Crehan: House of Lords overturns Court of Appeal ruling 1

On 19 July 2006 the House of Lords disagreed with the Court of Appeal’s ruling in the case of Crehan v Inntrepreneur and upheld Inntrepreneur’s appeal. The case considered the competition law legality of a “beer tie” which obliged Mr Crehan (then a publican) to purchase most of his beer from Courage.

There is a general principle of legal certainty which requires national courts of EU Member States to avoid taking decisions which conflict with those taken or envisaged by the European Commission in the implementation of the EU competition rules. The House of Lords’ judgment focused on how national courts should avoid such conflict. It did not however call into question the principle established by the ECJ reference earlier in this case that a party to an agreement prohibited under EU competition law may obtain damages from the other party.

The House of Lords found that it would be a denial of a fair trial for an English court to rule that a litigant could not challenge a particular situation because there already existed a European Commission decision relating to a situation which was similar to the litigant’s, but in which the litigant was not a party. The House of Lords noted that a conflict between a decision of an EU Member State’s national court and a decision of the European Commission only exists where the agreements to be ruled on by the national court “have been or are about to be the subject of a Commission decision”. Where decisions are being taken in respect of agreements in the same market but not involving the same parties, there is no such conflict.

In Crehan, this judgment means that an English court was entitled to consider all evidence before it rather than to simply follow the Commission’s decision in Whitbread, a case which presented similar facts but in which Mr Crehan was not involved.

As a result of this case, those wishing to bring claims based on EU or UK competition law breaches may find it more difficult to rely on Commission decisions covering situations similar to their own but to which they are not a party.

For the text of the 19 July judgment, please click here.