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Oil trader sued for breach of contract after non-compete clause 'broken'

AN Aberdeenshire cooking oil trader is being sued for breach of contract by the Liverpool company that bought his business five years ago.

Olleco agreed a deal in 2009 worth £200,000 to buy out Ian McCallion, a Buckie-based sole trader who supplied cooking oil to fish and chip shops and other retailers, and then sold on their waste oil for conversion into biodiesel.

But now the company - which was called Agri Energy at the time of the deal - is pursuing McCallion for allegedly breaching a five-year non-compete clause.

It won an important early victory at the Court of Session in Edinburgh last week when claims by McCallion that the action should be dismissed on the grounds the clause was too onerous were rejected by Lord Woolman.

The judge said: "In my view, a period of five years is reasonable in the circumstances of this case. The pursuer [Olleco] was entitled to a proper opportunity to develop its customer connection."

He also said he thought it reasonable that the clause was applicable to the whole of Scotland rather than just the north-east.

Olleco previously bought other Scottish players Maclennan Oils and Richardson Oils.

McCallion, who worked for the company for around a year after the deal, is accused in proceedings of criticising Olleco to its customers as he sought to poach their business.

Olleco declined to comment.

McCallion could not be reached in time for publication.

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