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EXCLUSIVE: Castel In Administration Despite Multi Million Dollar Legal Wins

After suing TCL, Whirlpool and then getting a multimillion dollar payout from Toshiba Melbourne based distributor Castel Electronics has been placed into administration.

Calls to the Companies main telephone number today, reveal the number is discontinued.

The business that was established in 1990 has had a chequered history. Back in October 2017 the CEO of Castel Electronics Michael Kwong passed away suddenly, after a car accident in Melbourne.

Kwong, was known for taking legal action against big consumer electronics brands, a visit to the Australian AustILL site reveals pages of legal actions against or taken by Castel and Michael Kwong.

A Malaysian migrant to Australia, he founded the Australian-registered and Melbourne-based company in 1990.

Kwong won a series of hotly contested legal judgments against TCL Air Conditioner (Zhongshan), a huge Chinese manufacturer, after it supplied faulty airconditioners and violated an exclusive distribution rights agreement.

The contract stipulated arbitration in Australia. Castel eventually pursued its case as far as the High Court, where it also won.

It was awarded compensation of more than $6 million with interest, with the crucial arbitration finding reviewed by senior authorities in Beijing and a direction sent to the local court to comply with the New York Convention on the enforcement of arbitral awards.

It is now more than three years since the High Court decision.

But in China’s deep southern industrial heartland of Guangdong, where TCL is based, the court appears helpless to implement the verdicts in a city — Zhuhai — where the producer looms powerfully large.

Kwong, with a Hong Kong business partner, had to bear legal costs of more than $3m.

He then took on Japanese based Toshiba.

After having the Toshiba AV products taken away from being distributed by Castel in 2010, in a similar case to his TCL battle, Kwong, sued the Japanese manufacturer.

They were awarded $13M dollars in damages after another lengthy legal fight.

Ironically Toshiba Australia who thought they could do a better job selling their own AV products ended up struggling to get traction with the Toshiba AV products and ended up pulling out of the Australian market five years later.

Last year ChannelNews revealed that Castel had also moved to take legal action against US brand Whirlpool who they accused of dumping 3,000 faulty products in Australia, including ovens, refrigerators and washing machines.

They claimed that some of the products had a failure rate of 84%. Castel took on the distribution of the Whirlpool business after losing the Toshiba CE and appliance business.

Whirlpool claimed at the time, that Castel made misleading statements about its ability to move the brand up-market and breached the distribution deal.

Castel claims that Whirlpool lied about the failure rate of their products when they first commenced negotiations.

In October 2012, Whirlpool formed a Project Phoenix committee comprising some of its most senior executives, which chose Castel as the distributor. But emails tendered to the court show the committee became alarmed when Castel demanded details about Whirlpool failure rates.

It commenced trading in 1990, originally establishing in Collingwood, Victoria, their web site claims they employed over 30 staff at the time of being placed into administration.

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