EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
	[2013] CSIH 97
Lady Paton Lord Bracadale Lord Kingarth	A278/07 OPINION OF THE COURT delivered by LADY PATON in the cause SCOTTISH PROFESSIONAL FOOTBALL LEAGUE LIMITED Pursuers and Reclaimers; against LISINI PUB MANAGEMENT CO LIMITED Defenders and Respondents: _______________

Pursuers and reclaimers: Lake QC; Harper Macleod LLP

Defenders and respondents: McIlvride; TLT Scotland Limited

15 November 2013

Introduction

[1] There are two issues in this reclaiming motion. First, whether the Lord Ordinary was correct to conclude that the defenders' written undertaking not to broadcast Scottish Premier League football matches on TV screens in their pubs on Saturday afternoons ceased to have effect following upon a decision by the European Court of Justice (ECJ) such that the pursuers were not entitled to the perpetual interdict sought in their principal action; and secondly, whether the Lord Ordinary was correct to hold that the defenders' averments in their counterclaim, seeking declarator of a breach of article 101 of the Treaty on the Functioning of the European Union (TFEU) together with damages, were sufficiently relevant for a proof before answer.

[2] By an interlocutor dated 25 March 2013, the Lord Ordinary (Lord Woolman) dismissed the principal action, and refused to dismiss the counterclaim. He put the case out By Order to discuss further procedure. The pursuers then reclaimed.

Article 101 of the TFEU

[3] Article 101 of the TFEU (whose precursor was article 85 of the Treaty of Rome) provides:

"1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment ...

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void ..."

Section 298 of the Copyright, Designs and Patents Act 1988

[4] Section 298 of the Copyright, Designs and Patents Act 1988 (the 1988 Act) provides:

"(1) A person who -

(a) makes charges for the reception of programmes included in a broadcasting service provided from a place in the United Kingdom or any other Member State,

(b) sends encrypted transmissions of any other description from a place in the United Kingdom or any other Member State, ...

is entitled to the following rights and remedies.

(2) He has the same rights and remedies against a person -

(a) who -

(i) makes, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire,

(ii) has in his possession for commercial purposes, or

(iii) installs, maintains or replaces for commercial purposes, any apparatus designed or adapted to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so ...

as a copyright owner has in respect of an infringement of copyright [in other words, declarator, interdict, damages etc]"

Background

[5] The pursuers hold broadcasting rights to Scottish Premier League matches. They grant licences authorising the broadcasting of matches in the UK and abroad, with the exception of live matches on a Saturday afternoon. That restriction implements a rule of the Union of European Football Associations (UEFA) which aims to encourage attendance at matches and to promote interest in sport in young people.

[6] In 2006 and 2007 the pursuers granted broadcasting rights, via two intermediaries, to a Polish television company ("Polsat"). The broadcasting chain was as follows: the pursuers provided the signal to TWI (UK) Ltd, who relayed it to Trans World International Inc, who passed it to Polsat. A contract was in place for each link in the chain. Polsat broadcast by satellite. Their customers accessed the signal by purchasing a decoder device and a smart card from an associated company, Cyfrowy Polsat (CP).

[7] The defenders own and run three pubs in the west of Scotland. They purchased the decoder device and smart card from CP on standard terms and conditions. Clause 4.2 of the conditions restricted the geographical area of the contract. It stipulated that "making use of the offer is possible solely in the territory of the Republic of Poland". However on a Saturday afternoon on 18 November 2006, the defenders used the Polsat signal to show a screening of a live Scottish Premier League football match in their Angels pub in Uddingston.

[8] The pursuers learned of the live match being shown in the defenders' pub. They sent the defenders a letter dated 24 November 2006 (which the defenders said they had not received). That letter stated inter alia:

"[The pursuers] have evidence that you have received a live broadcast of a APL football match broadcast on [Polsat] and shown this broadcast in Angels, being the SPL match between Celtic FC and Inverness Caledonian FC on Saturday 18 November 2006.

Access to such broadcasts is limited to people outside the United Kingdom. You therefore are not entitled to have access to these broadcasts.

To obtain access to these broadcasts to which you are not entitled you have made use of decoding apparatus, which you possess. That apparatus is licensed for use only in Poland. Its use anywhere else to obtain access to broadcasts to which you are not entitled is unauthorised ...

Possession of such apparatus for commercial purposes is unlawful in terms of section 298 of the [1988 Act]. Use of that apparatus may be a criminal offence under section 297 of that Act. On conviction for that offence you may be fined up to £5,000.

Because your actings are in breach of section 298 of the Act, you are in the same position as someone who has infringed copyright. Action may be taken against you. That action may include seeking orders from a court for interdict, interim interdict, delivery of the apparatus in question, payment of damages, payment of additional damages and an accounting for the profits that you have made in using this apparatus. One or more of these remedies may be sought...

[The pursuers are] entitled under the Act to seek such remedies against you. They may report your use of the decoding apparatus to the procurator fiscal. They may also report it to the licensing authorities and argue that it indicates that you are not a fit and proper person to hold a liquor licence.

To avoid action being taken, you must immediately cease showing the broadcasts and provide an undertaking that you will hand over the decoding apparatus and not show the broadcasts in the future ... We attach a draft undertaking. To provide a suitable undertaking, please complete and return the undertaking to us by return.

In the event that no undertaking is given, court proceedings may be commenced against you without further notice. We will seek orders that you be liable for the expenses of such proceedings ..."

[9] Subsequently, on two Saturday afternoons (2 and 23 December 2006) the defenders showed further live Scottish Premier League football matches, sourced from Polsat. The pursuers then raised an action in Hamilton Sheriff Court seeking delivery of the defenders' decoder device and smart card, together with interdict, and count and reckoning. The action was based upon an alleged infringement of the 1988 Act.

[10] Before the hearing of a motion for interim interdict, Lisa Wishart, one of the defenders' directors, signed an undertaking on behalf of the defenders dated 9 January 2007, in the following terms:

"Dear Sir,

Undertaking

I, Lisa Wishart, director and authorised signatory of Lisini Pub Management Co Limited (registered number SC262192, hereinafter referred to as "the Company"), which company is licensee of Angels, 114 Main Street, Uddingston, acknowledge that within said premises apparatus has been used to access programmes included in broadcasts by Telewizja Polsat SA ("Polsat") (1) on the afternoon of 18 November 2006 (Celtic v Inverness Caledonian Thistle live) (2) on the afternoon of 2 December 2006 (Celtic v Aberdeen live) and (3) on the afternoon of 23 December 2006 (Celtic v Falkirk live).

I am now aware that the apparatus which has been used by the Company to access the programmes is licensed only for use in Poland and not in the United Kingdom. I am now aware that access to these broadcasts is limited to people outside the United Kingdom and that I am not entitled to access programmes included within them. I am now aware that possession of such apparatus for commercial purposes is unlawful in terms of section 298 of the Copyrights, Designs and Patents Act 1988 and that use of that apparatus may be a criminal offence under section 297 of that Act.

On behalf of the Company I undertake that in future the Company will not purchase, hire or otherwise obtain, either on its own account or for any other person, any apparatus designed or adapted to permit access to programmes featuring live Scottish Premier League football matches included in a broadcasting service in a situation where there is no agreement with the broadcaster permitting the Company or such other person to have such access.

On behalf of the Company I undertake that in future the Company will not either on its own behalf or on behalf of any other person, use, cause to be used or permit to be used in any premises any apparatus designed or adapted to permit access to programmes featuring live Scottish Premier League football matches included in a broadcasting service in a situation where there is no agreement with the broadcaster permitting the Company or such other person to have such access."

The sheriff court proceedings were then dismissed.

[11] Despite the terms of the undertaking, the defenders screened another live match sourced from Polsat on a Saturday afternoon on 7 April 2007. The pursuers raised the present action in the Court of Session, and sought interim interdict. The summons referred to the letter dated 24 November 2006, the defenders' undertaking of 9 January 2007, and the 1988 Act sections 6, 6A, 96, 99, 297, 298 and 299. Interim interdict was granted on 4 May 2007.

[12] Subsequently parties became aware of a similar case (Football Association Premier League Ltd and others v QC Leisure and others (no 2) - "the English Premier League" case) - which had been referred by English courts to the ECJ. The present proceedings were sisted to await the outcome of that referral.

[13] On 4 October 2011, the decision of the Grand Chamber in the English Premier League case (reported in [2012] FSR 1) was issued. It changed the legal landscape. As the Lord Ordinary noted at paragraph [16] of his opinion:

"Put short, the ECJ found that clauses prohibiting the use of foreign decoders and smart cards were void. They constituted a restriction on competition and the [free competition] provisions of European law prevailed over the 1988 Act."

Thereafter the defenders enrolled a motion seeking recall of the interim interdict. Their motion was granted unopposed on 12 July 2012. Parties adjusted their pleadings. The pursuers deleted references to the 1988 Act and restricted their claim to interdict based on the undertaking of 9 January 2007. The defenders lodged a counterclaim seeking declarator that the interim interdict granted on 4 May 2007 was wrongful, and further, seeking damages of £1,761,749. It was at that stage, when the defenders enrolled a motion for recovery of documents in order to give better specification of their claim, that a debate took place, with the results noted in paragraph [2] above.

Submissions for the pursuers

[14] Mr Lake, for the pursuers, moved the court to recall the Lord Ordinary's interlocutor of 25 March 2013, to sustain the pursuers' fourth plea-in-law (added on 21 November 2012) namely "4. Defences being irrelevant, decree de plano should be granted in terms of the first conclusion of the summons [i.e. interdict]", and to dismiss the counterclaim.

[15] There were two questions of relevancy. First, the interpretation of the undertaking; and secondly, whether the defenders had averred facts sufficient to support the plea that there had been a breach of the competition rules in the TFEU.

[16] The effect of the English Premier League case was that the ECJ had held that section 298 of the 1988 Act infringed the provisions of the TFEU and therefore could not be given effect to by courts in the UK. The pursuers had accordingly deleted references to section 298 in their action, which now continued solely on the basis of the undertaking given by the defenders on 9 January 2007. When the defenders sought to recover the pursuers' commercial agreements with broadcasting parties, their motion was opposed on the basis that their counterclaim (averring that the interim interdict granted in 2007 was wrongful, entitling the defenders to damages) was wholly irrelevant and could not be cured by the recovery of such documents. The Lord Ordinary heard a debate on the basis that if he found the counterclaim relevant, he would not send the case to a proof before answer but would allow the recovery of documents, and the defenders would have an opportunity to develop their case further. The essence of the Lord Ordinary's ruling was that he decided that the undertaking had terminated on 12 July 2012 when the interim interdict was recalled of consent. The Lord Ordinary also decided that the counterclaim was sufficiently relevant to allow the defenders to proceed.

The interpretation of the undertaking

[17] It was accepted that, if the undertaking had ceased to be enforceable (or had fallen) the pursuers were not entitled to perpetual interdict. Whether or not it had fallen was a question of construction, depending on the terms of the undertaking. A proper construction depended upon the actual language, the actual words used and their natural and normal meaning, read in context (Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251, paragraphs 8, 26, 37 and 78).

[18] The defenders had never sought to withdraw the undertaking (even if that were possible, which was not clear). The undertaking contained no limit in time, nothing which indicated the possibility of an early termination. There was nothing to suggest that the interdict would fall if the ECJ were to decide that section 298 breached European law, or if the interim interdict were to be recalled of consent. The Lord Ordinary had erred by ignoring the clear wording of the undertaking. BCCI held inter alia that the parties' contract should be construed having regard to what the parties knew: but in this case it was not averred that either party was aware that a referral might be made to the ECJ, or that the interim interdict might be recalled. The proceedings which led to that referral post-dated the undertaking of 9 January 2007. One case was a criminal case with a conviction dated 27 January 2007 ([2008] 1 WLR 1869). The other three cases were civil, and arguments had been heard in April and May 2008 (2008 FSR case 32 page 789). To suggest that the enforceability of an undertaking depended upon the recall of an interim interdict not even foreseen by the parties went beyond what was permissible as a basis of interpretation. It would be attempting to make the parties' bargain, rather than applying the parties' bargain.

[19] It was accepted that the undertaking contained a "recital" referring to section 298, and to actings thought to be unlawful. But that had no particular bearing on whether or not the undertaking terminated. The sheriff court action was based on section 298, and sought delivery of the decoder and card, interdict and count and reckoning: but at that time there was no indication that section 298 would be found void by the ECJ or by any other court - or even that there was such a possibility. The parties' common assumption was that the acts referred to were unlawful: the undertaking did not say "should the question of unlawfulness change then the undertaking would be unenforceable".

[20] The European decision in effect declared the law "as it had always been". If the defenders were correct in their argument, the result would be that the undertaking had never taken effect (which would be at odds with the parties' intention). The defenders were seeking to re-write the parties' contract, to insert terms which, with hindsight, should have been included.

[21] If the defenders were to be successful in their argument, it was conceded that the pursuers would not be entitled to perpetual interdict, and that the principal action would fall to be dismissed; but it did not follow that the interim interdict was unlawful from the outset. The interim interdict was justified until it was recalled.

What must be averred in order to make a relevant case of a breach of article 101

[22] Senior counsel made the following submissions: (i) In order to engage article 101, the agreement in question must have as its object the effect of decreasing competition to an appreciable extent. (ii) For the rules to be engaged, the agreement must affect trade between member states to a material extent. (iii) An agreement which would otherwise infringe article 101 would escape its prohibition if it affected the market only insignificantly, having regard to the weak positions of the parties on the market. (iv) It was necessary to identify the market in order to consider whether or not competition was affected to an appreciable extent.

[23] These requirements were not met in the defenders' averments, and their case, as set out in the counterclaim, was irrelevant.

[24] The requirements were not spelled out in legislation, but had developed in the jurisprudence of the ECJ. It was necessary to examine the authorities in chronological order. Reference was made to Societe Technique Menieres v Maschinenbau Ulm GmbH [1966] ECR 235, [1966] CMLR 357 at pages 358-9, 375; Consten & Grundig v Commission [1966] ECR 299, [1966] CMLR 418 at pages 420, 471-3; Volk v Vervaecke [1969] ECR 295, [1969] CMLR 273 at pages 274, 276, 281; Yves Saint Laurent Parfums SA v Javico International AG [1999] QB 477 at paragraphs 12, 15, 17; Competition Authority v Beef Industry Development Society Ltd [2008] ECR I-8637, [2009] 4 CMLR 6; T-Mobile Netherlands v Raad van Bestur van de Nederlandsemededingingsautoriteit [2009] 5 CMLR 11; Football Association Premier League Ltd v QC Leisure (No 2) [2012] FSR 1 at paragraphs 134-143; Expedia Inc v Autorite de la concurrence [2013] 4 CMLR 14 at paragraphs 15, 28, 35-36; European Commission v Verhuizingen Coppens NV (International Removal Services Cartel) [2013] 4 CMLR 8.

[25] That line of authority established that "object" and "effect" were alternatives. The object of an agreement was to be considered (and parties were agreed that the present case was pled as an "object" case). But even when looking at the object, it was necessary to determine whether it had the requisite degree of harmfulness; whether it impeded competition to a considerable extent. That "magnitude" aspect had to be averred on record. If it was not possible to ascertain a sufficiently harmful object, then the effect of the agreement had to be considered. In pleadings such as the defenders', it was necessary to aver that the object of the agreement was to impede competition to a considerable extent, and to support that averment with averments of facts entitling the reader to come to that conclusion. One example might be a cartel of polythene suppliers, with control of about 70 per cent of the market, deciding to fix the prices. This submission was not an attempt to bring in "effect" by the back door: even when looking at "object", there must be sufficient harmfulness. Thus the question to be asked when examining the object of an agreement was "Was that object likely sufficiently to distort competition?" (for example, four big supermarket companies fixing the price of milk). There had to be appreciable distortion of competition.

[26] Thus it was important to identify the market. Parties might not agree what the market was. For example, in an action relating to the importation of bananas, was the market "bananas", or "fruit generally". In an action against distillers concerning a Pimms drink, was the market Pimms drinks, or alcoholic drinks, or alcoholic drinks stronger than wine, or the market for a particular brand. In the present case, the pleadings gave no indication of what the market was (all sport, or football, or Scottish football; only satellite television, or all televisions, or retail television services; or pub-owners). The pleadings did not explain what the market was, and what the appreciable effect was.

[27] There also had to be averments about the strength and position of the parties in the market. If parties were in effect "small fry", their agreement would not be caught by article 101 (cf the observations in Expedia Inc v Autorite de la concurrence [2013] 4 CMLR 14 at paragraph 16). It was necessary to aver an appreciable impact on both (i) trade between member states, and (ii) competition. The defenders had enough information to make the necessary averments without recovery of documents. There were commercial sensitivities relating to the pursuers' agreements with other broadcasters and companies. The pursuers should not have to give up these agreements until the defenders made the necessary averments relating to the undertaking with its object of impairing competition.

[28] The English Premier League case had not swept away the earlier line of authority. A continuation of the principles established by the earlier line could be seen in the Beef Industry case, and in the T-Mobile case. Those cases emphasised that the purpose of the agreement had to be viewed in context, including the market share (i.e. whether or not that share was sufficiently material) and whether the purpose was "sufficiently deleterious". If it was not possible to assess sufficient harmfulness by looking at the agreement in context, one had to go on to assess the actual effects.

[29] In this case, the defenders had made "believed and averred" averments in Answer 9 (page 12 of the reclaiming print). The defenders did not have the necessary commercial agreements, but they offered to prove what they believed those agreements provided. But what the defenders should have averred was the effects of the agreement with Polsat. However the defenders' position appeared to be that, as a result of the English Premier League case, they were not required to make such averments. But it was still necessary to aver whether the purpose was sufficiently deleterious. There was still a threshold requirement.

[30] Senior counsel submitted that, in the English Premier League case, the court had not focused upon the principal agreement, but upon the ancillary agreement to supply decoder devices and smart cards. Accordingly the court, in that case, did not have to consider whether the principal agreement had an appreciable effect on competition. Thus in paragraphs 140 et seq of the judgment, the court was focusing not on the primary obligation and whether there was a purpose or object which was sufficiently deleterious, but rather on the ancillary obligation restricting the transfer of decoding devices. If there was a prohibition on the supply of decoder devices to other territories, that might be caught by article 101. Thus the decision in the English Premier League case had almost nothing to do with the threshold requirement for the primary agreement. The question answered in paragraph 146 was the narrow question about decoding devices (referred to in paragraph 134). The question posed by the English court (at page 81: " (b) ... must it also be shown that the contractual obligation appreciably prevents, restricts or distorts competition in order to come within the prohibition imposed by article 81(1)") was simply not answered by the ECJ. The ECJ had chosen not to answer sub-paragraph (b). Thus the case did not decide anything about whether a party had to show that the object of the agreement would appreciably affect trading between member states. The case did not address the question of what was considered to be a significant degree of impairment of competition.

[31] Thus it was still necessary to show that competition had been prevented, restricted or distorted to an appreciable extent. The Lord Ordinary, in paragraphs [32] to [43] of his opinion, was wrong to conclude that in the English Premier League case the ECJ had given "clear answers to the precise questions referred to it" (paragraph [42]). The ECJ had not. Nor had the Lord Ordinary answered the submission made to him by the pursuers. It might be that "the object of such agreements [was] to restrict competition" (paragraph [43]): but that did not answer the question whether the restriction of competition was to an appreciable extent, and whether trading between member states was so restricted. The Lord Ordinary's error arose from holding the English Premier League case as relevant to the issue of appreciable degree of impairment, when the case had not dealt with that issue at all.

[32] Authorities post-dating the English Premier League case, and showing that the principles from earlier decisions were still authoritative, included Expedia Inc v Autorite de la concurrence [2013]4 CMLR 14, at paragraphs 15-17, 28-29, and 35-38 (referring to the Beef Industry case, and the T-Mobile case); and European Commission v Verhuizingen Coppens NV (International Removal Services Cartel) [2013] 4 CMLR 8, at paragraphs 63 and 64 (referring to Volke v Vervaecke with approval). Volke was an "object" case where the market share was considered to determine whether there was an appreciable degree of impairment of competition (paragraphs AG39 and 63-64).

[33] Thus the four principles (i) to (iv) outlined in paragraph [22] continued to be well-founded, even after the English Premier League case. On that basis, the defenders' averments in the counterclaim were insufficient. Reference was made to answer 9 in the principal action, and statements 7 and 10 in the counterclaim. The issue was: were there averments about the undertaking to the effect that it appreciably restricted competition? The answer was in the negative: there were no averments of fact stating that the undertaking between the pursuers and the defenders as owners of three pubs in the west of Scotland had any substantial effect. If the undertaking did have that effect, the onus lay on the defenders to state it. The defenders had done nothing to identify the market, and accordingly it was impossible to decide whether there was, or was not, any appreciable restriction on competition. What competition was affected? The pursuers no longer relied upon section 298 of the 1988 Act, but only upon the undertaking. Nor did the pursuers seek to rely upon the agreement with Polsat, or the agreement with TWI (UK) Ltd. In statement 10, the only averments of loss related to the undertaking, and not to any agreement with Polsat, or any agreement with TWI(UK) Ltd.

[34] Because the four matters (i) to (iv) had not been properly addressed, the counterclaim was irrelevant and should be dismissed. The Lord Ordinary's error had been based on a misunderstanding of the English Premier League case, which had facts similar to those in the present case, but did not answer the question posed (quoted in paragraph [30] above).

The appropriate disposal

[35] If the court were to conclude that the undertaking had not terminated, perpetual interdict should be granted de plano. If the court were to conclude that the undertaking had terminated, then the principal action fell to be dismissed. However it did not follow that the interim interdict was wrongful. That interdict was lawful so long as the undertaking remained in place.

[36] As for the competition law aspect: if the court held that the case based on article 101 was irrelevant, the counterclaim should be dismissed. If the court held the averments relevant, the case should be remitted to the Lord Ordinary for further procedure.

Submissions for the defenders

[37] Mr McIlvride for the defenders invited the court to refuse the reclaiming motion and to adhere to the Lord Ordinary's interlocutor. On a proper construction of the undertaking, the pursuers' averments in support of the conclusions of the summons were irrelevant. But the averments in the counterclaim were relevant for inquiry.

The proper construction of the undertaking

[38] Accepting Mr Lake's general propositions concerning the proper construction of a commercial agreement, one important background circumstance was the parties' mutual understanding about the law applicable at the time the agreement (or undertaking) was entered into. BCCI v Ali [2002] 1 AC 251 concerned the terms of an employee's waiver of rights, entered into years before the bank's reputation became tarnished. As their Lordships made clear in paragraphs 3, 8-9, 10, 21, 34-35, 37, 39, and 78, the parties' understanding of the law as it then stood, including "proved common assumptions which were in fact quite mistaken" (paragraph 39), formed part of the construction exercise. As Lord Bingham said: "In the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware" (paragraph 10).

[39] In the present case, the undertaking had to be construed as a whole. There was an undertaking not to do something because it would be a breach of section 298. The defenders entered into the agreement in order to obey the law. Given the preamble in the undertaking, it was difficult to argue that the undertaking was intended to survive what was in effect the repeal of the relevant law. On a proper construction, the defenders were not giving the undertaking "for life" (whether or not the acts involved remained illegal). The parties' correspondence at the time, the context of the court action, all demonstrated that the defenders were undertaking not to do what the parties assumed to be unlawful in terms of the 1988 Act.

[40] The mechanism underlying the proper construction of the undertaking might be (i) no termination of the undertaking, but it became unenforceable following upon the English Premier League case; or (ii) termination of the undertaking following upon that case. The Lord Ordinary had chosen the date when the interim interdict was recalled of consent (12 July 2012) rather than the date of the judgment in the English Premier League case (4 October 2011), perhaps making allowance for the decision to be studied and digested. But the critical question was whether, from at least the date at which interim interdict was recalled, the undertaking must be treated, on a proper construction, as having become unenforceable. In adopting the approach he had, the Lord Ordinary had not erred.

What must be averred for a relevant case of a breach of article 101

[41] The Lord Ordinary referred in paragraph [43] of his opinion to "a prima facie art.101 case". Fairly read, that was a short-hand means of referring to the test in Jamieson v Jamieson 1952 SC (HL) 44 at page 50.

[42] The pursuers' contention was that the Lord Ordinary's treatment of the article 101 chapter was flawed. They argued that it was necessary to make detailed averments which would enable the court to make the sophisticated economic analysis which would determine whether or not the result or effect of the agreement or conduct would in fact be a restriction of competition which would have an appreciable effect in the relevant market. However the defenders' position was that the Lord Ordinary had not erred in concluding that it was not necessary for the defenders to make those further averments in order to have a case relevant for inquiry.

[43] There were a number of propositions vouched for by the authorities. One critical point was that there are certain forms of agreement or conduct which, by their very nature or object, are regarded in principle as having a sufficient appreciable likely effect as to fall foul of the prohibition contained in article 101. Reference was made to the Beef Industry case, paragraphs 15 and 17, the T-Mobile case, paragraphs 23, 28-29, and the English Premier League case, paragraphs H3-4, H15, 11, and 16. The purpose of the agreement had to be considered. Then, only if an analysis of the clauses did not reveal the effect on competition to be sufficiently deleterious, was it necessary to demonstrate that competition had in fact been prevented or restricted or distorted to an appreciable extent.

[44] The recitals referred to in the English Premier League case (in paragraphs 11 and 16) made it clear that what was important was that individuals in member states should have access to broadcasts from other member states. So it was a breach of a fundamental obligation (and not an ancillary obligation) to prevent persons outside a state such as Poland from accessing a broadcast from within Poland. Contrary to the pursuers' position, the defenders submitted that the ECJ had answered the specific question put to them in that case. For example in paragraphs 86 to 89, the court considered whether legislation such as section 298 (which prevented persons from gaining access to a broadcast from, say, Poland) could be objectively justified, and concluded that it could not. The undertaking in the present case was an attempt to enforce the contractual prohibitions contained in the contractual chain linking the pursuers to Polsat. Just as legislation seeking to protect illegitimate provisions was not acceptable, so legislation designed to enforce illegitimate restrictions was not acceptable (paragraphs 122-125). It was open to a football company to have a closed period in order to encourage attendance at matches. But a company could not seek to encourage such attendance by partitioning the market - everyone had to be encouraged not to broadcast during the relevant period. Reference was made to the English Premier League case paragraphs 135, 140-144. The court gave its ruling at page 102. Paragraph 4 of that ruling made it clear that the court had considered both questions referred to it, and had given a response namely, in principle, agreements such as the undertaking are struck at. Absent any objective justification, then the undertaking was a breach of article 101. In their "believed and averred" passage in Answer 9 (page 12 of the reclaiming print) the defenders offered to prove that the pursuers contracted with Polsat to supply the signal to the relevant matches on condition that there would be no access to viewers outside Poland. The pursuers had entered into similar agreements with broadcasters in other states. This led to an attempt by the pursuers to partition the internal market on the basis of national boundaries. With those averments, a relevant case of breach was made out, and it was for the pursuers to seek to give an objective justification for these arrangements.

[45] The English Premier League case could not be characterised as an aberration, inconsistent with the general line of developing European competition law. While it would be acceptable to treat the decision as leaving the question of appreciable effect to the national court, the defenders' contention was that the ECJ in that case took a particular decision that "the anti-competitive object [of the contractual arrangement] constituted, by its nature and independently of any concrete effect that it may have, an appreciable restriction on competition" (cf paragraph 37 of Expedia, a decision of the ECJ following upon the English Premier League case; and Murphy v Media Protection Services Ltd [2012] 3 CMLR 2, paragraph 9, a decision of the High Court in England). Thus both the ECJ and the High Court in England took the view that the ECJ had answered the questions posed in the English Premier League case.

[46] Furthermore, Murphy helpfully illustrated another principle of European law, namely that all the components, or parts, of a series of agreements or conduct which had as their object the distortion of competition, were struck at. The agreements being considered were the football leagues' and the broadcasters', and the results of the contracts were that broadcasters were obliged to prohibit their customers from accessing broadcasts from that member state. Thus the court had to consider all the links in the chain intended to partition the market: the clause between the football league and the foreign broadcaster was void (as being contrary to article 101) but so also were similar clauses further down the contractual chain: for example, a clause in a contract between the foreign broadcaster and the ultimate customer was also struck at. That applied whether the component parts were horizontal (for example, a cartel of international removers colluding to fix prices, as in Coppens) or vertical (for example, a contractual chain such as existed in the present case). Thus the fact that the undertaking in the present case affected only three pubs in Lanarkshire did not mean that it fell outwith the prohibition. When the undertaking was seen as being part of a chain or a series of contracts, all with the common object of partitioning the internal market, the prohibition applied. It was therefore submitted that the pursuers, by obtaining the undertaking, were reinforcing or protecting a territorial exclusivity granted to a foreign broadcaster, and were preventing customers in Scotland from seeing a broadcast emanating from Poland.

[47] Against that legal background, the defenders' pleadings set out a relevant case of a breach of article 101. Reference was made to Answer 9 in the principal action (pages 11-14 of the reclaiming print). There were clear averments - admittedly some on a "believed and averred" basis - of territorial restrictions (preventing someone in Scotland from seeing a broadcast from Poland), and also conditions protecting the broadcaster/licenser from competition in its particular territory: for example, if BSkyB in the UK prevented persons from viewing broadcasts from other member states, that protected BSkyB from competition from Polsat's broadcast of the same game. The averments in Answer 9 had been met by the pursuers' general denial, with no explanations or objective justifications for the anti-competition restrictions - a situation which on one view entitled the defenders to argue for decree de plano in the counterclaim, as statement 2 adopted all the averments in the principal action. In the light of the English Premier League case, the defenders' agreement with Polsat fell to be read as if there were no territorial restriction on accessing their broadcasts, and therefore no prohibition being contravened.

[48] In conclusion, in the light of the decision in the English Premier League case, the averments (both in the principal action, and in the counterclaim) were sufficient to entitle the defenders to an inquiry in relation to the article 101 case. There were two separate links in the defenders' argument:

(i)   the undertaking was struck at by article 101 and rendered void;

(ii) the contract between Polsat and the defenders was also struck at - or should now be considered under deletion of the ex hypothesi void condition that "making use of the offer is possible solely in the territory of the Republic of Poland" (leaving Polsat's consent to the defenders' use of the decoder and smart card otherwise unaffected).

[49] Counsel submitted that these were alternative but not inconsistent arguments. The fact that Article 101 rendered void the condition imposing the territorial restriction (see (ii) above) did not mean that the undertaking was not rendered void (see (i) above).

Proposed disposal of the reclaiming motion

[50] The principal action: counsel invited the court to conclude that the Lord Ordinary was well-founded in his construction of the undertaking, and to adhere to the Lord Ordinary's interlocutor insofar as it dismissed the principal action. If, however, the court was not of that view, the court was invited to refuse the pursuers' motion for decree de plano and to allow a proof before answer, as the defenders had averred a relevant defence.

[51] The counterclaim: counsel invited the court to adhere to the Lord Ordinary's interlocutor insofar as he refused to sustain the pursuers' plea to the relevancy and to dismiss the counterclaim. The defenders' position was that they had relevantly averred a case in terms of article 101 to the effect that the interim interdict obtained by the pursuers was unlawful (insofar as obtained on the basis of the undertaking, as the pursuers no longer relied upon the 1988 Act).

Reply for the pursuers

[52] Mr Lake made several points in reply. BCCI did not support the defenders' argument. The submission that the activities should not be undertaken only insofar as they remained unlawful amounted to an argument about an implied term: but no averments had been pled which supported a case of an implied term (such as the necessity of implying the term).

[53] In relation to article 101, two different issues were involved. First, whether the agreement had an "object" of restricting competition (the object test). Secondly, whether any restriction was to an appreciable extent (the magnitude test). The pursuers were not contending that there were no relevant averments capable of making out an object test: only that there were no averments supporting the magnitude test. The Beef Industry case, at paragraph 16, and the T-Mobile case at paragraph 28, were referred to by Mr McIlvride in the context of the terms of the agreements: but there was also reference to the economic context. That was important, because the English Premier League case considered only the object test, and not the magnitude test. In the English Premier League case there was no citation of the first four cases referred to by the pursuers in their submission (namely Societe Technique Menieres v Maschinenbau Ulm GmbH [1966] ECR 235, [1966] CMLR 357 at pages 358-9, 375; Consten & Grundig v Commission [1966] ECR 299, [1966] CMLR 418 at pages 420, 471-3; Volk v Vervaecke [1969] ECR 295, [1969] CMLR 273 at pages 274, 276, 281; Yves Saint Laurent Parfums SA v Javico International AG [1999] QB 477 at paragraphs 12, 15, 17). As was explained in paragraph [136] of the English Premier League case, the court had to have regard to the economic and legal context of which the agreement formed part when assessing whether the object of the agreement was anti-competitive. Paragraphs 140 and 143 of that case also referred to the economic and legal context. The court in the English Premier League case was thus addressing the object issue, not the magnitude issue.

[54] Mr McIlvride had relied upon paragraph 37 of Expedia: but that paragraph made it clear that, in an object case, it was necessary that there be an effect on member states. In the first four cases (cited in paragraph [53] above), trading with member states was itself subjected to the magnitude test. So in order to be able to rely on Expedia, it was necessary to spell out the magnitude test inter-state: the defenders did not do so.

[55] Senior counsel for the pursuers made two further points in relation to the pleadings. Mr McIlvride had sought to portray the undertaking as something which could be considered as part of the contractual chain, and judged with the chain. However that case was not made out on record. The averments in Answer 9 (page 12 of the reclaiming print) commencing with the words "In those circumstances the agreements between the parties in that series of contracts ('the contractual chain')" did not state that the undertaking was part of the contractual chain: and indeed, the undertaking was not part of the contractual chain. So the focus of this case was a breach of the undertaking in isolation. In Statement 8 of the counterclaim (page 24 of the reclaiming print) it was averred that " ... any clause in (i) the Polsat Agreement and/or (ii) the TWI Licence Agreement which purported to provide that the defenders were prohibited from having access to the said programmes in the UK would be void in terms of article 101 TFEU." But if the undertaking was void, then it did not prohibit the defenders from accessing the Polsat broadcast (as the undertaking was only not to do something for which there was no consent from Polsat, something illegal). By definition therefore the undertaking could not have affected the trading of two member states. In other words, if the court accepted the argument that the undertaking was void, that was destructive of the proposition that the undertaking could restrict competition. The undertaking did not mention Polsat: when framing the interdict on the basis of the law applicable at the time, the view was taken that the pursuers could seek interdict in relation to Polsat. If the defenders were arguing that the Polsat agreement contained no restriction (and thus that the defenders were entitled to access and show the Polsat broadcasts) then it could be said that the interdict went further than the terms of the undertaking - although that was not currently argued. The problem was that the defenders were trying to ride a number of horses. They were not stating clearly what their position was in relation to these matters.

Discussion

The undertaking and the principal action

[56] Guidance as to the proper construction of the undertaking can be found in Bank of Credit and Commerce International v Ali [2002] 1 AC 251. In that case, an employee accepted certain terms in a release signed on 4 July 1990 -

"in full and final settlement of all or any claims whether under statute, common law or in equity of whatsoever nature that exist or may exist [emphasis added] and, in particular, all or any claims rights or applications of whatsoever nature that the applicant has or may have or has made or could make in or to the industrial tribunal".

[57] At a later stage, the employee sought to claim damages caused by his association with the bank, which had been found to have carried on its business in a corrupt and dishonest manner. The bank's liquidators contended that the employee was barred from claiming such damages by the terms of the release.

[58] That argument was rejected in the House of Lords. Lord Bingham (with whom Lord Browne-Wilkinson agreed) reasoned inter alia as follows:

"8 ... To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant facts surrounding the transaction so far as known to the parties ...

10 ... a long and in my view salutary line of authority shows that, in the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware ..."

Lord Nicholls stated:

"35 ... To my mind there is something inherently unattractive in treating these parties as having intended to include within the release a claim which, as a matter of law, did not then exist and whose existence could not then be foreseen ..."

[59] Applying the guidance given by their Lordships, we consider that the undertaking dated 9 January 2007 must be construed as a whole, giving the language its ordinary meaning. It must also be construed in the light of the circumstances in which it was granted.

[60] The undertaking was given in the context of a sheriff court action in which the pursuers sought to interdict the defenders from carrying out certain illegal acts. In particular, the initial writ contained the following averments:

"9. By letter dated 24 November 2006 the pursuers notified the defenders that the possession by them for commercial purposes of the decoder and card which they used to access the Polsat broadcasts was unlawful. The pursuers sought an undertaking from the defenders that they would hand over the decoder and card. The letter indicated that interdict and interim interdict were remedies open to the pursuer in respect of the defenders' conduct and that in the absence of such an undertaking being given court proceedings may be commenced. No response was received to the notice. As hereinbefore condescended upon, on the afternoon of Saturday 2 December 2006 the defenders showed the Celtic v Dunfermline match live between the hours of 2.45 pm and 5.15 pm, after they had received the pursuers' letter. In the circumstances, the pursuers have a reasonable apprehension that the defenders will continue to show SPL matches broadcast by Polsat. Further, the pursuers have a reasonable apprehension that the defenders will seek to obtain other decoders and cards enabling them to receive broadcasts from other member states within the European Union, which they are not entitled to receive in Scotland.

10. In the circumstances, the pursuers are entitled to delivery of the apparatus used by the defenders to access broadcasts of the football match. In addition, in the circumstances the pursuers are entitled to interdict of the defenders against use by them of that apparatus to access broadcasts of SPL matches. Reference is made to [the 1988 Act] sections 6, 6A, 96, 99 297, 298 and 299 ..."

[61] The undertaking dated 9 January 2007 was given prior to the hearing of a motion for interim interdict, clearly to forestall a court decree of interim interdict. The undertaking comprised four paragraphs. In the first paragraph, the defenders acknowledged that they had carried out certain acts on 18 November and 2 and 23 December 2006. In the second paragraph, the defenders recorded that they were "now aware" of the illegality of such acts - that is to say, that the acts were "unlawful in terms of section 298 of the Copyrights, Designs and Patents Act 1988" and possibly also that they constituted a "criminal offence under section 297 of that Act". In the third and fourth paragraphs, the defenders undertook that "in future" they would not carry out such acts.

[62] In our opinion, on a proper construction of the undertaking, read as a whole, the defenders undertook not to carry out any more of these specified illegal acts in the future. The whole purpose of the undertaking was to stop further illegal acts of the sort described in the first and second paragraphs. In other words, the content of the first and second paragraphs colour and qualify the words in the third and fourth paragraphs. If therefore the specified acts described in the first two paragraphs subsequently ceased to be illegal, we consider that the undertaking ceased to have effect and became unenforceable. Looked at another way, the undertaking given "for the future" should not, in the unforeseen circumstances which occurred, be construed as meaning "come what may". As the whole purpose of the undertaking was to prevent acts which were accepted by both contracting parties at the time as being forbidden because they were illegal, then, when the illegality was removed, the defenders were no longer bound by their undertaking: cf paragraph 35 of Bank of Credit and Commerce International SA v Ali.

[63] In the result, therefore, we agree with the Lord Ordinary that the undertaking is no longer effective and no longer binds the defenders. However it seems to us that the undertaking ceased to have effect as soon as the ECJ issued their opinion in the English Premier League case on 4 October 2011, rather than at any later date, such as the time when the interim interdict was recalled of consent on 12 July 2012.

[64] Even if we were wrong on this approach to the construction of the undertaking, given that, as we discuss below, the defenders have, in our opinion, made in the counterclaim relevant averments in relation to article 101 which plainly bear on the enforceability of the undertaking (putting it broadly at this stage), we would not have been minded to give effect to the motion to pronounce perpetual interdict, but rather would have allowed a proof before answer in the principal action.

Article 101 and the counterclaim

[65] The issue between the parties as to whether the defenders have made relevant averments in relation to article 101 came to be focused essentially on the question of the proper understanding of the English Premier League case. As to that, we do not accept the pursuers' position that the Grand Chamber chose not to answer sub-paragraph (b) of the questions referred, or that their decision can properly be described as dealing only with the "object" test, and not with the "magnitude" test. On the contrary, it is our view that the Grand Chamber gave careful consideration to the particular type of restrictive obligation in question (namely exclusive territorial licences granted to broadcasters containing terms preventing the broadcaster from distributing decoder devices such that the broadcast could be accessed by viewers outside the particular territory). They considered the recitals to various treaties. They considered case-law, including decisions confirming that some contracts are by their very nature injurious to the proper functioning of normal competition, whereupon there is no need to go further and demonstrate the actual or "concrete" effects on competition. Having assessed all these matters, they concluded that the particular obligation in question (outlined above) was in the circumstances - without any further averment, proof, or analysis being necessary, such as averment, proof and analysis of the actual effects of such a contract on inter-state competition in the internal market - by its very nature, injurious to the functioning of normal competition such that it was caught by the prohibition in article 101.

[66] We have reached that view for the following reasons.

[67] The relevant questions referred to the ECJ for a preliminary ruling were in the terms referred to below:

[68] In relation to Case C-403/08, the relevant question was:

(10) Where a programme content provider enters into a series of exclusive licences each for the territory of one or more Member States under which the broadcaster is licensed to broadcast the programme content only within that territory (including by satellite) and a contractual obligation is included in each licence requiring the broadcaster to prevent its satellite decoder cards which enable reception of the licensed programme content from being used outside the licensed territory, what legal test should the national court apply and what circumstances should it take into consideration in deciding whether the contractual restriction contravenes the prohibition imposed by article 81(1) [EC]?

In particular:

(a)  must article 81(1) [EC] be interpreted as applying to that obligation by reason only of it being deemed to have the object of preventing, restricting, or distorting competition?

(b)  If so, must it also be shown that the contractual obligation appreciably prevents, restricts or distorts competition in order to come within the prohibition imposed by article 81(1) (EC)? [Emphases added]

[69] In relation to Case C-429/08, the relevant question - Question (8) - was in identical terms.

[70] It is noteworthy that while sub-paragraph (a) of each question sought guidance about the applicability of article 81(1) to the particular type of obligation (namely exclusive territorial licences granted to broadcasters containing terms preventing the broadcaster from distributing decoder devices such that the broadcast could be accessed by viewers outside the particular territory), sub-paragraph (b) went further, and asked, if article 81(1) applied to that type of obligation, was it also necessary actually to show that the obligation appreciably prevented, restricted, or distorted competition in order to come within the prohibition imposed by article 81(1) (i.e. a stage beyond applicability).

[71] It is also important to note that the ECJ, in paragraph 134 of their judgment, abbreviated, paraphrased, and amalgamated the two questions (10) and (8) as follows:

"By Question 10 in Case C-403/08 and Question 8 in Case C-429/08, the referring courts ask, in essence, whether the clauses of an exclusive licence agreement concluded between a holder of intellectual property rights and a broadcaster constitute a restriction on competition prohibited by art.101 TFEU where they oblige the broadcaster not to supply decoding devices giving access to that right holder's protected subject-matter outside the territory covered by the licence agreement concerned."

[72] Thus the ECJ had very much in mind sub-paragraph (b) of the questions referred: for only sub-paragraph (b) focused on whether any prohibition had been triggered.

[73] The ECJ then gave careful consideration to the recitals in the preamble to the Television without Frontiers Directive, the Satellite Broadcasting Directive, and the Conditional Access Directive. Those recitals make clear that what is important is that individuals in member states should have access to broadcasts from other member states, and that it is a breach of a fundamental obligation if persons outside a state are prevented from accessing broadcasts from that state.

[74] The ECJ also took into account established and accepted case-law, including the Beef Industry case [2009] 4 CMLR 6, paragraphs 15 and 17, and the T-Mobile case [2009] 5 CMLR 11 paragraphs 28-29. In particular they noted that paragraph 17 states:

"" ... certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition"

[75] That approach was reiterated in T-Mobile paragraph 20:

" ... The distinction between 'infringements by object' and 'infringements by effect' arises from the fact that certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition ..."

[76] In the Beef Industry case at paragraph 15 it was confirmed as settled law that only if an analysis of the clauses of the agreement does not reveal the effect on competition to be sufficiently deleterious should the actual consequences or actual effect should be considered (cf Societe Technique Miniere (LTM) v Maschinenbau Ulm GmbH [1966] CML 357 at page 375). The Grand Chamber took that into account.

[77] Ultimately, at paragraph R1 at page 102 of the report, the Grand Chamber gave its final ruling, including the following passage:

"4 The clauses of an exclusive licence agreement concluded between a holder of intellectual property rights and a broadcaster constitute a restriction on competition prohibited by art.101 TFEU where they oblige the broadcaster not to supply decoding devices enabling access to that right holder's protected subject-matter with a view to their use outside the territory covered by that licence agreement."

[78] In our opinion, that ruling or conclusion (based on and in accordance with the relevant recitals to the treaties and established and accepted case-law) answered the entire question referred by the English courts in Questions (10) and (8), including sub-paragraph (b). The ECJ's decision was that a particular type of obligation (namely an exclusive territorial licence granted to a broadcaster containing terms preventing the broadcaster from distributing decoder devices such that the broadcast could be accessed by viewers outside the particular territory) was, by its very nature, injurious to the proper functioning of normal competition in the internal market (unless other circumstances falling within its economic and legal context justified an alternative conclusion, which it would be for those seeking to uphold the restriction to establish: cf paragraphs 140 and 143 of the decision). In other words, both the "object" and the "magnitude of harm" tests were satisfied by the very nature of the contractual obligation. For that sort of obligation, there was no need to aver and prove an actual effect on the market, namely that it appreciably prevented, restricted or distorted competition: that sort of obligation immediately triggered the prohibition imposed by article 101 of the TFEU.

[79] In the present case, there is no need for a particular averment by the defenders about what inter-state competition might be affected. The member states involved are obviously Poland and the United Kingdom, both members of the EC. Further the defenders offer to prove (admittedly on a "believed and averred" basis - with which the pursuers take no issue at this stage) that the restriction imposed by the contractual chain between the pursuers in the United Kingdom and Polsat in Poland, is that Polsat's standard terms when supplying a decoding device must restrict the use of the decoding device to the territory within the Republic of Poland. We consider therefore that the defenders have averred sufficient to support a claim that the contractual chain described in paragraph [6] above was, by its very nature, injurious to the proper functioning of normal competition for member states. As the Grand Chamber said at paragraph 140:

" ... where a licence agreement is designed to prohibit or limit the cross-border provision of broadcasting services, it is deemed to have as its object the restriction of competition, unless other circumstances falling within its economic and legal context justify the finding that such an agreement is not liable to impair competition."

[80] Thus in terms of the ruling at page 102 R1 of the English Premier League case, such contractual arrangements by their very nature amount to "a restriction on competition prohibited by art.101 TFEU". Accordingly we agree with Mr McIlvride that, in the context of any contract connected with that contractual chain, all that would be required of the defenders would be to aver the type of contract which by its very nature restricted normal competition, without the need to specify in any detail facts that would tend to show that the restriction would have an "appreciably injurious effect" on the market. It would be for the pursuers to "put forward any economic and legal context of such clauses that would justify the finding that ... these clauses are not liable to impair competition and therefore do not have an anti-competitive object" (paragraph 143 of the English Premier League case).

[81] Mr Lake pointed out that the undertaking relates to three pubs in the west of Scotland, is not part of the contractual chain, and is de minimis: therefore in any event falls outwith the ruling in the English Premier League case. We do not agree. The defenders aver that the undertaking was given because of, and as a means of enforcing, the condition in the associated company CP's purchase contract (concerning the decoder device and smart card) that "making use of the offer is possible solely in the territory of the Republic of Poland". The defenders thus offer to prove that the contractual arrangements which by their very nature amounted to "a restriction on competition prohibited by art.101 TFEU" had the effect that the defenders were induced to give the undertaking dated 9 January 2007, to avoid facing a court action with a variety of repercussions, penalty measures and expenses. The contractual chain was therefore, it is averred, the genesis of the undertaking, and the undertaking was intimately connected with the impugned contractual chain. Put another way, the defenders offer to prove that the undertaking was the effective means by which an appreciable distortion of normal competition in the internal market was sought to be enforced, and thus that it was void or unenforceable. We therefore consider that the ruling of the Grand Chamber in the English Premier League case applies with equal force to the undertaking, such that it is deemed, by its very nature, to have an injurious effect on normal competition within the internal market. Alternatively the defenders seek to establish that, because of the ex hypothesi void condition in the agreement with Polsat, the undertaking, on a proper analysis, would not have prevented them having the access to broadcasts which they wished to have. On either basis, they thus seek to establish inter alia that the interim interdict pronounced against them was, insofar as based on the undertaking, wrongfully obtained.

[82] In the result therefore, we are satisfied that sufficient has been averred in the counterclaim to satisfy the test in Jamieson v Jamieson 1952 SC (HL) 44 at page 50, namely that it cannot be said that, even if the defenders were to prove all that they aver in their answers to the principal action (specifically incorporated in the counterclaim) and their statements in the counterclaim, they would be bound to fail. We accordingly agree with the Lord Ordinary's refusal to dismiss the counterclaim.

Decision

[83] For the reasons given above, we refuse the reclaiming motion and adhere to the interlocutor of the Lord Ordinary. We shall remit the case to the Lord Ordinary for further procedure. We note that the defenders no longer insist upon their argument based upon breach of article 102 of the TFEU: it would be appropriate for the Lord Ordinary to deal with the relevant averments and pleas. We reserve all questions of expenses to enable parties to address us on that matter.