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Neutral Citation Number: [2009] Neutral Citation Number: [2009] EWCA Civ 750 Case No: A3 2008/2874 IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION) ON APPEAL FROM THE HIGH COURT OF JUSTICE CHANCERY DIVISION MR JUSTICE MORGAN [2008] EWHC 1978 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Date: 28 July 2009 Before: LORD JUSTICE MUMMERY LORD JUSTICE LLOYD and LORD JUSTICE MOORE-BICK - - - - - - - - - - - - - - - - - - - - - Between: (1) BOOKMAKERS’ AFTERNOON GREYHOUND Claimants SERVICES LTD Appellants (2) LADBROKES BETTING AND GAMING LTD (3) WILLIAM HILL ORGANIZATION LTD - and - (1) AMALGAMATED RACING LTD Defendants (2) RACING UK LTD Respondents (3) ALPHAMERIC PLC (4) ALPHAMERIC GAMING LTD (5) RACECOURSE MEDIA SERVICES LTD (6) RACECOURSE INVESTMENTS LTD (7) THE WESTERN MEETING CLUB LTD (8) BANGOR-ON-DEE RACES LTD (9) THE BEVERLEY RACE CO LTD (10) CARTMEL STEEPLECHASES (HOLKER) LTD (11) THE CATTERICK RACECOURSE CO LTD (12) THE CHESTER RACE CO LTD (13) GOODWOOD RACECOURSE LTD (14) THE HAMILTON PARK RACECOURSE CO LTD (15) THE LUDLOW RACE CLUB LTD (16) MUSSELBURGH RACECOURSE CO LTD (17) NEWBURY RACECOURSE PLC (18) THE PONTEFRACT PARK RACE CO LTD (19) REDCAR RACECOURSE LTD (20) THE BIBURY CLUB LTD (21) THIRSK RACECOURSE LTD (22) WETHERBY STEEPLECHASE COMMITTEE LTD (23) YORK RACECOURSE LTD - - - - - - - - - - - - - - - - - - - - - (Transcript of the Handed Down Judgment of WordWave International Limited A Merrill Communications Company 165 Fleet Street, London EC4A 2DY Tel No: 020 7404 1400, Fax No: 020 7404 1424 Official Shorthand Writers to the Court) - - - - - - - - - - - - - - - - - - - - - Christopher Vajda Q.C., Valentina Sloane and Philip Woolfe (instructed by SJ Berwin LLP) for the Appellants Peter Roth Q.C., Paul Harris and Ronit Kreisberger (instructed by Wiggin LLP) for the Respondents Hearing dates: 12-14 May 2009 - - - - - - - - - - - - - - - - - - - - - Judgment Lord Justice Lloyd: Introduction 1. Horseracing is a substantial business in the UK. Racecourses and bookmakers are among the several essential elements in that business. They are interdependent: bookmakers draw in funds from punters but they need races, and therefore racecourses, without which this aspect of their turnover would not exist, and punters provide the most important source of outside income for racing. Betting on horseracing provides a substantial proportion of the turnover of British bookmakers. 2. The present litigation is between the interests of several major bookmakers, as Claimants, and those of about half of the racecourses in Great Britain, as Defendants. Not for the first time, recourse has been had to competition law in an attempt to affect the distribution of economic resources within the business of horseracing. 3. One element in the economic pattern, though not relevant to the present dispute, is that the betting industry pays substantial sums, which are passed to British racecourses, by way of the Betting Levy, administered by the Horserace Betting Levy Board. In 2000 the Government announced its desire to abolish the levy and opened a consultation as to the implications of that. In 2002 the proposal to abolish the levy was withdrawn, and the levy has been renewed year by year since then. 4. Betting takes place either at racecourses (on-course) or elsewhere (off-course), the latter largely at licensed betting offices (LBOs) of which there are some 8,700 in Great Britain, though nowadays it may also take place over the internet. Betting at LBOs is not limited to horseracing: greyhound racing, other sports, numbers games, and other events or contingencies provide suitable and popular subjects for betting, but the bulk of LBO turnover is on horseracing. 5. Until 1986 it was illegal to show live televised pictures of racing in an LBO. The law changed in that year. In 1987 such a service began to be provided for LBOs by Satellite Information Services Ltd (SIS). (At first it was supplied by its parent company, but nothing turns on the distinction for present purposes.) The parent company, Satellite Information Services (Holdings) Ltd (SISH) was founded by the then four leading bookmaking firms, in anticipation of the change in the law. At the time relevant to the present dispute it was owned as to about 49% by Ladbrokes PLC, William Hill Organization Ltd and the Horserace Totalisator Board and as to about 7.5% by Mr Fred Done. Directly or indirectly it acquired licences to broadcast to LBOs live coverage of horse races at courses in Britain and also in Ireland. (I will refer to the relevant rights as LBO media rights.) With that and other material it put together a live television service broadcast by satellite (called SIS FACTS) to which LBOs could subscribe. Until 2007 it had no competitor. It was therefore the sole buyer for the media rights which racecourses could offer, and the sole seller to LBOs of a broadcast service of this kind. Some races were and are broadcast live by terrestrial channels, including the BBC, and LBOs can show those races using the terrestrial service, but the SIS FACTS coverage was much more comprehensive. 6. In 2007 a rival service to SIS FACTS came into play, providing a similar broadcast service, known as Turf TV. This is provided by the First Defendant, Amalgamated Racing Ltd (AMRAC), which is a joint venture between the Fourth Defendant, Alphameric Gaming Ltd, and the Fifth Defendant, Racecourse Media Services Ltd (RMS), which itself is owned by 19 undertakings which run 31 out of the 59 racecourses in Britain. Thus, SIS FACTS is provided by interests aligned with major bookmakers, whereas Turf TV is provided by interests which include those representing a significant number of racecourses. Both of those services are regarded as essential to an LBO: they are “must-haves”. 7. By the present proceedings, the principal bookmakers seek to undermine the Turf TV service, by showing it to be the product of a cartel illegal under the competition law of the European Union and of the UK. The racecourses object strongly, contending that it is absurd to try to use competition law in order to strike down a successful attempt to create competition in a situation where for 20 years there was none. 8. The proceedings came to trial before Mr Justice Morgan over some 6 weeks in 2008. He gave judgment in favour of the Defendants on the issues relevant to this appeal on 8 August 2008, and dismissed the claim: [2008] EWHC (Ch) 1978. He gave a later judgment on issues on a counterclaim ([2008] EWHC 2688 (Ch)); having done so he granted permission to appeal. I would like to pay tribute to the clarity of his long judgment, in the course of which, quite apart from having to consider the facts in more detail than we have had to, and to decide issues on the evidence, mainly concerned with that given by expert witnesses, he had to address several additional issues besides those which have been live on the appeal. Moreover, during the trial he had also to deal with a number of interlocutory points (including points as to the formulation of the Claimants’ claim, on which he gave a preliminary judgment, [2008] EWHC 2503 (Ch)) and also with points on the counterclaim, as well as hearing argument on one point, under article 81(3) of the EU Treaty, on which it was not necessary for him, in the end, to deliver a judgment. 9. In grappling with the issues on the appeal, we have been assisted by clear and concentrated written and oral submissions from Counsel (who, in the case of the Appellants, were a new team who had not appeared before the judge), enabling us to conclude the hearing of the appeal in three rather full days. The parties to the proceedings 10. The parties to the appeal are as follows. The Claimants included three of the largest four bookmakers in Great Britain: William Hill and Ladbrokes, each of which operates about 23% of British LBOs, and Done Bros, which trades as BetFred, with about 7% of British LBOs. However, Done Bros, although initially a party to the appeal, settled with the Respondents before the appeal hearing. Coral Racing Ltd (16%) had been a Claimant but settled with all parties before the trial. The other Claimant, BAGS, is a company limited by guarantee, established in 1967, which has as its members 22 of the UK’s 680 off-course bookmakers. It was originally set up to encourage greyhound racing at times when horse racing might be cancelled because of bad weather, so as to provide an alternative betting opportunity. BAGS took a licence of LBO media rights from 49 racecourses, and granted a non-exclusive sub- licence of those rights to SIS. 11. The First Defendant is AMRAC, which is the joint venture company which provides the Turf TV service to LBOs. The Second Defendant, Racing UK Ltd (RUK), was set up to exploit the media rights of 30 racecourses, responsible between them for 54% of off-course LBO betting turnover in Britain. The two parties to the joint venture are the Fourth Defendant (of which the Third Defendant is the parent company) and the Fifth Defendant, RMS. The shares in RMS are held by the undertakings which run the 30 RUK courses, and by that which runs Ascot. The grant of LBO media rights for Ascot to AMRAC occurred in circumstances which the Claimants do not allege was in breach of competition law, so Ascot is not a Defendant. 12. The 6th to 23rd Defendants are the 18 undertakings which are responsible for the 30 RUK racecourses. Racecourse Investments Ltd (RIL) was once called the Racecourse Holdings Trust, and is a subsidiary of Jockey Club Racecourses Ltd. It operates 14 courses, of which all but one granted rights to AMRAC. (The other, Exeter, was previously an independent course, and licensed its LBO media rights to SIS at that time.) The other Defendants are the operators of the 17 other RUK racecourses.
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