The Oxford University Law Faculty held a special lecture entitled “The Future of European Integration and EU Law: Why and how a financial crisis has become a crisis in European integration.” to celebrate the career of Sir Jeremy Lever KCMG, QC, a pioneer of both the practice and academic study of competition law in Europe. The lecture was given by Professor Miguel Maduro EUI and chaired by Sir Francis Jacobs KCMG QC.  The event was followed by a celebratory dinner at All Souls College.

Carlsberg (UK) Ltd and Inbev (UK) Ltd v HMRC [2012] EWCA Civ 82, 8 February 2012 (CA)

The Court of Appeal has held that brewers are not entitled to calculate beer duty on a “per container” basis and consequently round down the duty to the nearest penny on that basis.  The Court, dismissing appeals from the Upper Tribunal, rejected the brewers’ arguments that, under the Alcoholic Liquor Duties Act 1979 and the Beer Regulations 1993, duty on beer is to be assessed on each container and the rounding down of duty to the nearest penny under section 137(4) of the Customs and Excise Management Act 1979 (while it was in force) was therefore to be carried out in relation to the duty assessed on each container.  Although seemingly “somewhat esoteric, even abstruse”, the case is of (historic) importance to the brewing industry; the amount at issue in the appeals was of the order of £28 million.

Andrew Macnab acted for HMRC in the CA and below.

The hearing of Fresh Del Monte’s and Weichert’s appeal against the European Commission finding that they had participated in an anti-competitive information exchange on the setting of quotation prices for bananas took place today before the General Court. In October 2008 the Commission found that Chiquita, Dole, and Weichert were parties to an exchange of information which had the object of restricting competition contrary to Article 101 TFEU It also found that there was a single and continuous infringement. It fined Dole and Weichert/Del Monte €60m. Chiquita was not fined because it had applied successfully for leniency. The appeal raises important questions about the lawfulness of discussions on price setting factors, whether such discussions can amount to a restriction of competition by object as well as the scope of the concept of a single and continuous infringement.

Christopher Vajda QC, instructed by SJ Berwin, represented Weichert at the oral hearing.

The Competition Appeal Tribunal has today dismissed the challenge by BAA Limited to the Competition Commission’s July 2011 decision requiring BAA to sell Stansted Airport.

This was BAA’s second challenge to decisions of the Commission requiring that Stansted be sold so as to increase the scope for competition in the provision of airport services in South-east England.  The Commission first took such a decision in March 2009 following a market investigation into competition in the provision of airport services across the UK.  BAA’s challenge to that decision, which was the subject of an appeal to the Court of Appeal and subsequently an application to the Supreme Court in early 2011, was ultimately unsuccessful.  BAA then argued that, in the time that had passed since the March 2009 decision, i.e. while BAA’s challenge was ongoing, circumstances had changed.  In particular, BAA argued that the new Coalition Government’s policy of opposing the building of new runways in South-east England was a change in circumstances that meant that the scope for competition between airports was reduced and the sale of Stansted could no longer be justified.  It was the Commission’s decision rejecting those arguments that was the subject of BAA’s second challenge which the Tribunal dismissed today.

The Tribunal (chaired by Mr Justice Sales) dismissed BAA’s case in relation to all four of its grounds of challenge.  The dismissal means that BAA remains required to sell Stansted within a timeframe that BAA and the Commission have agreed.

Monckton barristers Daniel Beard QC and Alan Bates represented the Commission.  Paul Harris QC represented Ryanair, which intervened in the case urging the Tribunal to uphold the Commission’s decision.

The hearing of Fresh Del Monte’s and Weichert’s appeal against the European Commission finding that they had participated in an anti-competitive information exchange on the setting of quotation prices for bananas took place today before the General Court. In October 2008 the Commission found that Chiquita, Dole, and Weichert were parties to an exchange of information which had the object of restricting competition contrary to Article 101 TFEU It also found that there was a single and continuous infringement. It fined Dole and Weichert/Del Monte €60m. Chiquita was not fined because it had applied successfully for leniency. The appeal raises important questions about the lawfulness of discussions on price setting factors, whether such discussions can amount to a restriction of competition by object as well as the scope of the concept of a single and continuous infringement.

Christopher Vajda QC, instructed by SJ Berwin, represented Weichert at the oral hearing.

Christopher Vajda QC and Philip Woolfe, instructed by Peters & Peters, are acting for the English NHS in proceedings against Servier for the alleged illegal extension of a patent protection relating to Servier’s product, Perindopril, a drug designed to combat high blood pressure and coronary artery diseases.  The claim alleges infringements of both Articles 101 and 102 TFEU. The patent extension has meant that cheaper generic versions of the drug were not able to reach the market. The NHS’s claim is for over £200m in damages. The European Commission started parallel proceedings against Servier in July 2009. Servier has applied to stay the High Court proceedings pending the outcome of the Commission proceedings. Before deciding on the issue of a stay and the terms of any stay the High Court has sought information from the European Commission pursuant to Article 15 of Regulation 1/2003 on the progress of the Commission’s proceedings. The Commission has been asked to respond by 8 March prior to the matter being relisted on 17 April. The High Court also ordered disclosure of alleged anti-competitive agreements between Servier and a number of generic companies.

Christopher Vajda QC and Philip Woolfe are also acting in another claim for the NHS for damages for abuse of a dominant position in relation to the supply of Gaviscon against Reckitt Benckiser. Last year the OFT fined Reckitt Benckiser £10m over its supply of Gaviscon to the NHS for abusing its dominant market position in the supply of heartburn remedies by restricting competition.  Reckitt withdrew cheaper alternatives as their patents had expired, therefore limiting the choice available to prescribing pharmacists.

Mr Justice Roth today handed down judgment in the latest instalment of the litigation relating to the procurement of new trains by Eurostar International Limited (“Eurostar”). The Claimant and unsuccessful tenderer, ALSTOM Transport, had previously attempted to seek an interim injunction to restrain Eurostar’s decision to  award the contract to Siemens plc, as well as a declaration that the contract was ‘ineffective’ under Regulation 45J of the Utilities Contracts Regulations 2006 (as amended). Having failed in those applications, ALSTOM was left to pursue its claim on the merits that the procurement process carried out by Eurostar constituted a breach of its duties under the Utilities Contracts Regulations, and/or obligations under an implied tender contract.

Those allegations, however, raised a preliminary issue which was the subject of today’s judgement: is Eurostar a ‘utility’ for the purposes of the Utilities Regulations? The High Court has unequivocally ruled that it is not, and therefore ALSTOM can no longer proceed with those aspects of its claim based on Eurostar’s alleged duties as a utility. The decisive feature of the judgment is Roth J’s finding that Eurostar does not operate a network, an essential component of the definition of ‘utility’ under the Regulations, on the grounds that it does not provide or operate railway infrastructure, nor does it provide services pursuant to  relevant  conditions laid down by or under the law.  However, Roth J has also ruled in Eurostar’s favour on a number of other important points, in finding for instance that its services are of a commercial character rather than meeting needs in the ‘general interest’, and that it does not operate on the basis of special or exclusive rights.

The judgment thus  strongly supports Eurostar position in the claim as well as representing an important contribution to the development of procurement law in the utilities context. In terms of its wider significance, the judgment also considers the duty of a national court to disapply provisions of national law that are inconsistent with an EU directive, concluding (again in line with Eurostar’s submissions on the point) that there is no general requirement to do so in claims against private parties.

Michael Bowsher QC and Ewan West (instructed by Burges Salmon LLP) appeared on behalf of Eurostar at the hearing.”    

The Oxford University Law Faculty is holding a special lecture to celebrate the career of Sir Jeremy Lever KCMG, QC, a pioneer of both the practice and academic study of competition law in Europe.

Sir Jeremy’s academic contribution has been both profound and prolific. A Distinguished Fellow and Senior Dean of All Souls College, Oxford University, he was one of the earliest and most consistent advocates of an economically sound approach to competition law.  He established and taught one of the first courses in competition law in the United Kingdom at Oxford University. Publishing The Law of Restrictive Trade Agreements he has contributed to Chitty on Contracts, the gold-standard work on English contract law, was a consultant editor for Bellamy & Child, Common Market Law of Competition and has continued throughout his career to contribute articles to the major academic journals on state aid, vertical restraints, the modernisation of Community competition law and a range of other matters.

In practice, Sir Jeremy’s career has been no less remarkable and innovative. Called to the Bar in 1957, taking silk in 1973, first as a tenant, and later as head, of what is now Monckton Chambers, he led it to become a leading set of the London Bar, specialising in European Law. In the European Courts, he acted in some of the most important competition law and state aid cases from the 1970s to the 2000s, including notably IBM, AM&S Europe, Ford, Tiercé Ladbroke, Cimenteries CBR, British Energy and Scott SA. In the UK courts, he has appeared in an extraordinary range of cases from the Restrictive Practices Court in the 1960s, through ex parte Datafin in the Court of Appeal in 1986, to the House of Lords in a series of cases including Crehan v Intreprenneur Pub Co in 2006.

Sir Jeremy has been described as “the father of competition law” in Britain by Judge David Edwards of the Court of Justice of the European Union and was appointed Knight Commander of St Michael and St George for services to European Law in 2003. He has practised at Monckton Chambers for fifty-five years.

The Government of Myanmar (Burma) is understood to have confirmed the release of 28-year-old TV journalist Hla Hla Win, who had been detained since September 2009.  She had been sentenced to a total of 27 years’ imprisonment, having been arrested whilst on a journalistic assignment for a Norway-based media organisation.  The offences she was alleged to have committed involved unlawfully accessing the internet and allowing herself to be carried as a passenger on an illegally imported motorcycle.  Her news organisation has always maintained that the real reason for her detention was to suppress her journalistic reporting of politically sensitive issues.

In November 2011 a petition was filed with the UN Working Group on Arbitrary Detention seeking a formal opinion as to the arbitrariness of her detention.  The Government of Myanmar’s decision to release Miss Win comes before the date by which it had to file its defence to the petition.  Miss Win was amongst a number of political prisoners released to coincide with the recent visit of UK Foreign Secretary William Hague.

Monckton barrister Alan Bates, who was instructed by the Burma Justice Committee in relation to the filing of the petition, commented:

“It is brilliant news that this courageous young woman has been released following international pressure from multiple sources, though of course many other journalists and political activists continue to be detained. The UN Working Group on Arbitrary Detention is just one of a number of international legal mechanisms available for drawing attention to individual cases in which human rights treaty obligations are alleged to have been breached.”

In JBW Ltd v Ministry of Justice [2012] EWCA Civ 8 (16 January 2011) the Court of Appeal held that the procurement of bailiff services by the Ministry of Justice was a service concession and therefore fell outside the scope of the Public Contracts Regulations 2006 (“the Regulations”).

The vast majority of bailiffs’ work under the tendered contracts consists of the execution of warrants of distress issued by Magistrates for non-payment of fines. A bailiff enforcing a warrant issued by a Magistrates Court is entitled to levy distress against a fine defaulter by taking money or goods which are sold to generate funds to pay the fine.  The bailiff has a statutory right to retain out of the money thereby generated “the proper costs and charges of the execution of the warrant”.  In the case of distress warrants, monies received from defaulters are applied first to pay the court penalty, and then to pay the bailiff’s fees. The bailiff’s fees could be set by the bailiff on a case-by-case basis, leaving defaulters to verify for themselves that the fees are reasonable in the circumstances.  Tenderers were required to specify on a Schedule in the Invitation to Tender (ITT) the fees which they would charge.  Tenders were given marks according to whether the fee structure proposed was efficient, effective, economic and fair to debtors. Contractors were not guaranteed any particular level of work and the numbers of warrants issued would depend upon the numbers of defaulters which will vary from time to time.  And work could be allocated to a reserve contractor in the event that performance targets were not met.

JBW was an unsuccessful tenderer. It issued proceedings complaining of, amongst other things, a breach of the Regulations, alternatively, breach of an implied contract created by the ITT read with JBW’s tender in response to it, containing obligations of transparency and equality of treatment as under the Regulations.  JBW did not allege breach of EU Treaty rules as there was no cross-border interest in the contracts.

The Ministry applied for summary judgment on, alternatively strike-out of, the Claim on the basis that the contracts were service concessions which were excluded from the scope of the Regulations and that no contract could be implied as alleged by JBW. The Ministry was successful on both points.  Because of the importance of the case the appeal from the Master it went directly to the Court of Appeal.

A services concession contract is a public services contract under which the consideration given by the contracting authority consists of or includes the right to exploit the service or services to be provided under the contract (reg. 2(1)). The Ministry relied on recent ECJ decisions in Case C-206/08 Wasser and Case C-274/09 Stadler to say that it was sufficient to satisfy the definition of services concession that payment to the contractor came from third parties rather than the contracting authority, and that some risk was transferred from the contracting authority to the contractor, even if that risk was small having regard to the nature of the services to be provided.

Although the Court of Appeal considered that the contracts at issue was not “a paradigm case of a concession” where the contractor is put in charge of a business opportunity which he could exploit by providing services to third parties and charging for them, the Court nonetheless held that this was a service concession. Its reasoning was that i) there was some transfer of risk from Ministry to the bailiffs in the running of the bailiff service, ii) there was no direct payment by Ministry to the bailiffs for the performance of the service and iii) a service was provided to third parties, and iv) it did not matter that those third parties were unwilling recipients of the services.

The Court also rejected the argument of JBW that there could be an implied contract incorporating the terms akin to the duties found in the Regulations. Such terms were not necessary to give efficacy to the contract; there could have been no common intention to imply these obligations as the Ministry had always proceeded on the basis that the Regulations did not apply; and the Ministry had an express power to depart from the terms of the tendering document which was inconsistent with implying the EU principle of transparency. The Court held that the only contract that could be implied was one limited to consider tenders submitted as required by the invitation to tender, and also to consider them in good faith, as per the Court of Appeal’s decision in Blackpool Aero Club v Fylde BC.

This is an important case. It is the first time that the Court of Appeal has ruled on service concessions. The Court also made clear that a disappointed tenderer cannot rely on an implied contract to bring EU procurement obligations when the tender falls outside the scope of the EU rules.

Christopher Vajda QC acted for the Ministry of Justice.  Click to read the judgment inJBW Group Limited v Ministry Of Justice