Newcastle replica kit injunction refused

The Tribunal today rejected an application by Sports Direct for an interim injunction requiring Newcastle United Football Club to supply it with replica kit for the 2024/5 season.

Sports Direct argued that the club was dominant in the supply of Newcastle replica kit, and that refusing to supply that kit to Sports Direct was an abuse of that dominance; alternatively, that exclusivity arrangements the club had entered into with JD Sports were anti-competitive and therefore unlawful. It further argued that if it did not have supplies of the replica kit for the 2024/5 season, it would suffer harm that could not be compensated by damages.

Applying the principles in American Cyanamid, the Tribunal considered whether Sports Direct had established a “serious issue to be tried”, and found that it had not. It was not arguable that ceasing an existing supply arrangement was – of itself and without more – an abuse, even assuming dominance. In the present circumstances Sports Direct had a low expectation of continuing supply, and the new owners of the club were entitled to revisit the distribution arrangements for the club’s replica kit. The Tribunal further found that, if an infringement of the Chapter II prohibition was arguable, it could also be argued that the exclusivity arrangements the club had entered into were improperly collusive but, conversely, that absent an arguable claim in regard to the Chapter II prohibition, it could not discern any arguable infringement of the Chapter I prohibition.

Although that finding was sufficient to dispose of the application, the Tribunal went on to consider the remaining stages of the analysis in American Cyanamid. It concluded that neither party could be adequately compensated in damages in relation to the granting or not granting of the injunction, as the potential losses were material and difficult to quantity. Finally, it determined that the balance of convenience weighed against the granting of an injunction, in particular because it would disturb the business arrangements the club had put in place for the 2024/5 season.

The Tribunal indicated that it considered that its refusal of interim relief made the need for a speedy trial of the matter more urgent, and urged the parties to give careful consideration as to how quickly a trial could come on, focussing on the necessary (and not merely desirable) procedural steps in the run up to trial.

Alison Berridge appeared for Newcastle United, and Stefan Kuppen appeared for Sports Direct.

Professor Panos Koutrakos comments on Case C-516/22 Commission v UK about the Supreme Court Micula judgment

Professor Panos Koutrakos has written an Op-Ed for EU Law Live on the recent judgment of the European Court of Justice in Case C-516/22 Commission v UK. The ECJ held that, in handing down the Micula judgment ([2020] UKSC 5), the UK Supreme Court had  ‘seriously compromised the EU legal order’: it had misinterpreted and misapplied Article 351 TFEU, violated the duty of cooperation under Article 4(3) TEU, failed to refer to the Court of Justice under Article 267 TFEU, and infringed the duty laid down in Article 108(3) TFEU.

Professor Koutrakos has written extensively on the relationship between EU law and international investment law (for instance, ‘The anatomy of autonomy: themes and perspectives on an elusive principle’, European Central Bank Legal Conference 2019, Building Bridges: central banking law in an interconnected world p90). He is also on the European Commission List of Candidates Suitable for Appointment as Arbitrators and TSD experts.

CMA wins in Court of Appeal in Cérélia/Jus-Rol merger case

The Court of Appeal has handed down judgment today dismissing Cérélia’s appeal from the Competition Appeal Tribunal on all grounds. Both the Court of Appeal and the CAT upheld the decision of the CMA to require Cérélia to divest the Jus-Rol business that it had acquired in 2022.

The judgment is of interest in two important respects. First, it provides an analysis of the scope of judicial review by the CAT in merger cases. Second, it considers the circumstances in which the CMA is entitled to extend the statutory timetable within which it must conclude a merger investigation for “special reasons”.

Cérélia and Jus-Rol both supply dough-to-bake products to grocery retailers in the UK. Jus-Rol is the leading brand of such products, which include filo and shortcrust pastry, and bake-at-home croissants. Cérélia is the leading supplier of supermarket own-label dough-to-bake products, and also provides contract manufacturing services to Jus-Rol. The CMA found that the merger of the two suppliers would give rise to a substantial lessening of competition in the market for the wholesale supply of dough-to-bake items, and imposed a requirement of divestiture by way of remedy. Following an unsuccessful appeal to the Competition Appeal Tribunal (whose judgment of 1 September 2023 is here), Cérélia appealed to the Court of Appeal on five grounds.

By its first two grounds, Cérélia alleged that the CMA had acted irrationally and unfairly in concluding that the merged entity would not be kept in competitive check by two alternative suppliers of dough-to-bake products. In dismissing that complaint, the Court of Appeal conducted a valuable review of the scope of judicial review by the CAT in merger cases. It emphasised that the CAT was required to conduct a deep dive into the evidence, to enable it to make an informed decision as to the adequacy of the evidential underpinning of the CMA’s decision, and hence as to the legitimacy of its determination and evaluation of the facts. The Court of Appeal made clear that because of the CAT’s expertise, it was quite possible that the CAT would be critical of relatively complex evaluations by the decision maker, even where a non-specialist court might not be. In the present case, however, the CMA’s approach had been logical and rational, and there had been sufficient material before the CMA for it to find as it did. Further, the CMA’s consultation of the parties through the provision of its Provisional Findings had been fair.

Cérélia’s third ground concerned the CMA’s decision to extend time for completing its investigation for “special reasons”, under section 39(3) of the Enterprise Act 2002. The Court of Appeal held that the CAT had not erred in concluding that the CMA had been entitled to extend time on the facts of this case. It declined to lay down any canonical definition of “special”, given the fact and context specific nature of the test. It rejected Cérélia’s submission that such reasons were required to be “exceptional” in nature. The requirements of fairness were a relevant consideration which could inform the “special reasons”. Whether the reasons given by the CMA were in fact “special” was ultimately a matter of legal classification, and hence one for the CAT, but the CAT would take into account that Parliament had accorded a relatively broad discretion on the CMA.

Lastly, Cérélia’s fourth and fifth grounds concerned the question of the effect of any unlawful decision by the CAT to extend time. Since Ground 3 had been dismissed, these grounds had become academic. However, the Court of Appeal addressed them in any event. Cérélia had argued that the result of an unlawful extension was that the CMA’s final decision would have been made out of time – and that the consequence was that the merger should be treated as having been cleared. The Court of Appeal rejected that submission, holding that such a result would be inconsistent with the intention of Parliament. Instead, the CAT had a discretion as to whether to quash an unlawful decision to extend time and it would have been a rational exercise of that discretion to uphold the final decision in this case.

The Court of Appeal’s judgment is here.

Alison Berridge appeared for Cérélia.

Robert Palmer KC led for the CMA. Michael Armitage also appeared for the CMA in the CAT.

Optima v DWP: significant TCC judgment on disqualification of non-compliant bids

The Technology and Construction Court (Freedman J) has today handed down a significant judgment in a procurement dispute, dismissing a challenge to the exclusion of a tender for non-compliance following an expedited trial.

The claimant (Optima Health) had tendered for a call-off contract under a framework agreement to provide occupational health and employee assistance programme services to the Department for Work and Pensions. Under the framework agreement, suppliers could not charge prices in excess of framework prices for any call-off contract. Optima submitted a pricing schedule in which a small number of items were in excess of the framework prices. DWP considered Optima’s tender to be non-compliant and excluded it from the competition, although it had the highest score on quality and would (but for its non-compliant prices) have been the winning bidder.

Optima alleged that the pricing schedule contained obvious clerical errors and that its disqualification was in breach of the principles of transparency and equal treatment and/or disproportionate. At trial, the Court was asked to determine: (i) whether the tender documentation clearly and transparently set out the consequence of exceeding framework prices (ii) if the tender documents were clear and DWP therefore had a discretion, whether it had acted unlawfully by excluding Optima rather than taking alternative action, such as reducing the prices to the maximum framework prices, waiving the non-compliances, or seeking clarification.

The Court found against Optima on both grounds, holding that (i) it was clear from the tender documentation (understood in its commercial context) that bids with prices in excess of framework prices would or might be excluded and (ii) DWP had lawfully excluded Optima from the competition.

The judgment contains an in-depth consideration of the relevant case law along with a detailed application of the principles to the instant case. It will therefore be of widespread interest to both economic operators and contracting authorities as regards the correct treatment of non-compliant tenders, the circumstances in which exclusion of a tender is permitted, and in particular the application of the principles of transparency and equal treatment in the context of errors in a pricing schedule for a call-off under a framework agreement.

Valentina Sloane KC acted for Optima Health (instructed by Eversheds Sutherland (International) LLP).

Azeem Suterwalla and Alfred Artley acted for DWP (instructed by the Government Legal Department).

A copy of the judgment can be found here.

Francis Hornyold-Strickland wins in the Supreme Court of Gibraltar

Francis has achieved a resounding success in a hearing in the Supreme Court of Gibraltar, on behalf of his client, Oldstone Cargo and its insurers QBE Europe, the insurers of the OS 35, a vessel which sank off the Gibraltar coast in August 2022. The judgment releases £14,500,000 previously paid into Court by QBE Europe.

In a 37-page judgment covering issues of both private and public international law, Restano J held that: (a) a letter of undertaking (“LOU”) was “acceptable” and “adequate” security for the purposes of Article 11(2) of the Convention on Limitation of Liability in Maritime Claims 1976 (as amended) (“the LLMC”) as applied in the leading Court of Appeal authority The Atlantik Confidence [2014] EWCA Civ 217; (b) the Defendants’ concerns about enforcement of the LOU were not “real or material”; and (c) the Gibraltar Port Authority’s blanket refusal to consider LOUs was ultra vires and put both Gibraltar and the United Kingdom in breach of their obligations under public international law.

The judgment reiterates that signatories to the LLMC, including their public representatives such as port authorities, cannot adopt blanket prohibitions on LOUs without breaching public international law.  The judgment also clarifies the relevant considerations relating to whether an LOU is “adequate”, by adopting the test advanced by Francis, providing that “issues as to enforceability” of an LOU need to be “real and material”.

The judgment underscores chambers’ strengths in technical commercial law, including the intersection of commercial, shipping, insurance, and public international law. A copy of the judgment can be found here, with the substance of the analysis being from §44 onwards.

Francis Hornyold-Strickland was instructed by Jim Cashman and Jonathan Goulding of HFW (Athens and London). Local counsel were Raymond Triay and Sebastian Triay of Triay Lawyers.

CAT upholds appeals against finding of an unlawful agreement in Allergan PLC & Ors V The Competition and Markets Authority

The CAT has today published two judgments in Allergan PLC & Ors V The Competition and Markets Authority concerning a CMA Decision which found an unlawful agreement in relation to 10 mg hydrocortisone tablets. The first judgment (dated 29 September 2023 and originally handed down confidentially to the parties) addresses the substantive arguments on appeal and raises certain questions of due process. Those questions of due process were considered at a further (closed) hearing in October 2023. The second judgment, dated 8 March 2024, upholds the appeals against the finding of an unlawful agreement in the CMA Decision on the basis of the CAT’s findings that the CMA did not put certain adverse findings in the Decision to witnesses called by Advanz.

Robert Palmer KCLaura John and Jack Williams (instructed by Linklaters LLP) appeared for the Intas Appellants.

Mark Brealey KC (instructed by Morgan, Lewis & Bockius UK LLP) appeared for the Advanz Appellants.

Josh Holmes KCNikolaus GrubeckMichael Armitage and Daisy Mackersie (instructed by the legal department of the Competition and Markets Authority) appeared for the Competition and Markets Authority.

Robert Palmer KC successful in Prince Harry security judicial review

The High Court has dismissed Prince Harry, the Duke of Sussex’s, claim for judicial review challenging the decision of RAVEC that he should no longer be given the same degree of publicly funded protective security, provided by the police, when in Great Britain, following his decision in early 2020 to step back from his role as a working member of the Royal Family. RAVEC is the body given responsibility by the Home Secretary for decision-making in relation to matters of protective security in Great Britain.

The Duke of Sussex advanced a significant number of challenges to the decision-making of RAVEC, alleging: failures to follow their own policies; inconsistent treatment with others; irrationality given, amongst other matters, his status from birth as a senior member of the Royal Family; and procedural unfairness in the way in which the decision was reached and information which was not provided to him at the time. The judgment of Lane J dismisses all of the grounds of challenge, both to the decision taken in 2020 and all of the challenges in relation to its application to subsequent visits of the Duke to Great Britain.

Significant parts of the hearing before Lane J were necessarily held in private to ensure that details of the security arrangements of the Duke, and of third parties, were not placed in the public domain. The High Court’s public judgment is similarly heavily redacted on the same basis. That public judgment – R (Duke of Sussex) v Secretary of State for the Home Department [2024] EWHC 418 (Admin) – is available here.

Today’s decision is being widely reported, including on the BBC.

This was the second judgment dismissing a judicial review complaint that Prince Harry brought over his security arrangements. In May 2023, Robert also successfully defended a challenge brought by the Duke against RAVEC’s decision to reject in principle any ability to privately fund police protection. The decision concluded that it would be inappropriate to support or authorise the wealthy to ‘buy’ protective security services provided by specialist officers of the Metropolitan Police. The judgment in that case is available here.

Robert Palmer KC acted for the Secretary of State for the Home Department.

Court of Appeal issues judgment in first Trucks damages claim with all-Monckton cast list

The Court of Appeal has today handed down judgment in DAF Trucks Limited v Royal Mail and British Telecom, dismissing DAF’s appeal against the Competition Appeal Tribunal’s judgment of 7 February 2023.

This was the first case to reach trial in the UK based on the European Commission’s 2016 Trucks decision. The Tribunal upheld Royal Mail and British Telecom’s damages claims against DAF for loss arising from the breach of competition law found by the Commission.  In dismissing DAF’s appeal, the Court of Appeal addresses the use of the “broad axe” in quantifying competition damages, and the legal test to be applied in determining whether a claimant has passed-on its losses to customers.

All parties to the proceedings were represented by leading and junior counsel from Monckton Chambers.

Tim Ward KC, Ben Lask KC, Ligia Osepciu appeared for Royal Mail and British Telecom. Clíodhna Kelleher appeared for the Claimants at first instance.

Daniel Beard KC, Daisy Mackersie and James Bourke appeared for DAF.

A copy of the judgment is here.

Francis Hornyold-Strickland successfully resists an emergency ex parte injunction

Francis Hornyold-Strickland has successfully defended an ex parte application for an injunction. The injunction sought to restrain Francis’ client from exchanging on the sale of a high value property overlooking Hyde Park.

On 12 February 2024, Francis appeared before Leech J, in the chancery interim applications list, acting for the receivers and the mortgagee. The applicant’s company had taken out a £6,800,000 loan, secured by charges over various properties, including the property in issue. Having defaulted on the loan, the mortgagee took possession of the property. Receivers were about to exchange contracts with a buyer, when, the day before, the ex parte application was made on the basis, inter alia, that the sale was at an undervalue.

Leech J held that while there was clearly a serious triable issue about whether there was, in fact, a sale at an undervalue, nevertheless: (a) damages would be an adequate remedy, and the receivers were highly regulated professionals who were likely to have sufficient insurance in place; and (b) the balance of convenience weighed heavily in favour of not granting the injunction.

The application underscores chambers’ strengths in commercial litigation, including in bringing and defending emergency injunctions.

Stefan Kuppen acts for successful claimants in LCD damages claim

Following a 4-week trial at the end of last year, the High Court has handed down judgment in a cartel follow-on claim in relation to the LCD cartel. The claim was brought by Granville and OT Computers (now insolvent former UK computer manufacturers ‘Time’ and ‘Tiny’), based on a 2010 European Commission decision. The case is only the third cartel damages claim to reach final judgment in the UK (after Britned and the Royal Mail Trucks claim).

The Court, HHJ Pelling sitting as a High Court judge in the Commercial Court, found that the cartel, which had operated from 2001 to 2006, had resulted in an overcharge of between 4% and 8% for the main product categories (with a 14% overcharge found in relation to a very small third category). The Court further held that the Claimants were likely to have passed on 65% of that overcharge to their downstream customers in the form of higher prices. The Court accepted, however, that this gave rise to a substantial secondary claim for lost profits from lost sales due to higher retail prices.

The Court rejected arguments that the claim was time barred, following the Court of Appeal’s reasoning in a separate claim brought by the same claimants (OT Computers v Infineon [2021] Q.B. 1183) as to the knowledge an insolvent claimant could with reasonable diligence be expected to have discovered. The Court also rejected arguments that substantial parts of the claim (where products had first been put onto the market outside the EEA) were either governed by foreign laws, and should therefore fail, or otherwise fell outside the territorial scope of EU law. The Court of Appeal had ruled earlier that the Claimants were not entitled to claim compound interest for the period of their insolvencies, as the requirements for awarding compound interest on an equitable basis (as opposed to as damages in a Sempra Metals sense) were not met (Granville v LG [2024] 2 W.L.R. 372).

Stefan Kuppen acted for the claimants.