BCL Old Company Ltd and Others v BASF SE and Others
| Jurisdiction | England & Wales |
| Judge | Lord Walker,Lord Clarke,Lord Mance,Lord Phillips,Lord Wilson |
| Judgment Date | 24 October 2012 |
| Neutral Citation | [2012] UKSC 45 |
| Date | 24 October 2012 |
| Court | Supreme Court |
[2012] UKSC 45
Lord Phillips
Lord Walker
Lord Mance
Lord Clarke
Lord Wilson
Appellant
Christopher Vajda QC
Laura Elizabeth John
(Instructed by Taylor
Vinters)
Respondent
Mark Brealey QC
Sarah Ford
(Instructed by Mayer
Brown International LLP)
Heard on 9 and 10 July 2012
Lord Mance (with whom Lord Phillips, Lord Walker, Lord Clarke and Lord Wilson agree)
The first issue on this appeal is whether a statutory limitation period, which would otherwise bar the claim of the four appellants against the three respondents for damages for participation in an unlawful cartel, failed to comply with the European legal principles of effectiveness and legal certainty. If it was, the second issue is what if any effect that has on the application of that limitation period as between parties to civil litigation, in which it has now been held that the limitation period applies as a matter of domestic law to bar the claim. I will refer to the appellants and the respondents respectively as BCL and BASF.
The cartel related to the supply of vitamins within the European Union. By Commission Decision COMP/E-1/37.512 of 21 November 2001, the European Commission found that the cartel infringed Article 81 of the EC Treaty (now TFEU 101) and imposed fines accordingly. Members of the cartel had until 31 January 2002 to appeal against the Commission's decisions. In the event, on 31 January 2002, only BASF appealed, and BASF only appealed against the fine levied. Notice of its appeal was published in the Official Journal on 4 May 2002 (C109/49). The Commission's Decision to which the appeal related was only published in the Official Journal of the European Communities on 10 January 2003. The Court of First Instance on 15 March 2006 reduced the fine imposed on BASF. The deadline for any further appeal by BASF to the European Court of Justice expired on 25 May 2006 without any further appeal being lodged.
Under the Limitation Act 1980, section 2, BCL had six years to bring an action for tort in the High Court, running or "almost certainly" running (as Mr Vajda QC for BCL accepted in the notice of appeal and his oral submissions) from 21 November 2001. However, on 20 June 2003 section 47A of the Competition Act 1998, as inserted by section 18(1) of the Enterprise Act 2002, came into force, giving BCL the alternative possibility of a claim for damages in proceedings brought before the Competition Appeal Tribunal. The possibility was exercisable under certain conditions, the effect of which, as now conclusively established by the Court of Appeal, is that the time for bringing such a claim expired on 31 January 2004, two years after the time allowed for appeal against the Commission's decision on infringement, without any possibility of extension. No High Court proceedings were brought, but proceedings were in January 2004 issued in the Tribunal against other cartel members. The first intimation by BCL to BASF of any intended claim was on 21 November 2006, and proceedings were not issued in the Tribunal by BCL against BASF until 12 March 2008. BASF responded by contending that the claim was time-barred.
Reversing the Tribunal, the Court of Appeal held on 22 May 2009 that the claim was time-barred and could proceed, if at all, only with an extension of time, [2009] EWCA Civ 434. The Tribunal on 19 November 2009 assumed that it had power to grant an extension, but declined to do so on the merits, [2009] CAT 29. The Court of Appeal held on 12 November 2010 that the Tribunal had no power to extend time under United Kingdom law: BCL Old Co Ltd v BASF SE (No 2) [2010] EWCA Civ 1258, [2011] Bus LR 428. It held further that European law did not override the United Kingdom time bar or require a power to extend to be treated as existing. On this basis, the merits of any application for an extension, if there had been such a power, became irrelevant. With the Supreme Court's permission, BCL now appeals to the Supreme Court against the Court of Appeal's decision of 12 November 2010, but solely on the issue of European law.
The detailed legislative scheme is for convenience set out in the Annex to this judgment. For immediate purposes, it is sufficient to draw attention to the following features. First, BCL's right to claim damages in proceedings before the Tribunal under subsection (5) of section 47A did not arise until a decision (in this case by the Commission) had "established that the relevant prohibition in question has been infringed". Then it was, under subsection (8), postponed, though subject to a discretion in the Tribunal, during any period during which proceedings against the Commission decision might be instituted in the European Court of Justice and, if any such proceedings were instituted, during the period before those proceedings were determined. Second, by virtue of Rule 31 of the Competition Appeal Tribunal Rules 2003 (SI 2003/1372) made under the Act, any such claim for damages required to be made within two years of the later of the end of that period or the date on which the cause of action accrued.
BCL's main submission in the Tribunal and the Court of Appeal was that the limitation period for its claim against BASF in the Tribunal only began to run on 25 May 2006; that is, two years after the end of the period during which BASF could have lodged a further appeal in relation to the fine imposed on it. This submission was based on the proposition that the "decision [which] has established that the relevant prohibition has been infringed", to which subsections (5) and (6) of section 47A of the Act refer and against which subsection (8) contemplates that proceedings might be brought in the European Court, embraced not merely the Commission's decision that there had been an infringement but also its decision as to the penalty to be imposed for the infringement.
The Tribunal (Barling J, Ann Kelly and Michael Davey) on 25 September 2008 accepted this submission: [2008] CAT 24. It considered that other sections of the Act offered little assistance and that findings on penalty could be relevant to the nature and extent of any infringement. On 22 May 2009 the Court of Appeal (Waller, Lloyd and Richards LJJ) [2009] EWCA Civ 434 in a judgment given by Richards LJ took a different view of "the plain and ordinary meaning of the statutory language" and "the natural reading of the section" (paras 26–28 and 33). It regarded this as drawing a "clear" distinction between decisions as to infringement and as to penalty. It considered that the Tribunal's concerns as to any overlap between decisions on infringement and penalty were "over-stated", and did not consider that they could in any event justify a departure from the section's natural meaning. No further appeal followed. The distinction between decisions on infringement and penalty decisions has been taken up and applied more recently by the Court of Appeal in its judgment in Deutsche Bahn AG v Morgan Crucible Co plc [2012] EWCA Civ 1055, to which the Supreme Court was referred, without submissions, after the oral hearing of this appeal.
On the basis of Richards LJ's remarks on 22 May 2009, the existence of a power to extend time was conceded by BASF for the purposes of the applications decided by the Tribunal on 19 November 2009, [2009] CAT 29. The Tribunal (Vivien Rose QC, The Hon Anthony Lewis and Dr Arthur Pryor CB) therefore assumed that it had power under rules 19 and 44 to extend the time limit under rule 31. But reservations were made as to the right to challenge the existence of any such power in the Court of Appeal. When the matter came before the Court of Appeal (Maurice Kay V-P, Lloyd and Sullivan LJJ) on 12 November 2010, [2010] EWCA Civ 1258, the challenge to the existence of any power to extend time succeeded and no further appeal was permitted. Whether BCL would have been better off if the challenge had failed would have depended upon whether it could have disturbed the Tribunal's conclusion that it was not in any event appropriate to exercise any power to extend.
BCL's submission now is that the operation of the two-year limitation period (in particular as regards its commencement) and the lack of any power to extend the limitation period were legally uncertain matters, which rendered it "excessively difficult" for BCL to pursue its claim against BASF in time. BCL point out that, where a specialist tribunal like the Competition Appeal Tribunal exists, the principle of effectiveness applies to proceedings before that tribunal, even if recourse to the ordinary courts remains available: Case C-268/06 Impact v Minister for Agriculture and Food [2008] ECR I-2483, para 51. Mr Brealey QC for BASF does not take issue with this. To explain why BCL did not in fact bring proceedings against BASF in January 2004 at the same time as proceedings were brought against other cartel members, BCL refers to a paragraph in a witness statement by its solicitor, Mr Edward Perrott, stating:
"17 We considered bringing a claim against BASF at that point. It was discussed with Counsel and the conclusion from these discussions was that we were precluded from bringing the claims until the BASF appeal, about which we knew little, had been decided by the European Court."
In the Court of Appeal on 12 November 2010, Lloyd LJ observed, with justification, at para 56, that
"It seems unlikely that the advice was in fact that they could not bring proceedings against BASF at that time. For Counsel to have said that he or she would have had to have ignored the words 'otherwise than with the permission of the Tribunal' in section 47A(5)(b), the words 'without...
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