EWS turns to High Court for clarity on Royal Mail contract
UK FREIGHT train company EWS has launched High Court proceedings against Royal Mail, which is to axe all overnight mail train services.
EWS has confirmed that papers filed with the London High Court at the end of September have asked a judge to ‘clarify’ some disputed clauses relating to ‘service performance’ in the 10-year contract with Royal Mail.
A spokesperson for EWS said: ‘We are seeking clarification by the court of an issue relating to Royal Mail’s interpretation and of performance criteria.’
In June, the state-owned post office revealed that it was terminating a 10-year contract, signed in 1996, that is worth GBP50m ($87.44m) a year in revenues to EWS.
The contract, which sees EWS provide up to 49 trains a night for the long-distance trunking of letters, will now end in March 2004.
At the time of the announcement, EWS indicated that it would consider legal action for compensation because of the early termination.
But this latest twist seems to imply that EWS is questioning the issue of punctuality assessment, which formed one part of the Royal Mail decision to quit rail.
EWS is keen to avoid suggestions that it has escalated the dispute with Royal Mail, in a high-profile case that places big question marks over government policy to grow UK rail freight by 80% over 10 years.
Added the EWS spokesman: ‘It is not right to say that we are taking Royal Mail to court.
‘We are simply seeking clarification over performance criteria. Both EWS and Royal Mail are talking about this very issue, and we remain in negotiations over it.’
A Royal Mail spokesperson confirmed that a EWS train was deemed to be late if it arrived 10 minutes or more after the agreed arrival time.
But the contract clarification seems to centre on the frequency with which trains are late.
Observers suggest that the Royal Mail considers it within the terms of the contract to permanently delete a train from the timetable if it is late ten times within 40 continuing services.
It is the interpretation of this point, which appears to be in need of clarification, sources suggest.
Copyright 2003 Lloyds List. Source: Financial Times Information Limited – Europe Intelligence Wire.
