Claws out for Esso in war of the Tiger Tokens

A group of 104 petrol station managers will this week take on the might of Esso in a bitter court battle over Tiger Tokens.

In what is thought to be the largest legal action Esso has faced outside the US, the Commercial Court in London will tomorrow begin hearing evidence from former franchise-holders in a major dispute over licence agreements.

Because the case is set to probe deeply into the relationship between Esso and the people who run its petrol stations, it is expected to raise serious issues about the state of the industry. Legal experts believe a victory for the 104 managers could end in their receiving major damages from Esso, and set a critical precedent for other legal actions in the petrol retail industry.

The case, which has grown increasingly acrimonious, has been coming to the boil for nearly 18 months. At its centre is Esso's 1986-96 Tiger Token scheme, which gave motorists a token for every £6 spent on fuel. These could be exchanged for anything from a whisky tumbler to a hi-fi.

But, say the managers, ambiguous wording on the agreement between Esso and its franchise-holders did not make it clear whether Esso or the individuals should foot the bill for the gifts. The dispute centres on a paragraph of the licence agreement that obliged licensees to "join in" any promotional schemes Esso chose to run. Esso claims this also obliged the individual to pay for the gifts. Many of the franchise-holders refused to pay and after passing through mercantile and appeal courts, the issue has ended up in the Commercial Court.

When the group litigation order was made in the summer of 2001, Mr Justice Moore-Bick took the view that the issues raised went much further than the Tiger Token scheme alone, and that the dispute highlighted other areas that needed addressing. The most prominent is the issue of so-called "hot fuels".

Because petroleum volumes change with heat, the temperature at which they are delivered to the petrol stations can make a critical difference to the quantity actually received by the forecourt managers. Arguments over delivery temperatures and the apparent lack of a rigid system have been the cause of major rifts between all the big oil companies and the people who run their petrol chains.

The case is expected to last for at least six weeks, though it is understood that Esso continues to seek out-of-court settlements with the licensees.