Watching Churchill in Action: Trademark Dispute Settles Through UK’s Compulsory Mediation

By Batsheva Guez

Compulsory mediation—a process introduced in Churchill v. Merthyr Tydfil Borough Council, [2023] EWCA Civ 1416 (available at https://bit.ly/3A5Tmmt), which requires parties to attempt resolution through mediation before trial—has now been applied in a commercial trademark dispute between Manchester City Football Club and the British clothing brand Superdry.

In November 2023, in its famous Churchill v. Merthyr Tydfil Borough Council decision, the Court of Appeal held that courts could order parties to engage in alternative forms of dispute resolution without infringing upon their right to a fair and public hearing as guaranteed under Article 6 of the European Convention on Human Rights.

The United Kingdom’s closely watched mandatory mediation push appears to be well positioned for a significant impact on commercial dispute resolution.

The Churchill case has led to the amendment of the Civil Procedure Rules (CPR), which took effect in October 2024. These revisions now emphasize ADR promotion and use. Indeed, CPR 1.4, which addresses the court's duty to actively manage cases, now explicitly grants the court the power to order parties to use and facilitate ADR.

Merely a month after the CPR’s amendment, in November 2024, a trademark case, Superdry PLC v. [Manchester] City Football Club Comm. Operations Ltd., EWHC 3231 (2024) (available at https://bit.ly/42SXS3F), between the owners of Superdry, a clothing brand, and the Manchester City Football Club’s commercial operation division, was brought before the High Court of Justice of England and Wales.

The issue at stake before the England and Wales High Court was whether the use of the words "Super" and "Dry"— referring to Asahi’s beer, official sponsor of the Manchester City Football Club —on the team’s kit could infringe Superdry’s trademark rights by potentially misleading the public into believing the branding referred to the clothing brand rather than the beer.

Superdry, the claimant, sought a court order for compulsory mediation before proceeding to trial, arguing that the dispute was resolvable, as it was not particularly complex, and several aspects of the disagreement could lead to an out-of-court settlement, which might not be possible through a “standard” court ruling. These included negotiations over the design, size of logos and lettering on the sports clothing, and financial compensation, as well as the timing of those changes.

The claimant's final—and most persuasive—argument was that granting compulsory mediation would prevent the parties from incurring further litigation costs and would also save court’s resources.

The defendant football club, however, did not want the court to order mediation. Indeed, the defense  argued that “while there was no dispute about the power of the court to order mediation, it should only do so where there was a realistic prospect of success.” The defendant eagerly wanted the court to decide the matter in order to judicially determine, once and for all, whether Manchester City Football Club had the right to place the Asahi brand on its football kit and other merchandise. Furthermore, the club argued that a compulsory mediation would likely not lead to a settlement between the parties.

In weighing both parties' arguments about whether to order mediation, the court leaned in favor of the claimant’s arguments, deciding that ADR methods should be ordered whenever it is reasonable to order them. The court emphasized that even in difficult cases where the parties' positions are completely opposed, experience has shown that they can still reach a compromise.

In his unanimous opinion on behalf of a three-judge panel, High Court Judge Robert John Miles used engaging language, stating that “experience shows that mediation is capable of cracking even the hardest nuts,” and ordered the parties to mediate and report the outcome of the mediation to the court once it was completed.

As it turned out, the court's approach was correct—the parties informed the court that they had successfully settled the dispute through the ordered mediation, which the opinion notes as a postscript.

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The author is a Spring 2025 intern at the CPR Institute. She is an LLM student at the Benjamin N. Cardozo School of Law at Yeshiva University in New York.

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