Herbert Smith takes on OFT with Napp appeal

Herbert Smith is preparing to take a landmark case before the Competition Commission Appeal Tribunal, which has yet to hear a case in its one-year history.

The case centres on the Office of Fair Trading’s (OFT) conclusion, announced at the end of March and its first decision under the Competition Act 1998, to fine Napp Pharmaceuticals £3.2m for its anti-competitive price arrangements.

Herbert Smith competition partner Elizabeth McKnight confirms that she and fellow partner Stephen Wisking are currently processing an appeal on behalf of Napp.

The Competition Act, which came into force in March last year, gave the OFT and the utilities regulators powers to make decisions on competitive practices. The appeal tribunal was set up at the same time so that companies could appeal against the decisions if so desired.

Napp will be the first case of its kind in the UK. Decisions by the tribunal are likely to be highly significant because of its broad range of powers. In addition to agreeing or disagreeing with the decisions of the OFT or regulators, the tribunal can impose, revoke or vary the amount of any penalty.

Competition barrister Jeremy Lever QC of Monckton Chambers says that Napp will be a landmark case. “The appeal tribunal has power not only to quash decisions by the OFT and the regulators, but can exercise those powers to substitute its own decision,” he says. “Its powers are wider than the powers of the European Community’s Court of First Instance in Luxembourg, which hears applications relating to decisions by EC institutions under Community law.” The Court of First Instance hears only competition cases.

It is thought that companies will now be keen to take decisions to tribunal as it will be operating on new ground, and that nearly all OFT decisions will be challenged over the coming months.

Tribunal president Christopher Bellamy has not yet presided over an appeal. His role comes with a salary of £132,603 per annum. Yet a spokesman from the Competition Commission says that Bellamy’s only work so far has been to take a number of training sessions.

Bellamy has also been sitting as a deputy High Court judge since January 2000, after his contract with the Court of First Instance of the European Communities in Luxembourg ended in 1999.

It is thought that the Napp appeal will be heard in July.