1) Iiyama (UK) Ltd and Others v 1) Samsung Electronics Company Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 29 July 2016 |
| Neutral Citation | [2016] EWHC 1980 (Ch) |
| Court | Chancery Division |
| Date | 29 July 2016 |
| Docket Number | Case No: HC-2014-001980 |
[2016] EWHC 1980 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice,
Rolls Building, Fetter Lane,
London, EC4A 1NL
Mr Justice Morgan
Case No: HC-2014-001980
Neil Calver QC and Colin West (instructed by Stewarts Law LLP) for the Claimants
James Flynn QC, Paul Stanley QC and Robert O'Donoghue (instructed by Covington & Burling LLP) for the First to Fourth Defendants
Daniel Piccinin (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Fifth Defendant
Hearing dates: 25 th and 26 th May 2016
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
In these proceedings, the Claimants claim damages for alleged infringements of Article 101 of the Treaty on the Functioning of the European Union ("TFEU") and/or of Article 53 of the Agreement on the European Economic Area ("the EEA") and/or of Chapter I of the Competition Act 1998.
Amongst other things, Article 101 of the TFEU prohibits price-fixing cartels "which have as their object or effect the prevention, restriction or distortion of competition within the internal market". Article 53 of the Agreement on the EEA similarly prohibits price-fixing cartels in so far as they affect competition in the territory covered by the Agreement on the EEA and trade between the Contracting Parties to that Agreement. Chapter I of the Competition Act 1998 is in similar terms to Article 101 of TFEU, save that it is expressed by reference to trade and competition within the United Kingdom.
The matters complained of by the Claimants are the subject of a Decision of the European Commission dated 8 December 2010, having the reference COMP/39.309 – LCD – Liquid Crystal Displays. In this judgment, I will refer to Liquid Crystal Display panels as "LCDs". In summary, the Commission found that a number of persons had infringed Article 101 of TFEU and Article 53 of the Agreement on the EEA. The Commission held that the relevant persons had entered into a world-wide price fixing cartel in relation to LCDs and had implemented that cartel within the EU and within the EEA, that is to say, within the territorial scope of Article 101 of TFEU and of Article 53 of the Agreement on the EEA. The First and Fifth Defendants were addressees of this decision. The present claim against the Defendants is pleaded as a follow on claim, alternatively, as a stand-alone claim for damages for infringement of these Articles.
As will be seen, an issue which I will need to consider relates to the territorial scope of these provisions for the purposes of the claims made in these proceedings. It is common ground that the general principles to be applied to Article 101 of the TFEU and to Article 53 of the Agreement on the EEA are the same and that the references in the claim to the Competition Act 1998 do not add anything which needs to be separately considered. Accordingly, when I consider the territorial scope of these Articles, I will refer to Article 101 alone. Since I will refer to Article 101 alone, I will also refer only to the EU and not also to the EEA. However, it is to be understood that what is said in relation to Article 101 and the EU applies equally to Article 53 and the EEA.
The principal issues which I will need to address in this judgment are the following:
(1) is the claim against any of the Defendants within the territorial scope of Article 101?
(2) if the claim against any of the Defendants is within the territorial scope of Article 101, has the loss claimed by any of the Claimants been caused by an infringement of Article 101, having regard to that territorial scope?
(3) do any of the Claimants have a claim against any of D2 to D4, companies incorporated in England and Wales and therefore within the jurisdiction of this court?
(4) does the court have jurisdiction over D1 and D5, companies incorporated in South Korea?
(5) should the court exercise jurisdiction over D1 and D5?
The parties
The Claimants are companies within the iiyama group of companies. The iiyama group is involved in the manufacture and distribution of iiyama brand products, including LCD televisions and LCD computer monitors.
The First Claimant ("C1") is incorporated in England and Wales. The Second Claimant ("C2") is incorporated in Germany. The Third Claimant ("C3") is incorporated in the Netherlands. The Fourth Claimant ("C4") is incorporated in Poland. The Fifth Claimant ("C5") is incorporated in France. C1 to C5 are the main European subsidiaries of the iiyama Group. The Sixth Claimant ("C6") is incorporated in Japan. C6 was not involved in the matters the subject of the claim until 1 May 2006. Before that date, C6's role was performed by iiyama Corporation ("Corporation"), another Japanese company. Corporation is not a party to these proceedings. Although the relationship between Corporation and C6 is somewhat confusingly described in the pleadings and in the skeleton arguments, the Claimants have now confirmed that no claim is pursued in these proceedings for any losses allegedly suffered by Corporation.
The First Defendant ("D1") is incorporated in South Korea and is the parent company of the Second, Third and Fourth Defendants ("D2", "D3" and "D4", respectively). D2, D3 and D4 are incorporated in England and Wales and are wholly owned subsidiaries of D1.
The Fifth Defendant ("D5") is incorporated in South Korea.
The procedural history
The Claim Form in these proceedings was issued on 19 December 2014. The Particulars of Claim are dated 14 April 2015. On 17 April 2015, the Claim Form and the Particulars of Claim were served on D2, D3 and D4 within the jurisdiction.
On 11 May 2015, the Claimants applied for permission to serve the Claim Form and the Particulars of Claim on D1 and D5 out of the jurisdiction. That application was supported by two witness statements both dated 11 May 2015 from the Claimants' solicitor, Mr Campbell. The application was placed before Master Price for consideration on the papers and, on 13 May 2015, the Master granted the Claimants permission to serve D1 and D5 out of the jurisdiction and extended the time for service on them to 19 October 2015. The proceedings were then served on D1 and D5.
On 12 June 2015, D2 to D4 served their Defence to the claim.
On 22 September 2015, D1 applied for an order declaring that the court had no jurisdiction in relation to the claim against it or that the court should not exercise any such jurisdiction against it and for the Claim Form and the Order of 13 May 2015 to be set aside as against it. In the application notice, D1 contended that the claim against it did not fall within any relevant gateway for the court's jurisdiction and that permission to serve out on it should not have been granted because the courts in England and Wales were not the appropriate forum for the claim.
Also on 22 September 2015, D2 to D4 applied for orders that the Claim Form and Particulars of Claim be struck out as against them pursuant to CPR 3.4(2)(a) alternatively that they be granted summary judgment pursuant to CPR 24.2(a)(i).
On 2 October 2015, D5 made a similar application to that made by D1 on 22 September 2015. D5 has also raised the contention that the order of 13 May 2015 should be set aside on the ground that there had been material non-disclosure by the Claimants on their ex parte application to the Master for permission to serve out of the jurisdiction.
On 8 February 2016, the Claimants served their Reply to the Defence of D2 to D4.
On 4 May 2016, the Claimants applied for permission to amend the Particulars of Claim in accordance with a draft Amended Particulars of Claim.
The Commission Decision
The Commission Decision of 8 December 2010 is a lengthy document. The Claimants are in possession of a redacted version of this document. The redactions were made on the grounds of confidentiality. The document starts with a lengthy section containing many paragraphs of recitals, followed by the operative parts of the decision which are contained in four Articles.
By Article 1 of the decision, it was determined that a number of named persons, including D1 and D5, had infringed Article 101 of TFEU and Article 53 of the Agreement on the EEA by participating in a single and continuous agreement and concerted practice in the sector of LCDs for TV, notebook and monitor application. In the case of both D1 and D5, the period of infringement was stated to be from 5 October 2001 to 1 February 2006. By Article 3 of the decision, the undertakings listed in Article 1 were directed immediately to bring to an end the infringement referred to in Article 1, in so far as they had not already done so. Article 4 identified the persons to whom the decision was addressed and these included D1 and D5.
For present purposes it is sufficient to give a highly abbreviated summary of the recitals in the decision. In what follows, numbers in square brackets are the paragraph numbers of the recitals. The decision includes the following findings:
(1) the suppliers of LCDs and their major customers are global actors; LCD panels are sold world-wide and prices are set on a world-wide basis: [48];
(2) from October 2001 to January 2006, LCD panels were sold directly by the addressees of the decision to customers in the EEA (Direct EEA Sales): [49];
(3) a...
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