Esso had entered into a solus agreement with Naid covering one filling station. Esso introduced a marketing scheme called ‘Pricewatch’ under which it made financial support available to its dealers in return for their selling petrol at recommended retail prices, designed to compete with or undercut Esso’s competitors. Niad agreed to join the scheme, but in fact sold petrol at prices in excess of the recommended prices. Morritt V-C awarded Esso an account of Niad’s profits. His reasons for doing so were that: ‘First, damages is an inadequate remedy. It is almost impossible to attribute lost sales to a breach by one out of several hundred dealers who operated Pricewatch. Second, the obligation to implement and maintain the recommended pump prices was fundamental to Pricewatch. Failure to observe it gives the lie to the advertising campaign by which it was publicised and therefore undermines the effectiveness of Pricewatch in achieving the benefits intended for both Esso and all its dealers within Pricewatch. Third, complaint was made of Niad on four occasions. On all of them Niad appeared to comply without demur. It now appears that the breaches of its obligation were much more extensive than Esso at first thought. Fourth, Esso undoubtedly has a legitimate interest in preventing Niad from profiting from its breach of obligation.’
He continued to make a restitutionary award: ‘It is undoubted that Niad obtained a benefit, in the form of the price support, to which it was only entitled if it complied with its obligation to implement and maintain the recommended pump prices to be supported. In these circumstances it can hardly be denied that Niad was enriched to the extent that it charged pump prices in excess of the recommended prices. The enrichment was unjust because it was obtained in breach of contract. It was obtained at the expense of Esso because Esso was providing price support for a lower price than that charged by Niad. I can see no reason why this remedy should be unavailable to Esso if it wishes to pursue it. Indeed it appears to me to be the most appropriate remedy in that it matches most closely the reality of the case, namely that Niad took an extra benefit to which it was not entitled. It is just that it should be made to restore it to its effective source.’
Judges:
Morritt V-C
Citations:
[2001] EWHC 6 (Ch)
Jurisdiction:
England and Wales
Cited by:
See Also – Esso Petroleum Co Ltd v Niad Ltd ChD 22-Nov-2001
The court ordered an account of profits as a remedy for breach of a contractual scheme called ‘Pricewatch’ operated by the claimant with its dealers, who agreed to report competitors’ prices and to abide by prices set daily by Esso to match the . .
Cited – Devenish Nutrition Ltd and others v Sanofi-Aventis SA (France) and others ChD 19-Oct-2007
The claimant sought damages for the losses it had suffered as a result of price fixing by the defendant companies in the vitamin market. The European Commission had already fined the defendant for its involvement.
Held: In an action for breach . .
Cited – Devenish Nutrition Ltd v Sanofi-Aventis Sa (France) and others CA 14-Oct-2008
The defendant had been involved in price fixing arrangements, and the claimant sought damages for breach of its proprietary rights. The claimant appealed refusal of an award an account of profits for what was akin to a breach of statutory duty.
Lists of cited by and citing cases may be incomplete.
Damages
Updated: 07 May 2022; Ref: scu.276909