Future Investments SA v Federation Internationale De Football Association

The tort of causing loss by unlawful means requires wrongful interference with a third party’s freedom to deal with the claimant and an intention to cause loss. A party’s intellectual property rights are not economically harmed in the relevant sense merely because another party is wrongly told that it has authority to use the rights. Where a licence is required, the prospective licensee has no freedom to act without obtaining it. For jurisdiction under Article 5(3) of the Lugano Convention, the harmful event is located by identifying both the event giving rise to the damage and the place where its direct harmful effect occurred. In an economic-loss case, the direct effect may occur where the contract would have been made.

Future Investments SA claimed exclusive rights in footage from the 1998 Football World Cup through a chain of agreements originating with FIFA. FIFA later licensed IMG Media Limited to produce and distribute a DVD containing WC98 footage. Future discontinued its contractual claim and pursued only a tort claim alleging that FIFA caused loss by unlawfully warranting to IMG that FIFA could grant the relevant rights.

Future applied to amend its pleading. FIFA challenged jurisdiction under Article 5(3) of the Lugano Convention, arguing that the harmful event occurred in Switzerland, where FIFA signed the agreement. The court had to determine whether the amended claim disclosed a realistically arguable cause of action and, alternatively, where the harmful event and resulting damage occurred.

1. Amendment refused. The amended claim had to be assessed on the assumption that the pleaded facts would be proved. It nevertheless lacked a realistic prospect of success.
2. Applying OBG v Allen [2007] UKHL 21, the tort requires wrongful interference with the actions of a third party in which the claimant has an economic interest, together with an intention to cause loss. The unlawful act must affect the third party’s freedom to deal with the claimant.
3. FIFA’s warranty to IMG could not interfere with IMG’s freedom to deal with Future. If Future owned the relevant rights, IMG required a licence from Future. If it did not own them, no licence was required. The warranty neither removed Future’s rights nor conferred on IMG a freedom to use the footage without a licence. The relationship between Future and IMG therefore remained unaffected.
4. The court distinguished the customer-intimidation example in Tarleton v McGawley (1794) Peake 270. That case involved interference with a customer’s choice between competing goods. Intellectual property rights involve the legal necessity of obtaining a licence, not a choice that can be obstructed in the same way.
5. The court would also have refused the amendment because it introduced a new cause of action. The amended case relied for the first time on unlawful acts directed at IMG and loss caused by interference with IMG’s freedom to contract.
6. Under Article 5(3) of the Lugano Convention, jurisdiction may lie where the event giving rise to the damage occurred or where the damage occurred. The claimant had to establish the necessary jurisdictional facts to the standard of a good arguable case.
7. The harmful event was the signing by FIFA of the agreement containing the relevant warranty. The direct harmful effect alleged was interference with IMG’s freedom to contract with Future. On the evidence, any such contract would have been made in Switzerland, where Future was based. The jurisdictional challenge therefore succeeded.