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Commercial Disputes


3 April 2006

Dave ran a petrol station on a motorway. He was a licensee retailer of petrol for a major oil company..

He was driven out of business. The licence agreement terms were oppressive, and they were the reason why he was in such difficulty. The terms gave the Oilco the power to:-

a) Squeeze his retail margin on petrol sales so tight that he had to run that side of the business at a loss, and make ends meet by profits from the station shop.

b) However, the oil company saw the chance to make more money off the shop. They dictated where he had to position specific types and brands of goods. Such positioning and prominence suited their agenda, not his. For example they had deals with food and other suppliers whereby they made their own margin on the goods by ensuring that particular brands and goods had guaranteed volume outlet and sales throughout company's shops. This was not in Dave's interests. He was in a local station, being a local retailer, who wanted to sell and give prominence to the specific goods and brands that appealed to his specific regular customers. Under the terms of his agreement, he could not make these choices, only the Oilco could do so.

FK ran a challenge to the terms of the agreement as being anti-competitive under the European competition rules. We went to Court in London for a preliminary hearing. We obtained the judgment in favour of Dave, to the effect that the oil company should not be allowed to dictate product positioning etcetera. We won the point, and Dave was therefore on the way to substantial monetary compensation, though in the meantime he had had to give up the station.


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