Court strikes out telecoms reseller's declaration-only claim in Yello v Onecom

The Circuit Commercial Court has struck out a claim brought by a telecommunications reseller seeking declarations about the meaning of its supply contract, finding the strategy of pursuing declaratory relief as a forerunner to a separate damages claim amounted to an abuse of process.

In Yello Voice Solutions Limited v Onecom Partners Limited [2026] EWHC 1856 (Comm), HHJ Russen KC, sitting as a judge of the High Court, struck out Yello's claim under CPR 3.4(2)(a) and (b), while also finding, had the claim survived, that most of Yello's case would have failed on its merits in any event.

Yello had been a reseller partner of Onecom, buying telecommunications services for onward sale to its own customers under a Master Services Agreement terminated by Onecom in February 2025. Rather than bringing a conventional claim for damages, Yello sought only declarations that four pricing variations made by Onecom between 2023 and 2024 were invalid, expressly reserving its right to bring a subsequent claim for restitution or damages once those declarations were obtained. The claim rested substantially on a series of implied terms Yello contended governed how Onecom could vary charges under the agreement, including obligations of good faith and constraints derived from the Braganza line of authority on contractual discretions.

The judge held that this two-stage approach offended the well-established principle, traced through Henderson v Henderson (1843) 3 Hare 100 and more recent authorities including Aldi Stores v WSP Group plc [2007] EWCA Civ 1260 and Zavarco plc v Nasir [2025] UKSC 5, that a litigant must ordinarily bring forward the whole of its case at once rather than litigating it in stages. Drawing on the discretionary nature of declaratory relief as explained in Rolls-Royce plc v Unite the Union [2009] EWCA Civ 387 and applied in Uzbekov v Revolut Ltd [2024] EWHC 98 (KB), the judge found the declarations sought served no useful purpose independent of the damages claim Yello intended to bring later, since the parties had no ongoing relationship and the relief would not resolve anything finally. He further held the claim engaged the Jameel jurisdiction, given the modest value of Yello's admitted overcharging, estimated by Onecom at under £19,000, when weighed against the disproportionate cost of the litigation, with the parties' combined costs on the strike out application alone exceeding £455,000.

The judgement was also critical of Yello's approach as depriving the court of its ordinary case management powers by splitting what should have been a single claim into two proceedings, contrary to the "Aldi principle" requiring early identification of claims. While declining to attach weight to evidence that the litigation was being funded and directed by a third party connected to a rival business dispute with Onecom, finding that party's motives legally irrelevant, the judge accepted the broader submission that Yello's strategy served no legitimate procedural purpose.

Although the claim was struck out on that basis, the judge went on, at Onecom's invitation, to consider the underlying contractual arguments. He rejected nearly all of Yello's proposed implied terms as failing the stringent necessity test set out in Yoo Design Services Ltd v Iliv Realty Pte Ltd [2021] EWCA Civ 560, including a contention that variation notices had to display a specific document version number, finding such a requirement commercially absurd and unsupported by the contract's express wording. Only Yello's challenge to one variation, concerning whether Onecom's own profit margin had remained substantially unchanged following a supplier price increase, was found to raise a triable issue, though the judge indicated this alone would not have justified the claim proceeding to trial in its existing form.