Fast-track to settlement in land use restrictions case

The Competition Appeal Tribunal (CAT) has published an order consenting to the settlement of proceedings against Tesco Stores Limited alleging that a covenant in a land transfer agreement breached the UK Competition Act 1998.

The claimants, Shahid Latif and Mohammed Abdul Waheed sold land to Tesco in 1997.  The retained land was subject to a covenant "not to use or permit any of the retained land to be used for the sale of food convenience goods or pharmacy products".

It appears that the covenants at issue were not within the scope of the Groceries Market Investigation (Controlled Land) Order 2010 so were not required to be release under that Order.

The claimants sought an injunction restraining Tesco from enforcing the covenant and damages and requested designation of the proceedings under the fast track procedure. Under the fast-track procedure, the main substantive hearing must be fixed to commence as soon as practicable and in any event within six months of the order designating the proceedings as being subject to the fast track procedure.  The amount of recoverable costs is to be capped at a level to be determined by the CAT.

With the publication of the consent order on 18 March the claimants have settled the action and Tesco has released them from the contested covenant. This is only the second time that a standalone damages action has been brought before the CAT under the revised section 47A of the Competition Act. The first standalone damages action was also a settled (NCRQ Ltd v Institution of Occupational Safety and Health).  These cases illustrate that opportunistic claimants are seeking to test the boundaries of the new CAT Rules in standalone actions.  It may be some time though before a case goes to full trial given the pressure on defendants to settle.

Case 1247/5/7/16, Shahid Latif & Mohammed Abdul Waheed v Tesco Stores Limited