Mark Brealey QC successful before Supreme Court of Mauritius as Court Awards Damages to Mobile Phone Operator

On 9 August 2017, the Supreme Court of Mauritius awarded Emtel, a mobile phone operator in Mauritius, £13 million damages in respect of loss suffered as a result of cross-subsidies granted by Mauritius Telecom (“MT”), the monopoly fixed line operator, to its mobile phone subsidiary, Cellplus.

The Claimant, Emtel, was the first mobile phone operator in Mauritius.  Several years after Emtel started operation, MT established Cellplus as a second mobile phone operator. The Court found that it was a condition of Cellplus’ licence that it would not benefit from any cross-subsidy from its parent. On its launch Cellplus significantly undercut Emtel’s tarrifs.  Emtel was forced to reduce its tariffs match to avoid losing market share. The Court found that Cellplus’ loss-making tariffs were funded by financial assistance from MT in the form of interest free inter-company debt and lease finance at non-commercial rates.

The Court concluded that the cross-subsidisation constituted unfair competition (concurrence deloyale) and amounted to a “faute” within the meaning of article 1382 of the Civil Code. The Court awarded damages to Emtel to compensate it for the difference between the reduced tariff actually charged and the tariff that would have emerged in a counterfactual where Cellplus competed without benefiting from cross-subsidies.

The Court further held that the regulator was jointly and severally liable for the loss suffered by the subsidised low tariff,  on the basis that it had committed a “faute lourde”. Emtel had complained to the regulator about Celllplus’ non-compliance, but the regulator had wilfully taken no action.

Mark Brealey QC appeared for Emtel (having been granted special dispensation by the Lord Chief Justice of Mauritius to appear in the Supreme Court). The trial lasted 8 weeks.

To read the judgment please click here.

Uber loses London licence due to lack of corporate responsibility – Julianne Kerr Morrison advises on GMB campaign

Julianne Kerr Morrison was instructed by Leigh Day, acting on behalf of the union GMB, which sent the TfL a letter before action which threatened TfL with a judicial review if it did not impose conditions on Uber’s Private Hire Vehicle (PHV) Operator’s licence. Today’s announcement that Uber has been stripped of its London licence is seen as an historic decision and a vindication of GMB’s campaign to ensure drivers are given the rights they are entitled to – and that the public, drivers and passengers are kept safe. For further information read news release issued by Leigh Day, coverage by The Guardian can be found here.


Advocate General rejects Avon Cosmetics’ challenge to the UK’s derogation for the direct-selling sector

Advocate General Bobeck has released his opinion in Case C- 305/16 Avon Cosmetics v HMRC in which Avon alleged that a derogation granted by the European Council authorising the UK to oblige Avon and other direct sellers to account for VAT on the open market value of their products sold through un-registered sellers without taking into account VAT which they normally would be allowed to deduct as input tax, was granted unlawfully because it infringed certain EU law principles and because the UK had failed fully to disclose relevant material when seeking authorisation for the derogation. The Advocate General accepted all of the arguments advanced on behalf of the UK. The derogation did not foresee or allow for a notional input tax deduction because it was not intended to be applied in such a way as to emulate the tax situation that would prevail if the representatives had been VAT-registered. Further, having opted for the direct-selling business model, Avon could not “…have à la carte access to the VAT rules normally applicable to other models”. In a forthright opinion, the Advocate General concluded that the case advanced by Avon brought “… complexity in ‘through the back door’ in practice by (partially) delegating to the public administration and administrative burden that the Avon Ladies had chosen not to assume.” Accordingly, the derogation did not breach the principles of fiscal neutrality or proportionality. “Perfectly equal treatment was simply not achievable” between different business models. The Advocate General also concluded that the UK had not been under an obligation to inform the Commission that unregistered sellers incurred VAT on the purchase of goods used for the purposes of their economic activity.

Melanie Hall QC represented the UK.

Daniel Beard QC successful in Court of Justice of the EU as Intel’s appeal in relation to €1bn fine is upheld

Court of Justice of the EU has upheld Intel’s appeal in relation to its €1bn fine and overturned the General Court decision against Intel. The CJEU has looked again at the case law on how abuse of dominance works and has remitted the case back to the General Court.

Daniel Beard QC acted for Intel Corporation Inc.

To read the judgment please click here.

Western Sahara Trade Dispute in the Court of Justice of the European Union

Today, in the Grand Chamber of the Court of Justice of the European Union (CJEU) oral submissions are being heard on behalf of the Western Sahara Campaign UK (WSCUK) in its challenge against the legality of the EU – Morocco Fisheries Partnership Agreement.

Conor McCarthy, led by Kieron Beal QC, represents the WSCUK.

WSCUK argue that the UK unlawfully allowed products, originating from or processed in Western Sahara, to be imported into the UK under a trade agreement with Morocco. Proceedings were issued against DEFRA and HMRC in the High Court.

For further information on the case please click here to read the press release by Leigh Day.

The UT concludes that whether an excise duty point can arise in the UK’s control zone in France is a question that can only be determined in condemnation proceedings

The key question for the Upper Tribunal in the recent decision in Denley v HMRC was whether the Excise Goods (Holding, Movement and Duty Point) Regulations 2010  were in breach of the EU Excise Directive (Directive 92/12/EEC). The Appellant was stopped and questioned in Coquelles, the UK’s control zone by the entry to the Channel Tunnel in France, and found to have tobacco considerably in excess of the personal indicative levels. The goods were seized and an assessment to excise duty subsequently raised. The Appellant contended, in proceedings in the Tribunal, that as the Excise Directive indicated that a duty point only arose within the territory of another Member State, the UK and France could not, by bilateral international treaty, extend the scope of the UK’s territory for excess purposes as this was not permitted by the Excess Directive. HMRC argued that a conforming interpretation of the Excise Directive meant that the juxtaposed controls agreed between the UK and France in the Sangatte Protocol in fact gave effect to the aims of the Excise Directive rather than breaching it. In the event the UT agreed with HMRC’s prior point that the Appellant could not raise this argument in the FTT as the point should have been taken in the Magistrates Court by way of forfeiture proceedings, in accordance with the Decisions in Revenue and Customs Commissioners v Jones [2011] EWCA Civ 824 and HMRC Race [2014] UKUT 331. As the Appellant had not brought forfeiture proceedings, the UT considered that it should not express a view on the substantive question as to whether a duty point can arise when excise goods are held within the UK’s control zone in France. That will inevitably now be raised and considered by a Court in future forfeiture/condemnation proceedings.

Brendan McGurk was acting for the Respondents, instructed by the General Counsel and Solicitor to HM Revenue and Customs.

The full judgment can be found here.

E-commerce restrictions – Shoppers cannot be denied the right to buy goods online as CMA fines Ping £1.45m for unjustified online sales ban.

In a landmark move, the Competition and Markets Authority (CMA) has found that Ping, one of Britain’s biggest golf club manufacturers, has breached UK and EU competition law by preventing two UK retailers from selling its golf clubs online.

As well as the fine of £1.45m, Ping is required to bring the online sales ban to an end, and must not impose the same or equivalent terms on other retailers. Ping sought to justify its restriction on the basis that it was necessary to promote a genuine commercial aim of promoting in-store custom fitting. However the CMA found that Ping’s online sales ban was not objectively justified or proportionate as its aims could be achieved by less restrictive measures. The ban therefore infringed the Chapter I prohibition of the Competition Act 1998 (CA98) and Article 101 of the Treaty on the Functioning of the European Union (TFEU). Ping may require retailers to meet certain conditions for online sales but these conditions must be proportionate and compatible with competition law.

Anneli Howard and James Bourke acted for a complainant.

See Government press release.

Gender Reassignment – The Legal Saga Continues

The Upper Tribunal has given judgment in the latest round of litigation concerning the compatibility of the UK’s legislative scheme for gender reassignment with EU law. In Secretary of State for Work and Pensions v HY (RP) [2017] UKUT 303 (AAC), the Upper Tribunal allowed the Secretary of State’s appeals against two decisions of the First-tier Tribunal. It held that the requirement in the Gender Recognition Act 2004 to obtain a Gender Recognition Certificate as a condition for claiming a state requirement pension in one’s acquired gender was compatible with Council Directive 79/7/EEC on equal treatment in matters of social security.  This was the case notwithstanding that such Certificates had prospective effect only.

Ben Lask acted for the Secretary of State. Brendan McGurk acted for the claimants.

To read the case note please click here.

NHS England’s refusal to fund treatment for 7 year-old boy unlawful

Mrs Justice Andrews has found the decision of NHS England to refuse to fund treatment for a 7 year-old boy with an inherited metabolic disorder, Phenylketonuria (PKU), to be irrational and unlawful. PKU is a condition which inhibits the ability to digest protein and prevents the body from breaking down an amino acid called phenylalanine. High levels of phenylalanine can cause permanent brain damage. The claimant, S, was unable to control his intake of protein due to his autism and so his consultant sought funding approval for sapropterin dihydrochloride (Kuvan) from NHS England. Kuvan is not currently approved by NHS England for funding for children although it is approved by the European Medicines Agency and is widely prescribed in countries across Europe including France and Romania. Despite the evidence that S’s phenylalanine levels were above the safe level and so putting him at risk of brain damage NHS England refused his consultant’s request for funding. In a detailed judgment which is highly critical of the approach taken by NHS England, Mrs Justice Andrews found the decision to be irrational and unlawful. The decision was quashed and now has to be retaken in light of the judgment and any further clinical evidence presented by S’s consultant.

S was represented by Ian Wise QC and Steve Broach, instructed by Hodge Jones and Allen.

The full judgment can be found here.

This is covered by the BBC here and The Guardian here.

CAT allows BT’s appeal against Ofcom’s BCMR


The Competition Appeal Tribunal has issued a ruling declaring that Ofcom erred in its Business Connectivity Market Review (BCMR), and quashing the market definition decisions upon which Ofcom’s “dark fibre” remedy was based.

In its BCMR Statement, which was published in April 2016, Ofcom defined various markets for the provision of “business connectivity” services, used by companies to carry data between locations. Ofcom defined a single product market for contemporary interface symmetric broadband origination (“CISBO”) services of all bandwidths; and four separate relevant geographic markets: the Central London Area; the London Periphery; Hull; and the Rest of the UK. Ofcom also made determinations concerning the extent of BT’s core network. Ofcom found that BT had significant market power (“SMP”) for CISBO services outside Central London and Hull, and proposed a package of remedies including a so-called passive remedy allowing Communications Providers to lease only the fibre element of the leased lines from BT, allowing them to attach equipment of their own choosing at either end to “light” the fibre. This remedy was referred to as Dark Fibre Access (“DFA”) and was to be implemented in October 2017.

BT appealed on the grounds that Ofcom had erred in its Product Market Definition, in that Ofcom had failed to identify a separate product market for Very High Bandwidth (“VHB”) services of 1 Gbit/s and above, in which BT does not have SMP. BT also argued that Ofcom had erred in its approach to the Geographic Market Definition, and in its determination of the boundary between the (competitive) core segments of BT’s network and other terminating segments. BT further argued that the dark fibre remedy was disproportionate, including because it would undermine infrastructure based competition for VHB services from providers such as Virgin Media and CityFibre.

A hearing took place in April-May 2017 over sixteen hearing days, in which the Tribunal heard BT’s arguments in relation to market definition and the competitive core. Yesterday, the CAT issued a ruling on those issues. The CAT has unanimously decided that Ofcom erred in defining a single product market, in concluding that the UK outside London (and Hull) comprises a single geographical market, and in its determination of the boundary between core and terminating parts of BT’s network. Those decisions will be quashed and remitted to Ofcom for reconsideration. The CAT is still preparing its reasoned judgment for its conclusions, which will be handed down in due course.

The imposition of the DFA remedy was contingent on the correctness of Ofcom’s market definition analysis. A further hearing of the remedies issues raised by BT had been scheduled for September 2017, to allow those issues to be considered, if appropriate, before the implementation date of the DFA remedy. Given that Ofcom’s market definition will now need to be reconsidered, the hearing has been vacated.

Daniel Beard QC, Robert Palmer, Ligia Osepciu and David Gregory represented BT.

Josh Holmes QC represented Ofcom.

Philip Woolfe represented a group of communications providers including TalkTalk, Vodafone, Colt and Hutchison 3G.

The ruling has already been reported by the Financial Times and the Daily Telegraph.