmetics’ BiMax and the company in general. Their argument was built on the belief that many consumers who had once tried using the low quality imitation could have second thoughts on the original BiMax and its producer.

3.5 million RUR is the sum Kalina has to pay in compensation for the material damage done to the business image of Nefis Cosmetics JSC. Having paid this sum, Kalina will partly cover the emergency advertising campaign that Nefis Cosmetics had to run in the summer of 2003 in order to rebuild the customer loyalty to BiMax.