Beer tie — Beer to be purchased from list of brewers specified by landlord — Breach of tie — Application for interlocutory relief — Whether arguable case that tie unenforceable — Article 81 of EC Treaty — Application allowed
The defendant was the tenant of a public house under a lease that contained a beer tie. Under the terms of the tie, he was obliged to purchase his beer from a list of brewers specified by the claimant landlord. The claimant brought proceedings against the defendant for breach of the tie. The defendant admitted the breach, but submitted a defence in which he contended that the beer tie was contrary to the competition provisions of Article 81 of the EC Treaty, thereby rendering it unenforceable.
The claimant applied for an interim injunction, arguing that, in a case of admitted breach of a negative obligation, relief should follow as of right, regardless of whether the balance of convenience would otherwise favour its grant. It argued that the defendant’s defence was unarguable, since the agreement would be unenforceable under Article 81 only if it fulfilled the criteria in Delimitis v Henninger Brau AG C-234/89 [1991] ECR I-935, namely that: (i) having regard to the economic and legal context of the agreement at issue, it was difficult for competitors who could enter or increase their market share to gain access to the national market for the distribution of beer in premises for the sale and consumption of drinks; and (ii) the agreement made a significant contribution to the sealing-off effect brought about by the totality of those agreements in their economic and legal context. The claimant argued that the beer tie did not have that effect because there was no vertical integration with a particular brewer and any brewer could, in principle, ask to have its beers added to the list. In the alternative, it argued that if the tie was otherwise within the scope of Article 81, it fell within the block exemption for vertical agreements.
Held: The application was allowed.
The defendant’s Article 81 defence had no substance. The case advanced by the claimant had no legal answer, and, if it wished to stand on the letter of the agreement, it was entitled to do so: Delimitis and Inntrepreneur Pub Co Ltd 2000/484/EC 195 OJL 49 applied.
David Scannell (instructed by Ford & Warren, of Leeds) appeared for the claimant; the defendant appeared by his litigation friend.
Sally Dobson, barrister
