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The Observer
Sunday, 13 July 1988
The Observer defeats Al-Fayed injunction
by Lorana Sullivan
MR JUSTICE MANN ruled on Friday that The Observer should not be stopped from publishing further articles in connection with the newspaper's consistent allegations that the Egyptian brothers did not finance the £615 million takeover of House of Fraser entirely out of their own resources.
The Al-Fayed brothers, led by Mohamed Al-Fayed, sought to enjoin The Observer from publishing the results of its continuing inquiries into the family's claims of vast wealth, and the circumstances under which the Secretary of State for Trade & Industry allowed control to the House of Fraser to pass to the brothers' Liechtenstein company.
Costs of the action were awarded to The Observer. The hearing in chambers started on Monday and ended on Wednesday afternoon. Mr Justice Mann delivered his judgement in open court on Friday morning.
Roger Harrison, chief executive of The Observer, said : 'The Observer is deeply satisfied with the judgement, which wholly rejects the applications for injunctions sought by the Al-Fayeds to restrain the newspaper's publications concerning them and their acquisition of the House of Fraser. The position taken by The Observer succeeded on every point and costs were awarded against the Fayeds.
The Fayeds' application for an injunction came after they had issued three libel writs against The Observer covering various stories published between 10 March 1985 and 18 May 1986. The Observer is defending the actions and seeking to justify its allegations.
In finding against the Fayeds, Mr Justice Mann relied on the principle that the court will not restrain the publication of an article, even though it is defamatory, when the defendant says he intends to justify it or make fair comment on a matter of public interest. The only exception, he said, is when an allegation is manifestly untrue. 'That is not the case… ,' he added.
'I do not see how allegations of irresponsibility, persistency and lack of actual public interest assist the plaintiffs at this stage. The material matter is the allegation of truth, which is not obviously an ill-founded allegation.
'It is not for this court to control persistency at this stage, or to determine when the reading public ceases to be interested in the subject matter of an article. If the plea of justification should ultimately fail, then the various matters to which I have referred are matters material to the jury's assessment of damages and the plaintiff's reputation can be restored by the verdict of that jury and by their award.'
Specifically, The Observer is seeking to justify its allegations that the Al-Fayeds made false statements when they said that they had sufficient resources of their own to finance the purchase of the House of Fraser, and also that they purchased the stores group with their own money and not with the Sultan of Brunei's funds, or with the funds of another party.
Other allegations which The Observer intends to justify are that Mohamed Al-Fayed left Egypt, his native country, in disrepute and that he is anti-Semitic. Mr Justice Mann found that the newspaper's allegation that the Al-Fayed brothers had not held Egyptian passports since 1960 was not particularly defamatory.
Prior to the hearing The Observer's solicitors, Turner Kenneth Brown, wrote an open letter to Allen & Overy, the Fayeds' solicitors, stating that at present there was insufficient evidence to justify certain other allegations.
The Observer offered an undertaking that it would not re-publish these allegations until trial or further court order without giving 72 hours' notice of its intention to do so. During the hearing The Observer extended the length of notice to seven days and offered the undertaking to the court.
Most of these allegations were contained in two news stories entitled 'Mark Thatcher's mystery trip to see Sultan' and 'Mark Thatcher and guru clues to Harrods deal.' Other allegations covered by the voluntary undertaking concerned statements that the Fayeds had not purchased Harrods on their own behalf and that they had manipulated or exploited the Sultan of Brunei.
Mr Justice Mann said that a prerequisite of granting an injunction is some evidence of an intent to repeat a defamatory falsehood. In refusing to grant an injunction covering the allegations that The Observer cannot yet justify, he relied upon an affidavit sworn by Melvyn Marckus, editor of The Observer business section, on behalf of the newspaper, in which he stated:
'I end by respectfully asking this Honourable Court nor to make any Orders that will prevent The Observer from exercising its duties as a newspaper (both highly regarded and of long standing) pursuing a challenging and justified story in which there is a legitimate public interest.'
Lonrho, which owns The Observer, and Tiny Rowland, its chief executive, have constantly protested at the unfairness by which Lonrho, which had been attempting to take over House of Fraser for some seven years, was prevented from doing so by the Government, while the Al-Fayed family was given a go-ahead in the space of 10 days.
'A consideration of the dates suggests that Lonrho might feel aggrieved at the conduct of the Secretary of State. Whether there is any justification for that grievance is not for me to say,' said Mr Justice Mann.
Mr R. Buckley, QC, and Mr R. Rampton (instructed by Messrs Allen & Overy) appeared on behalf of the plaintiffs.
Mr J. Beverage, QC, Mr A. Pugh and Mr A. Fletcher (instructed by Messrs Turner Kenneth Brown) appeared on behalf of the defendants.
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