Competition law analysed in fish dispute

Posted: 24th April 2017

Fish and chipsFierce rivalry in the fresh and frozen fish industry was triggered by the exodus of senior staff from one company to another and led to a guideline case in which the High Court analysed the provisions of the Competition Act 1998.

A nationwide fish supplier (company A) launched proceedings after parting company with its sales director, who left under the terms of a settlement agreement that forbade him from soliciting its customers for three months. Other members of company A’s staff later left to join him in establishing company B, which swiftly succeeded in wresting from company A one of its supermarket clients.

Company A alleged that those events arose from a plot that was hatched whilst the sales director and those who joined him were still in its employment. Their actions were said to be have been in breach of contractual and fiduciary duties and to amount to a conspiracy to injure company A’s interests by unlawful means.

Those allegations were denied by the former sales director and staff members, who counterclaimed that company A had brought pressure to bear on numerous UK fish wholesalers and others not to deal with company B by threatening to withdraw its custom. Such pressure was alleged to be an attempt to cause loss to company B by unlawful means.

Company A also faced allegations that its conduct had breached the Act. In striking out that part of the claim, however, the Court found that there was no arguable case that company A had a dominant position in the relevant market, or that it had abused the same. It also could not be said that company A had entered into agreements that had the object or effect of preventing, restricting or distorting competition. All other issues in the case remained to be tried.