Judge throws out EE's £25M 5G contract suit against Virgin Media
2022's MVNO spat wrapped up as world+dog reminded to check exclusion clauses
A High Court judge has dismissed a 2022 £24.6 million ($31 million) breach of contract lawsuit in which EE sued Virgin Media when it struck a deal with Vodafone to provide 5G services – something EE claimed was in breach of the pair's MVNO network access agreement.
The original claim was filed in the Technology and Construction Court in August 2022, when mobile network provider EE filed suit against rival Virgin Media (VM). From 2013 until 2021, Virgin Mobile ran on EE's network (it doesn't operate its own physical radio access network and now has access to O2's after the companies merged).
In 2019, VM announced it was ending the deal and shifting off to Vodafone, which would provide customers with 5G services. EE claimed this was a "reckless and/or wilful" breach of contract on VM's part.
EE launched its 5G service in May 2019 and, according to the judgment, VM then issued a "request for proposals to all four UK MNOs, including EE." However, "absent agreement with EE, VM subsequently entered into an agreement for the supply of 5G services from Vodafone and from around January 2021, VM began to migrate customers from the EE network to the Vodafone network."
In its 2022 claim, EE sought £24.6 million in damages that it alleged it lost in charges which it claimed Virgin Mobile would have been obliged to pay under the contract for any breach.
It argued that Virgin Mobile breached the pair's networking agreement when it also "wrongfully" transferred customers who didn't have 5G-capable phones, or who were on contracts that did not permit 5G connectivity, from EE's network to Vodafone (and later O2's) networks.
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At issue was an exclusion clause – 34.5(a) – that the judge said "excludes damages claims by either party in respect of 'anticipated profits'."
EE also asked in its particulars of claim whether a customer who does not have a 5G-capable handset could be said to have been "provided" with 5G services.
But Mrs Justice Joanna Smith, who handed down the judgment on Monday, accepted Virgin Mobile's arguments that EE's claim was precluded by an exclusion clause that referred to a 2016 update to the pair's Telecommunications Supply Agreement (TSA), which they originally signed in 2013. Part of that 2016 update detailed what would happen if VM were to source 5G services from an alternative supplier.
The judge also noted: "EE remains contractually entitled to the payment of Minimum Revenue Commitments under clauses 17 and 39 of the TSA and remains entitled to bring a claim for debt for payment of any sums that are due and unpaid under these clauses."
A Virgin Media spokesperson said: "We've always been very clear that we fully honoured our former mobile agreement with BT while giving our customers access to 5G as soon as possible. We're pleased that the court has ruled in our favour and summarily dismissed EE's claim against us."
A BT spokesperson said: "We are disappointed by the court's judgment and will now carefully review the findings before considering next steps." BT Group has been EE's parent company since 2015. ®