Seafood Holdings Ltd v My Fish Company Ltd & Ors

Competition law claims may support an economic tort only where the pleaded and evidenced conduct establishes an infringement of competition law. A claimant alleging abuse of dominance must identify the relevant market, establish dominance in that market, prove abusive conduct and show that trade within the United Kingdom may be affected.

Conduct in one market will not ordinarily constitute abuse of a dominant position in another market where the undertaking is not dominant. Special circumstances, such as strong associative links between the markets or limited substitutability, are required. Vertical agreements may fall within the applicable block exemption where the relevant market-share thresholds are not exceeded and no severe restriction is established. Competition must be assessed by reference to the market as a whole, not merely to harm suffered by an individual competitor.

Seafood Holdings Limited sought summary judgment on competition claims brought by My Fish Company Limited and Gary Apps in a counterclaim arising from the establishment of a competing fish-supply business.

The counterclaim alleged that Seafood had abused a dominant position, contrary to section 18 of the Competition Act 1998, by pressuring suppliers not to supply My Fish. It also alleged agreements with suppliers having as their object the prevention, restriction or distortion of competition, contrary to section 2. The alleged conduct occurred in the upstream purchasing market, while dominance was pleaded in the downstream selling market.

The central questions were whether either claim had a real prospect of success and whether the alleged arrangements could amount to unlawful means for the purposes of the economic tort.

1. Summary judgment. The court applied the ordinary principles under CPR 24. Competition claims do not have a heightened survival threshold, although they must be pleaded with sufficient particularity because they involve serious quasi-public-law allegations and may require extensive evidence. The court could consider evidence beyond the pleaded case where it was material to the application.
2. Abuse of dominance. The section 18 claim required My Fish to identify the market, establish Seafood’s dominant position in the United Kingdom, prove relevant abusive conduct and show that trade within the United Kingdom might be affected. The pleaded dominant market was the downstream selling market, whereas the alleged abusive conduct took place in the upstream purchasing market, where Seafood had only about a 2% share.
3. Abuse by an undertaking that is non-dominant in the market where the conduct occurs was not impossible, but special circumstances were required. The associative links and limited substitutability present in Tetra-pak and BPB Industries were absent. Seafood’s alleged ability to influence suppliers did not establish that it could leverage a 21–25% downstream share to act abusively in the purchasing market.
4. The evidence also gave no real prospect of establishing dominance in the downstream market. The relevant competitor had an 18% share, producing virtual parity rather than a substantial disparity. Seafood’s financial strength did not alter that conclusion, particularly given the greater resources of its principal competitor.
5. Object infringement. The alleged supplier arrangements were vertical agreements in the upstream market. They were not of a type generally regarded as an infringement by object. The market shares of the suppliers and Seafood were below the 30% thresholds in Articles 2 and 3 of Commission Regulation 330/210, so the arrangements were exempt from the Chapter I prohibition. No severe restriction or concerted action with competitors was established.
6. My Fish would in any event have needed to plead and prove the terms of the agreements and their economic and legal context, showing that competition in the relevant market was significantly weakened. Evidence of increased supply costs for one type of fish did not establish harm to competition in the market as a whole.
7. Summary judgment was granted to Seafood on paragraphs 69(a) and 69(b) of the Counterclaim. The competition claims were removed, leaving the remaining claim and counterclaim to proceed as an ordinary commercial dispute.

First-instance decision. The judgment itself does not state any prior appellate history.