Rather like I note in my report on Highbury Poultry Farm, Secretary of State for Health & Ors v Servier Laboratories Ltd & Ors  UKSC is another example of why the UK Supreme Court and counsel to it will be missed post Brexit.
The case in essence queries whether a CJEU annulment (in General Court: Case T-691/14, currently subject to appeal with the CJEU) of a finding by the European Commission that companies breached Article 101 and 102 TFEU’s ban on anti-competitive practices, is binding in national proceedings that determine issues of causation, remoteness and mitigation of loss. The answer, in short: no, it does not.
The case essentially revolves around the difficulty of applying common law concepts of authority and precedent to the CJEU’s more civil law approach to court decisions. For those with an interest in comparative litigation therefore, it is a case of note.
The essence in the national proceedings is whether Claimants [who argue that Servier’s breaches of EU and UK competition law led to a delay in generic Perindopril entering the UK market, resulting in higher prices of Perindopril and financial loss to the NHS) failed to mitigate the loss they claim to have suffered as a result of Servier’s (the manufacturer of the drug) infringement of the competition rules. The Court of Appeal’s judgment is best read for the facts.
In T-691/14 Servier SAS v European Commission, the General Court of the EU had annulled only part of the European Commission’s decision by which it was found that the Appellants had infringed Article 102 TFEU. In the present proceedings, Servier seek to rely on a number of factual findings made by the
GCEU in the course of its judgment and argue that the English courts are bound by those findings. The High Court and the Court of Appeal have held that the propositions on which the Appellants seek to rely are not res judicata.
Core CJEU authority discussed is Joined Cases C-442/03P and C-471/03P P&O European Ferries (Vizcaya) SA and Diputación Foral de Vizcaya v Commission.
Lord Lloyd-Jones reaches the crux of his reasoning, on the basis of CJEU authority, at 39:
The principle of absolute res judicata gives dispositive effect to the judgment itself. It is the usual practice of EU courts to express the outcome of the action in a brief final paragraph of the judgment referred to as the operative part. While this will have binding effect, it will be necessary to look within the judgment beyond the operative part in order to ascertain its basis, referred to as the ratio decidendi. (EU law has no system of stare decisis or binding precedent comparable to that in common law jurisdictions and this EU concept of ratio decidendi is, once again, distinct from the concept bearing the same name in the common law.) It will be essential to look beyond the operative part in this way in order to identify the reason for the decision and in order that the institution whose act has been annulled should know what steps it must take to remedy the situation. In a case where the principle of absolute res judicata applies, it will extend to findings that are the necessary support for the operative part of the annulling judgment.
The GC’s findings were based on a limited ground only, relating to too narrow a market definition under A102 TFEU. As presently constituted, the claim in the national proceedings is a claim for breach of statutory duty founded on alleged infringements of article 101 TFEU. No question arises in the proceedings before the national court as to the relevant product market for the purposes of A102 or the applicability of A102.
The national proceedings therefore concern causation, remoteness and mitigation of loss in the arena of article 101 TFEU. The narrow res judicata window, it was held, clearly does not apply to them and that is acte clair which needs no referral to Luxembourg.