Mayer Brown and Slaughter and May have been shipped in to advise on legal proceedings brought by P&O Ferries against the U.K. government, over a £33 million payment to train operator Eurotunnel.

The action relates to the Department for Transport (DfT) having provided contracts worth £100 million to three ferry operators – Brittany Ferries, DFDS and Seaborne Freight – in December 2018, with the selected companies tasked with provide additional freight capacity on ferry services between the U.K. and mainland Europe in the case of a no-deal Brexit.

Last month, the DfT settled with Eurotunnel, which claimed it had never been considered for a contract despite having previously offered channel ferry services, for £33 million. In return, Eurotunnel pledged to improve its terminal.

P&O claims the use of taxpayers money paid to a rival and to be used for improving terminal services puts the ferry operator "at a competitive disadvantage".

Slaughters acted for the DfT in February, when it provided advice on how commercial and legal risks are dealt with through the negotiated contracts and ran background checks on Seaborne and its management, which were later discovered never to have run a ferry service. Their contract was cancelled.

Slaughters' dispute resolution partner Richard Jeens is leading for the Magic Circle firm on the P&O action. A person with knowledge of the matter said Slaughters will continue to support the government and the DfT in its latest proceedings.

Mayer Brown's team is being led by partners Julian Ellison and Alistair Graham, and the firm has also instructed Michael Bowsher QC and Brendan McGurk from Monckton Chambers.

P&O said in a statement: "We have repeatedly made clear during decades of providing vital transport services between Britain and the continent that we are happy to compete with other providers on a level playing field. We also fully accept that it was prudent of the government to make contingency plans to protect international supply chains in the event of a hard Brexit.

"However, we do not believe that the payment of £33 million of public money to Eurotunnel to settle its legal challenge to these plans is fair or reasonable. It is explicitly designed to be invested in the tunnel's infrastructure and if left unchallenged would put our services at a competitive disadvantage."

A government spokesperson said in a statement: "This cross-government decision helped protect vital freight capacity for medical supplies to enter the country, in the event the UK left the EU without a deal.

"We are confident we acted appropriately in reaching an agreement with Eurotunnel."

Slaughters declined to comment.