The High Court has temporarily restrained Dunnes Stores from applying unilateral rate changes to warehousing and distribution agreements with Whelan Frozen Foods Limited, preserving specified rates and payment terms pending a full hearing.
In a judgment dated 17 February 2006, Mr Justice John MacMenamin granted an interlocutory injunction concerning two contracts: one for frozen and chilled food distribution, said to have been made in or about October 2005, and another for textile warehousing and distribution, said to have been made in or about May 2003.
The order maintains frozen food at €1.69 per case and chilled food at €1.12 per case. For textiles, it preserves a rate of €1.45 per cubic foot, based on carton size, as it stood from 2 May 2003. In both cases, payment is to be made within two weeks of month-end.
The decision followed a dispute over rate reductions Dunnes proposed in November 2005 and implemented from around 20 December. Whelan Frozen Foods argued the changes were unilateral variations of existing agreements. Dunnes disputed that the parties had reached a binding long-term agreement on the rates, saying the food rate was an interim measure connected to a proposed change in the trading arrangement.
The judge found that a fair issue had been established for trial. In granting temporary relief, he considered disputed financial evidence about whether the reduced rates could put Whelan Frozen Foods at risk of insolvency. He also considered that the company depended entirely on Dunnes for its business and the effect the absence of an injunction could have before the full action was heard.
The ruling addresses the interim position only. It does not finally determine the parties’ contractual rights or the claims for withheld payments and other alleged losses. The court ordered the specified rates and credit terms to remain in place pending the hearing.