HC Deb 13 June 1956 vol 554 cc709-15

Amendments made: In page 14,line 34, leave out "the application of the Registrar" and insert: application made in accordance with this section".

In line 36, leave out "Part I" and insert "this Part".

In line 37, leave out "the said Part I" and insert "this Part of this Act".—[Mr. P. Thorneycroft.]


I beg to move, in page 14, line 38, after "agreement" to insert: (other than restrictions in respect of matters described in paragraphs (b) to (d) of subsection (5) of section six of this Act)". This is really hardly more than a drafting Amendment, but it was due to an error. It does exclude overseas trading arrangements from the jurisdiction of the Court. If they cast their minds back to the discussions we had, hon. Members will remember that we agreed that purely overseas trading arrangements were not restrictions on exports and imports and should not be included.

Sir L. Ungoed-Thomas

May I ask why therefore we have paragraph (a)of subsection (5) of Clause 6?

Mr. Thorneycroft

That refers to the export of goods from the United Kingdom. All I am concerned with here is overseas trading arrangements. Clause 6 includes a number of things, one of which

is exports and there are a number of paragraphs dealing with overseas trading arrangements. All I am concerned with here is to exclude overseas trade arrangements from the jurisdiction of the Court. Export agreements are dealt with separately, and are not in fact dealt with through the Court, but are brought in under Clause 25 for the purpose of dealing with them under the Monopolies. Commission.

Amendment agreed to.

Further Amendment made: In page 14, line 39, at end insert: (2) An application to the Court under the foregoing subsection may be made

  1. (a) in any case, by the Registrar;
  2. (b) in a case where an order in respect of the agreement is in force against any person under subsection (2) of section (Powers of High Court in case of default in furnishing particulars) of this Act, by that person
Provided that no such application shall be made by virtue of paragraph (b) of this subsection until after the expiration of the period of two years beginning with the date on which the order under the said subsection (2) was made.—[Mr. P. Thorneycroft.

Mr. P. Thorneycroft

I beg to move, in page 14, line 41, after "interest", to insert: the agreement shall be void in respect of those restrictions; and without prejudice to the foregoing provision". This Amendment adds a power to the Court to ensure that, where particular restrictions are found to be contrary to the public interest, not only can orders be made dealing with the particular restrictions, but that the agreements will become void. I think that is rather an important additional result to ensure in this Bill. It is important in normal circumstances, but it is perhaps additionally important in some of these rather complicated cases in which some of the parties who are in the United Kingdom are not entering into restrictions, but in which restrictions are entered into by the foreign parties. The Court cannot do much about the foreign parties, but it can ensure that the agreement itself is void. I therefore think that this Amendment covers what might otherwise be a gap in the legislation.

Amendment agreed to.

Amendment proposed: In page 15, line 2, leave out "are party to the proceedings" and insert: carry on business in the United Kingdom". —[Mr. P. Thorneycroft.]

Sir L. Ungoed-Thomas

We are a little concerned about this and should like a further explanation why this Amendment is considered consequential. We are dealing here in Clause 15 with the judicial investigation of registered agreements, and subsection (2) provides that, with regard to any of these restrictions which are found by the Court to be contrary to the public interest— the Court may, upon the application of the Registrar, make such order as appears to the Court to be proper for restraining all or any of the persons party to the agreement who are party to the proceedings— from this, that and the other. The relevant words are— who are party to the proceedings— What is proposed is that, instead of the injunction to restrain applying to the party to the proceedings, the injunction shall apply to the person who carries on the business in the United Kingdom. I cannot understand, first, why an injunction should not be issued against the party to the proceedings and, secondly, why an injunction should issue against a person carrying on business in the United Kingdom if he were not a party to the proceedings. I should like an explanation of that alteration.

10.0 p.m.

Mr. P. Thorneycroft

The explanation is that this deals with a rather difficult case where the parties to the agreement are partly United Kingdom and partly foreign. There may be a case in which the parties in the United Kingdom have not entered into restrictive arrangements, and it follows that in such a case an injunction against them is neither appropriate nor possible. It is no good issuing an injunction against the parties who are not in the United Kingdom; we do not want to issue injunctions which can have no effect whatever.

The Amendment simply makes it plain that in such cases the power of the Court is confined to declaring the agreement void and forbidding the British parties from giving effect to the agreement, enforcing it against foreigners or making another one like it. The facts of life impose that limitation upon us. If we do not amend the Bill in the way I describe, voiding the agreement, the powers of the Court would necessarily be very limited, but I think the Amendment makes it plain that the powers are limited to the extent I have indicated.

Mr. Charles Fletcher-Cooke (Darwen)

I am not clear whether the Amendment gives a new power to the Court to issue an injunction against persons who have not been parties to the proceedings. The hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) raised that point, and I do not think he got a very clear answer. It seems very novel and very revolutionary that the Court should issue an injunction against somebody who may be a party to an agreement but who has not been a party to the proceedings. He may have some very good reasons for which he should not have an injunction issued against him which have never been heard by the Court.

Sir L. Ungoed-Thomas

If I may speak by the leave of the House. may I press the President a little on this matter? It is clear from his answer that what is involved is a legal technicality and that no question of policy is involved. I would ask him to look at the matter again, and leave it at that.

First of all, taking the words as they stand, the injunction would issue against the party to the proceedings. He would not be a party to the proceedings, appearing before the Court, if he were not a person in this country, at any rate through his representative. If he were a party to the proceedings one would contemplate that at any rate in the vast majority of cases he would be a person in this country, at any rate through his representative. That is the first point.

Secondly, an injunction is merely an order against the person personally; it is not a case of executing anything against goods in this country or anything like that, and it would operate upon the person as soon as he was in this country or came within the jurisdiction of the Court.

It therefore does not seem to me that the right hon. Gentleman's answer is satisfactory. I believe that the two points which I made originally still stand and I am not at all convinced by his reply. There is nothing between us on policy here and I do not want to take up the time of the House, but I ask the right hon. Gentleman to look at this again, because the answer which he gave is no answer to the objections which have been raised.

Mr. P. Thorneycroft

I have made a quick inquiry and understand that I was right in what I said. It is a rather difficult technical and legal point but what I said is, I understand, correct concerning the alteration of these words to make it demonstrably clear that the order of the Court can issue only against the United Kingdom parties to these proceedings.

It is no good imagining that the Court can issue an injunction against a foreign person who has entered into restrictions although they may be part of the agreement and it is, therefore, necessary to insert these words. It is certainly not intended that an injunction should issue against someone who was not party to the proceedings. The Amendment is not for that purpose but excludes the foreign persons from the category of people against whom the injunction might issue. I freely admit that this is a technical matter. I will have the arguments which the hon. and learned Gentleman and others have advanced examined and sec whether there is any flaw—I understand there is not—which should be put right.

Mr. Jay

May I put the question in this way? While we see that it is necessary to insert the words carry on business in the United Kingdom why is it also necessary to leave out "or party to the proceedings "? Why not leave in both?

Mr. Thorneycroft

That is the point which should be properly examined.

Amendment agreed to.

Mr. P. Thorneycroft

I beg to move, in page 15, line 8, to leave out "any variation or" and insert "the".

I suggest that we could conveniently consider at the same time the next Amendment, in line 9.

Mr. Deputy-Speaker (Sir Charles MacAndrew)

We might discuss at the same time the Amendment in the name of the hon. Member for Chichester (Sir L. Joynson-Hicks), in line 9, at the end to insert: Provided that if at any time during the proceedings it appears to the Court that the agreement which is the subject of the application is reasonably capable of amendment, so as to render the restriction or restrictions in question not contrary to the public interest and that the parties to the agreement desire so to amend it, the Court may if it thinks fit adjourn the proceedings for this purpose, without prejudice to its eventual decision, and thereupon the Court shall have jurisdiction in respect of the agreement so amended and the provisions of this section shall apply thereto in all respects as though it had been the subject of an application by the Registrar under subsection (1) hereof.

Mr. Thorneycroft

These Amendments are a clarification of something which is clearly in the Bill. It was always our intention that it should be there: namely, that the parties should be able to vary an agreement during the course of the proceedings, which is useful, and that the Court should have power to rule against the original agreement and, if necessary, against the varied agreement. There is no guarantee that the varying of an agreement would necessarily mean that it would get through.

It would be wrong to say that if, after a case had proceeded some way and it was found that with variation an agreement would be approved, all the proceedings should start ab initio. Most countries which have experimented in this branch of law have found that some degree of negotiated settlement in proceedings of this character has a part to play in the arrangements. I suggest that we adopt that experience here, and make it demonstrably clear in the Bill that these variations can take effect without in any way prejudicing the power of the Court to make the necessary order against the agreements.

Sir L. Joynson-Hicks

I am very glad to hear my right hon. Friend say that it is his intention that in the event of a variation of an order, if the Court were to consider an order as varied, it should not be necessary for the proceedings to be started afresh ab initio. That was the apprehension in the minds of my hon. Friends and myself in tabling our Amendment. We did not feel that the inherent jurisdiction of the Court would enable it to continue the hearing of proceedings which had started upon one agreement but which it had adjourned to enable that agreement to be varied, because the varied agreement would, in our view, have been a fresh cause of proceedings before the Court and it would have to be started ab initio.

My right hon. Friend says that the words which he has included in his Amendment cover the point, and that in those circumstances it would not be necessary for the matter to be started afresh. We are grateful to him for meeting us on the point, and we are glad to support his Amendment.

Sir L. Ungoed-Thomas

I think that the Amendments in the name of the President of the Board of Trade are very reasonable, and we on this side of the House certainly accept them. The Amendment referred to by the hon. Member for Chichester (Sir L. JoynsonHicks) is open to some objection. It was getting perilously near to making the Court into an organisation for settling matters between parties and acting as a sort of judge in a haggle, which would never do.

Amendment agreed to.

Further Amendment made: In page 15, line 9, at end insert: and where an agreement is varied after the commencement of the proceedings, the Court may make a declaration and, if it thinks fit an order under subsection (2) of this section, either in respect of the agreement as at the commencement of the proceedings or in respect of the agreement as varied, or both".—[Mr. P. Thorneycroft.]