Cooper Tire & Rubber Company Europe Ltd and Others v Dow Deutschland Inc. and Others

JurisdictionEngland & Wales
JudgeLord Justice Longmore
Judgment Date23 July 2010
Neutral Citation[2010] EWCA Civ 864
Docket NumberCase No: A3/2009/2487 & A3/2009/2489
CourtCourt of Appeal (Civil Division)
Date23 July 2010

[2010] EWCA Civ 864

[2009] EWHC 2609 (Comm)





The Honourable Mr Justice Teare

Before: The Right Honourable Lord Justice Longmore

The Right Honourable Lord Justice Lloyd


The Right Honourable Lord Justice Gross

Case No: A3/2009/2487 & A3/2009/2489

Cooper Tire & Rubber Company Europe Limited & Ors
Dow Deutschland Inc and Others

Mr Laurence Rabinowitz QC & Mr Daniel Jowell (instructed by Linklaters LLP) for the Appellants (“the Dow Defendants”)

Mr David Foxton QC & Ms Philippa Hopkins (instructed by S J Berwin LLP) for the Respondents

Hearing dates: 6 th & 7 th July 2010

Lord Justice Longmore

Lord Justice Longmore:



This is the judgment of the court. This appeal raises the questions (1) whether the English court has jurisdiction pursuant to Article 6(1) of EC Council Regulation 44/2001 to determine claims made by the victims of illegal cartel arrangements found by the European Commission to have been made by the Defendants and (2) whether, if so, the proceedings should be stayed pursuant to Article 28 of that Regulation (which we shall call “the Judgments Regulation”) because the proceedings are related to proceedings brought elsewhere within the EU. There is also a cross-appeal raising a distinct point about a stay.


Once the Commission has found that there has been an infringement of Article 81 (now Article 101 of the Treaty on the Functioning of the European Union (“the TREU”)) of the EC Treaty on the part of participants in relevant anti-competitive conduct in any particular country, that finding cannot be challenged in the domestic courts of any Member State: see Article 16 EC Council Regulation 1/2003 EC (“the Modernisation Regulation”). Such a finding can only be challenged on appeal to what was the Court of First Instance of the Communities and is now called the General Court and then, if appropriate, by further appeal to the European Court of Justice on a point of law. Once an infringement has been established by the Commission, therefore, the main question liable to arise in national courts in respect of any alleged civil liability of participants in the infringement is whether any alleged victim has suffered any loss or damage as a result of that infringement. One might have thought that if there has been a Europe-wide infringement, as the Commission has found in this case, it would not much matter in which Member State that question should be tried. But for reasons which it might be easier to guess than to state, the infringers are very keen that the question should be tried in Italy while the victims are very keen that it should be tried in England. Teare J has decided that the victims’ claims to damages can and should be tried in England and some of the infringers (whom we shall call “the Dow Defendants”) now appeal with permission of the judge.

Factual Background


We can take this very largely from the judge's lucid exposition.


The decision by the Commission of the European Communities was dated 29 November 2006 (Case COMP/F/38.638) and entitled Butadiene Rubber and Emulsion Styrene Butadiene Rubber (the “Commission Decision”). The Commission Decision found 13 companies (the “Addressees”) guilty of an infringement of Article 81 (now Article 101 of the TFEU) of the EC Treaty in relation to the market for the supply of Butadiene Rubber (“BR”) and Emulsion Styrene Butadiene Rubber (“ESBR”).


The Addressees were: Bayer AG (“Bayer”), The Dow Chemical Company, Dow Deutschland Inc, Dow Deutschland Anlagengesellschaft mbH, Dow Europe GmbH (collectively “ Dow”), Eni SpA, Polimeri Europa SpA (collectively “Enichem”), Shell Petroleum NV, Shell Nederland BV, Shell Nederland Chemie BV (collectively “Shell”), Kaucuk a.s. and Unipetrol a.s. (collectively “Kaucuk”) and Trade-Stomil Ltd (“Stomil”).


The Addressees were variously domiciled in Germany, the Netherlands, Italy, the Czech Republic, Switzerland and Poland. None was domiciled in England.


The Commission Decision held that the Addressees committed a “complex single and continuous infringement” of Article 81 of the Treaty by agreeing price targets for their products, sharing customers by non-aggression agreements and exchanging sensitive commercial information relating to prices, competitors and customers. In particular it was said that:

i) The cartel took effect at least between 20 May 1996 and 28 November 2002.

ii) The agreement was operated by a series of meetings, usually taking place “on the fringes” of the committee meetings of the European Synthetic Rubber Association (“ESRA”), in an informal setting before or after the official committee meetings.

iii) ESRA meetings took place four times each year at various locations across Europe and the cartel meetings took place at the same locations. These locations included Milan, Vienna, Amsterdam, Brussels, Richmond-on-Thames, Frankfurt, Grosse Leder, and Prague. The cartel was ended at a meeting in London.


In considering the liability of particular companies the Commission said:

“Concerning the principle of personal liability, Article 81 of the Treaty is addressed to “undertakings” which may comprise several legal entities. In this context the principle of personal liability is not breached so long as different legal entities are held liable on the basis of circumstances which pertain to their own role and their conduct within the same undertaking. In the case of parent companies, liability is established on the basis of their exercise of effective control on the commercial policy of the subsidiaries which are materially implicated by the facts. Under these circumstances, the principle of personal liability is not breached. References to different areas of law where the principle of autonomy of a subsidiary plays a different role (such as under corporate law) is not appropriate.”


The Commission Decision then imposed fines on the Addressees. The fines were assessed by reference to the effective economic capacity of the offenders to cause damage to competition. For this purpose regard was had to the sales of BR and ESBR by each undertaking in the last full calendar year of the infringement. Enichem and Bayer were placed in the top category, Dow in the second category, Shell in the third, Kaucuk in the fourth and Stomil in the fifth. Regard was then had to the size of each undertaking (to ensure that the fine had a deterrent effect) by applying a multiplier to the basic fine. Shell had the largest multiplier applied. The fines were then adjusted to reflect the period of time each undertaking was party to the cartel. Aggravating factors (such as involvement in previous cartels) and mitigating factors (such as co-operation with the Commission) were considered. In the result Enichem received the largest fine of EUR 272.25 million, followed by Shell with a fine of EUR 160.875 million. Dow's fine was reduced by 40% to reflect the value of the evidence it supplied to the Commission of the cartel. In the result it was fined EUR 64.575 million. Bayer was granted immunity because it was the “whistle-blower”.


In February 2007, the Addressees, with the exception of Bayer, lodged appeals against the Commission Decision with the Court of First Instance of the European Communities (“CFI”). It is worth noting the grounds of appeal submitted by Dow and Enichem.

i) The Dow Chemical Company contends that it should not be held liable for the acts of its subsidiaries. The other Dow companies contend that the Commission identified too early a start date for the cartel and that the fine imposed on them was too high. Thus the Dow Defendants do not challenge the cartel's existence on their appeal. Nor do they challenge the participation of subsidiary companies in the Dow group in that cartel.

ii) Eni SpA contends that it should not be held liable for the acts of its subsidiaries. It also contends that the fine is too high. Polimeri Europa SA, a company in the Eni group, contends that the Commission made procedural errors in coming to its Decision, that the Commission's assessment of the market was unfair, that another company, and not it, was managing BR and ESBR, and that the fine imposed was too high. Thus Enichem also does not challenge the existence of the cartel.


The appeals to the CFI were heard in October 2009. A judgment is awaited.


On or around 29 July 2007, after receiving letters before action from the Milan office of S.J.Berwin LLP, Enichem commenced proceedings in Milan against 28 defendants, all of whom were companies in the Pirelli, Michelin, Continental, Goodyear, Bridgestone and Cooper groups, which use BR and ESBR in the manufacture of tyres. The relief claimed was as follows:

“(i) to rule and declare the inexistence in the period between 20. 5.1996 and 28.11.2002, of any agreement whatsoever and/or any other forbidden anti-competition practices (the so-called “cartel”) between the producers of [BR] and [ESBR] addressed by the [Commission Decision];

(ii) in any case, to rule and declare that Eni SpA, Polimeri Europa SpA and Syndial SpA have never adopted forbidden anti-competition behaviour within the sphere of the alleged “cartel” referred to under (i);

(iii) in any case, to rule and declare that the alleged “cartel” referred to under (i) had had no effect on the BR and ESBR prices and that, in any case, the subjects hereby summoned cannot complain of any damage consequent to the aforesaid “cartel”.”


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