Cooper Tire & Rubber Company v Shell Chemicals UK Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Teare J. |
| Judgment Date | 27 October 2009 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 27 October 2009 |
Queen's Bench Division (Commercial Court).
Teare J.
Laurence Rabinowitz QC and Daniel Jowell (instructed by Linklaters LLP) for the Dow defendants.
Mark Hoskins QC (instructed by Freshfields Bruckhaus Deringer) for the Bayer and Lanxess defendants.
David Foxton QC and Philippa Hopkins (instructed by SJ Berwin LLP) for the claimants.
The following cases were referred to in the judgment:
Ahlstrom Osakeyhtio & Ors v EC CommissionECAS (Case 129/85) [1988] ECR 5193.
Akzo Nobel NV & Ors v EC CommissionECAS (Case C-97/08 P) [2009] 5 CMLR 23.
Albany International BV v Stichting Bedrijfspensioenfonds TextielindustrieECAS (Case C-67/96) [1999] ECR I-5751.
Bryanston Finance Ltd v de VriesELR [1975] 1 QB 703.
Centro Internationale Handelsbank AG v Morgan Grenfell Trade Finance Ltd [1997] CLC 870.
Drouot Assurances SA v Consolidated Metallurgical IndustriesECAS (C-351/96) [1998] CLC 1270; [1998] ECR I-3075.
FKI Engineering Ltd v Dewind Holdings LtdUNK [2007] EWHC 72 (Comm).
Gleeson v WhippleWLR [1977] 1 WLR 510.
House of Spring Gardens v WaiteELR [1991] 1 QB 241.
HydrothermECAS (Case 170/83) [1985] ECR 2999.
Kolden Holdings Ltd v Rodette Commerce LtdUNK [2008] EWCA Civ 10; [2008] 1 CLC 1.
Masterfoods Ltd v HB Ice Cream LtdECAS (Case C-344/98) [2000] ECR I-11369.
National Grid Electricity Transmission plc v ABB Ltd & OrsUNK [2009] EWHC 1326 (Ch).
Owens Bank v Bracco (No. 2)ECAS (Case C-129/02) [1994] ECR I-117.
Philips v Ward (1863) 2 Hurstone and Colman 717; 159 ER 297.
Provimi Ltd v Roche Products LtdUNK [2003] EWHC 961 (Comm).
Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BVECAS (Case C-51/97) [1999] CLC 282; [1998] ECR I-6511.
Sandisk Corporation v Koninklijke Philips Electronics NVUNK [2007] EWHC 322 (Ch).
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439.
Conflict of laws — Jurisdiction — Stay of proceedings — Related proceedings — Same parties — Cartels — Subsidiaries — Res judicata — EC Commission Decision found 13 addressee companies guilty of anti-competitive practices in relation to market for supply of rubber for car tyres — None of addressees domiciled in England — Addressees appealed Commission Decision — Italian addressees commenced Italian proceedings against tyre makers for negative declaratory relief — Claims dismissed but appeal pending — Tyre makers brought proceedings in England against cartel members — Three “anchor” defendants domiciled in England — Whether claims against other defendants so closely connected that expedient to hear and determine them together to avoid risk of irreconcilable judgments — Subsidiaries which implemented infringing agreements by selling rubber could be jointly and severally liable for infringement even in absence of knowledge of infringing agreements or arrangements — Italian claimants and English defendants did not have identity and indissociability of interest — No sufficient degree of identification between English defendants and Italian claimants for purposes of res judicata — Time for seeking discretionary stay extended but stay not granted — Significant that proceedings in Italy dismissed and some defendants had submitted to jurisdiction — Council Regulation 44/2001, art. 6(1), 27, 28 — EC Treaty, art. 81.
This was an application by some of the defendants contending that the English court lacked jurisdiction against them, alternatively that the proceedings should be stayed.
The claims arose out of and followed a decision by the EC Commission that 13 companies were guilty of an infringement of art. 81 of the EC Treaty in relation to the market for the supply of butadiene rubber and emulsion styrene butadiene rubber used in the manufacture of car tyres. Those companies were variously domiciled in Germany, the Netherlands, Italy, the Czech Republic, Switzerland and Poland. None was domiciled in England. The Commission Decision imposed fines on the addressees. The addressees, with one exception, lodged appeals against the Commission's Decision with the Court of First Instance of the European Communities. They did not challenge the existence of the cartel, but contended, among other things, that they should not be held liable for the acts of their subsidiaries.
The two Italian addressees (Enichem) commenced proceedings in Milan against the major tyre-making companies for declarations that there was no cartel and that any cartel had no effect on prices so that the defendant tyre makers had suffered no loss.
Claimants, drawn from the same groups of 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 and were members of the undertakings which were the subject of the Commission Decision, with the exception of Enichem. The claimants in the English proceedings were named as defendants in the Italian proceedings or were subsidiaries or affiliates of the Italian defendants. Only four of the claimants were English companies. Only two of the defendants were domiciled in England, neither of which was an addressee of the Commission Decision. The claims brought in England were for damages for breach of art. 81.
A number of the defendants had intervened in the Italian proceedings and adopted the claims made by Enichem. Enichem had also joined those claimants in the English proceedings who were not already party to the Italian proceedings.
The applicant defendants then issued their application challenging the jurisdiction of the English court and, in the alternative, seeking a stay.
The Italian court had dismissed the Italian proceedings but the claimants and interveners in Italy had appealed.
The primary ground on which jurisdiction was asserted against the applicants was that the claims against the defendants domiciled in England (the “anchor defendants”) and the claims against the other defendants were so closely connected that it was expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings, under art. 6(1) of Regulation 44/2001. The applicants said that it was plain that the defendants domiciled in England, none of which was an addressee of the Commission Decision, had been selected as a tactical device to establish jurisdiction against the other defendants pursuant to art. 6(1).
In relation to the stay application the applicants submitted that the Italian courts were first seised of the entire dispute, including the dispute between the claimants and the defendants in England, because on the claimants” own case Enichem and the English defendants were joint tortfeasors and had such an identity of interest that they were to be regarded as the same party for the purposes of art. 27(1) of the Judgments Regulation; alternatively a stay was sought under art. 28 on the ground that the English and Italian proceedings were related and that the Italian court was the court first seised.
Held, ruling accordingly:
1. Where a corporate entity formed part of the undertaking which had been found in breach of art. 81, personal liability for damages could attach to that corporate entity because it formed part of the undertaking and implemented the offending agreements or arrangements, whether or not the corporate entity had knowledge of the offending agreements or arrangements. (Provimi Ltd v Roche Products LtdUNK[2003] EWHC 961 (Comm)followed; Akzo Nobel NV & Ors v EC CommissionECAS(Case C-97/08 P) 10 September 2009 andHydrotherm Geratebau GmbH v Compact de Dott Ing Mario Andredi & CSASECAS(Case 170/83)[1985] ECR 2999considered.)
2. It followed that the court had jurisdiction over the applicants by reason of art. 6(1) of the Judgments Regulation. The claimants had adduced evidence of sales by the anchor defendants within the jurisdiction. There was, therefore, at the very least, a good arguable case that the anchor defendants had implemented the agreements which infringed art. 81.
3. If the claimants could also rely on art. 5(3) on the basis that some damage occurred in England because some rubber was sold there, then jurisdiction was only established on that basis in respect of the damage which occurred in England, which was a very small part of the whole.
4. The proceedings in the two jurisdictions were not between the “same parties” for the purposes of art. 27. The claimants in the English proceedings were in essence the same as the defendants in the Italian proceedings. But the claimants in the Italian proceedings and the defendants in the English proceedings, which were all the rubber producers save Enichem, were not the same parties. Enichem and the defendants to the English proceedings did not have an identity and indissociability of interest. There was not sufficient privity of interest between the parties to justify the application of res judicata. Enichem and the defendants in England were legally distinct and separate entities. Whilst Enichem and the defendants in England had a common interest in resisting the claims of the claimants in England and of the defendants in Italy and establishing that they had suffered no loss, Enichem, as the person who was held by the Commission to have had a prominent role in the cartel and might therefore expect to face substantial contribution claims, ought to be allowed to marshal its own evidence and arguments rather than to have to rely on the evidence and arguments of others. The interests of Enichem and the defendants in England diverged on the question of contribution between the joint tortfeasors. Since the English and Italian proceedings were not between the same parties a stay of the English proceedings pursuant to art. 27 was refused. (Kolden Holdings Ltd v Rodette Commerce LtdUNK[2008] EWCA Civ 10; [2008] 1 CLC 1, Gleeson v WhippleWLR[1977] 1 WLR 510andDrouot Assurances SA v...
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