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Spring Salmon and Seafood Ltd v. Wisco Processing Ltd & Ors [2004] ScotCS 220 (29 September 2004)

OUTER HOUSE, COURT OF SESSION

CA5/04

OPINION OF LORD CLARKE

in the cause

SPRING SALMON AND SEAFOOD LIMITED

Pursuers;

against

(FIRST) WISCO PROCESSING LIMITED, (SECOND) PIETERS VISBEDRIJF NV, AND (THIRD) FJORD SEAFOOD CHILE SA

Defenders:

________________

Pursuers: Hayhow; Tods Murray WS

Defenders: Edward, Solicitor Advocate; Maclay Murray & Spens

29 September 2004

[1] The pursuers, in this commercial action, sue the defenders jointly and severally for breach of contract. The sum sued for is £983,435.75 with interest. The matter came before me for a proof before answer restricted to the merits of the pursuers' case.

History of the parties' communings
[2] I have found the following facts to be established, a good deal of which were not a matter of dispute and comes from correspondence passing between the parties.

[3] The pursuers are a company mainly engaged in the business of processing and supplying seafood and other fish products. In 2002 they had a contract to supply a company known as Oscar Mayer Limited. Oscar Mayer produce ready-made meals and supply them to, inter alia, the large United Kingdom supermarket company, Sainsburys. The pursuers' contract with Oscar Mayer was due to expire originally in October 2002. That contract was subsequently amended, in April 2002, to cover the period from 1 May 2002 to 30 April 2003.

[4] From late in 2000 the pursuers had purchased fish products from the third defenders, a company based in Chile. The third defenders were, and are, members of a group of related companies of whom the first and second named defenders are also members. The group structure is somewhat complex and has changed over the years but, as will be seen, in the event, nothing turns on the exact relationship between the respective defenders.

[5] The Managing Director of the pursuers is Mr Stuart Thomas. He had dealt with Mr Dag Gjerde, who is employed by the third defenders, for the supply, by the third defenders, to the pursuers, of fish and fish products. Mr Dag Gjerde is Norwegian.

[6] The first named defenders are a Scottish company based in Stornoway. They are 100% owned by the second named defenders. The first named defenders are engaged in the business of salmon processing, portioning, filleting and smoking salmon and selling whole fish. The third named defenders were engaged, at the material time, in salmon farming and processing and supplying frozen salmon and salmon pieces to companies in the United Kingdom, including the pursuers. The second named defenders, at the material time, for the purposes of this action, were engaged in processing all kinds of fish. In the course of 2002, a Mr Derrick Harris joined the first defenders as their general manager. He remained in that position until February 2004. Mr Harris was someone known to the pursuer's Mr Stuart Thomas for over 20 years. They had become friends through their business dealings.

[7] In about June 2002, the pursuers approached the first defenders to obtain supplies of fish products from them, which the first defenders agreed to do. The pursuers, through their Mr Thomas, sought to make the trading relationship between them and the first defenders subject to what they described as a non-circumvention and non-disclosure agreement. A copy of this document is attached to 6/19 of process. 6/19 is an e-mail message from Mr Thomas addressed to Mr Harris. It is dated 28 June 2002. It states:

"Please print off the enclosed agreement. Please sign two copies, and post to us for signing. We will return one original. Please fax one signed copy to us asap today on 01189 476235. Any queries please call Rod. Best regards Stuart".

The attached "non-circumvention and non-disclosure agreement" provided inter alia as follows:

"(1) WISCO will not, without the consent of SPRING, make any contract with, deal with or otherwise be involved with a third party introduced by SPRING in any transaction relating to salmon products during the terms of this agreement.....

(4) this agreement shall be binding on all entities owned or controlled by a signatory, and upon the associates, the principals, employees, employers, assignees, family and heirs of each signatory.....

(5) this agreement will remain in effect for five years from the date afixed below and shall be governed by the law of Scotland"

Mr Thomas appears to have followed up his e-mail of 28 June, with an e-mail dated 1 July, which is part of 6/20 of process. It is addressed to Mr Harris and is in the following terms:

"Can you please confirm the number of days from harvest to processing. Do you process your fish pre or post rigor? What is the time from process to delivery in Glasgow? For the Monday delivery please advise time from harvest through process to delivery. Can you please print off the confidentiality contract and fax a signed copy to us. We need to have this done prior to sampling.

Many thanks Stuart".

The reply to that e-mail from Mr Harris is also part of 6/20 of process and it is inter alia in the following terms:

"First thing i am not in a position to sign any contract that would bind wisco to springs (especially as we have not even made a sale between our companies) without a formal agreement on future business, also this a very restrictive agreement which could in effect stop wisco dealing with anyone else in the UK. When we have an agreement on specs and we have entered into a formal trading position I think this will be the time to discuss contracts".

The reply to that e-mail, from Mr Thomas, is an e-mail dated 1 July 2002 addressed to Mr Harris, which is 6/21 of process. That e-mail states inter alia as follows:

"I can see your position but we have to invest a great deal annually to maintain the M & S accreditation and unless we can obtain a non-circumvention agreement with respect to individual contracts then it is difficult for us to proceed. For the moment I will accept an e-mail from you to confirm that the current contract we are working on will not be circumvented by Wisco. I will then revert with full details of our contract and we can work openly. We can agree this initially for a period of 6 months and once the deal is done and the business is underway you can sign our contract specific to this particular piece of business. I hope this will be ok for you."

The reference to "M & S" is a reference to Marks and Spencer. There appears to have been no reply given to Mr Thomas, in writing, to that e-mail.

[8] In Article 2 of condescendence the pursuers aver as follows:

"Inter alia the pursuers would purchase salmon from the first defenders which they would in turn sell on to Oscar Mayer Limited, Furnham Road, Chard, Somerset, (Oscar Mayer) and Members of Oscar Mayer Group of Companies. The Defenders were aware that the Pursuers were selling on their product to Oscar Mayer Group of Companies. The Pursuers were apprehensive that the Defenders might attempt to supply Oscar Mayer direct which would result in the loss of business to the Pursuers" (my emphasis).

That apprehension, it seems, gained a concrete basis in the following circumstances. On 18 July 2002 Mr Thomas e-mailed Mr Harris, number of 6/22 of process. The heading is "Oscar Mayer conflict of interest". The significance of that e-mail is such that I require to set out its terms in full:

"As discussed we have a conflict of interest with your factory in Belgium and our customer Oscar Mayer in Chard, Somerset.

This has been a customer of ours for 6 years and over that time we have built up a portfolio of seafood products. We have a very strong relationship with the company but unfortunately the group buyer has seen the Pieters label on one of your boxes and has contacted Pieters directly in Belgium.

The products we supply are:-

Scottish salmon pieces bagged for poaching (Wisco supply to us).

Chilean salmon pieces bagged for poaching (from our own Chilean salmon portioning line using Fjord Chile raw material).

Salmon portions, centre cuts only 88-100g, deep skinned and boneless, dimensionally controlled, from our factory in Grimsby but cut from fillet supplied by Fjord Chile (Contact: Dag Gjerde). Our selling price: (£4.45/kg!).

These are our current salmon lines with Oscar Mayer and we have been advised that the group buyer has now arranged for samples of these products to come in from Belgium of which the Scottish salmon would come via yourself.

Given the circumstances we of course would have a major problem if Pieters as part of Fjord and Wisco now take this business from us. We would be compelled to withdraw our business from Fjord Chile (21mt of fillet received 2 weeks ago, 20 mt due in 24.7.02 and another 21mt confirmed today); we would also be unable to take any further volumes of pieces from Wisco and we would have withdraw from finalising the 200mt fresh salmon portion contract with Wisco. I am sure that you can see our predicament on this. We put no blame at all on Pieters for these events as we are sure they would not have pursued our customer actively but could you please now clarify the position with regards Fjord and Pieters going forward at your earliest convenience. We would ask you to confirm that you will not sample Oscar Mayer in competition with us.

We have been offered Scottish pieces from a Grimsby packer at under £0.80/kg ongoing but have chosen to continue with your product as it is more suitable for the other customers we have on this product and were trying to generate enough demand to use 100% of your production. It would be crazy if we now have to use this product to compete with Wisco for the same business!

Assuming we can sort all of this out in the next few days we will wish to move forward with a factory trial on the portions. We base the cost of £5.60/kg until you can confirm your new contract with the farms. We will also take the next 3 pallets of Scottish pieces.

We hope to hear back from you tomorrow." (my emphasis).

It is important to recognise what the concern of the pursuers was at that time. As has been seen, the pursuers had an ongoing contract to supply Oscar Mayer with certain fish products. That contract was due to expire in April 2003. The pursuers intended to meet some of the Oscar Mayer requirements by supplying them with products supplied to them, in turn, by the first and third defenders. In about July 2002 the pursuers, however, learned that the second named defenders had been approached by Oscar Mayer to supply Oscar Mayer with product directly. The pursers, through Mr Thomas, in the e-mail 6/22 of process sought to point out that it would be, to say the least, unsatisfactory for the pursuers and the second defenders both to supply Oscar Mayer, in competition with each other, when some of the fish products supplied by the pursuers to Oscar Mayer was obtained from the first and third defenders, who were members of the same group of companies as the second defenders. Mr Thomas, it can be seen, was seeking to prevent that situation arising. It is noteworthy that in the penultimate paragraph of his e-mail, however, he stated that he could obtain Scottish salmon pieces from a Grimsby packer but had chosen to continue with the first defender's product.

The reply to the concerns set out by Mr Thomas was contained in an e-mail from Mr Harris dated 18 July 2003, 6/23 of process, and was stated in the following terms:

"Got the picture, I have contacted Pieters, Belgium to tall (sic) them through the consequences of supplying Oscar Mayer. It does also seem that the Fjord/Chile contact, Dag Gjerde would have a stronger input than me looking at the volumes you are buying from them, maybe a two pronged attach (sic) would be advisable.

I will call you tomorrow".

It is noteworthy that Mr Harris refers, there, to the issue being "the consequences if Pieters supplying Oscar Mayer". Mr Thomas took up the suggestion of Mr Harris that Mr Gjerde of the third defenders might be in a better position to deal with the pursuers concerned. He did so by e-mailing Mr Gjerde on 19 July 2002 in what is 6/24 of process. That e-mail is headed "Conflict of interest with Pieters in Belgium. Importance: High". The e-mail is in the following terms:

"We have a bit if (sic) a complex situation here in the UK. We have a UK customer called Oscar Mayer who we have been supplying for six years with a wide range of seafood products.

On the salmon side we supply them with Scottish salmon IQF chunks bagged for cooking (we buy this product from Fjord Wisco in Scotland). We also supply Chilean salmon pieces which are off cuts from the portioning line when we cut fillets supplied from Fjord Chile. We also supply a 80-100g salmon portion cut from fillets supplied by Fjord Chile.

Unfortunately a group buyer of the Oscar Mayer Group has seen Pieters labels on the sides of the boxes we supply in and has contacted Pieters directly. Clearly this not an acceptable situation for us. Pieters did not chase this business and have no idea that we are a significant buyer from Fjord companies. I unfortunately have no contacts at Pieters so I would like you to e-mail their commercial department and explain your trading relationship with us and ask them to withdraw from this customer. After all everything that we are supplying in to Oscar Mayer is supplied to us via Fjord group companies.

Unfortunately if this can not be done we would have to withdraw all of our business with Fjord Chile and Wisco in Scotland due to the conflict of interest and compete head on.

As you know we buy significant volumes of salmon fillet from Fjord Chile; we have just received 21mt, we have 20mt due the next 2 weeks and we have 21mt ordered for shipment in 3-4 weeks. We are building demand for premium fillet from next month and expect to require a 60-100mt per month from September. The manager at Wisco is very keen to stabilise this situation as we are buying all of their off-cuts and we are about to start a 200mt salmon fillet portion contract for Marks and Spencer supplied by Wisco Scotland. He has suggested I contact you in order to back up the support we already have from Wisco.

Would you please be good enough to explain to Pieters the situation and seek their agreement to withdraw. We are really sorry to bother you with this but I am sure you can understand that it would be impossible for us to continue if a Fjord group company is competing head on with us in our own market place with one of our main customers.

We hope that we will have your support and we look forward to hearing from you".

It is to be noted that, in that e-mail, Mr Thomas is requesting that the second defenders should be asked to "withdraw" from Oscar Mayer. In an e-mail of the same date, 6/25 of process Mr Thomas wrote to Mr Harris in the following terms:

"Yes the volumes are large out of Chile; we have received in over 200mt of fillets so far this year. They are on board as they do not want to lose us as a customer. Given that 100% of the salmon product we put into Oscar Mayer originates from Fjord group companies it seems crazy to disturb the current good business we only have to end up competing; in the end no one wins. Thanks for your support."

I would emphasise that the words used by Mr Thomas were "it seems crazy to disturb the current good business".

[9] As at 19 July 2002 the position, then, as between the parties, was this. The pursuers had sought, unsuccessfully, to obtain from the first defenders an agreement to endure for five years whereby, it seems the first defenders, and associated companies, would not deal with or contract with or be involved with any party to whom they had been introduced by the pursuers. Separate from that, the pursuers in July 2002 discovered that the second defenders had been asked to supply Oscar Mayer with fish products when, at that time, the pursuers themselves had a contract to supply Oscar Mayer which was not due to terminate until April 2003. (It is a feature of this case that the court was not supplied with any evidence of the contract which the pursuers had with Oscar Mayer, apart from oral evidence about it from Mr Thomas). It appears to me that the defenders, in their various manifestations, in mid to late July 2002, were entitled to reach the view that what the pursuers, through their Mr Thomas, were seeking was an agreement by them to allay the pursuers' immediate concern, as I have just described it, namely, that Pieters would begin to supply Oscar Mayer directly with products, for the supply of which the pursuer had a subsisting contract with Oscar Mayer. In the event, the matter was taken up initially by Mr Dag Gjerde of the third defenders in an e-mail of 19 July 2002, 6/26 of process. It is headed "RE: Conflict of interest with Pieters in Belgium". It seems to me that that heading can fairly be read to refer to the then existing concerns of the pursuers, namely that Oscar Mayer were seeking supplies of fish products from the second defenders, directly, at that time. That is, I think, confirmed by the content of the e-mail itself which is in the following terms:

"This is a serious case and we are prepared to handle this in a professional way. I have this morning been in contact with the people in Pieters but we have the following information: Vacation.

And we have decided to do as follows:

Give you a general info. about Fjord - Pieters relationships.
Forward this message to the involved chiefs in our system.
Take contact with Fjord seafood Scotland and discuss this with Rudi Pieters (who also is on vacation two weeks more).

A general info.

Pieters is from now off (sic) a 100% daughter company of Fjord Seafoods. Pieters will be our sales department for value added products especially in Europe - including also UK. During the last two months there have been a change of the owner structure of Pieters. Before this Pieters was 50% owned by Domstein and 50% by Fjord. Domstein is the biggest owner of Fjord's Seafood. Which means that doing business with Pieters is the same as doing business with me or Fjord Seafood Scotland or Norway.

I discussed this mail this morning with the buyer of Pieters and he knows the Oscar Mayer have been in contact with Pieters for their products. At the same time he found it a little bit strange that the reason for contacted (sic) them was the label on the box. Pieters is a huge company in the fish business in Europe and have a turn over in 2001 of more than 200,000 Eur and should be known in the most environments, which deals with fish in Europe.

We want to take this serious and we want to find the best possible solution for both of us, and we will get in contact with the people that are able to take decisions in this case. In this case the decision will not be taken from me because this is a case internally in Europe and I do not know enough of the marked (sic) to make a correct decision this mail go (sic) with copy to Ludo Adelhof, in Pieters and Rune Vamtak in Fjord Seafood sales in Norway.

They are all in holiday the next weeks - and have to discuss this internally first and we will come back with a reply to you when they have been able to discuss this.

I hope you understand our situation as well and hope this will not disturb our relationship for the future."

Mr Thomas, of the pursuers, replied in an e-mail, 6/28 of process, dated 22 July 2002. In that e-mail Mr Thomas inter alia said this:

"We can not be in a position where we supply Fjord products to our customers and then Fjord try to compete with us again for the same business".

He also indicated that there was the possibility of the pursuers obtaining their supplies from another or other companies but that they would prefer to continue to do business with Fjord Chile. On 30 July 2002 Mr Thomas e-mailed Mr Harris (6/29 of process) in the following terms:

"As agreed on the phone last night we agree to take in the 2 pallets of salmon pieces for the moment.

subject to resolving the Oscar Mayer - Pieters problem.

Please hold on all further shipments until this is resolved."

Having regard to the preceding correspondence, which I have set out above, it appears to me that if any of the parties' representatives, who were informed of the position at the time, had been asked "what is the Oscar Mayer/Pieters problem?" they would have said that Pieters was being invited by Oscar Mayer to supply them with fish products at that time when the pursuers were an existing supplier of Oscar Mayer under a contract with them. That was the problem which the pursuers were seeking to have resolved.

[10] A proposed resolution of that problem was proffered by Mr Gjerde in an e-mail of 30 July 2002 addressed to Mr Thomas, which is 6/30 of process. It is headed "Oscar Mayer (Decision)". It states as follows:

"I have a chat this morning with Mr Adelhof in Pieters and we have decided to do as follows.

We will not offer salmon products to Oscar Mayer during the next twelve months - and we will explain this to Oscar Mayer. We will base our decision on that Spring Salmon are a big client for Fjord Seafood Scotland and Fjord Seafood Chile. We also understand the long-term relationship between Spring Salmon and Oscar Mayer.

Both Chile and Scotland have been discussing this and come to the same conclusion.

We hope this will prove the co-operation between Fjord and Spring Salmon and that this will open doors for the future corporations (sic).

If you would like to discuss this directly with Pieters - You should contact Mr Adelhof in Brugge on phone number +3250458600 - and he is prepared to discuss this with you.

This for your information".

The evidence, in the case, was that, somewhat surprisingly, perhaps, Mr Thomas never took up the invitation to discuss the contents of this e-mail with Mr Aldelhof in Brugge, directly by telephone. Mr Thomas instead replied directly to Mr Gjerde in an e-mail of 30 July, 6/31 of process. In that reply he stated:

"Many thanks for your note. I will be visiting Oscar Mayer for meetings on Friday so we can now clear the air on this. There is no need for me to contact Pieters now that I have your confirmation. I will pass your e-mail onto Wisco in Scotland who are holding product for us pending this decision.

Many thanks again for your assistance in this matter."

Mr Thomas also e-mailed Mr Harris, at the same time, 6/32 of process. He did so in the following terms: "I have just received this note in from Fjord Chile which is good news and will resolve everything. I would appreciate it if you could also verify this from your end and confirm". Mr Harris then replied to Mr Thomas on 30 July 2002 in an e-mail 6/33 of process. In it he stated "I spoke with Ludo in Brugge. It is good news, they are prepared to back off OM on salmon products, i don't know what you do for them in other products. They are going to meet OM and tell them they will work through SS in the UK, they will not however, give exclusivity as we are already supply (sic) a number of companies in the UK. They have extended an invitation to yourself if you wanted to visit Brugge. He told me that he would get Dag to give you all the information from Chile but i think it will be the same as i am telling you. I hope this will close the problem we have and we can get on with business" (my emphasis). Mr Thomas's reply to that message from Mr Harris is an e-mail of 31 July 2002, 6/34 of process it stated "This is fine. We were not asking for exclusivity in the UK but simply did not want to buy product from you only to compete with you to supply the same customers. This all makes good sense and so I can now push on and try and get some business done". Six days later Mr Thomas e-mailed Mr Aldelhof, 6/35 of process. In that e-mail Mr Thomas wrote as follows:

"I understand that we have now reached an agreement with Fjord group concerning our customer in the UK, Oscar Mayer Group (Oscar Mayer Chard, Rowan Foods and Fenland Foods).

As you know we currently supply these group companies with products supplied by Fjord Group Companies. The products we currently supply are:-

Scottish salmon pieces

Chilean salmon pieces

Chilean salmon portions 80-100g.

Pollock fillet pieces.

Cod fillet pieces.

I have now received confirmation from Fjord Chile and Wisco in Scotland that Pieters will not continue to offer fish products to the Oscar Mayer Group for a period of twelve months at which time we can review the situation. On this basis we have decided to proceed with the substantial new business projects we have in place with Fjord Seafoods. We thank you for your co-operation" (my emphasis).

It will be noted that Mr Thomas in that e-mail uses the expression "fish products" notwithstanding the fact that term had never been used in any of the preceeding correspondence between the parties, which always referred to salmon products. This was a point taken up by Mr Aldelhof in his reply to Mr Thomas which is 6/36 of process.

The Dispute
[11] In this action the pursuers sue on breach of contract by all three defenders. The averments relating to the contract which they allege was breached are to be found in Article 2 of condescendence. They are as follows.

"....the Pursuers entered into an agreement with the Defenders to the effect that the Defenders would not offer salmon produce to the Oscar Mayer Group of Companies. Said agreement is set out in an e-mail from Stuart Thomas on behalf of the Pursuers to Ludo Aldelhof of the defenders dated 6 August 2002 and the response from Ludo Aldelhof dated 8 August 2002, the response of 8 August was sent from Alain Lanoo's e-mail address but bears to have been sent by Ludo Aldelhof. The said agreement was subsequently varied by the parties. In particular the variations set out in the e-mail from Anje Vanhollebeke of the second defenders dated 7 November 2002. Copies of the said e-mails are produced herewith and held to be incorporated herein brevitatis causa. In terms of that e-mail the Defenders agreed not to supply the product group salmon for the period from 1 September 2002 to 30 September 2003" (my emphasis).

The breach of contract which the pursuers allege in this case has two aspects to it. The first is set out in Article 3 of condescendence where it is averred as follows:

"On 6 May 2003 Oscar Mayer on behalf of the Oscar Mayer Group of Companies invited companies to tender for the supply of fresh and seafood products.... . Both the Pursuers and the First Named Defenders tendered for the contract...... . In or around 25 July 2003 Oscar Mayer Limited on behalf of the Oscar Mayer Group confirmed that the Pursuers had not been successful in the tendering process. The Pursuers subsequently ascertained that the contract had been awarded to the First Defenders. In tendering for the supply of salmon products, the First Named Defenders were in breach of the said agreement".

The second aspect of the alleged breach of contract is averred in Article 4 of condescendence where it is, inter alia, averred as follows:

"In addition they have lost profits for the period between the initial breach of contract by the Defenders and 1 July 2003. In particular the First Named Defenders were in breach of the agreement from May 2003 to July 2003 in that they were supplying salmon to Oscar Mayer. The pursuers reasonably estimate their loss for that period to be £92,698.75".

The defenders deny that, in responding to Oscar Mayer's invitation in May 2003 to tender, they were in breach of any agreement with the pursuers. They accept, however, that between 22 July and 6 August 2002 they supplied Oscar Mayer with salmon product, which was a breach of their agreement with the pursuers. They accept that they are due to pay the pursuers compensation in respect of that breach. In averment, they state that the first defenders made a profit in respect of that supply to that the extent of £1,326.00. They also acknowledge that during the period 11 June 2003 and 30 July 2003 they supplied smoked salmon directly to Oscar Mayer. Their position was that smoked salmon was not covered by the parties' agreement because that did not fall within the description 'salmon product'.

[12] The main substance of the dispute between the parties came to be whether or not any agreement between them meant that the defenders, or any of them, were not entitled to tender for the supply of salmon products to Oscar Mayer in May 2003, even in relation to supplies which would not commence until after 6 August 2003 and, indeed for whatever duration the invitation to supply was directed at.

[13] As has been seen the pursuers aver that the agreement, upon which they found, was concluded by the e-mails of 6 and 8 August. They aver, however, that there were subsequent variations thereof, in particular by virtue of an e-mail from Anje Vanhollebeke, of the second defenders, dated 7 November 2002. The background to that last mentioned e-mail was as follows. In the first place as has been seen, 6/35 of process, Mr Thomas in his e-mail to Mr Aldelhof sought to have the agreement extended to cover pollock and cod pieces. No reply appears to have been made to that request. Nevertheless Mr Thomas e-mailed Mr Aldelhof some two months later, on 14 October 2002, 6/38 of process in the following terms:

"As discussed and agreed back in August could you please advise your sales team to withdraw from the Oscar Mayer account in Chard, UK. Current proposals by your company to supply pollock off cuts and cod pieces are not within the spirit of our agreement. Would you be so good as to provide us with assurances that prices will not be tendered and samples will not be sent as arranged".

It is difficult to see why Mr Thomas thought that he was entitled to say that supplying pollock off cuts and cod pieces was not within the spirit of the agreement which was clearly restricted to salmon product. In any event Mr Aldelhof replied in an e-mail of 7 November, 6/39 of process in the following terms:

"Regarding your e-mail dated 14.10.02, first of all I would like to apologise for the late answer but I wasn't in the office the last two weeks.

After internal discussions within the group (Fjord, Wisco and Pieters) we can't confirm your request to have full exclusivity for the seafood products for the account Oscar Mayer.

As we mentioned earlier we are prepared to do this for the product group "salmon" for the period 01.09.02 until 30.09.03."

That e-mail, in fact, bears to be from Anje Vanhollebeke. She is Mr Aldelhof's secretary. A copy of the e-mail bears to have been sent to inter alios, Mr Aldelhof. Mr Aldelhof informed the Court, in his evidence, that the substance of that e-mail was dictated by him to his secretary as he was away from his office at that time. It will be noted that the period of the undertaking involved is stated in the e-mail as being 01.09.02 until 30.09.03. The period of the undertaking became an issue before the Court. Mr Thomas replied to the last mentioned e-mail, by an e-mail of 7 November 2002, 6/40 of process, addressed to Mr Aldelhof and copied to among others, Mr Harris and Mr Gjerde. The terms of that e-mail were as follows:

"OK this is understood however it will make it more difficult for us to now extend the number of contracts that we had planned to assist Wisco to win in the UK market. We have 22 years of experience in the UK market for farmed salmon products and felt that a close co-operation would have yielded significant returns for all parties. You will be aware that after reaching a commission agreement with your company Wisco we were able to secure a contract (subject to final technical approval) with £1,500,000.00 in sales each year. We are very well connected in the industry and could easily expand on this, especially as we now specialise only in frozen.

You will appreciate that we are unable to secure valuable business for you if you at the same time wish to compete with us on our established business. I would put it to you that the business we could win for you will massively outweigh the value of the specialist sales into some of our ready meal customers in the UK.

It is probably worth mentioning to you at this stage that we are now grooming our group for sale in approximately 2-3 years time. If you are interested in making an assault on the UK market then you may wish to consider our company as a potential vehicle for this. Working in close co-operation with Wisco, it would make a powerful force in the UK. We would consider entering into discussions, at an earlier stage should you wish to proceed and we would consider a sale in return for Fjord paper. We look forward to opportunity of building our commercial relationship".

Mr Thomas, in that e-mail, it will be observed, made no reference to the commencement date of the undertaking provided by Mr Aldelhof. The variation of the agreement set out in the e-mails of 6 and 8 August 2002 was claimed by the pursuers to be with regard to the commencement date and the duration of the agreement. The defenders deny that there was any such variation. Mr Aldelhof in his evidence said that the reference to 1 September 2002 to 30 September 2003, was a mistake made by his secretary, as a result of her misunderstanding the information communicated to her by him.

[14] As has been seen the pursuers' case is, in part, based on the fact that the second defenders, in May 2003, responded to an invitation by Oscar Mayer to tender for supply to Oscar Mayer of certain fish products. (The tender which was in due course made was made on behalf of the first named defenders). The pursuers' own contract with Oscar Mayer for supply of fish products expired on 30 April 2003. The pursuers were also invited by Oscar Mayer to tender. Copies of pro forma tender documents are attached to a letter from Oscar Mayer to Mr Thomas dated 6 May 2003, which form 6/60 of process. The contract period is stated to be May 2003 to May 2004 but Oscar Mayer asked that the tender documents be returned to them by 16 May 2003. I heard evidence from the defenders' witnesses, which I accept, that the actual completion of the tendering process would normally take some weeks. On 13 May 2003, Mr Thomas e-mailed Mr Aldelhof, 6/42 of process. The subject was stated to be "Oscar Mayer" and the importance was stated to be "High". The content of that e-mail is as follows:

"Very good to meet with you in Brussels. It was a very interesting discussion and I think there is a huge potential for us to work together in the UK market and we look forward to entering into further discussions with you.

For your information we are working this week on a contract that will increase our volumes on salmon portions by an additional 40mt per month. I understand that Derrick may be seeing you on Friday and will be able to give you the detail on these new developments.

In the meantime would you be so good as to ask your account manager for the UK to honour our agreement with regards Oscar Mayer. As you can see from below this was for the product group "Salmon" and is valid through to 6 August 2003. You have started to supply smoked salmon product to Oscar Mayer in competition with ourselves and this is now causing us some problems. Can you please withdraw from this product for the moment and ask your account manager to confirm this to me. (Please see a copy of your agreement below). Thanks again for your time at the ESE".

It will be noted that Mr Thomas, in 6/42 of process, notwithstanding what was said in 6/39 of process, and what is now claimed by the pursuers in this case, was stating that the agreement was valid "through to 6 August 2003".

[15] The next written correspondence between the parties lodged in this action is dated July 2003. There clearly were, however, communings between the parties between the 13 May 2003 including, in particular, meetings and conversations between Mr Thomas and Mr Harris. Towards the end of July 2003 Mr Thomas discovered that the pursuers were not to be awarded the Oscar Mayer contract for 2003/2004 and that the first defenders were to be awarded the contract in respect of the products they had tendered for. He was informed by Oscar Mayer that the pursuers would not be obtaining the contract by an e-mail from Oscar Mayer's Mr Dominic Hobson, dated 25 July 2003, 6/47 of process. On 22 July 2003 Mr Thomas had e-mailed Mr Aldelhof, 6/44 of process. The heading to that e-mail is "Agreement with regards Oscar Mayer, Chard". The importance is stated to be "High". In that e-mail Mr Thomas wrote as follows:

"Hi Ludo,

Would you be so good as to confirm that the Pieters Group has operated within the terms of the agreement confirmed by yourselves with regards Oscar Mayer Limited. Can you please confirm that you have supplied nothing to Oscar Mayer within the product group "Salmon" and also confirm that to date you have not made any offers of salmon products to Oscar Mayer. Clearly we have been working very hard to expand the already significant sales of salmon products we have achieved for your WISCO plant and as this is directly linked to the mentioned agreement we would like to know that all is well. We intend to make a very significant push in September with regards fresh salmon portions and at much improved prices and expect to see sales of over £3M for 2004 so I would also ask you to confirm that you will renew this agreement for another twelve months.

If you have any queries please do not hesitate to call me; otherwise I look forward to receiving your reply".

On 5 August 2003 Mr Harris wrote to Mr Thomas by e-mail, 6/51 of process. This e-mail was copied to Mr Aldelhof. In it Mr Aldelhof said inter alia, as follows:

"In regards to your e-mail to Ludo on of (sic) 22 July 2003 i will reply for both Wisco and Pieters, Since we started to supply you last year with by-product, we have honoured the agreement made with Pieters on 6 August 2002 for a 12 month period. Quite soon after we started to supply you, Oscar Mayer contacted Pieters directly in Brugge looking for supplies of salmon and white fish, we made it clear to OM that we had an agreement in place for salmon with Spring Salmon for one year so they asked for other products which included white fish, which was out of the terms of the agreement. In May 2003 OM again contacted Pieters Brugge and asked them to tender for their next years contract which would have been at the end of your one year agreement with Pieters, i discussed this with Ludo and agreed to call you and explain we had been asked to tender for the contract and if we were successful and your agreement overlapped with the start of the OM contract Pieters/Wisco would compensate you for loss of profit, this was openly discussed with you, and you rejected any offer i made, as i said to you yesterday i am still open to discuss this, Your agreement with Pieters was as far as i am aware only for one year ....... I do hope we can continue to work with each other, please do not hesitate to contact me to discuss any points".

In evidence, Mr Harris confirmed what is said that e-mail, namely that in May 2003 he had told Mr Thomas that Oscar Mayer had invited the second named defenders to tender, and that if the second named defenders were successful and if there were any overlap between the end of the agreement with the pursuers and the commencement of any arrangement between the defenders and Oscar Mayer, compensation would be paid to the pursuers. If that be true, it is clearly significant, (as Mr Thomas, himself, accepted in his evidence), that, had the pursuers thought by responding to the invitation to tender, any of the defenders were in breach of the agreement with the pursuers, they (the pursuers,) took no steps in May 2003 to enforce their agreement with the defenders, in that respect. Mr Thomas's reply to Mr Harris's e-mail of 5 August was given in an e-mail of 6 August 2003, 6/52 of process. The subject is stated to be "REF: Contracts held with Wisco". In it Mr Thomas wrote, inter alia, as follows:

"Thank you for your note. I do not accept that you or anyone in the Fjord/Pieters Group asked our permission or notified us in May that you wished to try and win the Oscar Mayer contract. It is not true to say that you respected the agreement as it has come to our attention that you did in fact supply smoked salmon. The agreement covered the product group "Salmon" and you were therefore clearly in breach of the agreement. The agreement also clearly stated that the Fjord Seafood group (including Wisco and Pieters) would not "offer" salmon products to Oscar Mayer during the period of the agreement. You have clearly been in breach of this term as well and have actively pursued the business behind our backs. This has included the supply of several samples, commercial deliveries and also attending meeting on site at the Chard Offices of Oscar Mayer to negotiate and finalise terms of the contract to supply. In summary your breach of the agreement has been blatant.

It is true that I did hear that you had been in contact with Oscar Mayer and I did call you to tackle you on this issue. At the same time I wrote to Pieters for clarification but received no response. During my conversation with you it was proposed that you would offer us a commission in respect of the lost Oscar Mayer business if we accepted that you could offer salmon to them. We flatly rejected this proposal and advised you in no uncertain terms that the agreement was to be observed. I confirmed that failure to do so would jeopardise our trading relationship and that you should give consideration to our excellent performance with regards the Young's Bluecrest contract and did you really want to put all of this at risk. You confirmed that the Young's Bluecrest sales we had brought in were very important to your business but that you were at the mercy of what the management at Pieters decided to do....... I know that we have planned to talk at length on Monday but I would appreciate it if you would at least have the decency to be honest and open with me with regards the agreements we have made. I have known you as a friend for 20 years and you have stated at the end of your e-mail that you hope that we can continue to work together. At this moment in time I feel very strongly that the trust we had has been broken. I need to receive a note from you that will in fact reflect the true nature of the agreements between us. You said during our last telecom on Monday that you regretted not talking to me about Oscar Mayer before you went down to see them to negotiate final terms. This is your one opportunity to restore the trust that exists between us. For us, doing long-term business is all about relationships, trust and ethics: without that there is little chance of building a strong partnership. I look forward to hearing from you over the next day or so. Lets get this straight before we talk on Monday".

In his evidence, Mr Thomas, was adamant that Mr Harris never did alert him in May 2003 to the fact that any of the defenders would be tendering for the Oscar Mayer business.

Discussion of parole evidence given at proof
[16] The evidence of Mr Thomas, given at the proof, was that he discovered in, the course of 2002 that Oscar Mayer, had contacted Pieters directly to discuss competitive prices. His concern was that the pursuers' existing contractual arrangements with the defenders left the defenders free to trade with anyone. There was, in particular, nothing to prevent the defenders submitting and supplying salmon products directly to Oscar Mayer. He said that his concern, in that situation, was the pursuers' existing relationship with Oscar Mayer. The first defenders had said that they wanted to work with a company, like the pursuers, who could take up the whole of their product of salmon pieces. It would, accordingly, have been a wholly unsatisfactory situation for a company in the group, of which the first defender was a member to compete, with the pursuers, in respect of supplying Oscar Mayer with such product. It was against that background, he said, that he sought the assurances that he did in July 2002. When he received Mr Gjerde's e-mail, 6/30 of process, he assumed that the references to "we" meant that the proposed undertaking was to be given on behalf of all the defender companies. It would have made no commercial sense for the pursuers to have had an undertaking from only one of them. In examination-in-chief Mr Thomas said that his understanding of what was being proffered in Mr Gjerde's e-mail was that the defenders would not "disturb our business at all with Oscar Mayer". That appears to me to read more into what was said in the e-mail, on any view of matters. Mr Thomas also said that he read the fourth paragraph of that e-mail as stating that the undertaking would be reviewable in the future. I find it impossible to see how he could have reached that view of what is stated therein. Moreover, Mr Thomas, in examination-in-chief, said that he did not intend that the undertaking would be restricted to salmon products. By using the words "offer", Mr Thomas said that he understood that Mr Gjerde was saying that the defenders would not compete with the pursuers, at all, regarding salmon products with Oscar Mayer. It meant that the defenders would make "no approach at all regarding any supply, current or future". It seems that to me that whatever significance falls to be given to the words "offer", a matter to which I will require to return, Mr Thomas sought, in his evidence, to read into the e-mail, as much as he could read into it, no matter what its true commercial context and purpose was and no matter what it actually said. He quite clearly had hoped to keep the defenders from competing with the pursuers as long as the pursuers had Oscar Mayer as a customer. He said that, notwithstanding the reference to twelve months in the e-mail, it was always his assumption that the undertaking would be renewed after twelve months. In his evidence-in-chief, Mr Thomas described the content of 6/30 of process and his response to it as being "a pre-agreement with the defenders". He said, "I was not satisfied with it because it was only concerned with salmon products". His references to pollock fillet pieces, cod fillets and fish products in his e-mail, 6/35 of process, was, he said, an attempt by him to "tighten" the agreement to preclude the defenders "dealing with Oscar Mayer full stop". Under reference to 6/39 of process, Mr Thomas claimed that "negotiations had produced a concession that the agreement should endure from 1 September 2002 to 30 September 2003". He claimed that the agreement was finally concluded on 7 November 2002 when he accepted "the final terms in 6/39 of process for the period stated in relation to the goods mentioned therein". When he was asked why he, himself, subsequently, in correspondence, referred to the undertaking expiring on 6 August 2003, he said that he did so because he was very angry about what had emerged and had, in error, put in the reference to 6 August 2003 having picked it up from where it appeared in the various earlier e-mails.

[17] In examination-in-chief, Mr Thomas said that the pursuers became aware during 2003 that the first defenders were providing commercial supplies of smoked salmon to Oscar Mayer. That was the matter which he took up in his e-mail 6/42 of process in which he made the mistake, of referring to the undertaking expiring on 6 August 2003. He said that the pursuers' contract with Oscar Mayer had come to an end in April and this was a worry for the pursuers. The pursuers, he said, first became aware that they had lost the Oscar Mayer contract to the first defenders on 21 July 2003, during a telephone conversation with Mr Jacobs, the representative of Oscar Mayer, during which Mr Jacobs said that Mr Harris had attended the offices of Oscar Mayer on that day. Mr Thomas said that he telephoned Mr Harris at the end of the working day. He said he felt disappointed at what had happened. He was more disappointed than angry. His disappointment was all the greater because he had known Mr Harris for 20 years and he was someone in whom he had had total trust. Mr Thomas spoke to a note of his, dated 23 July 2003, 6/43 of process, as being a note made by him, at about that time. He said that what had occurred on 21 July was still quite fresh in his mind when the note was made and that he had, in any event, made hand-written notes at the time which he had converted into the note which is 6/43 of process. It is to be noted that, once again, Mr Thomas, in that note refers to the agreement expiring on 6 August 2003. In the note Mr Thomas states, inter alia, as follows:

"Derrick Harris was clearly very uncomfortable about the fact that I had caught him out and tried to explain that OM had pursued them and a decision had been taken to try and win all of the business and go direct. He said that he realised that this was in contravention to the agreement and said that it was unfortunate that I had found out prior to the agreement expiring. He tried to explain that he had not pushed for this but that the management in Pieters had instructed him to attend the meeting and tender for the salmon business. He said that although he thought we had been treated unfairly he had no other option but to proceed with the negotiations. The management in Pieters had told him that if we were not happy about it they would agree to pay us some kind of commission in respect of the business we had lost. I told Derrick that this would be completely unacceptable and that the way that they had handled the matter was highly unethical and we were considering our position."

Mr Thomas maintained that that note recorded what was "very close" to what Mr Harris had said to him and that he had, in particular, recognised that what had happened was in breach of the agreement with the pursuers.

[18] As has been seen Mr Thomas was, on 21 July, informed by Oscar Mayer that the pursuers were not to be awarded the Oscar Mayer contract, and found out that the first defenders had been awarded the contract for 2003-2004. Notwithstanding that fact Mr Thomas e-mailed Mr Aldelhof on 22 July 2003, 6/44 of process in the terms set out above.

[19] Mr Thomas' explanation for the terms of that e-mail was that he was still hopeful that the situation might be retrieved for the pursuers. Under reference to Mr Harris' e-mail of 5 August 2003, 6/51 of process, Mr Thomas emphatically denied that he had ever had a conversation with Mr Harris, in or about May 2003, when he was informed that one of the defenders would be tendering for the Oscar Mayer business. His position was that had he been so informed he would have contacted his lawyers and sought an interdict against the defenders. He said that, in May 2003, he had been invited to a meeting with Oscar Mayer to discuss the tendering process. They had raised a number of issues with him and had, in particular, said that they were aware that the pursuers had precluded the defenders from tendering to Oscar Mayer. There was no other evidence, adduced at the proof, which supported Mr Thomas' evidence in this respect and he accepted that it was contradicted in terms of 6/51 of process. As at 6 August 2003, the date of his e-mail to Mr Harris, 6/52 of process, Mr Thomas said he thought that there was, perhaps, a "glimmer of hope" regarding a negotiated settlement and that the defenders might to back to Oscar Mayer "to remedy the situation". He sought to chase up the matter by an e-mail to Mr Harris of 8 August 2003, 6/54 of process. That was replied to by Mr Harris in an e-mail of 9 August 2003, 6/55 of process. In that e-mail Mr Harris wrote as follows:

"Firstly I apologise for not getting back to you at the end of last week. Your agreement with Pieters as far as I am aware is for one year only as I have already stated, therefore we are quite within our rights to negotiate with OM for their next year's contract, this means, along with other suppliers we had to quote and send samples which were on (sic) no commercial value as part of the tendering process. Can I also clear up a point which you keep bringing up. OM contact Pieters in Brugge, you had not informed Wisco who your customer was, we did not contact them, we had no knowledge of who your customer was until we were contacted by them, it was OM who found out where you were purchasing your salmon from, we then, as I have already stated, told OM we had an agreement with SS for salmon and could only commercially supply other products. ... I hope we can sort our disagreement out next week and get back to normal trading, I believe we could be missing substantial business whilst we are not communicating on a commercial level."

It is important to note that what Mr Harris wrote there was entirely consistent with the defenders' position in this action and at the proof before me. Mr Harris, in that e-mail, went on to discuss certain other matters of disagreement between the parties at the time with which I am not concerned. It will be noted, however, that his e-mail concluded with the hope that the disagreement could be sorted out. Mr Thomas claimed, in evidence, that what Mr Harris had said in that e-mail regarding the Oscar Mayer business was not the position he had taken previously in relation thereto. Mr Thomas said that his reaction to Mr Harris' e-mail was that the matter should now be placed with his lawyers and that he e-mailed Mr Harris to inform him of that. Mr Thomas was referred to a note of a telephone conversation he had with Mr Harris on 11 August 2003, which is 6/56 of process. It is in the following terms:

"Received a telecom from Derrick Harris in response to an e-mail sent to him the same morning confirming the instruction of our lawyers.

DH was clearly very alarmed by the action we have taken. He readily confirmed that he and the company had made a very big mistake in failing to observe the terms of the agreement made in respect of OM. He also confirmed that they had also broken the agreement with regards the supply of broken salmon fillets and admitted that this was due to the fact that the return to them was significantly less than they could recover by selling the fillets fresh.

In what amounted to a dramatic change of tune he accepted that Wisco had a contract with us in respect of OM, the supply of broken fillets and also Young's Bluecrest.

He appeared to accept that if we took the matter to court we would succeed with our claim. He said that he now want (sic) to find a solution that would prevent the matter escalating out of control and made a proposal to pull out of the OM business and to fulfil the contract on broken fillets.

I said that I felt that the damage had now been done and that the course of action that we had been forced to take would be difficult to undo. I said that this was not a personal matter but simply a commercial decision to recover the loss of profit resulting from his actions. I confirmed the matter was now firmly in the hands of our solicitors and if he wanted to make a proposal he should do so in writing."

[20] It might be noted that there is no specific reference in that note to the defenders responding to the invitation to tender from Oscar Mayer being in breach of any agreement with the pursuers. The note bears to be a note recording a conversation which took place with Mr Harris at 12.00 hours. Number 6/57 of process is an e-mail from Mr Harris to Mr Thomas, time 12.17 hours. In it he wrote as follows:

"Please look at the proposal we discussed.

Wisco walk away from OM contract stating that we had a contract with SS which we had thought was only for one year, but in looking at the overall wording of the contract it appears we are unable to offer our products direct.

We supply you as stated with the Broken fillets to the volumes agreed. I would ask a favour here that we can review the price, we lose substantial money in this product.

I hope this will give you the confidence that we can all make mistakes, and i am prepared to do something about this so we can get back trading with you again. Please give me a call when you have discussed this with Rod."

In the event, it appears, that proposal was not taken up by the pursuers. Mr Thomas, accepted in examination-in-chief, that the e-mail 6/57 of process can be read as simply referring to an agreement by the defenders not to supply Oscar Mayer with salmon products for a year as contended for by the defenders.

[21] In cross-examination Mr Thomas accepted that Mr Gjerde was not a native English speaker and that the word "offer" could mean a number things. He said that he himself had interpreted it as meaning "approach". He maintained that at the time of the e-mails 6/33 and 6/34 of process the parties were still in negotiation. Mr Thomas accepted that the pursuers' contention, as to the effect of the undertaking given by the defenders, could have prevented the defenders from trading with Oscar Mayer for at least thirty months. At one point in his cross-examination Mr Thomas seemed to be contending that there were three agreements between the parties. The first was constituted by Mr Gjerde's e-mail, 6/30 of process and Mr Thomas' response thereto. The second was constituted by the e-mails 6/35 and 6/36 of process and the third was constituted by the e-mails of 7 November 2002, 6/39 and 6/40 of process. He thought that the "agreement" of 7 November superseded previous agreements. He insisted that the alteration of the duration of the agreement to an expiry date of 30 September 2003 was a concession made by the defenders and was not an error. Under reference to 6/42 of process, the witness said that he had received a call from someone in Oscar Mayer in April 2003 confirming that they had received salmon from the second named defenders. He said that he had not wanted to build this up to a huge argument with the defenders, particularly as the pursuers were now generating large business with the first named defenders. He simply wished to bring the matter to Mr Aldelhof's attention and to ask him to rectify the position. He, once again, was quite adamant that Mr Harris, had not at or about this time informed him that any of the defenders would be tendering for the Oscar Mayer business. When it was put to him that the tone and content of his e-mail, 6/44 of process, to Mr Aldelhof, was not indicative of his concern that the defenders had been in breach of contract by tendering for the Oscar Mayer contract, Mr Thomas said that that was because he was still doing business with the defenders and he wished to protect that business. He was hoping for a "concession" from Mr Aldelhof. He did not, in terms, make any mention of the "tendering problem" at that stage, because he still had not received final confirmation about that. The witness denied that the terms of Mr Harris' e-mail, 6/51 of process, was consistent with what Mr Harris had previously been saying to him. He also maintained that Mr Harris had changed his position in his e-mail 6/55 of process from what he had previously said in conversation with Mr Thomas. Mr Thomas was not prepared to accept that the proposal put by Mr Harris in 6/57 of process was simply an attempt by him, on behalf of the defenders, to keep the relationship between the parties alive. He preferred to see it simply as a recognition by Mr Harris of the defenders' breach of contract. He accepted, in any event, that he never put the offer to the test. His position was that by that time the damage had been done and trust had been lost.

[22] In his evidence Mr Dag Gjerde of the third defenders explained that the main commercial activity of these defenders was the production, in Chile, of salmon from smolt and marketing thereafter the salmon both in fresh and frozen form. The company supplied some UK companies. He himself first came into contact with the pursuers in 2002, when he took over the operation of an established contract between the third defenders and the pursuers. Mr Stuart Thomas was his "contact person" in the pursuers. Mr Gjerde was unaware of who the pursuers' own customers were. Under reference to the e-mails 6/24 and 6/26 of process, Mr Gjerde said that he understood the position to be that the pursuers, through Mr Thomas, wished him to put pressure on the European side of the group's business to find a solution as to who should supply Oscar Mayer. There was no question of the third defenders ever supplying Oscar Mayer. In an e-mail, 6/26 of process, Mr Gjerde made contact with a number of persons involved in the defenders' European operations. Mr Gjerde said that Mr Thomas in his e-mail to him of 22 July 2002, 6/28 of process, did not appear to be asking for anything very specific. He was wishing to point out that the pursuers were an important customer of the third defenders and was inviting the defenders to come to an agreement that they would not supply to Oscar Mayer and was waiting for a reaction to that proposal. He was asking Mr Gjerde to put pressure on the European side of the defenders' business. Mr Gjerde said that he himself was not in a position to take any decision regarding the matter. There was never any question of the third defenders competing with the pursuers for the Oscar Mayer business.

[23] After discussing the matter with persons involved in the defenders' European operation, in particular Mr Aldelhof and a Mr Rudi Pieters, Mr Gjerde sent his e-mail, 6/30 of process, to Mr Thomas. Mr Gjerde made it clear that, in sending that e-mail, he was, in effect, acting as a messenger for the European side of the defenders' business and was simply seeking to convey what the representatives of the European side of the business had agreed might be offered to the pursuers. He was quite straightforward in saying that the offer, however, was being made on behalf of the defenders as a group (contrary to what is pled on the defenders' behalf in the action).

[24] Asked what he intended to convey by the wording he used in that e-mail, Mr Gjerde said that he was, on behalf of the group, giving an undertaking that salmon products should not be supplied from the group to Oscar Mayer for twelve months. In using the word "offer" he said he meant to convey that none of the group would go actively and "be on Oscar Mayer's door to supply the products". On reflection he accepted that it would probably have been better if he had used the words "sell and supply". He did not consider that a tender made by any of the group to Oscar Mayer, if it followed an invitation from Oscar Mayer to make such a tender, would amount to an offer in terms of the undertaking set out in 6/30 of process, provided that it was made clear that any supply of salmon products as a consequence of the tender being successful could not be made until the end of the twelve month period referred to. In other words, he said, "I could give an offer to deliver next year and that would not have breached the proposed undertaking". The undertaking did not, and was not intended to, prohibit the group from tendering to Oscar Mayer for supply of salmon products for future years. The witness was, however, prepared to accept that all of this might have been made more clear had he used the word "supply" instead of the word "offer". He pointed out that a copy of 6/30 was not sent by him to anyone else in the group. What he was intending to communicate in it was what he had discussed with Mr Aldelhof. For that reason he had invited Mr Thomas to discuss the proposal directly with Mr Aldelhof. He found it strange that Mr Thomas did not take up that invitation and confirm the position with Mr Aldelhof one way or another. When asked about the use of the expression "salmon products" in his e-mail 6/30 of process, Mr Gjerde said that that expression was meant to cover products for human consumption which had salmon as their raw material. He was asked if this covered smoked salmon. He said that at the time he had not considered whether or not it would be covered because his company did not supply smoked salmon but he was now prepared to accept that smoked salmon fell to be regarded as a salmon product (contrary to the position taken, on behalf of the defenders, in the action). After he received Mr Thomas' e-mail addressed to him 6/31 of process, this witness played no further active role in any negotiations or discussions regarding the Oscar Mayer business.

[25] In cross-examination Mr Gjerde said that while his company, the third defenders, did a substantial amount of business with the pursuers, the pursuers were not "a strategic client". The volume of product taken by the pursuers did assist the third defenders in disposing of what were described as non-graded product. Mr Gjerde said that when Mr Thomas first approached him in July 2002 about the Oscar Mayer problem, he understood that Mr Thomas did not wish the defenders to compete with the pursuers for the Oscar Mayer business. The witness said that it was Mr Aldelhof and Mr Pieters who had asked him to convey the message contained in 6/30 of process. He did so when matters were fresh in his mind and he was clear what he was being asked to convey. He said that the decision he was being asked to communicate was for the whole group, including the three defenders to the action. There was no particular problem in that respect for the third defenders, as they were not in a position to do business with Oscar Mayer, in any event. The period of twelve months specified was discussed with Mr Aldelhof and Mr Pieters. When asked, again, what he meant by the use of the word "offer" he said "not to actively try to take Oscar Mayer as a client". An offer for him was, however, he said a piece of paper. Sending out a sample therefore would not be an offer but if the sample was sent with the remark "Here's what we can do" that would be an offer. What the word "offer", where it appeared in the proposal in 6/30 of process, could be read as conveying was that the group would not actively seek to take business from Oscar Mayer during twelve months. The intention, however, had been to say that the group would not supply Oscar Mayer with salmon products during the twelve month period. He said he was, however, aware of there being differences in meaning between the word "offer" on the one hand and the word "supply" on the other. An offer, he said, preceded a deal. One needed a deal before there was a supply.

[26] I found this witness to be careful and cautious in the giving of his evidence. I also concluded that he was doing his best to assist the Court. He was clearly awkward about the use of the term "offer" in his e-mail but I was satisfied that he was telling the truth when he said that his intention had been to convey an undertaking not to supply salmon products to Oscar Mayer during the specified period and that, indeed, those were his instructions from those in the group who had authority to grant any such undertaking. The witness was, on the other hand, quite forthright in departing from the defenders' position as regards what was covered by the expression "salmon product" and whether or not the undertaking was being given on behalf of all three defenders.

[27] The next witness led, on behalf of the defenders, was Mr Derrick Harris. He was the general manager of the first defenders from May 2002 until February 2004. Mr Harris confirmed that he had known Mr Thomas for about twenty years. The first defenders began to supply the pursuers with fish in or about June/July 2002. Mr Harris said that the supply to the pursuers was not, in the first defenders' terms, "substantial". Mr Harris said that Mr Thomas had asked him to sign an agreement, 6/19 of process, at the commencement of their dealings. The witness said he had never come across such an agreement before in the trade. In the event, trading between the pursuers and the first defenders was not governed by any written agreement.

[28] Mr Thomas came to hear that Oscar Mayer was inviting the second defenders to supply them with fish products directly and was upset by this. It was, as Mr Harris put it, for "Belgium" to decide whether or not to supply a customer in the United Kingdom directly. Mr Thomas threatened to stop taking produce from the first and third named defenders if any of the defenders dealt directly with Oscar Mayer. Mr Harris said that the threat, had it been carried through, would have a greater impact on the business of the third defenders than it would have on the business of the first defenders. He understood that as a result of the intervention of Mr Gjerde and himself, the second defenders were prepared to agree that the group would not offer to sell salmon to Oscar Mayer for a period of twelve months. Whatever the e-mail 6/30 of process might be read to say, he himself understood that what the group were prepared to do was not to sell or to supply salmon product to Oscar Mayer for a year. He accepted that the undertaking, as worded, covered anything relating to salmon including smoked salmon. When in his e-mail, of 30 July 2002, 6/33 of process, to Mr Thomas he had used the expression "back off Oscar Mayer", he meant that the group would not sell salmon product to Oscar Mayer for twelve months. He accepted that in retrospect "back off" was not a happy expression. He thought that the expression "back off" had come from Mr Aldelhof. Mr Harris accepted that any agreement about these matters was intended to, and did, bind all three defenders.

[29] The first defenders continued to supply the pursuers with product during the rest of 2002 and into 2003. Mr Harris said that in May 2003 he was told by the Accounts Manager of the second defenders, Mr Peter Van Gerven, that they had received tender documents from Oscar Mayer and that they were going to tender in response thereto. Mr Van Gerven asked Mr Harris to price salmon products for the purpose of the tender. It was always understood that the tendering process would take some time to complete and that any supply, after a successful tender, would not commence for at least some weeks after the beginning of May. Mr Harris considered that any supply to Oscar Mayer by any of the defenders would conflict with the undertaking given to the pursuers, if it started before 6 August. It was not the intention of the defenders that any supply should begin before then. Mr Harris said, in examination-in-chief, that he thought he had told Mr Thomas in May 2003 that the second defenders had been sent tender documents from Oscar Mayer and that Mr Thomas had said that he did not believe that the defenders were entitled to tender for the next year's contract. Mr Van Gerven, in the event, instructed that a tender should be made in respect of all the products specified in the tender documents, except shellfish. Mr Harris was subsequently asked to go the offices of Oscar Mayer to discuss the tender with their Mr Hobson. Mr Hobson told Mr Harris that the first named defenders were on the shortlist. Mr Harris, in the event, said that he told Mr Hobson that the defenders could not supply Oscar Mayer with salmon product until late August because of an agreement they had with the pursuers. Mr Hobson was content with that. The first defenders were awarded the contract and were informed of this in July. Mr Harris recalled having a telephone conversation with Mr Thomas concerning this. He disputed that Mr Thomas' note 6/43 of process was altogether an accurate record of that telephone conversation. He thought that he had said to Mr Thomas that the defenders were not in breach of their agreement with him in tendering for the Oscar Mayer contract as it prevented only the supply of salmon product to Oscar Mayer until August 6 2003. He was, however, prepared to accept that he had said he personally thought the pursuers had been treated unfairly since they were still customers of the defenders and there would be problems if both the defenders and the pursuers tendered for the same custom. He said he personally had not wanted the defenders to tender. This, however, did not mean that he understood that the defenders were in the wrong in tendering, in the sense of having breached any agreement with the pursuers. He recalled telling Mr Thomas that the defenders would make the pursuers some kind of payment in respect of any loss of profits suffered by the pursuers due to supply by the defenders to Oscar Mayer in what he described as the "overlap" period. He recalled Mr Thomas saying that this was unacceptable and that the second defenders were in the wrong and were acting unethically and in contravention of the agreement with the pursuers.

[30] Mr Harris said that, at this stage, he had no impression as to what Mr Thomas was going to do. The witness said that during the period 23 July to 5 August 2003 he probably had other conversations with Mr Thomas but none which dealt directly with the Oscar Mayer business. During that period, however, Mr Harris had discussed the matter with Mr Aldelhof. It was agreed that he should e-mail Mr Thomas in reply to Mr Thomas' e-mail to Mr Aldelhof of 22 July 2003, 6/44 of process. The reply is 6/51 of process. As has been seen, in that e-mail Mr Harris reaffirmed the defenders' position as regards the agreement with the pursuers and its effect. He was referred to the mention in the e-mail of a conversation with Mr Thomas in May 2003 when he told Mr Thomas that one or other of the defenders would be tendering for the next year's Oscar Mayer contract and that the defenders would be prepared to pay the pursuers in respect of any loss of profit arising from any supply by the defenders to Oscar Mayer during the "overlap" period. Mr Harris was quite clear that he had had such a conversation with Mr Thomas in May and that he had told him that the defenders would be tendering. He said, however, that the question of compensation may have been raised by him at a later date. Under reference to Mr Thomas' e-mail of 6 August 2003, 6/52 of process, Mr Harris said that he personally believed that the supply of smoked salmon by the second named defenders to Oscar Mayer was in breach of the undertaking given to the pursuers, although his colleagues in Belgium had not thought that that was the case. Overall, Mr Harris said that his reaction to Mr Thomas' e-mail of 6 August was that Mr Thomas was clearly disappointed. He, Mr Harris, felt embarrassed and guilty because he regarded Mr Thomas as a friend. Nevertheless he still believed that the agreement only prevented the defenders from supplying salmon product during the prescribed period. It was important, he thought, to bear in mind that Oscar Mayer had approached the second defenders and asked them to tender, not the other way round as the pursuers at the time seem to have thought. That was, among other things, that he was trying to say to Mr Thomas in 6/55 of process. Mr Harris said that, nevertheless, he thought, even at that stage, that matters could be "rectified" as between the parties. He was alarmed, therefore, when he heard from Mr Thomas that the dispute had been put in the hands of the pursuers' lawyers. He freely admitted that while, until then he had firmly believed that the defenders were within their rights in tendering for the Oscar Mayer contract, he began to have some second thoughts. He did not think that he had said, as recorded in Mr Thomas' note, 6/56 of process, that "he and the company had made a very big mistake" but he might have said to Mr Thomas that he was beginning to have second thoughts about the defenders' position in the matter. There was no "dramatic change of tune" on his part, as stated by Mr Thomas in the note. It was simply that he now recognised that there was a problem between the parties, which the pursuers had referred to their lawyers and, accordingly, he began to consider if the defenders had been in breach of their agreement. It was in that context that he made certain proposals to Mr Thomas as recorded by Thomas. He had not discussed these proposals with his colleagues in Belgium, before making them. The proposals set out in 6/57 of process were not firm proposals. They were put forward for discussion, to try and head off legal procedures.

[31] In cross-examination Mr Harris explained that he had been made redundant by the first defenders in February 2004. He was now acting as a consultant. He agreed that he was being paid by the defenders in respect of his giving evidence in the present case, at the rate of £300 per day. He accepted that, at the time of his giving evidence, he had no other source of income. He said, also, that there was always the possibility that he might be re-employed by one of the companies in the defenders' group.

[32] Mr Harris said in July 2002, Mr Thomas phoned him and said that he did not want the defenders' group to be competing with him for one of his existing customers. The witness said that he was sympathetically disposed towards Mr Thomas with regard to his position because, in particular, of the possibility of further business between the pursuers and the first defenders. As far as the detailed words of 6/30 were concerned, Mr Harris said he never applied his mind, very carefully, at the time, to what they meant. He said he personally would have expected a more detailed agreement to follow on from it. The wording "back off Oscar Mayer" when they appeared on 6/33 of process, he considered, meant not to engage actively in seeking their business. The witness said that he had always understood that the agreement with the pursuers was to continue until 6 August 2003. He repeated that he considered that smoked salmon fell within the expression "salmon product".

[33] In cross-examination Mr Harris, maintained firmly that he had definitely told Mr Thomas in May 2003 that the defenders had received the Oscar Mayer tender documents. Mr Harris accepted that when Mr Thomas spoke to him on the telephone, when Mr Harris was at the airport in July 2003, Mr Thomas knew that Oscar Mayer was going to give the first defenders the contract and that he was upset about that because it involved a substantial part of the pursuers' business. Mr Harris also accepted that Mr Thomas, at this stage, said that he had an agreement with the defenders that they would not take up the Oscar Mayer contract. What he was not prepared to accept was that he, Mr Harris, had told Mr Thomas that this would be contrary to the parties' agreement. He said he would not have said that because he did not believe that there had been any breach of the agreement and that he was not arriving at that view now, with the benefit of hindsight. He still believed, to this day, that the parties' agreement merely prevented the defenders from supplying salmon products to Oscar Mayer up until August 6 2003. The witness said that what really upset him was that Mr Thomas had learned that the contract was being awarded to the first defender, from someone in Oscar Mayer. But, in any event, he was quite definite that Mr Thomas had been told in May that the defenders were going to tender.

[34] Mr Harris repeated in cross-examination that he personally "absolutely wanted to avoid litigation" and that if he and Mr Thomas had kept talking the problem might have been resolved amicably.

[35] I formed the overall impression of this witness that he was, to be regarded as credible and reliable. He did, however, I think, suffer throughout the history of this matter from feelings of divided loyalties. On the one hand he had had a very lengthy friendship with Mr Thomas based on their having done business together over the years. I have no doubt he was anxious to promote the pursuers' interests because of that friendship and was embarrassed, or indeed upset, when those interests appeared to be affected adversely by actings of any of the defenders. On the other hand, he recognised he owed loyalty to his employer, the first defenders, and he recognised what he considered were their rights in the matter, however much the exercise of those rights might affect adversely the interests of the pursuers. Having heard and seen both Mr Thomas and Mr Harris I reached the conclusion that the relationship between them may well have been one in which Mr Thomas felt that he could use Mr Harris in promoting his interests through the defenders. I have, of course, taken into account in assessing Mr Harris' credibility and reliability the fact that he was being paid by the defenders to give his evidence. In re-examination he, in fact, described the pursuers in taking this point against them, as having fired "a cheap shot". I considered his evidence very carefully, in the light of all of this, but ultimately reached the quite clear conclusion that he did not, in respect of the material aspects of his evidence, seek to tailor that evidence to support the defenders' case.

[36] The next witness was Mr Peter Van Gerven. He is presently the sales manager of a company known as Fjord Pieters, part of the defenders' group of companies. He told the Court that he became aware of the pursuers in about July 2002. He said that he had been in contact with Oscar Mayer regarding the supplying to them of fish products. He learned from Mr Aldelhof that the pursuers took supplies of salmon products from the third defenders and that these were then provided to Oscar Mayer. He was informed by Mr Aldelhof, and his own direct superior Mr Greet Leuridan, that the defenders had agreed, as he put it, "not to do business with Oscar Mayer for one year regarding products which the defenders supplied to the pursuer". He said that the agreement was to run from the end of July 2002 to August 2003. Mr Van Gerven was instructed not to go ahead with any proposed supply of salmon products to Oscar Mayer during that period. He understood that the agreement was on behalf of the whole group and referred to salmon portions and bits and pieces of salmon. He did not understand that the agreement covered smoked salmon. It was an agreement arrived at for commercial reasons, having regard to the existing business between the pursuers and the third defenders, which covered salmon products being supplied by those defenders which the pursuers, in turn, used to supply Oscar Mayer. Cod was supplied by the second defenders to Oscar Mayer during 2002 and early 2003. Mr Hobson of Oscar Mayer informed Mr Van Gerven that he wanted the defenders to tender for supply of other products. Oscar Mayer were, the witness said, aware of the agreement between the defenders and the pursuers. In May 2003, Mr Hobson sent tender documents to Mr Van Gerven. Mr Van Gerven said that he considered that the defenders were free to respond to this, provided that there was no actual supply by them of salmon products to Oscar Mayer before August 2003. That was not anticipated to be a real problem because he said it was common for negotiation still to be taking place for about two months after tenders were first received. Mr Van Gerven said that he had contacted Mr Hobson and had said that the defenders wanted to do business in relation to salmon products from August 2003 onwards and that Mr Hobson had agreed that if any tender of the defenders was accepted then the supply would not commence until August. Mr Van Gerven himself had then arranged for the completion of the tender documents. He responded on behalf of the second defenders. During the negotiations, however, it became clear that the provision of salmon products would be best dealt with by the first defenders so Mr Van Gerven handed things over to Mr Harris in June. Mr Van Gerven heard in July from Mr Hobson, with whom he was dealing in relation to other matters, that the first defenders had got the contract for salmon products.

[37] In cross-examination, Mr Van Gerven said that the second defenders had been supplying Oscar Mayer with cod from the end of 2001. He said that, as far as the agreement, arrived at by the defenders and the pursuers, regarding the Oscar Mayer business was concerned, he heard from his colleagues that it meant that the defenders, for a twelve month period from the end of July 2002 could not deliver any salmon products to Oscar Mayer. He understood salmon products to mean pieces and portions of salmon.

[38] The final witness was Mr Aldelhof. He has been sales director of a company known as Fjord Seafood Retail since March 2004. Previously he was sales director of the second defenders. He explained that in 2002-2003 the United Kingdom was one of the second defenders' markets but not a "core" market. They supplied the total range of their products into the United Kingdom and had done so for about ten years. Mr Aldelhof said that, at some point, which he initially thought was in June/July 2001, but which he subsequently corrected to June/July 2002, one of his sales team raised with him the question of supplying Oscar Mayer with white fish and salmon products. This was the first time that he personally had become aware of Oscar Mayer. The question of supplying Oscar Mayer was raised with him in the context of a possible "conflict situation" with the pursuers. This was also the first time that he personally became aware of the pursuers. Mr Aldelhof was told by his colleagues that Oscar Mayer had asked to be supplied by the second defenders with the whole range of their products. The pursuers, however, were seeking to persuade the defenders group not to do so in respect of product which they were presently supplying to Oscar Mayer. The issue was, he said, set out in the e-mail 6/22 of process which he saw sometime after it was sent. Mr Harris had discussed the matter with him. Contact was also made with Mr Gjerde in Chile. Mr Aldelhof said that he could see no commercial incentive for the defenders to enter into an exclusivity agreement with the pursuers. He recalled then receiving a copy of Mr Gjerde's e-mail of 19 July 2002, 6/26 of process. After discussion among himself, Mr Harris and Mr Gjerde, the view was reached that, because of the existing business between the pursuers and the first and third defenders, it would be commercially best to respect their relationship with the pursuer, by proposing that defenders would not offer salmon products to Oscar Mayer for a period of twelve months, by which, he meant, he said, no delivery or supply of salmon products to Oscar Mayer during that period. He was quite clear that the reference to "salmon products" did not include smoked salmon, but only related to fresh and frozen salmon. He said that this undertaking would be given on behalf of all the three defenders.

[39] The witness said that although he could not say that he had seen the e-mail, 6/30 of process, at or about the time it was sent, it did reflect the understanding arrived at among himself, Mr Harris and Mr Gjerde. Mr Aldelhof said that the restriction to which the defenders were prepared to be bound by, was that they would not supply salmon product to Oscar Mayer for a period of twelve months. Had Mr Thomas phoned him on receipt of 6/30 of process, as suggested by Mr Gjerde, Mr Aldelhof said he would have made it perfectly clear that the undertaking was not to supply Oscar Mayer with salmon products for the relevant period. Under reference to 6/35 of process, the witness said that in his e-mail, Mr Thomas was going beyond what had been proposed by the defenders in seeking to extend the range of products concerned and in proposing a renewal of the undertaking after twelve months. Mr Aldelhof corrected the position regarding the range of products involved, by his e-mail, 6/36 of process, and said that by sending that e-mail an agreement had been reached between the pursuers and the defenders that the defenders would not supply salmon products to Oscar Mayer for twelve months. He considered that any supply covered by the agreement would be paid supply and would not cover, for example, provision of samples. The undertaking was to run from the date of 6/35 of process namely 6 August 2002 for one year. Notwithstanding the agreement arrived at, Mr Aldelhof said that, by his e-mail 6/37 of process, Mr Thomas was again seeking to have the undertaking extended to other products. Mr Aldelhof spoke to his sales team who reached the view that they should not accede to Mr Thomas' further request in that respect. Notwithstanding the defenders had not agreed to extend the undertaking in relation to other products, Mr Thomas, by 6/38 of process, sought to suggest that the supply of pollock off cuts and cod pieces was not within the spirit of the agreement. This e-mail had been received in Mr Aldelhof's office during a period when Mr Aldelhof was away from his office. He instructed his secretary to reply to it. She had replied, on his behalf, in the e-mail 6/39 of process. In that it was reiterated that the agreement related only to the product group "salmon". For some unexplained reason his secretary typed, in error, that the period of the undertaking was from 1/9/2002 to 30/9/2003. Mr Thomas' e-mail 6/40 of process had pointed out that the defenders might wish to consider purchasing the pursuers sometime in the future as a vehicle for entering into the UK market. There was some subsequent discussion about that proposal, at a meeting held between the pursuers and the defenders in Brussels, but these discussions had been inconclusive.

[40] The witness went on to say that some time in May 2003 he became aware of the fact that Oscar Mayer had asked the second defenders to tender for salmon products. He recalled this being discussed by himself and the head of his sales team, Greet Leuridan. His understanding was that Oscar Mayer had said that they wished the defenders to tender. Oscar Mayer knew about the defenders' agreement with the pursuers but said if the defenders did not supply Oscar Mayer directly in the future Oscar Mayer would not take product from the pursuers. The witness said that he spoke to representatives of Oscar Mayer. He said that he was told that it was difficult to predict at that stage when actual supply, as a result of the new tendering process, would commence. The defenders decided that they would be able to offer salmon product to Oscar Mayer, with effect from after August 2003, but if there was any overlap between the commencement of supply to Oscar Mayer, the expiry of the agreement with the pursuer and the defenders would offer the pursuers a commercial agreement regarding compensation. When Mr Aldelhof received Mr Thomas' e-mail, 6/42 of process, in which he pointed out that the defenders had started to supply smoked salmon pieces to Oscar Mayer, he did not regard this as involving any breach of the defenders' undertaking. While Mr Aldelhof was not himself directly involved in the tendering process with Oscar Mayer, he was aware that the pursuers were tendering. While he himself did not tell Mr Thomas that compensation would be payable if supply of salmon to Oscar Mayer, by the defenders, began before August 2003, he had told Mr Harris to tell Mr Thomas this. Mr Harris told him, afterwards, that he had informed Mr Thomas of this. This had happened before the defenders had actually put in their tender. It did not elicit any response from the pursuers at that time. Mr Aldelhof reiterated that Oscar Mayer had said that, if the defenders did not tender, then Oscar Mayer would not purchase from the pursuer so the defenders would lose business in any event. Under reference to the e-mail communications which took place between Mr Thomas and the defenders during July 2003, Mr Aldelhof said that the content of 6/51 of process reflected what he had agreed with Mr Harris should be set out as the defenders' position regarding the agreement, and the position regarding the tendering. Mr Aldelhof said that he had not seen the e-mails 6/55, and 6/57 of process sent by Mr Harris to Mr Thomas and said also that he had given Mr Thomas no authority to make the proposals contained in that correspondence. He said that, in no circumstances, would he have recommended that the defenders withdraw from their contract with Oscar Mayer.

[41] In cross-examination Mr Aldelhof said that the words written in 6/30 of process were Mr Gjerde's words and not his. He did not think that he had used the word "offer" when discussing the matter with Mr Gjerde but he accepted that he had used this word in his own evidence in Court. What the undertaking was designed to cover was the supply of fish which the pursuers were currently delivering to Oscar Mayer. Mr Aldelhof also said, in cross-examination, that the defenders decided to tender because Oscar Mayer had made it clear that otherwise the defenders would lose business. He and Mr Harris had agreed to inform Mr Harris in May 2003 that they were going to tender. That was an ethical way of doing business. In re-examination, Mr Aldelhof said that he was quite satisfied that Mr Harris had told Mr Thomas in or about May 2003 that the defenders would be tendering. I accepted both this evidence of this witness in relation to this matter and that of Mr Harris in preference to that of Mr Thomas

Submissions for the pursuers
[42] In opening his submissions, counsel for the pursuers indicated that it had been intimated to him by the solicitor advocate for the defenders, that the defenders were no longer contending that the agreement was with only one of them. Counsel for the defenders conceded now that the agreement was binding on all three defenders.

[43] Counsel for the pursuers submitted that the agreement, in question, was contained in the e-mails 6/30, 6/31 and 6/32 of process. While it was true that Mr Thomas attempted subsequently to "improve" on that agreement, or to build upon it, as it was put, the terms of the agreement, itself, were to be found in those communications. Counsel nonetheless, went on to submit that subsequently a "concession" was made by the defenders with regard to the period of the agreement, whereby it was extended to 30 September 2003, by virtue of the e-mail 6/39 of process. The question for the Court was, therefore, how should the e-mails, in question, be construed. I was referred in that respect to what is said in McBryde The Law of Contract in Scotland, 2^nd Ed., paras 8-07-8-09 and to the opinion of Lord President Rodger in the case of Bank of Scotland v Dunedin Property Investment Co Ltd 1998 SC 657 at pages 661 and 665. The starting point, it was said, was to look at the words actually used and to apply to them their ordinary meaning. In the present case when Mr Gjerde used the word "offer" in 6/30 of process he was using that word in its ordinary sense, in the English language. No allowance should be made for the fact that English was not the first language of either Mr Gjerde or Mr Aldelhof. The definition of the word "offer" provided in the Chambers English Dictionary included "to hold out for acceptance or rejection". That was the sense in which the word was being used by Mr Gjerde in 6/30 of process. The agreement was one not to compete with the pursuers for the business which the pursuers had with Oscar Mayer. That was what Mr Gjerde was, in effect, accepting, at one point in his evidence, when he said that the defenders were not to go and actively seek Oscar Mayer's business. It was, it was submitted, of commercial benefit to both the pursuers and the defenders not to compete with each other for the Oscar Mayer business, although it was accepted that there was to be a time limit on that restriction on the defenders seeking the Oscar Mayer business. The use of the expression "back off", in 6/33 of process, showed that the defender saw the agreement as being a non-competition agreement. Mr Aldelhof had used exactly the same expression, in his evidence, and had confirmed that the defenders thought it commercially appropriate to "back off" from competing with the pursuers for the Oscar Mayer business. The pursuers' concern was with regard to their continuing business with Oscar Mayer. Counsel for the pursuers relied heavily on the evidence of Mr Thomas as to what Mr Harris had said to him as recorded in 6/43, 6/45 and 6/56 of process, as showing that Mr Harris and, accordingly, the defenders understood that the agreement was that the defenders would not compete with the pursuers for the Oscar Mayer business. Counsel for the pursuers also invited the Court to reject the evidence of Mr Harris and Mr Aldelhof to the effect that Mr Thomas was told, in or about May 2003, that defenders (or one of them) would be tendering for the Oscar Mayer business and to accept Mr Thomas' evidence to the effect that that never happened. It was simply inconceivable that he would not have taken action, had he been told of this. It was commercially improbable that the defenders would have told him that they were tendering.

[44] As regards to the use of the expression "salmon products" there was nothing to justify restricting that wording to what the pursuers were actually supplying to Oscar Mayer at the time the agreement was reached and, in particular, there was no justification to say that these words did not cover and include smoked salmon. As to the disposal of the case counsel for the pursuers submitted that if the Court were to favour the pursuers' position, to any extent, the matter should be put out By Order for discussion as to further procedure.

[45] In reply the solicitor advocate for the defenders confirmed that it was now accepted that the agreement in question was binding on all three defenders. He informed the Court that the defenders' position was that the agreement between the parties was to be found in number 6/35 and 6/36 of process. That was the pursuers' own position in their pleadings. The pursuers' position, in submission, seemed to have changed to saying that there were, in effect, three agreements. The first being constituted by 6/30, 6/33 and 6/34 of process, the second by virtue of 6/35 and 6/36 of process and the third by virtue of 6/39 and 6/40 of process. The defenders' solicitor advocate contended however, that the contents of 6/30, 6/33 and 6/34 of process should be treated as prior negotiations. It was clear that Mr Harris and Mr Gjerde were, in effect, at that stage, messengers for Mr Aldelhof in making proposals. As far as 6/39 and 6/40 of process were concerned, the period of the undertaking stated in 6/39 of process should be held to have been stated in error and it appeared after the agreement had been concluded, by virtue of 6/35 and 6/36 of process. It was a unilateral error of expression which the pursuers were not entitled to take advantage of.

[46] The agreement, contained in 6/35 and 6/36 of process, should be construed as an agreement by the defenders not to supply salmon products to Oscar Mayer during the twelve month period expiring on 6 August 2003. On that basis a tender by any of the defenders to Oscar Mayer, in May 2003, to supply them with product after 6 August 2003 would not amount to a breach of the undertaking. It was accepted that there had been some supply to Oscar Mayer by the defenders prior to the 6 August 2003. It was accepted, and it had always been accepted by the defenders, that they require to pay the pursuer compensation in respect of such supply. The solicitor advocate for the defenders submitted that, with regard to the period of the undertaking it was significant that, in July 2003 Mr Thomas, himself, accepted that undertaking expired on 6 August 2003. This he did in his e-mail 6/43 of process. In 6/42 of process, in his e-mail to Mr Aldelhof of 13 May 2003 Mr Thomas had referred to the agreed being "valid through to 6 August 2003". There had simply been an error in expression in 6/39 of process and the pursuers had never been in any doubt that the true duration of the agreement was from 6 August 2002 until 6 August 2003. In relation to the products which the undertaking was intended to cover, the solicitor advocate for the defenders maintained that the words used were not intended to cover smoked salmon. That was primarily because the pursuers, themselves, had never supplied smoked salmon to Oscar Mayer.

[47] In turning to review the evidence, in support of the submissions just made, the solicitor-advocate for the defenders, reiterated that the agreement between the parties was to be found in the e-mails 6/35 and 6/36 of process. Both Mr Gjerde and Mr Harris had said that they had no authority to conclude any agreement on behalf of the defenders. It was accepted, however, by the defenders' solicitor advocate that it might be argued that the agreement was to be found in the whole series of e-mails making up 6/30 to 6/40 of process but that approach to matters, he contended, would not materially affect the defenders' position in the case. The pursuers case, to a very considerable extent, turned on the significance of the word "offer" in Mr Gjerde's e-mail, 6/30 of process. While it was accepted that a lawyer may have had little difficulty in accepting that use by him of that word would cover the making of a tender, Mr Gjerde was not a lawyer and the word was not being used with the precision which a lawyer might use it. The Oxford English Dictionary provides, as one of its definitions, of the verb "to offer", "the making available or putting up for sale". One of the definitions of "supply" contained in the Concise Oxford Dictionary was "to make available". This was the sense in which the word "offer" was being used in the relevant correspondence. The effect of approaching matters in this way was that the defenders were not to compete with the pursuers for the business of Oscar Mayer for a restricted period and in respect of a restricted class of goods. The construction which the pursuer sought to put on the correspondence, on the other hand, would have the effect of cutting out the defenders from dealing with Oscar Mayer for an indefinite and imprecise period, depending on how Oscar Mayer set out their invitations to tender. It was submitted that commercial parties do not enter into restrictions in their trading beyond what is reasonably necessary. What Mr Aldelhof was prepared to agree to was a concession, based on existing trading between the pursuers and the first and third defenders, and which reflected the existing connection of the pursuers with Oscar Mayer. Mr Thomas was always aware that the agreement was intended to operate, in the restricted sense advanced now on behalf of the defenders, and only, with the advice of lawyers, perhaps, did he seek now to put a different meaning on the parties' communings.

[48] I was invited by the solicitor advocate for the defenders to accept the evidence of Mr Harris and Mr Aldelhof that Mr Thomas had been told by the defenders in about May 2003 that they would be intending to supply Oscar Mayer with effect from August 2003. If this evidence was accepted then the fact that Mr Thomas did not take immediate action was supportive of the position being that he did not truly regard any tendering for the Oscar Mayer business in 2003 as being in breach of the undertaking given to the pursuers by the defenders. I have already indicated that I did accept the defenders' evidence on this matter. The correspondence from Mr Harris in the period July-August 2003 addressed to Mr Thomas, and on which the pursuers were relying, as pointing to a recognition by the defenders that they considered the tendering to be in breach of their agreement, was conducted when the relationship between the parties was on the brink of breaking down completely and Mr Harris was trying to save it. Mr Aldelhof had made it clear that Mr Harris in making the proposals he did in those e-mails, did so without Mr Aldelhof's knowledge or authority.

[49] The defenders' solicitor advocate referred, in conclusion, to various authorities regarding the construction of commercial agreements. I was, in particular, referred to Brador Properties v British Telecommunications Plc 1992 SC 12 and Bovis Construction (Scotland) Limited v Whatlings Construction Limited 1994 SC 351 as to the extent, and to what effect, prior and post agreement communings can be looked at for the purposes of interpreting the intention of the parties to an agreement. I was, moreover, referred to the speech of Lord Hoffman in the case of Investors Compensation Scheme Limited v West Bromwich Building Society (1998) 1 WLR 896 and the case of Eurocopy (Scotland) Plc v Lothian Health Board 1995 SC 564. These authorities were referred to, by the solicitor advocate for the defenders, to support his submissions that the Court should approach the question, in the present case, having regard to the commercial realities and the commercial purpose of the agreement, rather than on the basis of any strict linguistic analysis. Further support for that approach, in the context of a case like the present, was said to be found in the decision of the House of Lords in the case of Hunter v Livingston Development Corporation 1986 SC (HL) 31. Lastly I was referred to the case of Angus v Bryden 1992 SLT which, it was said, illustrated that a unilateral error of expression could not be taken advantage of by the other party to an agreement. What Mr Thomas was seeking to do, in the present case, was to take advantage of a clerical error, which Mr Aldelhof's secretary had made, in setting out the terms of the agreement.

[50] The solicitor advocate for the defenders was in agreement with counsel for the pursuer that whatever the Court's decision was on the principal question between the parties it would be necessary to have the case put out By Order for further proceedings. The defenders for one thing admitted that they were liable to the pursuers in respect of the supply of certain products to Oscar Mayer in the period prior to 6 August 2003.

Decision
[51] This case involves the construction of certain communings between the parties' representatives, whereby the defenders agreed to a restriction on their freedom to trade with the company Oscar Mayer in competition with the pursuers. The question for the Court to determine is what did the parties agree should be the extent of that restriction, both with regard to its duration and the activities covered thereby. This is not a case where agreement as to the restriction was arrived at after negotiation and then embodied in any formal document, far less any document which lawyers were involved in drafting. The agreement has to be identified from among the series of e-mails which passed between the parties, towards the end of July 2002, as explained and supported by the evidence given by the witnesses at the proof. At one stage it appeared to me that the parties may have simply misunderstood each others' intention, at the relevant time, to such an extent, that there was absence of true consensus between them. That was a conclusion, which, although it was canvassed with them, was one which neither side wished the Court to arrive at. I have come to the conclusion, taking the evidence as a whole, that it is not a conclusion which is for the Court to reach.

[52] The uncertainty as to what the parties' intentions were in relation to matters in this case arises, in my judgment, to a substantial extent, because of certain particular factors. The first is that the discussion as to the restriction which the defenders might accept was conducted among a number of different individuals, situated in different parts of the world, Chile, Belgium, England and Scotland, some of who did not have English as their first language. Secondly the recording of the parties understanding of what was being agreed to was expressed in, different ways, at different times, by different parties, in terms of e-mails. Because e-mail correspondence freezes words in printed form it is, perhaps, tempting to invest it with a status beyond what is simply said face to face or in telephone conversation. E-mail is, however, a form of modern correspondence whose main characteristic and, indeed, perhaps, main advantage is immediacy. There may be a price to be paid for that immediacy and it is the price of uncertainty. Those who engage in e-mail correspondence frequently ignore the basic rules of grammar and vocabulary. They do not necessarily take any time to choose the mot juste to give the precise meaning of what they intend, as a careful conveyancer might do. In such a context, it may be inappropriate and, indeed, dangerous to focus ones' concentration on the dictionary definition of one word, or certain words, however important these may appear, at first sight, to be, when they, nonetheless, are simply to be treated as part of the context of the relevant communings. As has been seen, the pursuers' position in the present case, to a very large extent turns on the dictionary definition which might be given to the word "offer", where it appeared in 6/30 of process. This, however, is, in my judgment, one of those cases to which the dictum of Staughton LJ in the case of Youell v Bland Welch (1992) 2 Lloyd's Rep 127 at 133 might appropriately be applied where his Lordship, at that passage just cited, said this:

"The notion is what the parties had in mind, and the Court is entitled to know what was going on around them at the time when they were making the contract. This applies to circumstances which were known to both parties, and to what each might reasonably have expected the other to know".

Moreover, the resolution of the question raised in the present case is one which may attract, in my judgment, the application of dictum of Lord President Rodger in Bank of Scotland v Dunedin Property Investment Company Limited where at page 665 his Lordship said:

"It is, however, trite that in interpreting a provision in a contract the Court may 'enquire beyond the language and see what the circumstances were with reference to which the words were used, and the object, appearing from those circumstances, which the person using them had in view': Prenn v Simmonds at p1384 per Lord Wilberforce citing the speech of Lord Blackburn in MacDonald v Longbottom. See also Inglis v Buttery & Co at pp 102-103 and Bovis Construction (Scotland) v Whatling Construction Limited at page 357 per Lord President Hope".

Before, however, seeking to apply these principles to the circumstances of the present case, the Court has to deal with the dispute between the parties as to how, and in what terms, the agreement in question was concluded, never mind what it meant. It is, in this connection, of some importance, to consider the pursuers' pleading on the point. As has been seen, they aver in Article 2 of condescendence:

"The pursuers were apprehensive that the Defenders might attempt to supply Oscar Mayer direct which would result in the loss of business to the pursuers. Accordingly the Pursuers entered into an agreement with the Defenders to the effect that the Defenders would not offer salmon produce to the Oscar Mayer Group of Companies. Said agreement is set out in an e-mail from Stuart Thomas on behalf of the pursuers to Ludo Aldelhof of the Defenders dated 6 August 2002 , and the response from Ludo Aldelhof dated 8 August 2002, the response of 8 August was sent from Alain Lanoo's e-mail address but bear to have been sent by Mr Aldelhof". That position, as averred, is consistent with what was submitted, on behalf of the defenders, as to how the agreement was made and wherein it is to be found. As has been seen, also, at the proof, the pursuers' representative departed from the position as pled by them and sought to maintain that an agreement had been concluded by virtue of the e-mails 6/30, 6/31 and 6/32 of process, which was followed by 6/35 and 6/36 which were described as attempts to build on the existing agreement or were variations of the agreement. The reason for that departure from the pursuers' position, as pled, may have been, to some extent at least, to allow more weight to be given to Mr Gjerde's e-mail, which is 6/30 of process. Be that as it may, in my judgment, a binding and concluded agreement was arrived at, between the parties, as to the extent of the restriction which the defenders were prepared to accept by the sending of the e-mail 6/36 of process by Mr Aldelhof in reply to Mr Thomas' e-mail of 6 August 2002, 6/35 of process. I am satisfied that it was Mr Aldelhof and not either Mr Gjerde or Mr Harris who had authority to bind all three of the defenders and that Mr Thomas was particularly seeking an undertaking on behalf of the second defenders' company in Brussels. The communings from Mr Harris and Mr Gjerde, prior to Mr Aldelhof's e-mail, 6/36 of process fall, in my judgment, to be regarded as communications of proposals, which Mr Aldelhof had made, but which did not become a binding undertaking until the exchange of the e-mails 6/35 and 6/36 of process. Having said that, I am satisfied that in coming to a conclusion as to the nature of that binding undertaking, it is relevant to have regard to those previous e-mails as part of the relevant context. That final consensus between the parties had not been reached prior to Mr Aldelhof's e-mail, 6/36 of process, can be seen by virtue of the fact that in 6/35 of process Mr Thomas was writing to Mr Aldelhof as follows:

"I have now received confirmation from Fjord Chile and Wisco in Scotland that Pieters will not continue to offer fish products to the Oscar Mayer Group for a period of twelve months at which time we can review the situation".

[53] Mr Thomas no doubt, picked up the word "offer" from Mr Gjerde's e-mail. He wrote, what he did in 6/35 of process, as has been seen, after he had set out what the products were which the pursuers were supplying to Oscar Mayer, namely Scottish salmon pieces, Chilean salmon pieces, Chilean salmon portions 80-100g, pollock fillet pieces and cod pieces. There was no evidence, whatsoever, that prior to that e-mail, the defenders or anyone on their behalf had ever proposed that the undertaking would go beyond salmon products or indeed that the pursuers had even raised that possibility. Accordingly, in my judgment, Mr Thomas, in writing what he did in that e-mail, was misrepresenting what the defenders had proposed in this respect and was being opportunistic in seeking to extend the proposed undertaking beyond anything proposed by or on behalf of the defenders. Mr Aldelhof was quick to put matters right in that respect in his, e-mail, 6/36 of process and to point out that the extent of the undertaking to be given was restricted to salmon products. I am satisfied that sending his e-mail 6/36, in the terms he did, Mr Aldelhof made the undertaking a concluded and binding undertaking. Mr Thomas, as has been seen, immediately tried to extend the undertaking to cover pollock and cod pieces, by his e-mail 6/37 of process, but this was never accepted by the defenders. The terms of that e-mail, however, rather support the view that in writing what he did in 6/35 of process, Mr Thomas was simply acting opportunistically. I have to say that the impression I formed of Mr Thomas, from his evidence as a whole, was that he was something of an opportunist and while opportunism may to some extent be the life-blood of successful commerce, it is not a quality which necessarily sits well with the giving of evidence as to actual circumstances which have occurred in the past.

[54] I am satisfied, on the evidence, that there was never any intention by the defenders, far less an agreement with the pursuers, that the duration of the undertaking should be altered from one year from the 6 August 2002 to a period commencing on 1 September 2003 and ending on 30 September 2003. On the evidence led, I am satisfied that the latter period was referred to on one occasion only by mistake, after the agreement between the parties had been concluded and that was in the e-mail sent by Mr Aldelhof's secretary 6/39 of process. It was simply an error in expression and not an agreed variation of the concluded agreement. I am also satisfied that the position adopted by Mr Thomas, in relation to this matter is another feature of his somewhat opportunistic approach to life, since it is clear from the productions and other evidence that, whatever was said in 6/39 of process, he, himself, after it was sent, referred to the undertaking as enduring from the 6 August 2002 to 6 August 2003.

[55] On the other hand, I reject the defenders' position that the phrase "salmon products" was never intended to cover smoked salmon. All of the defenders' witnesses, with the exception of Mr Aldelhof were prepared to accept that that phrase, in its ordinary meaning, covered smoked salmon. Notwithstanding that it appears that the pursuers themselves were not supplying smoked salmon to Oscar Mayer during 2002, I am satisfied that the pursuers were entitled to conclude that the defenders were undertaking not to supply smoked salmon during the relevant period.

[56] The remaining and crucial question is whether or not the act of tendering for the supply of salmon products to Oscar Mayer, with effect from August 2003, amounted to a breach of the undertaking which Mr Aldelhof, on behalf of the defenders, agreed to be bound, by the terms of his e-mail, 6/36 of process. The answer to that question cannot, in my judgment, rest simply on what a lawyer might consider would be embraced by the use of the word "offer" where it appears in 6/30 and 6/35 of process. The nature of the restriction which the defenders were accepting should be imposed upon them in their trading activities with Oscar Mayer is, in my judgment, is to be arrived at, the circumstances of this case, not simply by focusing one or more particular words used in the relevant communings between the parties. It has to be arrived at by having regard, in addition, to the commercial context, in which the undertaking was being sought by the pursuers, and the commercial purpose it was designed to fulfil, having regard to the interest and intentions of both parties. In that respect it seems to me of the utmost importance to recall what the state of affairs obtaining between the relevant parties, the pursuers, the defenders and Oscar Mayer was at the material time. So far as material, the position was as follows. The pursuers had a contract to supply Oscar Mayer with, inter alia, Scottish Salmon Pieces, Chilean Salmon Pieces and Chilean Salmon Portions, which was due to expire in April 2003. At least, to some extent, they supplied those products to Oscar Mayer from supplies obtained by themselves from the first and third named defenders. There was no guarantee, that Oscar Mayer would renew their contract with the pursuers post April 2003 (there was indeed, as has been seen, some evidence from Mr Aldelhof that if the defenders had not tendered for the supply to Oscar Mayer from 2003 onwards the pursuers would not have obtained the contract to supply Oscar Mayer). In about July 2003 Oscar Mayer sought to obtain supplies of fish products from the second defenders. At that time, as far as the evidence went, the pursuers had no contractual dealings with the second defenders. The situation could, therefore, have arisen whereby during the currency of the pursuers' existing contract with Oscar Mayer, for the supply of salmon products, which the pursuer were performing by obtaining supplies from the first and third defenders, Oscar Mayer could circumvent their agreement with the pursuers by obtaining their supplies direct from the second defenders. That, in my judgment, was a specific and immediate problem, which the pursuers sought to address and which provoked the correspondence in late July 2002. So defined, the pursuers' concern was reasonable and understandable. It is reasonably easy to see why the defenders, though they were not bound, in any sense, to address that problem, considered it appropriate and sensible from a commercial point of view not to upset the existing commercial arrangement whereby the first and third named defenders supplied salmon products to the pursuers, which the pursuers used to perform their subsisting contract with Oscar Mayer, and to agree not to supply directly Oscar Mayer with such product for the remaining period during which the pursuers had a contract to do so. Had Mr Gjerde used the word "supply" instead of the word "offer" in his e-mail, 6/30 of process, there would, it seems to me, have been little room for the pursuers to argue that the undertaking amounted to any more than that. It is true to say that Mr Thomas had attempted to obtain, through Mr Harris, the agreement of the first defenders to a five year exclusivity agreement, when he began to deal with the first defenders through Mr Harris. There was never, however, any question, in my judgment, of the defenders agreeing to any such type of agreement and indeed, it is my view, that in seeking to obtain such a very wide, and perhaps extraordinary agreement, Mr Thomas was probably attempting to exploit his long-term friendship with Mr Harris to his advantage. It is a somewhat unsatisfactory aspect of Mr Thomas' position that he did not take up the invitation or suggestion of Mr Gjerde, in 6/30 of process, that he should discuss the proposal contained there with the second defender and, in particular, Mr Aldelhof. I am in little doubt that had he done so and had he put it to Mr Aldelhof that the undertaking proposed would mean that none of the defenders could tender to supply Oscar Mayer with salmon products after 6 August 2003 he would have been immediately told that that was not the effect of what was being proposed. All of the defenders' witnesses gave clear evidence to the effect that the intention of the defenders, in granting the undertaking was to accept a restriction not to supply salmon products to Oscar Mayer for a period of twelve months from 6 August 2002. I accept, without qualification, that was the subjective intention of the defenders at the material time, however they may have expressed matters. Contracts are, of course, not made by what parties subjectively think in their inner-most minds, but by what they say or do. That principle of contract law, however, involves a two way process. Even if Mr Thomas had in his inner-most mind the thought that the undertaking given by the defenders prevented them from tendering in May 2003 for post August 2003 supplies to Oscar Mayer, and that was what he thought he was seeking from the defenders, he did not, in my judgment, make that clear to them in any of the communings I have referred to. He was prepared to leave matters on at least a very ambiguous or uncertain basis. As has been seen the word "offer", though capable of including the making of a tender, is, according to the Oxford English dictionary capable of also meaning "to make available or put up for sale". I am, ultimately entirely satisfied that the 'commercially sensible construction' to use the phrase adopted by Lord President Rodger in Bank of Scotland at page 641 to be placed upon the parties' communings, in the present case, having regard to the context and the purpose of the undertaking, is that, by their communings the defenders, were undertaking not to supply salmon products to Oscar Mayer for the twelve month period from 6 August 2002. Bearing in mind the particular features that I already referred to, namely the use of e-mails passing between several parties, not all of whom had English as their first language, and none of whom was legally qualified, it seems to me that, having regard to the context, the e-mails have to be construed realistically, and in such a way as to give effect to what, in my judgment, was the true commercial intentions of the parties.

[57] For the foregoing reasons I conclude that the undertaking had the effect and meaning contended for by the defenders. I am also satisfied that Mr Thomas did not seriously think otherwise until some time after the defenders had tendered for the Oscar Mayer business and the fact that he did not react when told by the defenders that they would be tendering for that business is demonstrative of this. Moreover it is, I think, of some significance that in the important e-mail from Mr Thomas, 6/35 of process he described the undertaking as one whereby the second defender's "will not continue to offer fish products to the Oscar Mayer Group". (my emphasis). The underlined word clearly indicates that the concern which he realised that the defenders were prepared to address, was in relation to the supply by the defenders to Oscar Mayer during the subsistence of the pursuers' contract with Oscar Mayer.

[58] The defenders' approach to the construction to be placed on the relevant communings avoids, in my judgment, certain commercially unrealistic implications and, indeed, uncertainties, which the pursuers' approach involves. If the pursuers' approach was correct, it would mean that, even if the pursuers themselves had, in the event, decided not to tender for the Oscar Mayer business in 2003, the defenders could not have tendered for it, for there is nothing in the correspondence which seems to me at least expressly to suggest that the undertaking, whatever it might mean, subsisted only as long as the pursuers were interested in the Oscar Mayer business. Even more significantly, the pursuers' approach would also mean that, had Oscar Mayer not invited the pursuers to tender for the supply in 2003, the defenders would not themselves have been able to tender. Moreover the construction of the communings advanced on behalf of the pursuers would mean that had Oscar Mayer sought tenders in 2003 for supply to them for periods of three or five or more years the defenders would not have been able to tender for those periods. I do not think it is reasonable to suppose that the defenders ever intended to be precluded from dealing with Oscar Mayer for such protracted and uncertain periods. Rather, as I have indicated, the undertaking granted by the defenders was one which was intended to deal with the present, and subsisting, problem in relation to supplying Oscar Mayer with salmon products while the pursuers themselves had a subsisting and binding contract with Oscar Mayer to do so.

[59] I have arrived at the foregoing conclusions having regard to the evidence as a whole. In that connection I should say a further few words about the evidence of Mr Harris. I have already indicated that, notwithstanding that he accepted in cross-examination that he has given his evidence in return for payment by the defenders, I accepted that he was not to be regarded as either incredible or unreliable in relation to the key aspects of his evidence. I repeat that I consider that he was a victim of what might be described as divided loyalty. He was clearly embarrassed at the way in which matters had turned out as between the pursuer and the defenders, standing the long, and apparently close, friendship he had had with Mr Thomas. As I have already hinted at, he struck me as a person who Mr Thomas might well have considered he could exploit to his advantage because of that friendship. Whatever may have been his position in that respect, it did seem to me that he did recognise throughout, that however he might have regarded the defenders' conduct, from a moral point of view, he never believed that by tendering for the Oscar Mayer business in May 2003, they were in breach of any legal agreement with the pursuers. I also accept his explanations as to why he wrote what he did in his e-mails to Mr Thomas in August 2003 and indeed those explanations were consistent with the view that I took of this witness, namely that he had found himself in the position of having divided loyalties.

[60] The defenders accepted that they were in breach of contract in respect of certain supplies made to Oscar Mayer prior 6 August 2003. As both sides' representatives agreed, it will be necessary for the case to be put out By Order to discuss, inter alia, further procedure in respect of that aspect of the dispute.