Christopher Vajda QC spoke at the Lawyer Conference held on 7 May 2008 on the EC White Paper on damages actions for breach of EC antitrust rules. He spoke on the subject of access to evidence and what, if any, changes the White Paper would herald for the disclosure regime in England and Wales
The Competition Appeal Tribunal (‘CAT’) has refused permission to bring claims for damages said to arise from the EC Commission’s decision finding an infringement of Article 81(1) EC in relation to electrical and mechanical carbon and graphite products against a number of proposed defendants, including Le Carbone Lorraine SA, while their appeals to the Court of First Instance against that decision are pending. The CAT held in an earlier judgment that the two year time limit for bringing a follow on claim for damages in the CAT does not begin to run until any appeals against that decision have been determined and that permission is required to bring a claim at any time before that date. The CAT distinguished the position of Le Carbone and others from the claims against Morgan Crucible plc, in respect of which it granted permission in an earlier judgment. Morgan has not appealed the Commission’s decision. The CAT’s decision to refuse permission means that it was not necessary for it to deal with various detailed arguments advanced by the proposed defendants regarding the Tribunal’s jurisdiction under the Brussels Regulation.
Daniel Beard was instructed on behalf of Le Carbone Lorraine by Ross & Co on the application for permission.
Ben Rayment was instructed by Sullivan & Cromwell LLP on behalf of Morgan Crucible plc.
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Daniel Beard QC
Ben Rayment
On Wednesday 30 April 2008, the Appeal Panel of the ECB unanimously allowed appeals by three South African cricketers against the decision of the ECB to refuse to register them as Qualified Cricketers for the English 2008 season. The ECB had refused to register them because they had played cricket for the Indian Cricket League. The Appeal Panel directed the ECB to register the cricketers forthwith. In view of the urgency of the situation the Appeal Panel gave its decision today and will provide its reasons later.
Christopher Vajda QC, Paul Harris, Josh Holmes and Ewan West acted for one of the cricketers, Johannes Van Der Wath, instructed by Sheridans.
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Paul Harris QC
Josh Holmes
Ewan West
Our flagship VAT event took place on Tuesday 29 April at the Kingsway Hall Hotel. Once again in association with Lexis Nexis, the event brought together some of the leading practitioners in VAT to discuss updates in the principles of EU law which underpin the VAT system.
Seven speakers from Monckton Chambers, along with special guests from the European Commission, HMRC, Eversheds and BT, all shared their expertise with the delegates.
Topics included:
The OFT announced today (23 April) that it had settled the judicial review and defamation actions brought against it by Morrisons.
In September last year, the OFT issued a press release with a Statement of Objections against a number of large supermarkets and dairy processors. Morrisons was one of the supermarkets included in the Statement of Objections.
Today’s statement said, “The OFT regrets that the press release contained these serious errors, and wishes to apologise sincerely to Morrisons for their publication.”
To read the statement in full, please click here.
Meredith Pickford acted for Morrisons, instructed by Wilmer Hale.
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Meredith Pickford
The Court of Appeal gave judgment on Wednesday 16 April in an appeal brought by Abbey Mine Limited (“AML”), the disappointed applicant for a coal mining licence at the Margam site in South Wales.
Margam has large reserves of high quality coal, and once it is operational, will supply virtually all the coking grade coal mined underground in the United Kingdom. The Coal Authority awarded the licence to Corus, the steel producer, instead of to AML.
AML brought judicial review proceedings to challenge the Authority’s decision, alleging procedural unfairness. At first instance, Mrs Justice Dobbs rejected AML’s complaints. On appeal, the Court of Appeal has once again found for the Authority.
The Court of Appeal’s judgment, delivered by Lord Justice Laws, contains important guidance as to what constitutes a fair procedure in competitive licensing cases. The Court held that “in a competition case like this. fairness imposes two broad requirements: (1) that an applicant by told the substance of the decision-maker’s concerns about his own case, and (2) that each applicant be treated like every other: there should, to use the hackneyed phrase, be a level playing-field. the applicant is entitled to be told of the decision-maker’s concerns about his own case, but not the details of his rival’s case”.
Christopher Vajda QC and Josh Holmes acted for the Coal Authority, instructed by Nabarro.
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Josh Holmes
On Wednesday 16 April, the House of Lords handed down judgment in the case of
Edwards v Environment Agency [2008] UKHL 22.
The appeal arose out of an application by a concerned local resident to quash a permit issued on 12 August 2003 by the Environment Agency (“the Agency”) to Rugby Ltd for the operation of the Rugby cement works. The chief grounds were that the Agency did not disclose enough information about the environmental impact of the plant to satisfy its statutory and common law duties of public consultation.
The case involved significant issues of EC environmental law, particularly the correct interpretation and application of the Environmental Impact Assessment (EIA) and the Integrated Pollution Prevention and Control (IPPC) Directives. It also raised important matters of principle relating to a public body’s common law obligation to consult on “internal” documents.
Their Lordships held unanimously that the Agency was not obliged to disclose to the public reports which it had commissioned internally from its Air Quality Modelling Assessment Unit (AQMAU) on emissions of particulates (dust) from the plant either under the EIA regime or under the IPPC regime. They also held that, even if there had been a breach of the common law duty of fairness by the Agency in failing to disclose those reports, the Judge below had been entitled to exercise his discretion not to grant relief on the grounds inter alia that “it would be pointless to quash the permit simply to enable the public to be consulted on out-of-date data”.
The appeal was therefore dismissed.
Kassie Smith acted for the Respondents, the Environment Agency, the First Secretary of State and the Secretary of State for the Environment, Food and Rural Affairs
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On 11 April, the OFT accepted undertakings offered by Transocean Inc arising from its merger with GlobalSantaFe (GSF) in November 2007. Transocean and GSF are major worldwide suppliers of drilling rigs to oil and gas exploration companies: each party had a worldwide turnover in 2006 of between US$3 and 4 billion. The merger was considered by a number of competition authorities worldwide including the OFT and the US Department of Justice.
In the UK, the OFT accepted the parties’ arguments that the sale of two of the rigs previously operated by GSF in the UK sector of the North Sea addressed the OFT’s competition concerns, and on that basis decided not to refer the merger to the Competition Commission.
George Perez and Ben Rayment acted for the parties before the OFT; they were instructed by Baker Botts in Houston, Texas, on behalf of Transocean and by Skadden, Arps, Slate, Meagher & Flom on behalf of GSF.
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George Peretz
Ben Rayment
On Monday 14th April Paul Lasok QC will be taking part in a Competition Law debate at the new offices of Norton Rose. The panel will be made up of some of the most highly regarded experts in the area of competition law, including former CAT President Sir Christopher Bellamy, Michael Grenfell (Norton Rose), Stephen Kon (SJ Berwin), Tony Woodgate (Simmons & Simmons) and a representative from the OFT.
Norton Rose are administering this event in association with the Times.
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Paul Lasok QC
Her Majesty’s Revenue and Customs (Petitioners) v Loyalty Management (UK) Limited (Respondents)
Her Majesty’s Revenue and Customs (Petitioners) v Baxi Group Limited (Respondents)
Total (UK) Limited (Petitioners) v Her Majesty’s Revenue and Customs (Respondents)
An Appeal Committee of the House of Lords comprising Lord Hoffmann, Lord Walker and Lord Mance has granted the Commissioners leave to appeal in two separate cases involving loyalty schemes operated by Loyalty Management (UK) Limited (‘LMUK’) and Baxi Group Limited. It held that an immediate reference should be made to the ECJ. On the same day the Appeal Committee refused Total (UK) Limited leave to appeal in a case against the Commissioners for HM Revenue and Customs.
LMUK promotes the ‘Nectar’ high street customer loyalty scheme. Retailers who accept Nectar Points from customers as payment in whole or in part for goods or services are paid a “Service Charge” by LMUK. Baxi operates a loyalty scheme for purchasers of its boilers under which reward goods are provided by a separate company and paid for by Baxi. LMUK and Baxi contend that they are entitled to reclaim the VAT on their payments as consideration for a supply of services to them. The Court of Appeal agreed. The Commissioners argue that the payments are third party consideration for supplies of rewards (either goods or services) to the recipients; accordingly LMUK and Baxi have no right to deduct the VAT.
During argument Lord Hoffmann commented that the guidance of the ECJ was needed in reconciling the decision of the House of Lords in CEC v Redrow Group plc [1999] STC 161 with more recent decisions of the ECJ. The Appeal Committee rejected the submissions of LMUK and Baxi that the issues raised were acte clair in their favour.
A number of other appeals concerning customer loyalty schemes are currently stayed pending the resolution of LMUK and Baxi. As a result, both the Commissioners and taxpayers have a significant interest in the outcome of the two cases.
Total operated a sales promotion scheme through which customers could collect points every time they purchased fuel. Once the customer had collected a certain number of points these could be exchanged for a voucher issued by Total. The voucher was worth £5 when the customer used it to purchase goods or services in certain high-street retailers or donated its value to charity; it could not be exchanged for cash.
The main issue was whether the transfer of the voucher to the customer constituted a retrospective discount off the price of the fuel. Total contended that it was operating a price reduction scheme and that the voucher had the same VAT consequences as a cash rebate; i.e. that it reduced the amount on which the company was liable to pay output tax. The Court of Appeal had rejected this analysis [and held that the voucher did not act as a rebate because the customer received more at the same price rather than the same at a lesser price. In doing so the Court had placed significant reliance on the scheme documentation].
Before the Appeal Committee Total argued that there was a direct link between the supply of fuel and the provision of a voucher which enabled the voucher to act as a retrospective reduction in the price received for the fuel. It also suggested that a reference be made to the ECJ and alleged that the Court of Appeal’s judgment offended the principle of fiscal neutrality. The Commissioners contended that the principles of law to be applied were clear and that the scheme documentation was evidence that the voucher acted as a grant of an additional benefit to the customer and not as a price reduction. The Appeal Committee refused Total leave to appeal.
The result clarifies the position with regard to loyalty schemes which allow customers to collect points when goods or services are purchased and subsequently to redeem those points for non-monetary ‘rewards’. Following Total the transfer of a non-monetary reward [for example a voucher] to a customer redeeming his points does not operate to reduce the taxable consideration obtained by the supplier for the original goods or services.
Christopher Vajda QC represented the Commissioners against Loyalty Management (UK) Limited.
Nicholas Paines QC represented the Commissioners against Baxi Group Limited.
Christopher Vajda QC and Andrew Macnab represented the Commissioners for HM Revenue and Customers against Total (UK) Limited
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Andrew Macnab
