BCL Old Company Ltd and Others v BASF SE and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lord Justice Sullivan,Lord Justice Maurice Kay |
| Judgment Date | 12 November 2010 |
| Neutral Citation | [2010] EWCA Civ 1258 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 November 2010 |
| Docket Number | Case No: C3 2010/0446 |
[2010] EWCA Civ 1258
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COMPETITION APPEAL TRIBUNAL
VIVIEN ROSE (CHAIRMAN), THE HON ANTONY LEWIS
AND DR ARTHUR PRYOR CB
Before: Lord Justice Maurice Kay
vice-president Of The Court Of Appeal Civil Division
Lord Justice Lloyd
and
Lord Justice Sullivan
Case No: C3 2010/0446
[2009] CAT 29
Christopher Vajda Q.C. and Laura Elizabeth John (instructed by Taylor Vinters) for the Appellants
Mark Brealey Q.C. (instructed by Mayer Brown International LLP) for the Respondents
Hearing date: 18 October 2010
Lord Justice Lloyd:
Introduction
This appeal from the Competition Appeal Tribunal (the Tribunal) is a sequel to a decision of the Court of Appeal ( Waller LJ, Richards LJ and myself) [2009] EWCA Civ 434, given on 22 May 2009, by which we held (reversing the decision of the Tribunal) that proceedings brought by the Claimants under section 47A of the Competition Act 1998 (the 1998 Act) had been brought out of time. The Claimants had applied in the alternative to the Tribunal for such an extension, in case of need, and they then pursued that application. The Tribunal (differently constituted) refused the extension sought. The Claimants appeal with permission granted by Etherton LJ. The Defendants have served a Respondent's Notice contending that the Tribunal had no power to extend the time.
The European Commission investigated a cartel in relation to vitamins for use in animal foodstuffs. On 21 November 2001 it published a decision as a result of the investigation, in which it held that, among others, the First Defendant had infringed article 81 of the EC Treaty by participating in agreements affecting the Community markets for various vitamins. It was ordered to bring the infringement to an end at once, if it had not already done so, and it was subjected to a fine. The decision was announced in a press release issued on the day, but the full text was not generally available until its publication in the Official Journal (OJ) on 10 January 2003. The cartel had operated for 10 years from 1989. The aggregate fines imposed by the Commission were the largest up to that date. The Tribunal referred to the terms of the Commission's decision as being trenchant and to the conduct of the cartelists as egregious.
BASF appealed to the Court of First Instance against the amount of the fine, but not against the finding of infringement. The fact of the appeal was published in the OJ on 4 May 2002. Eventually the appeal was successful and the fine was reduced (from €296 million to €248 million) on 15 March 2006. There was no further appeal to the European Court of Justice.
The Claimants brought their proceedings on 13 March 2008. The proceedings were commenced in the Tribunal under section 47A of the 1998 Act, which permits a claim to be brought for damages by a person who has suffered loss or damage as a result of the infringement of a relevant prohibition, including a breach of article 81. Such a claim may be brought in the Tribunal if, and only if, a decision, which includes a decision of the European Commission, has already established that there has been a breach of a relevant prohibition.
Because appeals are possible against a relevant decision, section 47A provides that, while a relevant appeal is possible or, if brought, is pending, proceedings may only be brought with the permission of the Tribunal. The effect of the previous decision of this court is that an actual appeal only has this suspensive effect if the appeal challenges the relevant finding of infringement, and does not do so if the appeal is only against the amount of the fine.
For the Claimants, Mr Vajda Q.C., who had not appeared on their behalf previously, contended that this court's previous decision had been unforeseen and unforeseeable. He said that it had had the unpredictable effect of cutting the Claimants' time for bringing their claim down by over 4 years, from May 2008 to January 2004, and of doing so at a time when the relevant period had long since expired. He argued that there was power to extend time under the Competition Appeal Tribunal Rules (the Rules), and that European Community law required that that power be exercised in his clients' favour. Further he contended that, if the Rules did not confer such a power, the frustration of the Claimants' legitimate expectation that the period during which they could bring their proceedings ran until 2008, together with the European doctrines of legal certainty and effectiveness, meant that the Tribunal ought to be treated as having such a power and required to exercise it in the Claimants' favour.
Thus, the issues for decision are:
i) Is there a power under the Rules to extend time for bringing proceedings under section 47A on their true construction?
ii) If there is no such power on the construction of the Rules, should such a power be treated as existing in the present case, by reason of European Community law principles?
iii) If there is such a power, was the Tribunal's refusal to exercise it in the Claimants' favour a proper exercise of their discretion, either (a) as a matter of UK law, or (b) having regard to principles of European Community law?
Mr Vajda pointed out that the circumstances of the present case are unusual in that, from May 2009 onwards, parties will have known how section 47A worked in terms of the effect of an appeal against an infringement decision, and would have no good reason for not bringing a claim under section 47A within time. By contrast, he argued (not in these terms) that the goal posts had been moved by the Court of Appeal's previous decision to the Claimants' disadvantage and that it should be regarded as entirely unacceptable, as a matter of European Community law, even if not of UK law, that (to adopt a different metaphor, also not one used by him) the rug should be pulled from under his clients' claim by a finding that there was no power to extend time.
I have referred to UK law, because the 1998 Act extends to the UK as a whole, as does the jurisdiction of the Tribunal. However, except when the law of another part of the UK is relevant for a particular point, I may refer hereafter to English law and procedure. Article 81 of the EC Treaty has now been replaced by article 101 of the TFEU, but I will ignore that nominal change and others arising from the Lisbon Treaty.
Claims for damages against members of a cartel
A person who suffers loss as a result of the operations of a cartel conducted in breach of article 81 (or, in UK terms, of the Chapter I prohibition in the 1998 Act) may recover damages on the basis of a breach of statutory duty. Before section 47A came into force (on 20 June 2003), this remedy could only be sought in ordinary proceedings in the High Court. As such, a limitation period of 6 years would apply to it, under section 2 of the Limitation Act 1980. The period would run from the date on which loss was suffered, but the start of the period would be postponed if (over-simplifying) material facts were deliberately concealed by the Defendant, as they are likely to have been in the case of a cartel, which of its nature is secret. In such a case the time runs from the date on which the Claimant knew or ought to have known of the material facts. In practice the relevant date for the start of the period may well be the date on which a decision by a regulator (such as the European Commission) about the cartel is first published.
Different periods of time for such claims apply in different systems of law within the European Union; in Scotland, as I understand it, the period is 5 years. It is for national law to specify the regime for recovery of compensation for a breach of article 81, including any time limit. European law demands that an aggrieved party be given an effective remedy but does not prescribe how that is done.
The Enterprise Act 2002 (the 2002 Act) created an alternative remedy for a Claimant seeking damages for breach of article 81, by introducing section 47A into the 1998 Act. This procedure is available when there has been a relevant decision that article 81 or the Chapter I prohibition has been infringed. A relevant decision is one reached by the European Commission, or by the OFT (or a sectoral regulator) or on appeal by the Tribunal. This type of claim is known as a follow-on claim, as distinct from the normal procedure, referred to as a stand-alone claim. It is an alternative to a stand-alone claim: subject to the relevant provisions being satisfied, a Claimant may pursue either according to its choice.
There are special rules about bringing a follow-on claim under section 47A, to some of which I have alluded. There must first have been a relevant decision. Because such a decision is subject to potential appeals, a claim may be brought, but only with the permission of the Tribunal, if the time for an appeal has not yet expired or if an appeal is pending. The time limit for such a claim is laid down by the Rules, and is two years from the later of (a) the end of the period during which the permission of the Tribunal is needed for the proceedings to be brought, and (b) the date on which the cause of action accrued. Leaving aside the case, perhaps unusual, where the damage is suffered rather late in the day so that (b) may apply, it may be a matter of chance whether...
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Case Notes
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