Cooper Tire & Rubber Company Europe Ltd v Dow Deutschland Inc.
| Jurisdiction | England & Wales |
| Judge | Longmore,Lloyd,Gross L Jj. |
| Judgment Date | 23 July 2010 |
| Date | 23 July 2010 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division).
Longmore, Lloyd and Gross L Jj.
Laurence Rabinowitz QC and Daniel Jowell (instructed by Linklaters LLP) for the appellants (“the Dow Defendants”).
David Foxton QC and Philippa Hopkins (instructed by S J Berwin LLP) for the respondents.
The following cases were referred to in the judgment:
Akzo Nobel NV v EC CommissionECAS (Case C-97/08 P) [2009] 5 CMLR 23.
Centro Internationale Handelsbank AG v Morgan Grenfell Trade Finance Ltd [1997] CLC 870.
FKI Engineering Ltd v Dewind Holdings LtdUNK [2007] EWHC 72 (Comm).
Owens Bank Ltd v BraccoELR [1992] 2 AC 443 (CA and HL); (Case C-129/92) [1994] ECR I-117; [1994] QB 509 (ECJ).
Provimi Ltd v Roche Products LtdUNK [2003] EWHC 961 (Comm); [2003] 2 All ER (Comm) 683.
Trademark Licensing Co Ltd v Leofelis SAUNK [2009] EWHC 3285 (Ch); [2010] ILPr 16.
Conflict of laws — Jurisdiction — Anti-competitive activities — Cartels — Stay of proceedings — Closely connected claims against a number of defendants — Related actions — Parent and subsidiary companies — Commission Decision addressed to 13 companies finding cartel existed in relation to supply of rubber for car tyres — Italian addressees sought negative declarations in Italy against tyre manufacturers — Manufacturers brought proceedings in England against addressees' subsidiaries domiciled in England and others — Not necessary to decide whether subsidiaries automatically liable under Community law for infringing activities of group companies — Pleadings sufficiently alleged knowledge and participation on part of subsidiaries — Claims against foreign defendants sufficiently connected with claims against English domiciled defendants — English court had jurisdiction — No discretionary stay of proceedings — Judge entitled to take into account length of time before hearing in Italy — Defendant domiciled in Switzerland not entitled to stay under Lugano Convention — Where related actions in courts of two member states Judgments Regulation applied — EC Treaty, art. 81 — Regulation 44/2001, art. 6(1), 28.
This was an appeal by defendants (“the Dow defendants”) from a refusal to stay proceedings pursuant to art. 28 of Regulation 44/2001 (see [2009] 2 CLC 619).
The European Commission found 13 companies (“the addressees”) guilty of operating a cartel in breach of art. 81 of the EC Treaty in relation to the market for the supply of rubber for car tyres. The addressees were domiciled in various European countries but not in England. The Commission Decision imposed fines on the addressees.
The addressees, with one exception, lodged appeals against the Commission Decision with the Court of First Instance, arguing among other things that they should not be held liable for the acts of their subsidiaries.
Two Italian addressees (“Enichem”) commenced proceedings in Milan against 28 defendants, all of whom were companies which manufactured tyres, seeking declarations that there was no cartel, that Enichem were not party to it and that the defendants could not complain of any damage.
A number of the tyre manufacturers who were named as defendants to the Italian proceedings issued proceedings in England against defendants who were alleged to be part of the cartel, claiming damages for breach of art. 81. Two of the defendants (“the anchor defendants”) were domiciled in England. They were members of undertakings which were the subject of the Commission Decision.
The Dow defendants issued an application in England challenging the jurisdiction of the English court and, in the alternative, seeking a stay.
The Italian proceedings had been dismissed and the Dow defendants had appealed.
The judge decided, following Provimi Ltd v Roche ProductsUNK [2003] EWHC 961 (Comm), that it was arguable that a subsidiary in the position of the anchor defendants could be liable to a victim, although the subsidiary was not itself a party to, or aware of, the relevant anti-competitive practices adopted by other entities in the relevant undertaking. Thus the English court had jurisdiction over the Dow defendants by virtue of art. 6(1) of the Regulation.
The judge went on to decide that he should not stay the proceedings against the Dow defendants pursuant to art. 28 of the Regulation, although the Italian court was first seised and the proceedings were closely related. That was because proceedings were more advanced in England, since the Italian proceedings had been dismissed, subject to appeal; while the proceedings were not particularly proximate to England and were more proximate to Italy, there was no court which could be said to be the centre of gravity of the dispute; and proceedings would be likely to be continuing in England in any event against two companies which had submitted to the jurisdiction.
The Dow defendants submitted that Provimi was wrongly decided, alternatively the point should be referred to the European Court of Justice. Further the judge had erred in refusing to stay the proceedings which had a much more substantial connection with Italy, which was anyway first seised.
The claimants cross-appealed from the decision of the judge that one of the Dow defendants, domiciled in Switzerland, was entitled to a stay of the proceedings against it under art. 21 of the Lugano Convention.
Held, dismissing the appeal and allowing the cross-appeal:
1. The particulars of claim encompassed both the possibility that the anchor defendants were parties to or aware of the anti-competitive conduct of their parent company and the other addressees and the possibility that they were not. It was only if they were not that the Provimi point would arise. It was unnecessary to decide it on this application because it was open to the claimants on the pleadings to prove that the anchor defendants were parties to or aware of the addressees' anti-competitive conduct. The strength or otherwise of any such case could not be assessed until after disclosure of documents. The case that the anchor defendants were parties to the cartel arrangements or were aware of them was not a case that was susceptible to being struck out at the present stage. In those circumstances, the claims against the Dow defendants were sufficiently closely connected with the claims against the anchor defendants to make it expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings and the English court therefore had jurisdiction pursuant to art. 6(1) of the Regulation.
2. The judge conducted a carefully considered balancing exercise and did not err in law or come to a decision outside the reasonable range of options open to him on the art. 28 point. The fact that the Italian court was first seised of Enichem's claim could not operate as a sort of trump card or even as a primary factor where there was as much care and deliberation on the part of Enichem in starting proceedings for negative declaratory relief as there was in the claimants' decision to make their substantive claim in England. The judge was not wrong to take into account the time when a decision was likely to be reached in Italy. That was not an implied criticism of the Italian court system but a fact of life.
3. The Judgments Regulation, not the Lugano Convention, applied where the dispute involved a choice between jurisdiction in two member states. (Trademark Licensing Co Ltd v Leofelis SAUNK[2009] EWHC 3285 (Ch); [2010] ILPr 16approved.)
Longmore LJ:
1. 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.
2. 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 of 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.
3. We can take this very largely from the judge's lucid exposition.
4. The decision by the Commission of the European Communities was dated 29 November 2006 (Case...
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