Emerson Electric Company and Others v Mersen Uk Portslade Ltd ( Sued as and Formerly Le Carbone (Great Britain) Ltd)

JurisdictionEngland & Wales
JudgeLord Justice Mummery,Lord Justice Moore-Bick,Lady Justice Black
Judgment Date28 November 2012
Neutral Citation[2012] EWCA Civ 1559
Docket NumberCase No: C3/2011/1658
CourtCourt of Appeal (Civil Division)
Date28 November 2012
Between:
Emerson Electric Co & Ors
Appellants
and
Mersen Uk Portslade Ltd ( Sued as and Formerly Le Carbone (Great Britain) Ltd)
Respondent

[2012] EWCA Civ 1559

Before:

Lord Justice Mummery

Lord Justice Moore-Bick

and

Lady Justice Black

Case No: C3/2011/1658

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE COMPETITION APPEAL TRIBUNAL

THE HON MR JUSTICE BARLING (President)

Claim No: CAT 1077/5/7/07

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr JON TURNER QC and MS LAURA ELIZABETH JOHN (instructed by Crowell & Moring LLP) for the Appellants

Mr DANIEL BEARD QC (instructed by Hogan Lovells International LLP) for the Respondent/6 th defendant.

Hearing date: 8 th March 2012

Lord Justice Mummery

Follow-on claims in general

1

The claims for damages in this case are brought in the Competition Appeal Tribunal (the Tribunal) under the specialist statutory jurisdiction conferred on it by s.47A of the Competition Act 1998 (the 1998 Act). The so-called "follow-on" monetary proceedings issued on 9 February 2007 are based on established infringements of relevant prohibitions of competition law.

2

The decision of the European Commission (the Commission) in December 2003 found that relevant prohibitions had been infringed. That decision was addressed to named undertakings. They were found to have participated in a single and continuous infringement by the operation of an international cartel contrary to Article 101( 1) (ex Article 81(1) EC) of the Treaty on the Functioning of the European Union (TFEU). An unlawful cartel between suppliers of electrical and mechanical carbon and graphite products was in operation over an 11 year period between 1988 and 1999.

3

The Commission imposed very hefty fines, totalling over Euros 100m, on the undertakings to which the decision was addressed by name. Before these proceedings, which could only be brought on the basis of that decision, could effectively get under way there were appeals by various addressees to the General Court (formerly the Court of First Instance) and to the Court of Justice. The appeals, which were unsuccessful, were not finally disposed of until 12 November 2009. Hence the lack of progress in the s.47A proceedings. Interlocutory applications in London then took over from appellate activities in Luxembourg. The latest move is another appeal, this time from an interlocutory order striking out, as a defendant, an entity (the respondent), to which the Commission had not addressed its decision by name.

4

The practical significance of the case is that the Commission has made infringement decisions in this and other cases about the activities of international corporate groups, which commit breaches of competition law in different national jurisdictions through the medium of numerous subsidiary companies. The paramount purpose of conferring a specialist jurisdiction on the Tribunal, which is specifically linked to binding decisions of the Commission on infringement issues, was to satisfy the fundamental EU requirement of providing an effective remedy in national courts for people who have suffered loss and damage as a result of the infringements found by the Commission.

5

In that connection it must be emphasised that this is not a one-off case testing the limits of the Tribunal's jurisdiction and the validity of its procedural rulings. Several recent appeals from the Tribunal to this court have been against strike out orders made in the course of the Tribunal's case management of follow-on proceedings. Under Rule 40 of the Competition Appeal Tribunal Rules 2003 (the Rules) the Tribunal has power to reject a claim for damages at any stage of the proceedings, if it considers that there are no reasonable grounds for making the claim. The latest appeals from the Tribunal to this court include a clutch of legal points about the limits of the Tribunal's jurisdiction; the interpretation and application of the statutory two year limitation period for follow-on proceedings; the joinder of parties to the proceedings; the significance of the distinction between the Commission's infringement decisions and its penalty decisions; and the proper exercise by the Tribunal of its discretionary case management powers.

6

This appeal, which is about the jurisdictional limits of the Tribunal and the joinder of parties, is from an order of the Tribunal made on 7 April 2011 striking out the respondent as a defendant to the claims under s.47A. It is fortunately free from the added complication of the time-bar issue which cropped up in other cases.

7

Given the size of the sums involved, the novelty of the jurisdiction and the endless ingenuity of legal practitioners, there will be more appeals on other aspects of follow-on proceedings. This is an opportunity to take interim stock of s.47A claims, which have developed even as this judgment was in preparation. What is the right way to look at this new jurisdiction and the emergent jurisprudence?

8

Caution, as well as a patient and practical intelligence, is highly desirable in s.47A cases. The Tribunal and the courts should steer well clear of "the hazards of commitment" to narrow preconceived attitudes conditioned by domestic law, but they must not be overawed by the panoramic view of a new legal landscape that includes dominating EU legal doctrines, such as the powerful principles of effectiveness and legal certainty. They must not lose sight of the basic elements of fair procedure or of the root principles of the rule of law, though they may be modified in their application to cases originating in the EU context.

9

Thus the Tribunal, like the ordinary civil courts, can only decide cases falling within its jurisdiction, but the precise boundaries of the jurisdiction may be difficult to draw in the case of a competition law jurisdiction that has been split between the binding fact-finding functions of the Commission in the EU and the remedial functions of the Tribunal in the UK. The Tribunal must hear and determine preliminary objections that the case based on the Commission decision is out of time or has been brought by or against the wrong parties. The rulings on such objections may depend on interpretation of the nature and scope of the decision of the Commission as the fact-finding body and not just on the interpretation and application of s.47A and the Rules.

10

A step forward was taken on 24 October 2012 when the Supreme Court handed down judgment in BCL Old Co Ltd & Ors v. BASF plc & Ors [2012] UKSC 45; [2012] 1 WLR 2922(BCL). It is the first follow-on case to reach that height. The case deserves close consideration for any light that it may shed on the points argued on this appeal, in particular the procedural law affecting objections raised under s.47A, such as limitation and proper parties, in the wider EU context of the fundamental right to an effective remedy and the need for legal certainty.

11

Lord Mance, with whom the other four Supreme Court Justices agreed, gave the leading judgment in BCL. The principal point was whether the two year limitation period in the 1998 Act for s.47A claims was permissible, having regard to the paramount EU principles of effectiveness and legal certainty. The judgment is mainly taken up with a comprehensive review of those EU principles culminating in a decision that their requirements were satisfied and that there was no basis for any reference to the Court of Justice. In this case there are elements of remedial efficacy and legal certainty and the tensions between them in the rival submissions, even though they may not bear as directly on the outcome of this case as they did in BCL.

12

Lord Mance's account of the detailed legislative scheme, as conveniently set out in an Annex to his judgment, and of authorities connected with this case is helpful. The authorities include an earlier judgment of the Tribunal in proceedings involving some of the same parties ( Emerson Electric Co v. Morgan Crucible Company plc [2007] CAT 28) ( Emerson Electric) (see [32] of BCL) and the recent judgment of this court in Deutsche Bahn AG & Ors v. Morgan Crucible Company plc [2012] EWCA Civ 255; [2011] CAT 16(Deutsche Bahn) (see [38] of BCL), which discussed the judgments of the Tribunal in Emerson Electric and of Court of Appeal in BCL. The Supreme Court upheld the decision of the Court of Appeal in BCL allowing the appeal from the Tribunal and it referred twice to the case of Deutsche Bahn. I shall return to these matters later on.

Introduction to the issues and the grounds of appeal

13

The damages claimed in this case are for losses resulting from breaches of relevant prohibitions of competition law committed by the participation of undertakings in the operation of a cartel of undertakings. Follow-on Tribunal proceedings must be based on "a decision" of the Commission establishing that the prohibition in question has been infringed and the decision is binding on the Tribunal: s. 47(9) of the 1998 Act. Although the decision was dated 3 December 2003, only now has the Tribunal arrived at the preliminary stage of deciding whether the respondent, to which the decision was not addressed by name, was properly joined as a defendant to the s.47A proceedings. The joinder was pursuant to an order made by the Tribunal on 19 May 2010 when it granted permission to amend the claims by the addition of further parties.

14

I will refer to the 2003 decision of the Commission as "the Decision" in order to distinguish it from decisions taken by the Commission in other cases. The early "naming of parts" of the Decision is necessary in order to minimise confusion. The Decision, which...

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3 cases
4 firm's commentaries
  • Brexit And Competition Law: What To Expect
    • European Union
    • Mondaq European Union
    • 20 September 2016
    ...Others [2010] EWCA Civ 864 and Emerson Electric Co & Others v Mersen UK Portslade Ltd (formerly Le Carbone (Great Britain) Ltd) [2012] EWCA Civ 1559. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your s......
  • Private Antitrust Litigation in the UK
    • United Kingdom
    • JD Supra United Kingdom
    • 9 October 2013
    ...to have infringed competition law. See Emerson Electric and others v. Mersen UK Portslade Ltd, formerly Le Carbone (Great Britian) Ltd [2012] EWCA Civ 1559). Several steps then may be taken to secure an anchor defendant in the English courts. First, one can show that a UK Company (such as a......
  • Consumer Rights Act 2015: Private Actions for Breaches of Competition Law – Overview of the New Regime
    • United Kingdom
    • JD Supra United Kingdom
    • 1 October 2015
    ...& ors v Morgan Crucible Company PLC & ors [2012] EWCA Civ 1055, and Emerson Electric Co & ors v Morgan Crucible Company PLC decision [2012] EWCA Civ 1559. 4 The CRA15 amends section 47A of the CA98 to allow the CAT to hear ‘stand-alone’ claims, including claims for damages or applications f......
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    • JD Supra United Kingdom
    • 19 September 2016
    ...Inc & Others [2010] EWCA Civ 864 and Emerson Electric Co & Others v Mersen UK Portslade Ltd (formerly Le Carbone (Great Britain) Ltd) [2012] EWCA Civ 1559. WILMER CUTLER PICKERING HALE AND DORR LLP 5 Moreover, the participation of a UK subsidiary in a cartel often has been used to establish......
1 books & journal articles
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    • United States
    • ABA Antitrust Library Competition Laws Outside the United States. Volume II - Third Edition
    • 2 February 2020
    ...v. Otis NV, 2012 E.C.R. I-684 (Eur. Ct. Justice). 1157. Emerson Elec. Co. v. Morgan Crucible Co. [2011] CAT 4, upheld on appeal [2012] EWCA Civ 1559. 1158. Air Can. v. Emerald Suppliers [2015] EWCA Civ 1024; Pergan Hilfsstoffe für industrielle Prozesse GmbH v. Comm’n, 2007 E.C.R. II-4225 (E......

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