Monckton Chambers warmly congratulates Andrew Macnab who has been elevated to the Attorney General’s A Panel of Treasury Counsel, along with Gerry Facenna and Anneli Howard, who have both been elevated to the B panel.  These elevations continue to illustrate our expertise in VAT/indirect tax litigation and water regulation, public, civil and European Community law litigation.  Chambers has a total of 19 panellists.

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Andrew Macnab
Gerry Facenna
Anneli Howard

The case concerned complaint referrals brought by the Competition Commission against Pioneer Foods (Pty) Ltd, in which Pioneer’s bread baking divisions, Sasko and Duens, are alleged to have formed part of bread manufacturers’ cartels that fixed prices and divided markets under sections 4(1)(b)(i) and (ii) of the Competition Act.

Tiger Brands and Foodcorp, the other colluding parties agreed to a penalty and to the implementation of compliance programmes in their organisations.

The tribunal handed the Pioneer Foods (Pty) Ltd the maximum penalty due to a lack of co-operation with the agencies and the fact that to date it has not taken disciplinary action against, at date of hearing, a single person involved in these contraventions.

The total penalty imposed on Pioneer Foods (Pty) Ltd in respect of these complaints is 195 million rand.

David Unterhalter SC appeared for the Competition Commission

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David Unterhalter SC

The Court of Appeal today dismissed an appeal by TV shopping channel JML Direct relating to the allocation of Electronic Programme Guide (EPG) numbers by Freesat, a multi-channel TV service owned jointly by the BBC and ITV.  The ruling has implications for the interpretation of regulatory codes.

JML had appealed the earlier judgment of Mr Justice Blackburne’s, in which he found that Freesat had not breached its contract with JML when allocating EPG numbers prior to its launch in May 2008.  (An EPG is an on screen television programme guide used by digital TV systems.)

The Court of Appeal considered three questions:

(1) whether Freesat had failed to “publish and comply with an objectively justifiable method of allocating listings”, as required by the Ofcom Code of Practice (with which Freesat was bound to comply by the terms of its contract);

(2) whether the requirement in Freesat’s EPG Listing Policy (with which it was also bound to comply) for it to “take into account” a number of specified matters when allocating EPG numbers permitted it to attach no weight to one or more of those factors if it had rational grounds for doing so;

(3) whether the Judge’s finding that one of the reasons relied on by Freesat for its allocation was irrational meant that Freesat’s entire decision was invalid and in breach of contract.

The Court rejected JML’s arguments on each of these questions and dismissed its appeal.

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

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Tim Ward QC
Ben Lask

The 2010 edition of Bellamy and Child: Materials on European Community Law of Competition, edited by Andrew Macnab of Monckton Chambers, was published by Oxford University Press on 28 January 2010.

This volume of EC competition law materials serves both as the Materials volume of the Sixth Edition of Bellamy & Child: European Community Law of Competition, and as a free-standing work of reference in its own right. It includes legislation, notices and guidelines relevant to all areas of EC competition law (including Treaty provisions, modernisation and procedural matters, substantive antitrust matters, mergers and concentrations, sectoral regimes, public undertakings and State aids). It provides a one-stop resource for competition and antitrust practitioners worldwide.

This book is ideally suited to practitioners dealing with competition (antitrust), business and EC law; competition and trade authorities; practitioners and regulators in key sectors such as telecommunications, financial services, intellectual property and transport; academics and students specialising in competition (antitrust), business and EC law; reference libraries; in each case, throughout Europe and worldwide.

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Andrew Macnab

The High Court has today given judgment in a VAT appeal concerning single/multiple supplies and issues concerning place of supply of services. The Court dismissed an appeal by a UK based American Express company in relation to supplies of real estate services provided to its American parent.  American Express had contended the place of supply was America and that no VAT had been due.

HMRC’s argument and the VAT Tribunal’s decision that there was a single supply was upheld.  The Court rejected a submission that it was only in exceptional cases that it was possible to find a single supply on the Levob test where the transaction comprised a combination of services (rather than a combination of goods and services). It held that the transaction was not too complex to be a single supply. That the supplier had discretion in the way in which the service was provided did not mean that the elements of the transaction were independent. On the facts the Levob test for a single supply was satisfied.

On place of supply, the Judge rejected an argument that Art 9(2)(a) of the Sixth Directive (services connected to land) applied, as the necessary connection with specific properties was absent.

The next question for the Court was whether the Tribunal was correct to hold, on the facts found, that the single supply did not fall within the third indent of Art 9(2)(e) of the Sixth Directive covering the services of consultants, engineers, lawyers, accountants and other similar services, as well as data processing and of the supplying of information.

The judge upheld HMRC’s submissions that the indent should not be interpreted more widely to include management functions and that the single service supplied had gone well beyond the habitual activity of a consultant.

Mrs Justice Proudman dismissed the appeal

Peter Mantle represented HMRC

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Peter Mantle

The Court of Appeal today dismissed a challenge by Vtesse Networks Ltd to the way its fibre-optic network is valued for the purpose of levying Business Rates.

The Valuation Office Agency had valued Vtesse’s network by reference to the valuations which had already been ascribed to comparable fibre-optic networks, but not by reference to the valuation which had been ascribed to BT’s ubiquitous national network (which includes a substantial fibre-optic component).  The Lands Tribunal decided that, under principles of UK ratings law, Vtesse’s network was not usefully comparable with that of BT, and the Valuation Officer’s valuation should therefore stand.  Vtesse appealed to the Court of Appeal, arguing that EU Telecoms Directives required that Vtesse’s network be valued in a way that took account of the valuation ascribed to BT’s network, lest competition be distorted.  In that regard, Vtesse sought to show that it was paying substantially more in rates per metre of fibre-optic strand pair than was its competitor, BT.

Dismissing the appeal, the Court of Appeal held that the UK ratings regime pursued the same object of equal treatment as lay behind the Directives.  The Lands Tribunal was applying well established UK valuation principles and, in finding that Vtesse’s network was not usefully comparable with that of BT for valuation purposes, was making a decision within the scope of its expert valuation judgement.  Against that background, Vtesse could not establish any incompatibility with the Directives, and there were therefore no good grounds for requiring the Lands Tribunal to revisit its decision.

Monckton barristers Christopher Vajda QC and Alan Bates acted for the Respondent, the Valuation Officer.

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Alan Bates

On 28 January 2010, the Court of Justice of the European Union (formerly the European Court of Justice) handed down its judgment in Case C-406/08 Uniplex.  This judgment will affect fundamentally the way in which challenges to public procurement processes are made in the United Kingdom.

The case concerned a dispute between Uniplex (UK) Ltd (“Uniplex”) and the NHS Business Services Authority (“NHS”) concerning the conclusion of a framework agreement for the supply of haemostats.

Uniplex had submitted its tender on 18 July 2007.  On 22 November, NHS sent a letter to Uniplex informing it that NHS had decided to conclude a framework agreement with three tenderers, not including Uniplex.  It told Uniplex that it had received the lowest marks of all tenderers which had been invited to submit.  The letter set out the award criteria, with corresponding weighting, and indicated the names of the successful tenderers, the range of successful scores and Uniplex’s evaluated score.  The letter also informed Uniplex of its right to challenge the decision, of the mandatory 10-day standstill period, and of Uniplex’s entitlement to seek an additional debriefing.

Uniplex requested a debriefing by email on 23 November 2007.  NHS replied on 13 December 2007 providing details of its approach to the evaluation of the award criteria for the successful tenders in relation to Uniplex’s tender.

On 28 January 2008, Uniplex sent NHS a letter before action alleging a number of breaches of the 2006 Regulations.  In that letter, Uniplex stated that it considered that time did not start to run for the bringing of proceedings until 13 December 2007.  In subsequent correspondence, NHS made clear its view that time had started to run on 22 November 2007, but Uniplex only issued proceedings on 12 March 2008.  Uniplex sought, first, a declaration that NHS had breached the applicable public procurement rules and, secondly, damages.

The High Court made a reference to the Court of Justice concerning the date upon which time should start to run for the bringing of proceedings and how the national court should apply (i) the requirement for proceedings to be brought promptly, and (ii) any discretion as to extending the national limitation period for the bringing of such proceedings.

The Court of Justice held:

• First, that the period for bringing proceedings seeking to have an infringement of the public procurement rules established or to obtain damages for the infringement of those rules should start to run from the date on which the claimant knew, or ought to have known, of that infringement.
• Second, that the provision in the 2006 Regulations which requires proceedings to be brought “promptly” is precluded by Directive 89/665.
• Third, Directive 89/665 requires the national court, by virtue of the discretion conferred on it, to extend the limitation period in such a manner as to ensure that the claimant has a period equivalent to that which it would have had if the period provided for by the applicable national legislation had run from the date on which the claimant knew, or ought to have known, of the infringement of the public procurement rules. If the national provisions do not lend themselves to an interpretation which accords with Directive 89/665, the national court must refrain from applying them, in order to apply Community law fully and to protect the rights conferred thereby on individuals.

Kassie Smith acted for the United Kingdom in the proceedings before the Court of Justice of the European Union.

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Kassie Smith QC

The Competition Appeal Tribunal has decided that it will hear all appeals against the OFT’s decision in the construction investigation separately.

On 21 September 2009, following a five year investigation into the construction industry, the OFT imposed financial penalties totalling £129.2 million on 103 construction companies for having engaged in cover pricing.   Twenty five of those companies have appealed to the Tribunal.  Six of them have appealed both liability and penalty.  The remainder have appealed in relation to penalty only.

The Tribunal is faced with the largest set of appeals that it has ever had to manage.  It considered at a hearing early this week (and following written submissions from all parties to the appeals) “how to manage the appeals effectively, and by reference to what timetable”.

The Tribunal decided that “in order to ensure that the appeals can be disposed of fairly and within a reasonable time, ensuring that proper attention is paid to each of the cases”, each case will need to be heard separately.  The Tribunal will set up three panels to hear the cases in June and July of this year.

Members of Monckton Chambers are acting for a number of the appellants and for the OFT.

• Paul Lasok QC and Josh Holmes (instructed by DLA Piper UK) for ISG Pearce Limited.
• John Swift QC and Kassie Smith (instructed by Pinsent Masons) for Galliford Try Plc.
• Christopher Vajda QC and Ronit Kreisberger (instructed by CMS Cameron Mckenna) for Ballast Nedam NV.
• David Unterhalter SC, Daniel Beard and Alan Bates (instructed by the General Counsel, Office of Fair Trading) for the Office of Fair Trading.
• George Peretz (instructed by DLA Piper UK) for Renew Holdings Plc, Allenbuild Limited, Robert Woodhead (Holdings) Limited and Robert Woodhead Limited.
• Paul Harris (instructed by Nabarro) for Corringway Conclusions plc.

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Paul Lasok QC
John Swift QC
David Unterhalter SC
Paul Harris QC
Daniel Beard QC
Kassie Smith QC
George Peretz
Josh Holmes
Alan Bates

The Court of Appeal today held that agricultural exporters that abused their rights under a CAP subsidy scheme should have to pay a substantial penalty.

The scheme in question had special provisions that helped small exporters.  In order to meet the criteria of that scheme, a large exporter decided to get seven of its subsidiaries to make separate claims rather than make one large claim itself.  Although the terms of the scheme permitted it to do that, it was held by the High Court that that tactic was an “abuse of right” and that the seven separate claims should be disallowed.  In the Court of Appeal, the exporter argued that it should not also have to pay a penalty for making a claim to which it was not entitled.   However, the Court of Appeal agreed with DEFRA’s submissions that there was nothing in the EU case-law on “abuse of right” that stopped a penalty being imposed in this case: the relevant EU Regulation made it clear that a penalty was payable whenever it made a claim to which it was not entitled, even where there was no fault on the part of the exporter and even where the claim complied with the strict terms of the scheme.

The case is an interesting contribution to the developing EU principle of “abuse of right”, which has recently become particularly important in the VAT field as well as in other areas of EU law.

George Peretz represented DEFRA in the Court of Appeal.

To view the judgment, please click here.

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George Peretz

The Court of Appeal has today handed down its judgment in the BSkyB/ITV litigation,  The outcome is is that the Competition Commission and the Secretary of State for Business Enterprise and Regulatory Reform (both represented by teams from Monckton Chambers) have succeeded on all of the various appeals and cross appeals which were live before the Court.

The case arose from the acquisition by British Sky Broadcasting plc (Sky) in November 2006 of 17.9% of the issued share capital of ITV plc.

The acquisition was referred to the Competition Commission by the Secretary of State under the public interest provisions of the Enterprise Act (the first reference of its kind),  A Competition Commission investigation concluded that a relevant merger situation had been created leading to a substantial lessening of competition.  The Commission recommended that Sky be required to divest itself of enough shares to reduce its holding to below 7.5%.  The Commission however concluded that the merger was not likely to operate against the public interest on grounds relating to media plurality.  The Secretary of State agreed with the Commission’s conclusions on media plurality.

Before the CAT, Sky challenged the Commission’s findings on the competition issues and remedies, and Virgin challenged the findings of the Commission and the Secretary of State on media plurality, focussing on a question of statutory interpretation under the new regime for media mergers. The Competition Appeal Tribunal rejected Sky’s challenge but upheld that of Virgin.

The Court of Appeal has considered the findings of the CAT on both sets of issues with Sky appealing on both competition and plurality grounds, and the Commission and the Secretary of State also appealing on the plurality issue.

In a judgment given by Lloyd LJ, Sky’s appeal against the CAT’s judgment on competition issues was rejected, but the appeals of the Commission, the Secretary of State and Sky on the media plurality issue were upheld.  The result is that the decisions of the Commission and the Secretary of State on competition issues have been upheld and their decisions on plurality have been reinstated.

Paul Lasok QC and Elisa Holmes represented the Secretary of State (now, for Business Innovation and Skills)

John Swift QC, Daniel Beard and Rob Williams represented the Competition Commission

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Paul Lasok QC
John Swift QC
Daniel Beard QC
Rob Williams
Elisa Holmes