Harrods wins right to sue US paper over Enron 'joke'

Al Fayed: behind spoof plan to “float” Harrods

Harrods has been given the go-ahead to pursue a High Court defamation claim against the publisher of The Wall Street Journal after an April Fool’s joke turned sour.

Harrods, which for April Fool’s Day 2002 issued a press release claiming that chairman Mohammed Al Fayed planned to float the store with a “first-come first-served share option offer”, is suing Dow Jones after the Journal published an article in response headlined “The Enron of Britain?”

Mr Justice Eady rejected moves by the publisher of the Journal to have the proceedings stayed on the grounds that the UK is the wrong jurisdiction in which to bring a claim.

The judge granted permission to Harrods to bring the claim, which he said the publishers are expected to defend on the basis that their article was a humorous response to the initial joke by Harrods.

The judge said that on 31 March 2002, Harrods issued a press release under the heading “Al Fayed Reveals Plan to ‘Float’ Harrods”, indicating that an important announcement would be made the following day, only available until noon on the chairman’s personal website, www.alfayed.com.

Anyone interested was invited to contact Loof Lirpa at Harrods.

“It will be noted,” said the judge “that Loof Lirpa is simply April Fool backwards.” He said that the announcement attracted a good deal of media attention, and that an article appeared in the Deals & Deal Makers column of 5 April Wall Street Journal headlined “The Enron of Britain?” which included the words: “If Harrods, the British luxury retailer, ever goes public, investors would be wise to question its every disclosure.”

He said that Harrods sent a letter of complaint on 10 April, claiming it was “quite scandalous” for it to be equated with Enron and requiring the publication of an immediate apology as well as substantial damages to be paid to charity. It launched legal proceedings last May.

The judge said the particulars of claim attribute to the disputed words a “natural and ordinary meaning” that every corporate disclosure of Harrods should be distrusted. They also claimed there was an alternative innuendo meaning, he said, to the effect that “it is reasonably suspected that if the claimant were to become a public company it would prove itself to be Britain’s Enron by deceiving and defrauding its investors on a huge scale”.

The judge added that, if it becomes necessary to do so, the defendant would defend the allegations “as not being defamatory and as representing a humorous response to Mr Al Fayed’s April Fool’s Day joke”.

Ruling that the proceedings were “most conveniently” to be dealt with in an English, rather than an American, court, he added that he encouraged the parties to arrive at a “sensible compromise”.

“My words may fall on stony ground, but that is no reason for not making an attempt,” he said.

By Roger Pearson

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