Crehan v Inntrepreneur Pub Company CPC

Under Article 81 of the EC Treaty, a national court determining whether a beer-supply network forecloses a market must give substantial deference to the Commission’s informed competition assessments. It must not second-guess their validity; any challenge belongs to the Community courts. The Delimitis conditions are cumulative, and a large tied estate may make a significant contribution even where its market share is near a general de minimis guideline. A beer tie by type does not qualify for the automatic Block Exemption, which requires specified beers, and a clause allowing several potential suppliers is not exclusive. A claimant’s participation does not bar damages where the dominant party imposed the tie and the claimant bore no significant responsibility for the restriction. Damages for a hypothetical free-of-tie business should be assessed when the business was lost, avoiding undue speculation.

Bernard Crehan claimed damages from Inntrepreneur for losses allegedly caused by beer ties in agreements for two public houses. Park J dismissed the claim, holding that Delimitis condition 1 was not satisfied, although he made obiter findings on the Block Exemption, responsibility, causation and damages: [2003] EuLR 663.

The claim followed earlier proceedings and a reference to the European Court of Justice. The appeal concerned whether the relevant beer-market networks infringed Article 81(1), whether the Block Exemption applied, whether Mr Crehan could recover damages, and the proper basis for assessing those damages.

1. Appeal and liability. The appeal was allowed. The court held that Inntrepreneur’s beer tie infringed Article 81(1) of the EC Treaty.
2. Commission decisions and sincere cooperation. The national court had to give much greater deference to the Commission’s conclusions on market foreclosure. Under the duty of sincere cooperation, it was not entitled to second-guess the validity of the Commission’s competition decisions or create an irreconcilable conflict with them. Any challenge to their validity belonged to the Community courts. Park J therefore erred in law in finding that the United Kingdom on-trade beer market was not foreclosed.
3. Delimitis conditions. Condition 1 was satisfied. Loan ties and long-term supply arrangements could contribute to foreclosure despite termination provisions. Neste was distinguishable because it concerned a different market and agreement structure. Condition 2 was also satisfied. The de minimis notices supplied general guidance and did not prevent a smaller market share from making a significant contribution. Inntrepreneur’s large tied estate necessarily made such a contribution.
4. Block Exemption. Under section 3 of the European Communities Act 1972, the court followed the Court of First Instance’s interpretation of the Council Regulation 1984/83. Article 6 concerned beers specified by brand or denomination, not merely by type. The agreement also fell outside Article 6(2) because it allowed Inntrepreneur and several other potential suppliers. Special commercial or financial advantages were assessed when the agreement was made, rather than tenant by tenant or with hindsight. The Block Exemption therefore did not apply.
5. Responsibility and damages. There was no abuse of process in Inntrepreneur defending the claim. Mr Crehan did not bear significant responsibility for the restriction: Inntrepreneur was the largest tied-house landlord and imposed the non-negotiable tie on a markedly weaker tenant. Although English statutory-duty principles ordinarily require loss of the kind protected by the duty, the European Court of Justice’s ruling conferred a right to pursue the particular damages claim. The trial judge’s causation finding was open to him and was upheld.
6. Quantum. Damages were assessed when the businesses were surrendered in 1993, not at judgment, because future profits over ten years involved excessive speculation. Applying the approach in UYB Ltd v British Railways Board, the court awarded £131,336, subject to consequential directions and any remaining submissions on interest and tax.

1. Court of Appeal (Civil Division). The appeal from Park J was allowed. Liability was established and damages were awarded on the basis stated in the judgment.
2. European Court of Justice. On a reference made in the earlier proceedings, the court held that a party to a prohibited tied-house agreement could rely on Article 81 and was not barred from claiming damages solely because it was a party to the agreement: [2002] QB 507.
3. Court of Appeal. The earlier appeal resulted in the reference to the European Court of Justice and, after the ruling, the proceedings were remitted for trial: [1999] EuLR 834.
4. High Court, Chancery Division. Park J dismissed Mr Crehan’s claim on 26 June 2003, holding that Delimitis condition 1 was not satisfied, with further findings made obiter: [2003] EuLR 663.