In Granville Expertise Group Ltd v Chunghwa Image Tubes Ltd & Ors [2024] EWHC 13 (Comm) Pelling J offers with a follow-on damages declare within the context of the LCD cartel (an EC determination beneath Article 101 TFEU). In E&W these are characterised as tortious claims for breach of statutory responsibility, as they’re in most EU jurisdictions, too.
The relevant legislation points had been handled beneath residual English legislation pre Rome II. The occasions with which this declare is anxious occurred earlier than 11 January 2009, when Rome II got here into impact. For the Brussels Ia and Rome II points see my paper right here. Nonetheless the decide’s dialogue of components displacing the English legislation’s presumption of locus damni have vital comparative context to EU legislation as I focus on under.
Claimants had been English registered firms carrying on enterprise in England and Wales within the manufacture and/or sale primarily of desktop PCs bought with screens and notebooks. They’re now all in liquidation. The decide handily remembers the rules [18]] for these not aware of follow-on actions
A claimant alleging a contest legislation infringement can deliver a declare earlier than the English courts both as a ‘standalone’ declare (by which case it should set up each the breach of competitors legislation alleged and the loss which it alleges was precipitated thereby); or (as on this case) as a ‘follow-on’ declare, the place the claimants depend on the findings of the related competitors authority (on this case the Fee) to ascertain breach. The “comply with on” choice is offered as a result of in legislation the Excessive Courtroom is sure by infringement choices of the Fee, such because the Determination. Nonetheless the claimant in a comply with on declare should show the loss it alleges it has been brought on by the infringement relied on…
Injury after all is a matter and [27] on this case as in lots of related ones, “advanced financial proof involving statistical modelling at numerous ranges of complexity and class was deployed by each events however particularly by the defendant in an try and establish what a part of the value will increase in LCD panels over the Related Interval was attributable to the cartel’s infringing exercise.”
[34] Relevant problems with legislation that come up in opposition to a number of the defendants, are:
i) Whether or not any losses that come up out of purchases by the claimants of LCD panels or LCD Merchandise containing LCD panels which had been first put onto the market exterior the EEA fall exterior the territorial scope of EU legislation and are subsequently unrecoverable;
ii) whether or not the Declare in as far as it arises out of purchases by the claimants of LCD panels or LCD Merchandise containing LCD panels which had been first put onto the market in South Korea, Taiwan, China and Japan is ruled by the legal guidelines of those international locations; and if that’s the case whether or not the claims by the claimant to get well damages for breach of TFEU, Article 101 and/or AEEA, Article 53 is a explanation for motion inside the legal guidelines of these states. The claimants haven’t tried to show the related legal guidelines of any of these states and depend on the presumption (“Presumption of Similarity”) that these legal guidelines are materially the identical as English legislation except the opposite is pleaded and proved. The defendants case is that the Presumption of Similarity is of no software making use of the choice of the Supreme Courtroom in Brownlie v FS Cairo (Nile Plaza) LLC [2021] UKSC 45 per Lord Leggatt at [119] – [124]. If the defendants are right on this subject, they keep the declare fails to the extent that it’s primarily based on purchases by the claimants of LCD panels or LCD Merchandise containing LCD panels which had been first put onto the market in South Korea, Taiwan and China and Japan. The defendants estimate this at about 78% of the entire. There’s a dispute as to the right proportion within the occasion the defendants succeeds on the precept In any occasion, the claimants submit that if I agree with the defendants on the problem of precept I ought to adjourn dedication of the problem and provides the claimants the chance to plead and show the related overseas legislation. I return to that subject under; and
iii) Whether or not the claims in opposition to the third and fourth defendants are statute barred beneath the Limitation Act 1980 (“LA”). The claimants depend on LA, s.32 and keep that they might not have with affordable diligence found the related information earlier than publication of the Determination, notably given that each one the claimants are in liquidation and have acted in any respect materials instances by their liquidators and their help workers.
The overseas legislation subject is handled [292] ff. The related agreements, choices and concerted practices all occurred exterior the EU in Taiwan, Japan and South Korea, as did the overcharge for the LCD panels included into the products which the claimants in the end purchased: this occurred when the LCD panels had been first bought by the cartelists together with the defendants to the producers of screens that had been then included into screens and notebooks. Loss to the claimants loss (topic to downstream go on) occurred in E&W, after they bought screens or notebooks with LCD screens included into them or the components essential to allow them to assemble notebooks. Their losses on lowered gross sales had been additionally suffered in E&W.
That is the place PILA s11 and 12 are available: for his or her content material and implications see my submit on UKSC Zubaydah. That is the place attention-grabbing comparative components emerge with EU legislation.
[297]
As soon as the completely different components of the occasions and the nation by which they occurred have been recognized, the court docket then has to make a ‘worth judgment’ relating to the ‘significance’ of every of these ‘components’ in relation to the tort in query – see Iiyama (UK) Ltd v Samsung Electronics Co Restricted (ibid.) at [48]. In that case, it was conceded that “…within the trendy world the place the place a cartel settlement occurs to be made is of little significance…” Neither get together on this case suggests, and particularly the defendants don’t counsel, in any other case. I agree. That being so, the first concerns that stay by a means of elimination are (a) the place or locations the place the cartel was supposed to be applied; and (b) the place or locations the place the harm ensuing from the infringing exercise was suffered.
In my aforementioned paper p.150 I criticise the CJEU’s method for jurisdictional functions) in C-352/13 CDC which it repeated in C-27/17 flyLAL. For locus delicti commissi, beneath Article 101 TFEU (cartels), as regards to CDC, the CJEU opted for courts for the place by which the settlement was definitively concluded: this actually is extraordinary for it permits for discussion board buying by the cartel individuals, and it’s a far cry kind the sentiment expressed in present judgment (for relevant legislation) that the place the place a cartel settlement occurs to be made is of little significance…. For Article 102 TFEU (abuse of dominant place) the image is extra fuzzy on the CJEU as I focus on in my submit on flyLAL. I realise the evaluation in present judgment is for relevant legislation, not jurisdiction and I additionally realise that on relevant legislation Rome II’s Article 6 is nearer to a discussion board damni evaluation (as befits the overall DNA of Rome II) than the CJEU’s locus delicti commissi evaluation for jurisdiction in CDC and flyLAL.
Events nonetheless disagree nevertheless on the place that place is the place the cartel was first applied. Defendants say this was on the time costs first included the Overcharge, which was when LCD panels had been bought to unique tools producers in Taiwan, Japan, China and South Korea.
The decide on this context discusses the territorial scope of EU competitors legislation [299] ff:
….if and to the extent that the main focus in relation to relevant legislation needs to be on the restriction on competitors inside the inside market, then concluding that EU competitors legislation mustn’t apply to infringing exercise that has impact inside the EU as a result of the cartelists are primarily based, or conspired, or first gave impact to their conspiracy exterior the EU would have a chilling impact on the efficacy of EU competitors legislation as an efficient mechanism for shielding and enhancing truthful competitors for the profit in the end of all shoppers inside the EU.
Enter CJEU Woodpulp, Gencor and Intel. [308] “in my judgment the proof accessible establishes that the cartel in subject in these proceedings was a worldwide cartel which was supposed to supply and actually produced substantial oblique results on the EU inside market.”
[313]
I conclude that the declare is one which comes inside the territorial scope of EU competitors legislation Returning to the relevant legislation subject, these conclusions lead me to the additional conclusion that making use of PILA, s.11(2)(c), the relevant legislation is that of England and Wales together with the legislation of the EU that utilized on the time of the occasions giving rise to this declare. I attain that conclusion as a result of probably the most vital components of these occasions had been (a) the place or locations the place the cartel was supposed to be applied, which for the explanations I’ve recognized was materially the territory of the EU together with the UK and, subsequently, England and Wales ; and / or (b) the place or locations the place the harm ensuing from the infringing exercise was suffered which once more materially was England and Wales. Because the Fee makes clear in Article 331 of the Determination, whereas the results of the cartel had been skilled elsewhere as effectively that’s totally immaterial for current functions, as is the truth that quite a few gross sales had been first put available on the market exterior the EU. That’s so as a result of the Fee has determined and the Determination establishes that the oblique gross sales of panels had been focused on the EU (together with England and Wales) and had been supposed to and within the occasion had substantial results on competitors within the EU (together with England and Wales).
Reference right here can be made to Deutsche Bahn Ag & Ors v Mastercard Included & Ors [2018] EWHC 412 (Ch) by which each a pre and a submit Rome II state of affairs was at subject.
Obiter, [314]
…had I concluded that the overall rule was that the relevant legislation in relation to gross sales that had been first put available on the market exterior the EU was the legislation of the state the place that had occurred, I’d nonetheless have concluded that the importance of the elements referred to above which join the tort to the EU and, subsequently, England and Wales, so outweighed the elements connecting the tort to the states the place LCD screens had been first put available on the market exterior the EU through the Related Interval in order to make it considerably extra acceptable for the relevant legislation to be the legislation of England and Wales incorporating that of the EU as related. EU competitors legislation is probably the most acceptable legislation to use to a tort involved with a breach of TFEU, Article 101 to the extent that it has impact inside the EU as a result of it comes inside the territorial scope of EU competitors legislation and English legislation is probably the most acceptable intra EU system of legislation to use by purpose of the impact available on the market as far as the claimants are involved being in England and Wales, the claimed losses having been suffered in England and Wales and the claimants having carried on enterprise in England and Wales throughout the entire of the related interval till they had been every positioned in administration. The geographical place of incorporation of every claimant is a minor consideration though the primary and second claimants had been registered in England and Wales and though OTC was registered in Jersey, it nonetheless carried on enterprise in England and Wales and claims in respect of losses suffered there. To my thoughts it’s also at the least realistically debatable, given the fee and inconvenience of getting to show individually the competitors legislation of every state the place LCD screens had been first put available on the market exterior the EU through the Related Interval, that to resolve in any other case would undermine the direct impact and/or the effectiveness rules.
Of word. Geert.
EU non-public worldwide legislation, 4th ed. 2024, [2.447] ff, 4.53 ff.
