MyTravel To Sue European Commission Over Merger Decision

by Robin Pilgrim, LawAndTax-News.com, London

24 March 2003

MyTravel PLC, formerly known as Airtours announced on Thursday that it intends to make a claim to the Court of First Instance against the European Commission for its prevention of the company's bid to acquire rival package tour operator, First Choice in 1999.

In its Annual General Meeting Statement, following an admission that the tourism industry in general is currently experiencing 'difficult times', the company announced that:

'The amount of any damages awarded will be for the European Court to decide. The figure we claim will be substantial but the European Court proceedings are likely to take several years before any judgement is given or damages awarded. The Court papers will be filed within the next few weeks.'

The company is thought to be suing to recover the cost of the bid, plus estimated gains from the scuppered merger.

Speaking to the Financial Times on Friday, Mark Friend from international law firm Allen & Overy suggested that the company's earlier appeal to the Court of First Instance - which ruled in 2002 that the European Commission had not proved that the takeover was anti-competitive, and had therefore been wrong to block the move - stood it in good stead, but added that:

'I would expect the court to be very wary about opening the floodgates to a raft of claims against the Commission.'

'So while it might allow recovery of bid costs in a situation where the Commission is shown to have been at fault, it will probably be much more difficult to recover more speculative elements of loss.'

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