In Granville Technology Group Ltd v Chunghwa Picture Tubes Ltd & Ors [2024] EWHC 13 (Comm) Pelling J deals with a follow-on damages claim in the context of the LCD cartel (an EC decision under Article 101 TFEU). In E&W these are characterised as tortious claims for breach of statutory duty, as they are in most EU jurisdictions, too.
The applicable law issues were dealt with under residual English law pre Rome II. The events with which this claim is concerned occurred before 11 January 2009, when Rome II came into effect. For the Brussels Ia and Rome II issues see my paper here. However the judge’s discussion of elements displacing the English law’s presumption of locus damni have important comparative context to EU law as I discuss below.
Claimants were English registered companies carrying on business in England and Wales in the manufacture and/or sale primarily of desktop PCs sold with monitors and notebooks. They are now all in liquidation. The judge handily recalls the principles [18]] for those not familiar with follow-on actions
A claimant alleging a competition law infringement can bring a claim before the English courts either as a ‘standalone’ claim (in which case it must establish both the breach of competition law alleged and the loss which it alleges was caused thereby); or (as in this case) as a ‘follow-on’ claim, where the claimants rely on the findings of the relevant competition authority (in this case the Commission) to establish breach. The “follow on” option is available because in law the High Court is bound by infringement decisions of the Commission, such as the Decision. However the claimant in a follow on claim must prove the loss it alleges it has been caused by the infringement relied on…
Damage of course is an issue and [27] in this case as in many similar ones, “complex economic evidence involving statistical modelling at various levels of complexity and sophistication was deployed by both parties but in particular by the defendant in an attempt to identify what part of the price increases in LCD panels over the Relevant Period was attributable to the cartel’s infringing activity.”
[34] Applicable issues of law that arise against some of the defendants, are:
i) Whether any losses that arise out of purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market outside the EEA fall outside the territorial scope of EU law and are therefore unrecoverable;
ii) whether the Claim in so far as it arises out of purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market in South Korea, Taiwan, China and Japan is governed by the laws of these countries; and if so whether the claims by the claimant to recover damages for breach of TFEU, Article 101 and/or AEEA, Article 53 is a cause of action within the laws of those states. The claimants have not attempted to prove the relevant laws of any of those states and rely on the presumption (“Presumption of Similarity”) that those laws are materially the same as English law unless the contrary is pleaded and proved. The defendants case is that the Presumption of Similarity is of no application applying the decision of the Supreme Court in Brownlie v FS Cairo (Nile Plaza) LLC [2021] UKSC 45 per Lord Leggatt at [119] – [124]. If the defendants are correct on this issue, they maintain the claim fails to the extent that it is based on purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market in South Korea, Taiwan and China and Japan. The defendants estimate this at about 78% of the whole. There is a dispute as to the correct percentage in the event the defendants succeeds on the principle In any event, the claimants submit that if I agree with the defendants on the issue of principle I should adjourn determination of the issue and give the claimants the opportunity to plead and prove the relevant foreign law. I return to that issue below; and
iii) Whether the claims against the third and fourth defendants are statute barred under the Limitation Act 1980 (“LA”). The claimants rely on LA, s.32 and maintain that they could not have with reasonable diligence discovered the relevant facts before publication of the Decision, particularly given that all the claimants are in liquidation and have acted at all material times by their liquidators and their support staff.
The foreign law issue is dealt with [292] ff. The relevant agreements, decisions and concerted practices all occurred outside the EU in Taiwan, Japan and South Korea, as did the overcharge for the LCD panels incorporated into the goods which the claimants ultimately bought: this occurred when the LCD panels were first sold by the cartelists including the defendants to the manufacturers of screens that were then incorporated into monitors and notebooks. Loss to the claimants loss (subject to downstream pass on) happened in E&W, when they purchased monitors or notebooks with LCD screens incorporated into them or the parts necessary to enable them to assemble notebooks. Their losses on reduced sales were also suffered in E&W.
This is where PILA s11 and 12 come in: for their content and implications see my post on UKSC Zubaydah. This is where interesting comparative elements emerge with EU law.
[297]
Once the different elements of the events and the country in which they occurred have been identified, the court then has to make a ‘value judgment’ regarding the ‘significance’ of each of those ‘elements’ in relation to the tort in question – see Iiyama (UK) Ltd v Samsung Electronics Co Limited (ibid.) at [48]. In that case, it was conceded that “…in the modern world the place where a cartel agreement happens to be made is of little significance…” Neither party in this case suggests, and in particular the defendants do not suggest, otherwise. I agree. That being so, the primary considerations that remain by a process of elimination are (a) the place or places where the cartel was intended to be implemented; and (b) the place or places where the damage resulting from the infringing activity was suffered.
In my aforementioned paper p.150 I criticise the CJEU’s approach for jurisdictional purposes) in C-352/13 CDC which it repeated in C-27/17 flyLAL. For locus delicti commissi, under Article 101 TFEU (cartels), with reference to CDC, the CJEU opted for courts for the place in which the agreement was definitively concluded: this truly is extraordinary for it allows for forum shopping by the cartel participants, and it is a far cry form the sentiment expressed in current judgment (for applicable law) that the place where a cartel agreement happens to be made is of little significance…. For Article 102 TFEU (abuse of dominant position) the picture is more fuzzy at the CJEU as I discuss in my post on flyLAL. I realise the analysis in current judgment is for applicable law, not jurisdiction and I also realise that on applicable law Rome II’s Article 6 is closer to a forum damni analysis (as befits the general DNA of Rome II) than the CJEU’s locus delicti commissi analysis for jurisdiction in CDC and flyLAL.
Parties still disagree however on where that place is where the cartel was first implemented. Defendants say this was at the time prices first incorporated the Overcharge, which was when LCD panels were sold to original equipment manufacturers in Taiwan, Japan, China and South Korea.
The judge in this context discusses the territorial scope of EU competition law [299] ff:
….if and to the extent that the focus in relation to applicable law should be on the restriction on competition within the internal market, then concluding that EU competition law should not apply to infringing activity that has effect within the EU because the cartelists are based, or conspired, or first gave effect to their conspiracy outside the EU would have a chilling effect on the efficacy of EU competition law as an effective mechanism for protecting and enhancing fair competition for the benefit ultimately of all consumers within the EU.
Enter CJEU Woodpulp, Gencor and Intel. [308] “in my judgment the evidence available establishes that the cartel in issue in these proceedings was a worldwide cartel which was intended to produce and in fact produced substantial indirect effects on the EU internal market.”
[313]
I conclude that the claim is one that comes within the territorial scope of EU competition law Returning to the applicable law issue, these conclusions lead me to the further conclusion that applying PILA, s.11(2)(c), the applicable law is that of England and Wales including the law of the EU that applied at the time of the events giving rise to this claim. I reach that conclusion because the most significant elements of those events were (a) the place or places where the cartel was intended to be implemented, which for the reasons I have identified was materially the territory of the EU including the UK and, therefore, England and Wales ; and / or (b) the place or places where the damage resulting from the infringing activity was suffered which again materially was England and Wales. As the Commission makes clear in Article 331 of the Decision, while the effects of the cartel were experienced elsewhere as well that is entirely immaterial for present purposes, as is the fact that a number of sales were first put on the market outside the EU. That is so because the Commission has decided and the Decision establishes that the indirect sales of panels were targeted at the EU (including England and Wales) and were intended to and in the event had substantial effects on competition in the EU (including England and Wales).
Reference here is also made to Deutsche Bahn Ag & Ors v Mastercard Incorporated & Ors [2018] EWHC 412 (Ch) in which both a pre and a post Rome II scenario was at issue.
Obiter, [314]
…had I concluded that the general rule was that the applicable law in relation to sales that were first put on the market outside the EU was the law of the state where that had occurred, I would nonetheless have concluded that the significance of the factors referred to above which connect the tort to the EU and, therefore, England and Wales, so outweighed the factors connecting the tort to the states where LCD screens were first put on the market outside the EU during the Relevant Period so as to make it substantially more appropriate for the applicable law to be the law of England and Wales incorporating that of the EU as relevant. EU competition law is the most appropriate law to apply to a tort concerned with a breach of TFEU, Article 101 to the extent that it has effect within the EU because it comes within the territorial scope of EU competition law and English law is the most appropriate intra EU system of law to apply by reason of the effect on the market so far as the claimants are concerned being in England and Wales, the claimed losses having been suffered in England and Wales and the claimants having carried on business in England and Wales during the whole of the relevant period until they were each placed in administration. The geographical place of incorporation of each claimant is a minor consideration although the first and second claimants were registered in England and Wales and although OTC was registered in Jersey, it nonetheless carried on business in England and Wales and claims in respect of losses suffered there. To my mind it is also at least realistically arguable, given the cost and inconvenience of having to prove separately the competition law of each state where LCD screens were first put on the market outside the EU during the Relevant Period, that to decide otherwise would undermine the direct effect and/or the effectiveness principles.
Of note. Geert.
EU private international law, 4th ed. 2024, [2.447] ff, 4.53 ff.
gavc law - geert van calster 