Dahabshiil Transfer Services Ltd. v Barclays Bank Plc

At the interim stage, the court asks whether there is a serious issue to be tried and which course is likely to cause the least irremediable prejudice. The practical consequences of granting or withholding relief matter more than whether an injunction is labelled prohibitory or mandatory. A refusal by a dominant undertaking to continue supplying an existing customer may arguably constitute an abuse, but the issue ordinarily requires trial. An objective-justification defence rests on the dominant undertaking and requires conduct that is necessary and proportionate. Alternative, less restrictive solutions may defeat the defence. Where withdrawal of banking facilities threatens business failure and damages are inadequate, interim relief may be justified.

Dahabshiil, Harada and Berkeley Credit and Guarantee applied for interim injunctions requiring Barclays to continue providing banking services after Barclays adopted stricter eligibility criteria for money service businesses and served termination notices. Dahabshiil operated an international money-remittance business. Harada operated bureaux de change facilities, while Berkeley also carried on pawnbroking.

The applications relied solely on alleged abuse of a dominant position contrary to Article 102 TFEU and the Chapter II prohibition in section 18 of the Competition Act 1998. The central questions were whether there was a serious issue as to Barclays’ dominance in the relevant market, whether withdrawal could constitute abuse, whether Barclays had an objectively justified and proportionate defence, and how the balance of convenience should be assessed.

1. Applications granted. Barclays was required to continue providing banking services to the claimants pending trial or further order. The parties were directed to consider further directions and expedition.
2. The court applied the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396 and National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] UKPC 16. The relevant inquiry was whether there was a serious issue to be tried and which course was likely to cause the least irremediable prejudice. The practical consequences of the actual order mattered more than whether it was characterised as mandatory or prohibitory.
3. There was a serious issue as to whether the relevant market for Dahabshiil was the supply of banking services to money remitters. Barclays’ estimated 70 per cent share was capable of supporting an arguable dominant position. The court also narrowly concluded that there was a triable issue as to dominance in the wider money service business sector, although the evidence was substantially weaker.
4. It was at least arguable that terminating supplies to an existing customer could constitute an abuse of dominance under section 18 of the Competition Act 1998. The issue was unsuitable for summary determination and required trial.
5. Barclays bore the burden of establishing objective justification. The conduct had to be necessary and proportionate. The defence required full examination, including the high net-asset thresholds, the proposed income criterion and the committee’s overriding discretion. It could not safely be assumed at the interim stage that the defence would succeed.
6. Damages were inadequate. Refusal of relief risked the collapse of the claimants’ businesses, whereas granting relief required Barclays to continue serving established customers with apparently satisfactory records. The balance of convenience therefore favoured interim injunctions.

The applications were initially considered by Warren J on 30 September 2013, who ordered an expedited hearing and granted temporary arrangements. The present applications were then determined at first instance by the High Court (Chancery Division).