Judgment was delivered on 26 March 2009 in JML Direct Ltd v Freesat UK Ltd [2009] EWHC 616. The case concerned the allocation of Electronic Programme Guide (“EPG”) numbers by Freesat, a new multi-channel TV service owned jointly by the BBC and ITV (an EPG is an on screen television programme guide used by digital TV systems)

JML (a provider of TV shopping channels) claimed that Freesat had, in breach of contract, failed to comply with its own EPG Listing Policy and the Ofcom EPG Code in allocating numbers to the channels broadcasting on its platform. As a result, JML’s channels had been listed lower down the EPG than they should have been. Dismissing JML’s claim, Mr Justice Blackburne held that Freesat’s Listing Policy was an “objectively justifiable method” for the purposes of the Ofcom Code and that, in applying the Policy, Freesat had acted within the margin of discretion afforded to it under its contract with JML. The judgment confirms that, in order successfully to challenge the exercise of contractual discretion, a claimant must show that the party exercising that discretion acted dishonestly, in bad faith or “irrationally” in a sense analogous to the pubic law concept of Wednesbury unreasonableness.

Tim Ward and Ben Lask were instructed by the BBC on behalf of the successful Defendant.

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Tim Ward QC
Ben Lask

Regina (Oriel Support Ltd) v Commissioners for Revenue and Customs

Peter Mantle has, along with other members, been successfully expanding his practice into direct taxes, adding to his reputation as an indirect tax practioner. The case of Oriel Support Limited was recently decided by the Court of Appeal and has been reported in the Times. Peter succeeded at first instance and before the CA in this test case on when liability for PAYE could be removed from an employer to the person who in fact paid the employees’ wages.

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Peter Mantle

Milk Supplies Limited v Department of Environment Food and Rural Affairs [2009] EWHC 503 QB

The High Court has held that a company that used multiple subsidiaries to claim export refunds set aside for small exporters, in circumstances where it had exhausted its own entitlement to refunds, had abused its rights under Community law and was subject to the strict penalties under the Regulation governing the system of export refunds for agricultural products (Regulation (EC) No 800/1999). DEFRA, represented by Rebecca Haynes, successfully opposed the company’s contentions that the artificial practice of diverting exports through subsidiaries was not contrary to the overall objectives of the relevant Community law which, it claimed, was to enable as many exports as possible to be covered by refunds, subject only to the Community’s international obligations under the WTO agreements to cap export aid at an agreed limit. The company further argued that following such cases as Halifax and Weald Leasing there was no basis for applying penalties in cases of abuse of rights and that it was not sufficiently clear that the relevant penalty provisions were intended to apply to abusive practices. DEFRA successfully argued that since the consequence of the application of the abuse of rights doctrine was that there was never any entitlement to the export refunds, it followed that the subsidiaries had over-claimed and that the penalty provisions of the refund system applied. The Court held that as the beneficiary of the money claimed by way of refunds, the company was liable to repay the refunds claimed through its subsidiaries, together with penalties totalling 50% of the amounts claimed and interest.

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Rebecca Haynes

R (on the application of Sovio Wines Ltd) v Food Standards Agency [2009] EWHC 382 (Admin)

The High Court recently upheld the decision of the Food Standards Agency to seize a consignment of partially de-alcoholised wine which was manufactured using an unauthorised oenological process and was labelled as Spanish semi-sparkling wine. Rebecca Haynes, acting for the Agency, successfully defended a judicial review brought on the principal ground that since the Sovio product did not satisfy the definition of semi-sparkling wine contained in the Community Wine Regulation (having an alcohol content of less than 8%), the Agency had no jurisdiction to take action in respect of it. The Court held that the Wine Regulation clearly applied to goods purporting to be wine products and applied a prohibition of the use of the “wine” or “semi-sparkling wine” denomination to any product which failed to meet the Community definition of wine terms. The Claimant also failed to persuade the Court that the Agency was bound by a statement of another public body, Cheshire Trading Standards, erroneously indicating that the labelling was fully compliant with relevant labelling legislation.

For the High Court judgment, please click here.

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Rebecca Haynes

On 4 March, the Competition Appeal Tribunal (CAT) handed down judgment in Tesco’s application for review of one of the Competition Commission’s (CC) remedies in its Groceries Report.

Following a two-year inquiry into the grocery sector, the CC had recommended to central government that a ‘competition test’ should be introduced into the planning system. The CAT held that the CC had failed properly to consider certain relevant considerations relating to the costs and benefits of the competition test. The CAT clarified, however, that it had not concluded that the competition test was unreasonable, disproportionate or otherwise inappropriate or unlawful.

The parties have been invited to address the CAT on the question of specific relief at a hearing on 16 March 2009.

Several barristers from Monckton Chambers were involved in the case. Julian Gregory acted for Tesco.

Peter Roth QC, Daniel Beard, Valentina Sloane and Ewan West acted for the Competition Commission.

Tim Ward and Kassie Smith acted for the interveners, Asda and Waitrose respectively.

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Tim Ward QC
Kassie Smith QC
Julian Gregory

Michael Bowsher QC is set to speak at the 15th Annual Federal Procurement Institute in conjunction with the American Bar Association in Chicago on Wednesday 5th March 2009.

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Michael Bowsher QC

RB (Algeria) and another v Home Secretary [2009] UKHL 10

Robert Palmer was junior counsel for the Home Secretary in these appeals, in which the House of Lords found in favour of the Home Secretary on all the points argued, which turned on issues arising principally under Articles 3 and 6 of the ECHR. The appeals arose out of deportation proceedings instituted against two Algerian nationals who the Home Secretary considers are a risk to national security; a third Jordanian nation’s appeal was heard at the same time: he is the Islamist cleric better known as Abu Qatada. The Special Immigration Appeals Commission (SIAC) had dismissed all their appeals.

The House of Lords held that it was permissible for the Home Secretary and SIAC to rely on inter-governmental assurances about the treatment of the deportees after their return to their countries of origin to conclude that they would not (as they would otherwise have been without such assurances) be at risk of torture or inhumane or degrading treatment. The House of Lords also decided that procedures of the Special Immigration Appeals Commission for considering evidence only disclosed to a Special Advocate and not the Appellant himself are not unfair. The case is also important for the conclusion that the Court of Appeal’s jurisdiction, on an appeal from SIAC, is limited to questions of law as provided by the statute even in relation to human rights issues; consideration of such issues does not automatically raise questions of law but may (as here) be purely matters of factual assessment for SIAC.

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Robert Palmer

The European Court of Human Rights declared admissible an application by YUKOS Oil Company on 29 January 2009. Details of that decision now released show that the Court has accepted for further examination on their merits YUKOS’ complaints that:

• the company had been taxed unlawfully in respect of liabilities totalling US $37 Bn which were wholly unknown to Russian Law before the Yukos case;
• that this taxation and its enforcement amounted to the disguised expropriation of the company and its assets, and
• that these measures singled the company out for special treatment in a discriminatory way as an abuse of power.

The Court also admitted for further examination that YUKOS’ complaints that the Russian tax proceedings as a whole had been unfair and represented the imposition of retrospective criminal penalties.

In declaring the vast majority of Yukos’ complaints admissible, the Court also rejected the Russian Government’s argument that all these complaints were now moot because Yukos had been made bankrupt and ceased to exist under Russian law. The Court specifically held that Piers Gardner, of Monckton Chambers, who has represented YUKOS before the Court since this application was filed in 2004, continues to be YUKOS’ valid representative in the proceedings.

The Court has requested written submissions from the parties in relation to nine questions and has decided to hold a hearing on the merits.

YUKOS’ underlying dispute concerning the tax liabilities of US$37 Bn and their consequences is the largest dispute by value ever to have been litigated before any court, domestic or international

For the ECtHR judgment, please click here.

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Piers Gardner

Philip Moser has been advising CounterBalance, a coalition of European NGOs, in relation to the European Investment Bank and Case 155/07 Parliament v Council, an ECJ ruling on the Community Guarantee Decision.

On 28th January 2009 Philip Moser gave evidence to an EU select committee on the Community Guarantee and he has assisted in drafting proposed legislative amendments which are currently before the European Parliament.

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Philip Moser QC