Court Orders Compulsory Mediation in Superdry v Manchester City FC Dispute – Parties Reach Settlement
In a significant ruling, the High Court has ordered compulsory mediation in a trademark dispute between the owners of the well-known Superdry brand and City Football Group, the entity behind Manchester City FC’s commercial operations. The case, which centred on the alleged infringement of Superdry’s trademark by the club’s sponsor, Asahi Super Dry 0.0% lager, was ultimately settled following the court-mandated mediation.
Background of the Dispute
The case, DKH Retail Ltd & Ors v City Football Group Ltd, revolved around the use of the words “Super” and “Dry” on Manchester City’s playing kit. The claimants ”Superdry” parent companies argued that the branding could mislead the public into associating the football club’s kit sponsorship with their fashion brand rather than Asahi’s alcohol-free beer.
A key issue in the proceedings was the disclosure of the sponsorship agreement between Manchester City and Asahi. The claimants sought access to this document, arguing it could provide insight into how the branding was intended to be used. The court ruled in their favour, ordering the contract’s disclosure.
Court’s Decision to Order Mediation
In an important application, the claimants also sought a compulsory mediation order, citing recent changes to the Civil Procedure Rules (CPR), which now explicitly promote alternative dispute resolution (ADR). The defendant resisted, arguing that mediation would not succeed, given both parties’ desire for a judicial determination.
However, Mr Justice Miles ruled in favour of ordering mediation, highlighting:
The potential for mediation to resolve even entrenched disputes.
The significant costs both parties were incurring.
The flexibility of mediation compared to a binary court judgment.
Despite objections from Manchester City’s legal team, the judge emphasised that mediation had a strong chance of success and should take place before the trial.
Settlement Reached
On 13 January 2025, the parties informed the court that they had reached a settlement, avoiding a costly and protracted trial. The terms of the agreement were not disclosed, but the resolution demonstrates the growing influence of court-mandated ADR in commercial disputes.
The Growing Role of Court-Ordered Mediation
This case marks a significant shift in the court’s approach to dispute resolution. The Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council (2023) established that courts have the power to compel parties to engage in ADR, even if they are unwilling. The recent amendments to the CPR, effective 1 October 2024, further reinforce this stance, making it clear that refusing mediation could have cost consequences.
Key Takeaways from the Case:
Courts are taking a firmer stance on mediation – refusing without a strong reason may carry risks
Cost implications: parties who unreasonably reject mediation could face financial penalties.
Efficiency: ADR offers a quicker, cheaper, and more flexible alternative to litigation.
This decision aligns with a broader push to integrate mediation into Court proceedings. It sends a message to parties: engaging in ADR is no longer something to try to avoid. The Court may direct parties to mediate.