Arcadia Group Brands Ltd and Others and Others (Claimants/Appellants) v Visa Inc. and Others

JurisdictionEngland & Wales
JudgeLord Justice Patten,Lord Justice Richards
Judgment Date05 August 2015
Neutral Citation[2015] EWCA Civ 883
Docket NumberCase No: A3/2014/3813
CourtCourt of Appeal (Civil Division)
Date05 August 2015
Between:
(1) Arcadia Group Brands Limited and others
(2) Asda Stores Limited
(3) B&Q Plc
(4) Comet Group Limited (In Liquidation)
(5) Debenhams Retail Plc and others
(6) House of Fraser (Stores) Limited
(7) Iceland Foods Limited
(8) New Look Retailers Limited
(9) Next Retail Limited
(10) Record Shop 2 Limited (in liquidation) and others
(11) WM Morrison Supermarkets Plc
(12) Argos Limited and others
Claimants/Appellants
and
(1) Visa Inc
(2) Visa International Service Association
(3) Visa Europe Limited
(4) Visa Europe Services Inc
(5) Visa UK Limited
Defendants/Respondents

[2015] EWCA Civ 883

Before:

THE CHANCELLOR OF THE HIGH COURT

Lord Justice Richards

and

Lord Justice Patten

Case No: A3/2014/3813

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE QUEEN'S BENCH DIVISION

COMMERCIAL COURT

MR JUSTICE SIMON

Royal Courts of Justice

Strand, London, WC2A 2LL

Fergus Randolph QC, Christopher Brown, Max Schaefer (instructed by Stewarts Law LLP) for the Appellants

Dinah Rose QC and Brian Kennelly (instructed by Milbank Tweed Hadley & McCloy LLP) for the First and Second Respondents

Stephen Morris QC and Anneli Howard (instructed by Linklaters LLP) for the Third to Fifth Respondents

Hearing dates: 21 and 22 July 2015

The Chancellor of The High Court (Sir Terence Etherton):

1

This is an appeal by the claimants from the order dated 11 November 2014 of Simon J by which he ordered on summary judgment applications by the defendants that (1) the claimants are not entitled to rely on section 32(1)(b) of the Limitation Act 1980 ("the 1980 Act"); and the claims are time barred pursuant to sections 2 and 9 of the 1980 Act insofar as they seek damages or restitution in respect of a period earlier than six years prior to the commencement of the proceedings and are dismissed; and (2) references to any earlier claims, dates and periods are struck out pursuant to CPR 3.4(2)(a) or amended pursuant to CPR 17.1(2).

The background

2

The twelve appellants are retailers who have each begun separate proceedings against five of the companies involved in the operation of the Visa credit and debit card schemes in Europe ("Visa") claiming damages and restitutionary relief for breaches of European and domestic competition law arising out of Visa credit and debit card transactions in the UK and Ireland.

3

Payments made with Visa cards in Europe generally involve four parties: (1) a merchant; (2) the merchant's bank (known as "the Acquirer"); (3) a cardholder; and (4) the cardholder's bank ("the Issuer"). Both the Acquirer and the Issuer are licensed by Visa and are contractually required to comply with its rules and procedures.

4

When the cardholder makes a payment with a Visa credit or debit card, the Acquirer passes details of the transaction to the Issuer. The Issuer then collects payment from the cardholder, and pays the Acquirer the payment amount minus a transaction fee, known as the "interchange fee", which it retains. The Acquirer in turn pays the merchant the payment amount less a Merchant Service Charge ("MSC") made up of (1) a fee for the Acquirer's services, (2) a card network scheme fee payable to Visa and (3) the interchange fee.

5

In theory, Issuers and Acquirers may agree the level of interchange fees they will charge each other on a bilateral basis. Absent a bilateral agreement, the level defaults to one set by Visa. That default fee is the "multilateral interchange fee" or "MIF". Different MIFs apply for different territories and kinds of card. The Visa MIFs in issue in these proceedings are: (1) those applicable to cross-border transactions in the EEA (where the merchant is in one Member State and the card was issued in another), except for the period when they were exempted by the European Commission ("the EEA MIFs"); (2) those applicable where both the merchant and the Issuer are in the UK ("the UK MIFs"); and (3) those applicable where both are in Ireland ("the Irish MIFs").

6

The appellants' case is that the MIFs in issue, by setting effectively a minimum price that merchants had to pay to their acquiring banks to process payments by Visa card, unlawfully restricted competition. They say that, if there had been no unlawful restriction of competition, there would have been no MIFs or the MIFs would have been lower and so the MSC that the appellants paid their banks when accepting payments by Visa card would have been lower. Their claim is based on breaches of Article 101 of the Treaty on the Functioning of the European Union ("TFEU") or the equivalent previous provisions in the European Community Treaty, Article 53 of the European Economic Area ("EEA") Agreement, section 2 of the Competition Act 1998 ("CA 1998") and section 4 of the Irish Competition Act 2002 ("ICA 2002"). The claim is primarily for damages based on the alleged overcharge of the MSC due to the MIFs.

7

The proceedings were begun in relation to Claims 2013 Folio Nos. 982–991 and 996 on 23 July 2013, and in relation to Claim number 2013 Folio No.1334 on 4 October 2013. The pleaded claims for damages date back to 1977 and so cover a period of some 37 years.

8

The first and second respondents, on the one hand, and the third to fifth respondents, on the other hand, have been separately represented and have served separate defences. There are several strands to their defences. They deny that any MIFs in issue had the object or effect of restricting competition. They aver that, if any did, they were exempt under Article 101(3) TFEU and analogous domestic provisions. Critically, for the purposes of this appeal, the respondents contend that in any event the claims for damages sustained more than six years before issue are time-barred. That is the limitation period for breach of statutory duty under section 9 of the 1980 Act (it being common ground on the appeal that the limitation point for tort in section 2 of the 1980 Act is irrelevant or, at any event, adds nothing to the issues).

9

By applications dated 17 March 2014 the third to fifth respondents, and by a further application dated 21 March 2014 the first and second respondents, applied to strike out those parts of the appellants' claims which allege infringements of competition law in the period prior to 23 July 2007 in the case of Claims 2013 Folio Nos. 982–991 and 996 and 4 October 2007 in the case of Claim 2013 Folio No.1334. Those dates ("the Limitation Dates") are six years prior to the issue of the relevant proceedings. The respondents applied, alternatively, for summary judgment under CPR Part 24 in relation to the limitation issue.

1980

Act section 32

10

The appellants contend that the limitation period in section 9 of the 1980 Act has not expired, and indeed has not yet begun to run, by virtue of section 32 of the 1980 Act. So far as relevant, section 32 provides as follows:

"(1) …where in the case of any action for which a period of limitation is prescribed by this Act —

(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant;

the period of limitation shall not begin to run until the plaintiff has discovered the … concealment … or could with reasonable diligence have discovered it.

References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.

(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."

11

Section 38(9)(a) provides that references to a right of action shall include references to a cause of action.

The statements of case

12

It is alleged in paragraph 81 of the amended particulars of claim that the following facts and matters were deliberately concealed from the appellants:

"a. The manner and mechanisms by which the EEA MIF, UK MIF and Irish MIFs were and are set are secret and have never been disclosed to the Claimants.

b. At all material times, the precise nature and scope of the MIF arrangements were concealed from the Claimants.

c. At all material times, the responsibility of the various Defendants for the breaches of statutory duty pleaded above were concealed from the Claimants.

d. Until around 2009, the actual MIF levels which applied were concealed from the Claimants.

e. ….[P]rior to [2006] … the MIF rates were not available or visible to the Claimants. In any event… the relevant MIF rates have been imposed without negotiation and the mechanisms by which they are set have never been made available to the Claimants either via their Acquiring Bank or directly by the Defendants."

13

In paragraph 76 of the amended defence of the first and second respondents it is alleged that the appellants were aware of, or could with reasonable diligence have discovered, sufficient facts by 22 November 2002 at the latest to plead an adequate statement of claim against the first and second respondents. The matters relied on are set out in paragraph 77. It is alleged in paragraph 78 that, even if those matters were insufficient to issue proceedings in respect of the UK MIFs, the appellants had sufficient facts in respect of those MIFs by 19 October 2005. In paragraph 79 the first and second respondents assert that the appellants themselves admitted in paragraph 84(e) of the amended particulars of claim that that the appellants were aware of the applicable individual MIF rates since around early 2006. In paragraphs 81 and 82 of their amended defence the first and second respondents in any event deny that they concealed...

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