Virgin and BA likely to head for US courts: Anti-trust case set to begin

THE ESCALATION of the dirty tricks dispute between British Airways and Virgin Atlantic is likely to see them in the US courts fighting an anti-trust action, writes Michael Harrison.

Although Virgin said it was also considering action through the British courts or the European Commission, it is almost certain to opt for the US.

Richard Branson, Virgin's chairman, said last night he might also invoke the Racketeer- influenced Corrupt Corporations Act, under which the share trader Ivan Boesky and leading Mafia figures have been prosecuted.

As Virgin's lawyers began preliminary work on the legal challenge, the dispute continued over whether BA had insisted on Mr Branson's silence as a condition of a settlement.

Virgin had agreed to accept pounds 9m compensation from BA for the commercial damage done by the dirty tricks campaign and to return documents obtained under legal discovery rules.

But Mr Branson said the gagging clause BA wanted to insert would have forced Virgin to sign away its rights to speak out again. 'When someone offers you freedom of speech or pounds 9m it is sometimes hard to make a decision,' Mr Branson said.

BA flatly denied that it had sought to gag Mr Branson and published the text of the proposed clause in the 26-page agreement. This reads: 'British Airways and Virgin Atlantic agree that they shall each use their best endeavours to discourage media coverage or comment about the past relationship between BA and VA and the matters covered by this agreement. BA and VA shall seek to ensure that any such coverage is limited to recording the views of both parties that the disputes are resolved and that both parties are looking to the future. Both parties agree to consult with each other as and when necessary to achieve this objective.'

Mr Branson wrote to Sir Colin Marshall, BA's chairman, yesterday morning calling for an agreement by the evening. The reply convinced Mr Branson that negotiation had run its course.