A £1m penalty imposed on multi-sector recruiter Eden Brown for its part in a cartel of construction industry recruitment agencies was “plucked out of the air” and “arbitrary”, a court has heard.

Paul Harris, counsel for Eden Brown, told a Competition Appeal Tribunal in London yesterday that the figure “does not bear any reference to the circumstances of my client”.

Harris argued that when calculated as a percentage of net fee income Eden Brown’s penalty at 10.9% was the highest of all those in the cartel.

Eden Brown is one of three recruiters who are appealing against the size of fines imposed on them by the Office of Fair Trading (OFT) for their part in the cartel, which fixed prices in 2004-05.

The other two recruiters appealing at the Tribunal are Hays and CDI AndersElite, who received penalties of £30.4m and £7.6m respectively. All three argue that the fines are excessive and disproportionate.

Later, Ronit Kreisberger, counsel for CDI AndersElite told the Tribunal that it was “discriminatory and disproportionate” for the OFT to calculate its penalty on the same basis as Hays.

She told the court: “CDI is not in the same position as Hays because it is a foreign company based in the US, with only 18% of CDI’s worldwide turnover coming from the UK compared with 57% for Hays (2008).”

A total of six firms, who participated in the cartel during 2004-05 were fined and one received immunity for whistle blowing. A decision from the Tribunal is expected later this year, according to Hays’ advisers.