Ocado Falling-Out Prompts Court Battle Over Destroyed Messages

(Bloomberg) -- Amidst an extraordinary legal battle between two former friends and co-founders of the U.K.’s largest online-only grocer, a lawyer is now being accused of ordering the destruction of secret messages.

Ocado Group Plc has thrust Raymond McKeeve, partner at Jones Day law firm, into the center of the fight, accusing him of contempt of court for instructing a computer technician to “burn” messages on a private app. Ocado says these messages could have been used in evidence as part of a dispute with its co-founder Jonathan Faiman and his new rival firm, Today Development Partners.

Ocado, whose retail partners include Kroger Co. and Marks & Spencer Group Plc, is suing Faiman and TDP for “conspiracy to misappropriate and misuse Ocado’s highly sensitive business confidential information” for their benefit. TDP contests the claims and made a counterclaim for damages, blaming Ocado for the loss of its partnership with Waitrose supermarkets.

On Wednesday, Ocado asked a High Court judge for the case to go to trial. A ruling is yet to be made.

Ocado, McKeeve and TDP didn’t immediately respond to requests for comment.

Friends Turned Rivals

The fraught legal battle is a far cry from Faiman and Ocado Chief Executive Officer Tim Steiner’s once close friendship. The pair grew up together in London and even worked together as bond traders for Goldman Sachs.

It was there that they met Jason Gissing, with whom they founded Ocado in 2000. Faiman became its chief technology officer and then its chief operating officer before leaving in 2010.

He kept a low profile for the next nine years, but popped up again in the world of retail this year with his new company, TDP. Faiman poached Jonathan Hillary, a senior employee at Ocado, as its chief operating officer, and Ocado alleges in a separate lawsuit that they both unlawfully obtained confidential information to help the business in a separate lawsuit.

“The facts of this case are truly extraordinary, perhaps unprecedented,” David Cavender, Ocado’s lawyer, told a London High Court on Wednesday.

‘Burn It’

McKeeve, who is a personal friend and lawyer for Faiman and TDP, gave instructions to TDP employee Martin Henery to burn the messages after learning of a court search order that had been granted to Ocado, Cavender said. McKeeve followed this up with a phone call to confirm that Henery had deleted several email accounts and the private messaging system, Cavender said.

The email accounts were digitally recovered, but the messaging system was irretrievably destroyed, along with all the messages it stored. Ocado says this was done in order to undermine and subvert the purpose of the search order and accuses McKeeve of interference with the administration of justice.

McKeeve didn’t interfere with the justice system or have any intention of doing so, his lawyer Robert Weekes told the court. McKeeve merely told Henery to destroy the messages to avoid his wife, a member of the European Parliament, being dragged into the dispute with Ocado, he said.

“Mr. McKeeve’s instruction to Mr. Henery was a knee-jerk reaction and a grave error of judgment, for which he has sincerely apologized,” he said. The message app only had a basic messaging facility, was rarely used and messages exchanged were administrative in nature, he said.

To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Eric Pfanner

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