Panayiotou and Others v Sony Music Entertainment (UK) Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 21 June 1994 |
| Date | 21 June 1994 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Jonathan Parker
Competition - European law - whether recording contract distortion
A claim under article 85 of the EEC Treaty had to be on the basis that an agreement between undertakings, as it affected trade between member states had, as its object or effect, the restriction or distortion of competition in the common market.
In that context, an agreement which was made in 1988 between Georgios Panayiotou, professionally known as George Michael, and the CBS group of record companies, whose recording business was taken over by the Sony group at about the same time, for the delivery by him of eight albums of his music over a long period, was not an agreement affecting trade between European member states nor was it one which had as its object the distortion of competition in the common market.
Mr Justice Jonathan Parker so held in the Chancery Division in a reserved judgment after a hearing of 74 days between October 1993 and in April 1994.
Mr Mark Cran, QC, Mr Jeremy Lever, QC, Mr Pushpinder Saini and Mr Ian Mill for George Michael; Mr Gordon Pollock, QC, Mr David Unwin, Mr Vernon Flynn and Mr Peter Duffy for Sony.
MR JUSTICE JONATHAN PARKER said that George Michael was claiming against the Sony Group that the agreement in 1988 for the delivery of eight albums of records over a period of time was void or unenforceable because it was an unreasonable restraint of trade and was in any event rendered void by article 85(2) of the EEC Treaty, directed at maintaining freedom of competition within the common market.
Restraint of trade
On the restraint of trade issue it had to be borne in mind that the 1988 agreement was a renegotiation of an agreement made in 1984; that by 1988 George Michael was already an established artist and that the essence of the renegotiation was a substantial improvement in the financial terms in exchange for additional albums.
In any event, his Lordship concluded that it was not open to the plaintiff to challenge the 1988 agreement on the ground of restraint of trade because:
1 There was a public interest in enforcing agreements reached by way of compromise of disputes. The 1984 agreement was such a compromise and as the 1988 agreement was a renegotiation of the 1984 agreement, the same applied.
2 It would be unjust to Sony if the 1988 agreement were treated as unenforceable or void because: (i) George Michael at all times had expert legal advice from Russells and was well aware of the doctrine of restraint of trade; (ii) Sony had agreed to bring forward dates of various payments for tax reasons...
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