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High Court grants what is believed to be the first Norwich Pharmacal Order (“NPO”) in a competition case in a paradigm example of the exercise of the jurisdiction

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Norwich Pharmacal Orders

09-11-2017

Zantra Ltd v BASF plc [2016] EWHC 3578 (Ch)

Facts of the case

– BASF PLC (“D”) had five existing distributors of its crop protection products (the “Existing Distributors”). The Existing Distributors accounted for 80-90 per cent of the market. 

– D subsequently also appointed Zantra Ltd (“C”) as a distributor only for it shortly afterwards to reverse its decision citing adverse market reaction to the news.

- C wished to bring a claim for breach of competition law against the Existing Distributors which it believed had colluded to force D to reverse its appointment.

– C applied for an NPO seeking the following to determine which of the Existing Distributors were involved: (i) disclosure by D of its discussions with the Existing Distributors and (ii) a witness statement from D setting out the content of those discussions.

– D opposed the NPO application on the grounds that the evidence relied upon by C did not establish a sufficiently arguable case.

The decision

– Barling J granted the NPO, finding that all of the criteria for the exercise of the jurisdiction (as set out in Mitsui & Co Limited v Nexen Petroleum UK Limited [2005] EWHC 625 (Ch)) were satisfied on the basis that:

– there was an arguable case that a wrong had occurred given (i) D had acknowledged in correspondence that the majority of the Existing Distributors had applied commercial pressure on it to persuade it to un-appoint C and (ii) there appeared to be reasonable grounds to infer there had been some collusion between the Existing Distributors, or at least D acknowledged that there could have been 

– without the NPO order, it was difficult to see how C would make any progress with its claim

– D was mixed up in the wrong doing or facilitated it by bowing to the commercial pressure applied by the Existing Distributors.

Analysis and practical advice

– This case is a paradigm example of the use of the NPO jurisdiction and it is believed to be the first instance of such an order being made in a competition case.

– In addition to the threshold criteria set out in Mitsui, the judgment also provides a reminder of some of the factors which the court will have regard to when exercising its discretion. These include:

– the strength of the possible cause of action identified by the applicant;

– the strength of the public interest in allowing the applicant to vindicate its legal rights; 

– whether making the order will deter similar wrong in the future;

– whether the information could be obtained from another source; 

– whether the respondent was aware or ought to have known that he was facilitating arguable wrong doing; 

– the degree to which the material sought is confidential and, where it is, whether it could be protected by a confidentiality club or redaction; and

– whether the order would constitute an inappropriate fishing exercise.

 

 

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