1) Iiyama (UK) Ltd v 1) Samsung Electronics Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lord Justice Henderson,Lady Justice Asplin DBE |
| Judgment Date | 16 February 2018 |
| Neutral Citation | [2018] EWCA Civ 220 |
| Docket Number | Case No: A3/2016/2765, A3/2016/4232, A3/2016/4238 & A3/2016/4246 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 February 2018 |
The LCD Appeals
The Crt Appeal
[2018] EWCA Civ 220
THE RIGHT HONOURABLE Lord Justice Longmore
THE RIGHT HONOURABLE Lord Justice Henderson
and
THE RIGHT HONOURABLE Lady Justice Asplin DBE
Case No: A3/2016/2765, A3/2016/4232, A3/2016/4238 & A3/2016/4246
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
THE HONOURABLE MR JUSTICE MANN
THE HONOURABLE MR JUSTICE MORGAN
Royal Courts of Justice
Strand, London, WC2A 2LL
In the LCD Appeals
Mr Neil Calver QC & Mr Colin West (instructed by Stewarts Law LLP) for the Appellants
Mr Paul Stanley QC & Mr Robert O'Donoghue QC (instructed by Covington & Burling LLP) for the First to Fourth Respondents
Mr Daniel Piccinin (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Fifth Respondent
In the CRT Appeal
Mr Aidan Robertson QC and Mr Gerard Rothschild (instructed by Stewarts Law LLP) for the Appellants
Mr Daniel Beard QC and Mr James Bourke (instructed by Allen & Overy LLP) for the First and Second Respondents
Mr Daniel Jowell QC and Mr David Bailey (instructed by Simmons & Simmons LLP) for the Third to Fifth Respondents
Ms Marie Demetriou QC (instructed by Slaughter & May) for the Sixth and Seventh Respondents
Hearing dates: 12, 13 and 14 December 2017
Approved Judgment
Introduction
This is the judgment of the court (drafted by both Henderson and Asplin LJJ with whom Longmore LJ has agreed) on four closely related appeals which we heard together. They have numerous facets but, in essence, they are all concerned with the same central issue, namely the territorial scope of Article 101 of the Treaty on the Functioning of the European Union (“Article 101”) and/or of Article 53 of the Agreement on the European Economic Area (“Article 53” and the “EEA” respectively).
The main questions which we have to decide may be encapsulated as follows: do the claimants have a real prospect of success in claiming that Article 101 and/or Article 53 have been infringed, and losses suffered by them as a result, following the purchase of products at inflated prices through the operation of worldwide cartel agreements, the products having been first supplied to entities outside the EU and the EEA, then to a claimant holding company also outside the EU and/or the EEA, which then supplied the products to claimant subsidiary companies within the EU and/or the EEA, and in some cases within the United Kingdom, for onward sale and distribution within the EU and/or the EEA; and (if so) can those alleged losses be recovered in the present proceedings commenced in England and Wales?
The appeals arise out of two orders in relation to interlocutory applications for summary judgment/strike out and challenges to the jurisdiction/service out. The first was made by Mann J on 24 June 2016 (“Mann J's Order”). The second order was made by Morgan J on 24 October 2016 (“Morgan J's Order”). Mann J's Order was made in proceedings concerning claims for damages for the alleged effects of alleged infringements of Article 101 and/or Article 53 and/or Chapter I of the Competition Act 1998 in relation to cathode ray tubes (“CRTs”). We shall refer to that action and the appeal arising from Mann J's Order respectively as the “CRT Action” and the “CRT Appeal”. Morgan J's Order was made in relation to proceedings concerning similar claims for damages for the alleged effects of alleged infringements in relation to liquid crystal displays (“LCDs”). We shall refer to that action and the three appeals arising from Morgan J's Order as the “LCD Action” and the “LCD Appeals” respectively.
CRTs were, and LCDs are, components in televisions and computer monitors. In both the CRT and the LCD Actions, it is claimed that substantial loss was suffered as a result of the alleged infringements because the conduct complained of resulted in an increase in the price of CRTs and LCDs respectively, which were a major component in the computer monitors ultimately sold by companies in the iiyama group within the EU and/or EEA and which the claimants say account for some 70% of the cost of such monitors.
The claims for damages in the CRT and LCD Actions are each based upon a Decision of the European Commission. Those Decisions are binding on this court pursuant to Article 16 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, [2003] OJ L 1. At present, both Decisions are available only in redacted form. The first was delivered on 8 December 2010 (Case AT/39.309 – LCD – Liquid Crystal Displays) (“the LCD Decision”) in which the Commission decided that from 5 October 2001 to 1 February 2006, Samsung Electronics Co Ltd (“SECL”) and LG Display Co Ltd (“LGD”) (the first and fifth defendants in the LCD Action), amongst others, had entered into a worldwide price fixing cartel in relation to LCDs and had implemented the LCD cartel within the EU and EEA, thereby infringing Article 101 and Article 53. The second was delivered on 5 December 2012 (Case AT/39437 – TV and Computer Monitor Tubes (“the CRT Decision”)) in which the Commission determined that there had been a worldwide cartel operating in the CRT market, that some of the former sixth to twelfth defendants in the CRT Action had been in the cartel, and that Article 101 and Article 53 had been infringed.
The CRT Action was also based upon a further Decision of the European Commission concerning the glass for CRTs. As that part of the CRT Action against the former first to fifth defendants, which concerned the CRT glass cartel, is no longer pursued, that Decision is no longer relevant.
Amongst other things, Article 101 prohibits price fixing cartels “which have as their object or effect the prevention, restriction or distortion of competition within the internal market.” Article 53 also prohibits price fixing cartels in so far as they affect competition in the territory covered by the Agreement on the European Economic Area and trade between the Contracting Parties to that Agreement. Chapter I of the Competition Act 1998 is in similar terms to Article 101, save that it refers to trade and competition within the United Kingdom. As the same principles apply in relation to Article 101 and Article 53, and for present purposes nothing further is added by the Competition Act 1998, we will in general henceforth refer solely to Article 101 and to the EU.
The parties and relevant procedural history
The claimants in both the CRT and the LCD Actions are the same. They are all companies within the iiyama group. It is involved in the manufacture, distribution and sale of electronic goods including televisions and computer monitors which originally contained CRTs and now contain LCDs. The first to fifth claimants are the main European subsidiaries of the iiyama group and were each incorporated in an EU Member State. iiyama (UK) Limited, which is the first claimant in the LCD Action and the third claimant in the CRT Action, as its name suggests, was incorporated in England and Wales. Mouse Computers Co. Ltd (“Mouse”), which is the sixth claimant in both the CRT and the LCD Actions, is a Japanese company. It supplied the iiyama products containing CRT or LCD components to its European subsidiaries, either directly or through one subsidiary for onward transmission to the others. The subsidiaries then distributed and sold the products within the EU. Prior to May 2006, Mouse's role was performed by iiyama Corporation (“Corporation”), another Japanese company. Corporation makes no claim in either action.
The defendants in both the CRT and the LCD Actions were either addressees of the CRT or the LCD Decisions, or are affiliated companies within the same corporate group as one or more of the addressees and are alleged to have participated or been involved in or implemented the relevant cartel. As we have already mentioned, SECL and LGD (respectively, the first and fifth defendants in the LCD Action) were addressees of the LCD Decision. The second, third and fourth defendants in the LCD Action, Samsung Electronics Limited, (“SEL”), Samsung Electronics (UK) Ltd (“SEL(UK)”) and Samsung Semiconductor Europe Limited (“Semiconductor”) were each incorporated in England and Wales and are wholly owned subsidiaries of SECL, which was incorporated in South Korea. They were each concerned with the distribution and sale of products containing LCDs. LGD was also incorporated in South Korea.
The claim form and the particulars of claim in the LCD Action were served on SEL, SEL(UK) and Semiconductor within the jurisdiction. Permission to serve the proceedings on SECL and LGD out of the jurisdiction was granted by Master Price on 13 May 2015 pursuant to CPR 6.40(3)(b) and CPR 6.42, under Article 5 of the Hague Convention, on the basis, amongst other things, that the claim had a reasonable prospect of success, and England and Wales was the proper place in which to bring the claim. The application was supported by two witness...
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