The Competition Appeals Tribunal (CAT) handed down a judgment on 12 December 2011, in which it refused to permit the Office of Fair Trading (OFT) to alter and refine its case against members of an alleged tobacco cartel.
This is the latest episode in the long-running tobacco industry case. The case essentially involved allegations that Imperial Tobacco and five retailers entered into agreements which restricted competition by restricting the ability of the retailers to determine their selling prices independently and for which they were fined £225m.
During the course of the hearings witness statements failed to fully support the infringements as described and it emerged that the OFT had cast its case too narrowly. In November 2011, the OFT therefore decided to submit to the CAT an altered and refined position. The OFT claimed that its new position was a refinement of the description of restraints set out in part, if not the whole of its original decision and based on the same facts, so that the appeals could proceed on that basis.
However, the CAT concluded that the restraints which the OFT now alleged were not within the scope of the original OFT decision and therefore the CAT does not have jurisdiction to continue to hear them and that it would not be fair or appropriate to exercise its discretion to do so. As the OFT no longer contests the appeals on the basis set out in its defences, the OFT’s decision against the appellants was quashed. The OFT issued a statement admitting its disappointment at the outcome.