Daimler AG v Mol (Europe Africa) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 22 November 2019 |
| Neutral Citation | [2019] EWHC 3197 (Comm) |
| Date | 22 November 2019 |
| Docket Number | Case No: CL-2018-000572 |
| Court | Queen's Bench Division (Commercial Court) |
[2019] EWHC 3197 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HONOURABLE Mr Justice Bryan
Case No: CL-2018-000572
Brian Kennelly QC and Andrew Scott (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the Claimant
Josh Holmes QC and William Hooper (instructed by Travers Smith LLP) for the Third to Seventh Defendants
Marie Demetriou QC and Daniel Piccinin (instructed by Steptoe & Johnson UK LLP) for the Eleventh Defendant
Sarah Abram (instructed by Wilmer Cutler Pickering Hale and Dorr LLP) for the Twelfth Defendant
Hearing dates: 14 and 15 November 2019
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 61.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mr Justice Bryan
A. INTRODUCTION
A.1 The Applications
This is the hearing of applications (“the Applications”) brought by the Third to Seventh Defendants (collectively, “WWL”), the Eleventh Defendant (“NYKE”); and the Twelfth Defendant (“CSAV”) against the Claimant (“Daimler”). The argument in support of the Applications was led by Ms Demetriou QC counsel for NYKE but I also received skeleton arguments and heard oral submissions from counsel for each of WWL (Mr Holmes QC) and CSAV (Ms Abram).
The Applications are in materially identical terms and seek:
(1) To strike out, or have summarily dismissed, that part of Daimler's claim which is based on international maritime services provided by the Defendants exclusively between ports located outside the EEC/EC/EEA during the period prior to 18 October 2006; or alternatively
(2) to obtain a reference for a preliminary ruling to the Court of Justice of the European Union under Article 267 of the Treaty on the Functioning of the European Union (“TFEU”).
Daimler opposes the Applications. It submits that it would be wrong summarily to determine what it characterises as a narrow and controversial point of EU law, and that to do so would risk injustice to Daimler and serve no useful purpose. It says that there is no justification for seeking a preliminary ruling from the CJEU because the main question that the Applicants want to have referred are already before the CJEU as a result of a reference from the Dutch courts, and guidance will be forthcoming from the CJEU in any event. It submits that were the Court minded to make a reference for a preliminary ruling from the CJEU there would be no good reason for a stay in the meantime, still less a stay of all the proceedings, given the limited application of the reference to the overall proceedings.
A.2 The Claim
Daimler claims damages to compensate it for loss that it alleges it has suffered as a result of the Defendants' participation in what it says was a serious price-fixing and market-sharing cartel relating to the provision of roll-on, roll-off cargo services (“RoRo Services”), contrary to EU/EEA competition law and infringements of Article 101 TFEU and Article 53 EEA. The alleged infringements comprise agreements between the Defendants restricting competition to supply international shipping services for roll-on, roll-off cargo. Daimler alleges that these agreements were in place and caused it to suffer loss from at least February 1997 to at least 6 September 2012 (the “Relevant Period”).
Daimler alleges that the alleged infringements affected RoRo Services in various places around the world, including but not limited to the EU and EEA. A proportion of Daimler's claim relates to RoRo Services between non-EEA ports (e.g. shipping cars from Tokyo to Sydney) (“non-EEA services”).
In support of its Claim, Daimler relies on a decision of the European Commission (“EC”) in Case AT.40009 – Maritime Car Carriers published on 21 February 2018 (the “EC Settlement Decision”), along with other decisions and actions of criminal and competition authorities around the world that it alleges establish or evidence the unlawful cartel conduct. The EC Settlement Decision found that a number of undertakings infringed Article 101(1) TFEU and Article 53(1) EEA. The EC Settlement Decision was addressed to various entities in the MOL, WWL, K-Line, NYK, and CSAV undertakings. Each of the addressees of the EC Settlement Decision (including NYKE's parent, NYKK and the K-Line Defendants' parent, KK) settled the investigation by admitting to having participated in unlawful cartel conduct amounting to a single and continuous infringement of EU/EEA law from 18 October 2006 to 6 September 2012.
As to the nature of the wrongdoing, the EC found (among other things) that “the parties applied the rule of respect as a guiding principle for their practices” on various routes worldwide, including the EEA; that there was an “overall scheme pursuing a single anti-competitive object and single anti-competitive aim of restricting price competition”; that this was “structured around the “rule of respect” involving “a combination of multi-lateral and bi-lateral contacts”; and the parties “knowingly substituted the risks of competition between them for practical co-operation”; such “behaviour [having] all the characteristics of an “agreement” and/or “concerted practice” within the meaning of Article 101(1) TFEU and Article 53(1) EEA. The fines imposed by the EC were substantial (EUR207,335,000 in the case of the WWL Defendants; EUR39,100,000 in the case of the K-Line Defendants' parent, EUR141,820,000 in the case of NYKE's parent; and EUR7,033,000 in the case of CSAV SA).
Daimler also relies on Foreign Regulatory Materials (as pleaded out in the Re-Amended Particulars of Claim “RAPOC”). For example, in the United States the Defendants or other entities in their corporate groups entered into plea agreements, pleaded guilty to criminal cartel offences, and accepted fines in excess of US$167 million; and in the cases of the NYK and WWL/EUKOR undertakings, the admitted infringements dated back to (respectively) February 1997 and February 2000. In Australia, NYKE's parent admitted to similar criminal offences and was fined AUD25 million in the context of what was described as an “extremely longstanding global cartel”.
One of the issues for trial is when the “Unlawful Arrangements” (and in particular the “Respect Agreement”) first commenced. The 18 October 2006 date referred to in the EC Decision is a deemed start date, by which the EC limited its finding of liability as part of agreeing a settlement with the RoRo carriers. This was a reflection of the EC's assessment of its jurisdiction as part of a settlement process, rather than a factual finding as to when the cartel began (Daimler contends that the wrongdoing began much earlier and can be traced back to as early as February 1997 (as it says is reflected in the Foreign Regulatory Material).
As regards the EC's jurisdiction and the 18 October 2006 deemed start date for the infringement that it found, Recital (42) of the EC Decision states as follows:
“The rules for the implementation of competition law apply to all maritime transport services, including to cabotage and international tramp services since the entry into force of Council Regulation (EC) No 1419/2006 of 25 September 2006 repealing Regulation (EEC) No 4056/86 on 18 October 2006. That date is the earliest date from which the Commission can exercise its jurisdiction to sanction the conduct of the parties. In order to reflect this jurisdictional change and for the purposes of the present decision, the conduct is deemed to have started for all parties on 18 October 2006”.
18 October 2006 was taken for the purposes of the EC Settlement Decision to be the deemed start date, because it was the first date from which EU/EEA competition rules applied to “ all maritime services, including to… international tramp services” (emphasis added). Prior to that date, tramp vessel services were expressly excluded from the scope of the EU/EEA competition rules (Regulation (EEC) 4056/86, Art. 1(2)). By choosing that start date, the EC did not need to examine whether the RoRo services covered by the EC Decision were tramp shipping services or not. An issue in the present action (which it is common ground is not suitable for summary determination) is whether the services were tramp shipping (which may turn on disclosure and factual and expert evidence).
Daimler's primary head of loss is in respect of the alleged overcharges paid on RoRo Services purchased in respect of various routes worldwide during and following the Relevant Period. These are the “Overcharge Losses” which are particularised in the RAPOC. Daimler estimates the value of the affected commerce to be in excess of US$1,943 million. Daimler states that the vast majority of that was in respect of routes to and/or from a port in the EEC/EEA. Daimler says that only a small minority was in respect of routes that are exclusively to/from a port outside the EEC/EEA. Daimler presently estimates its total Overcharges Losses amount to US$214 million.
Daimler's Claim was issued in August 2018, but the action has yet to progress to a CMC in circumstances where CSAV had to be served in Chile. Service has now been effected, with Defences and in some cases Amended Defences...
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Daimler AG v MOL (Europe Africa) Ltd and Ors
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