Yesterday that battle was resurrected when Jean-Marie Messier, the mercurial chairman of Vivendi Universal, launched a defamation suit against Klaus Esser, the former Mannesmann head.Before Vodafone launched its bid for Mannesmann in late 1999, Mr Esser had tried to forge a link-up with Vivendi. Those talks ended abruptly in early 2000, when Mr Messier agreed an internet services pact with Vodafone, removing Mannesmann's last defence against the UK company. Days later Vodafone won its £110bn bid.The defamation action, which may be waged in the High Court, followed remarks by Mr Esser reported in the Financial Times yesterday. He said: "I had been discussing things with Mr Messier that can only be discussed in climate of absolute trust. For him to talk with Vodafone at the same time was a highly indecent and dishonourable thing to do."In launching the suit, the French company said: "Vivendi Universal indicated that following Mr Klaus Esser's declarations, Jean-Marie Messier has decided to take legal action for defamation against Mr Klaus Esser."Libel suits among corporate chiefs are rare.

When they have flared up, notably in the battle for control of Harrods between Tiny Rowland and Mohamed Al Fayed, the process has been expensive, entertaining and unpredictable.Commenting on where this latest Franco-Teutonic struggle would take place, a lawyer with a leading libel firm observed: "The most natural place to sue would be where the story was primarily published, which in the FT's case is the UK." He estimated the cost of a "tooth and nail fight" at upwards of £1m. British courts traditionally award higher damages than courts on the Continent.Mr Esser's comments referred to remarks in a book written by Mr Messier last year that blamed the German executive for torpedoing a Mannesmann-Vivendi deal. A 59m German mark (£19m) payment to Mr Esser from Mannesmann following the merger with Vodafone is meanwhile being investigated by German prosecutors.. The power industry emerged victorious yesterday from a five-year battle with its own employees when the House of Lords ruled that the companies did not have to inject £1.5bn into their pension funds. The power industry emerged victorious yesterday from a five-year battle with its own employees when the House of Lords ruled that the companies did not have to inject £1.5bn into their pension funds. In a surprise verdict overturning the judgement of two lower courts, the Lords ruled that companies including National Grid and National Power (now International Power) had appropriately used surpluses from the industry-wide pension fund.

The five Law Lords unanimously ruled that the companies did not have to return the money to the Electricity Supply Pension Scheme (ESPS), which has 200,000 members and is a defined benefit scheme that guarantees its members a certain payout on retirement.The case arose because the ESPS made surpluses in 1992 and 1995, totalling £1.5bn. The 21 companies in ESPS used two-thirds of this to fund enhanced redundancy benefits paid to scheme members who lost their jobs. The remaining one-third was used to fund other benefits for members of the scheme, like lump-sum payments to certain members.At issue was whether the second use was appropriate. Yesterday's decision came as a nasty surprise to pensioners who opposed the companies, as both the Court of Appeal and the High Court had ruled for them.Dave Laws, one of the pensioners who brought the case, said: "There is no justice in this decision. Many of our pensioners are on income support." Mr Laws said an appeal to the European Court of Human Rights was a "real possibility".However, the utility companies said they were confident the battle was over. Roger Urwin, chief executive of National Grid, said: "It is important to us that the House of Lords has now confirmed that we have at all times acted in accordance with both the letter and the spirit of the rules of our pension fund."In 1999, the Court of Appeal had raised the possibility that the companies might be able to use the surplus in the way they did if they enacted a retrospective deed of amendment.