Granville Expertise. Relevant legislation points in follow-on cartel damages declare provoke engagement with territorial scope of EU competitors legislation, its effet utile (and contrasts with CJEU in CDC, flyLAL). – Cyber Tech

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 underneath Article 101 TFEU). In E&W these are characterised as tortious claims for breach of statutory obligation, as they’re in most EU jurisdictions, too.

The relevant legislation points had been handled underneath 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. Nevertheless 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 corporations 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 recollects the rules [18]] for these not acquainted with follow-on actions

A claimant alleging a contest legislation infringement can deliver a declare earlier than the English courts both as a ‘standalone’ declare (during 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 accessible as a result of  in legislation the Excessive Courtroom is sure by infringement selections of the Fee, such because the Determination. Nevertheless the claimant in a comply with on declare should show the loss it alleges it has been attributable to the infringement relied on…

Harm after all is a matter and [27] on this case as in lots of related ones, “advanced financial proof involving statistical modelling at varied ranges of complexity and class was deployed by each events however specifically by the defendant in an try to establish what a part of the worth 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 among 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 nations; and if that’s the case whether or not the claims by the claimant to get better damages for breach of TFEU, Article 101 and/or AEEA, Article 53 is a reason behind motion throughout 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 utility 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 appropriate on this problem, they preserve the declare fails to the extent that it’s based mostly 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 proper 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 difficulty of precept I ought to adjourn dedication of the difficulty and provides the claimants the chance to plead and show the related international legislation. I return to that problem under; and

iii) Whether or not the claims in opposition to the third and fourth defendants are statute barred underneath the Limitation Act 1980 (“LA”). The claimants depend on LA, s.32 and preserve that they may not have with cheap diligence found the related details earlier than publication of the Determination, significantly given that every one the claimants are in liquidation and have acted in any respect materials instances by their liquidators and their assist workers.

The international legislation problem is handled [292] ff. The related agreements, selections  and concerted practices all occurred exterior the EU in Taiwan, Japan and South Korea, as did the overcharge for the LCD panels integrated 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 integrated into screens and notebooks. Loss to the claimants loss (topic to downstream move on) occurred in E&W, once they bought screens or notebooks with LCD screens integrated into them or the components essential to allow them to assemble notebooks. Their losses on diminished gross sales had been additionally suffered in E&W.

That is the place PILA s11 and 12 are available in: for his or her content material and implications see my put up on UKSC Zubaydah. That is the place fascinating comparative components emerge with EU legislation.

[297]

As soon as the completely different components of the occasions and the nation during 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 celebration on this case suggests, and specifically the defendants don’t recommend, in any other case. I agree. That being so, the first concerns that stay by a technique 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, underneath Article 101 TFEU (cartels), on the subject of CDC, the CJEU opted for courts for the place during which the settlement was definitively concluded: this actually is extraordinary for it permits for discussion board procuring by the cartel individuals, and it’s a far cry type 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 put up 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 final DNA of Rome II) than the CJEU’s locus delicti commissi evaluation for jurisdiction in CDC and flyLAL.

Events nonetheless disagree nonetheless on the place that place is the place the cartel was first applied. Defendants say this was on the time costs first integrated the Overcharge, which was when LCD panels had been bought to authentic gear 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 target in relation to relevant legislation needs to be on the restriction on competitors throughout the inner market, then concluding that EU competitors legislation shouldn’t apply to infringing exercise that has impact throughout the EU as a result of the cartelists are based mostly, 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 honest competitors for the profit in the end of all customers throughout the EU.

Enter CJEU Woodpulp, Gencor and Intel. [308] “in my judgment the proof out there establishes that the cartel in problem in these proceedings was a worldwide cartel which was supposed to provide and actually produced substantial oblique results on the EU inner market.”

[313]

I conclude that the declare is one which comes throughout the territorial scope of EU competitors legislation Returning to the relevant legislation problem, 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 essentially 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 consequences of the cartel had been skilled elsewhere as nicely that’s fully immaterial for current functions, as is the truth that a variety of 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 also be made to Deutsche Bahn Ag & Ors v Mastercard Included & Ors [2018] EWHC 412 (Ch) during which each a pre and a put up Rome II state of affairs was at problem.

Obiter, [314]

…had I concluded that the final 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 might nonetheless have concluded that the importance of the components referred to above which join the tort to the EU and, subsequently, England and Wales, so outweighed the components connecting the tort to the states the place LCD screens had been first put available on the market exterior the EU in the course of the Related Interval in order to make it considerably extra applicable for the relevant legislation to be the legislation of England and Wales incorporating that of the EU as related. EU competitors legislation is essentially the most applicable legislation to use to a tort involved with a breach of TFEU, Article 101 to the extent that it has impact throughout the EU as a result of it comes throughout the territorial scope of EU competitors legislation and English legislation is essentially the most applicable intra EU system of legislation to use by cause 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 no less than realistically controversial, 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 in the course of the Related Interval, that to resolve in any other case would undermine the direct impact and/or the effectiveness rules.

Of word. Geert.

EU personal worldwide legislation, 4th ed. 2024, [2.447] ff, 4.53 ff.