Gemalto Holding BV v Infineon Technologies AG
| Jurisdiction | England & Wales |
| Judge | Sir Geoffrey Vos,Lord Justice Green,Lord Justice Birss |
| Judgment Date | 10 June 2022 |
| Neutral Citation | [2022] EWCA Civ 782 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Appeal No: CA-2022-000233 |
[2022] EWCA Civ 782
Sir Geoffrey Vos, MASTER OF THE ROLLS
Lord Justice Green
and
Lord Justice Birss
Appeal No: CA-2022-000233
Case No: CP-2019-000027
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMPETITION LIST (ChD)
MRS JUSTICE BACON
Royal Courts of Justice,
Strand London WC2A 2LL
Jon Turner QC, Laura Elizabeth John, and Kristina Lukacova (instructed by Stewarts Law LLP) for the Claimants (together “Gemalto”)
Sarah Ford QC, Tim Johnston and Emma Mockford (instructed by Freshfields Bruckhaus Deringer LLP) for the First and Second Defendants (together “Infineon”)
Daniel Jowell QC and David Bailey (instructed by Latham & Watkins (London) LLP) for the Third to Fifth Defendants (together “Renesas”)
Hearing dates: 17 and 18 May 2022
Sir Geoffrey Vos, Master of the Rolls:
Introduction
The central question in this appeal is whether Gemalto's claims for loss arising from an unlawful cartel in which the defendants, Infineon and Renesas (together the defendants), participated are statute barred. The cartel related to the supply of Smart Card Chips (“SCCs”). The question turns on the proper approach to be adopted to the application of section 32(1) of the Limitation Act 1980 (section 32(1)). Mrs Justice Bacon (the judge) identified two possible tests for the determination of whether the claimants' knowledge, more than 6 years before the commencement of the proceedings, was sufficient to amount to discovery for the purposes of section 32(1)(b).
The first was the so-called statement of claim test of whether the claimant had, or could with reasonable diligence have, obtained such knowledge as would allow it and its professional advisors properly to plead a claim that would not be liable to be struck out as unarguable or lacking a sufficient evidential basis (see the judgment at [50]). The statement of claim test was applied by the Court of Appeal in Arcadia Group Brands v. Visa [2015] EWCA Civ 883 ( Arcadia), DSG Retail v. Mastercard [2020] EWCA Civ 671 and by Foxton J in Granville Technology Group v. Infineon Technologies [2020] EWHC 415 (Comm) ( Granville) (which was appealed, but not on that point, in OT Computers v. Infineon Technologies [2021] EWCA Civ 501 ( OT Computers)).
The second possible test was the so-called FII test adumbrated by the Supreme Court in a case concerning a mistake of law ( Test Claimants in the Franked Investment Group Litigation v. HMRC [2020] UKSC 47 ( FII)). The FII test suggests that time should begin to run from the point when the claimant knows, or could with reasonable diligence know, that it has a worthwhile claim. The claimant must know about the mistake (or in this case the concealment) with sufficient confidence to justify embarking on the preliminaries to the issue of proceedings, such as submitting a claim to the proposed defendant, taking advice and collecting evidence. The Supreme Court in FII adopted that formulation from Lord Donaldson MR in Halford v. Brookes [1991] 1 WLR 428 at page 443 ( Halford).
In this case, the judge decided to apply the statement of claim test (which she acknowledged might in some cases allow time to start to run later than the FII test), because neither side had identified any practical difference that they said would result from the application of one or other of the two tests.
The judge concluded, having applied the statement of claim test, that the limitation period in respect of Gemalto's pleaded claims had started to run under section 32(1)(b) at least from the end of April 2013. The European Commission (the Commission) had issued a press release on 22 April 2013, referring to having sent a Statement of Objections to participants in the alleged cartel. Gemalto had previously received two Requests for Information (RFIs) from the Commission on 3 July 2012 and 25 September 2012, identifying a time period for their enquiries concerning the alleged cartel between 2003 and 2006. Gemalto had responded to the first RFI on 24 July 2012 and 20 August 2012, and to the second RFI on 9 October 2012. Accordingly, the judge determined that Gemalto could legitimately have pleaded a cartel covering 2003–2006 from the end of April 2013. Since the proceedings were not issued until 19 July 2019, more than 6 years after 22 April 2013, they were statute barred.
Gemalto had made a follow-on claim based on the Commission's infringement decision (the decision) in Case AT.39574 Smart Card Chips, finding that between 2003 and 2005 various suppliers of SCCs had unlawfully coordinated their pricing behaviour and exchanged competitively sensitive information. The decision was dated 3 September 2014, some 16 months after the date upon which the judge decided that the limitation period had begun. Gemalto submitted to the judge and to this court that the limitation period began to run on the announcement of the decision. If that were right, Gemalto's claim would have been brought in time.
It is against this background that Mr Jon Turner QC, leading counsel for Gemalto, submitted that the judge was wrong to rely on the Statement of Objections, which Gemalto did not see at the time, as providing a basis for a reasonable belief that there may have been participation in an unlawful cartel. The Statement of Objections was, Gemalto submitted, not, without more, a fact from which it could reasonably infer that a defendant to whom it had been sent was a party to an unlawful cartel that caused it loss. In addition, Gemalto could not have legitimately pleaded a cartel between 2003 and 2006 on the basis of the RFIs alone.
Infineon's skeleton suggested that FII cast some doubt on the application of the statement of claim test in cases of this kind, because time may start to run when the claimant appreciates it has a worthwhile claim or sufficient confidence to justify embarking on the preliminaries to the issue of proceedings. Infineon did not, however, in its skeleton, object to the judge's conservative adoption of the statement of claim test. Renesas's skeleton also did not object to the application of the statement of claim test. Both Infineon and Renesas supported the judge's reasoning without filing a respondent's notice.
When the argument in the appeal began, the court queried with counsel whether it was actually appropriate for it to apply the statement of claim test, if, on a proper analysis, the Supreme Court's reasoning in FII indicated that a different test was appropriate to the proper construction of section 32(1). We mentioned that, whilst FII was a tax case in which the Supreme Court had declined to express a view on cases of concealment, the reasoning of the majority construed the words: “the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it”. Those words at the end of section 32(1) applied as much to section 32(1)(c) (where the action is for relief from the consequences of a mistake) as to section 32(1)(b) (where any fact relevant to the claimant's right of action has been deliberately concealed from it by the defendant).
On the first day of argument, it seemed that there was nothing between the parties as to the correct test following FII. Mr Turner submitted that limitation would begin to run only when the claimant recognised that it had a worthwhile claim, and that a worthwhile claim arose only when a reasonable person could have a reasonable belief that (in this case) collusion had occurred or that there was a cartel (see [196] in FII). The respondents accepted that to be the test, but submitted, in effect, that once the Commission had issued its Statement of Objections, it was obvious that a reasonable person could have a reasonable belief that there was a cartel, even if there was always the possibility that the Commission would withdraw its Statement of Objections or change its mind as to the participants. The Statement of Objections was only issued after a detailed investigation by the regulators and constituted the charges to which the respondents were required to produce any answers they might have.
On the second day of the hearing, Gemalto slightly changed its position, arguing in reply that four propositions emerged from FII as follows: (i) the facts which the claimant must discover are those which include each of the essential ingredients of the cause of action (including in this case when the claimant bought the goods in question at distorted prices), (ii) the claimant only discovers these essential facts when it recognises that it has a worthwhile claim in damages and has sufficient confidence to embark on the preliminaries of making a claim, (iii) having sufficient confidence to embark on the preliminaries of making a claim did not mean investigating whether the essential elements of the claim existed; that already had to have been discovered (see (i) above), and (iv) the concept of recognition that there is a worthwhile claim implies that the claimant has a reasonable belief as to these facts, which means that a reasonable person could conclude on the basis of available material that it was more likely than not that the essential ingredients of the tort could be pleaded.
Against that background, I intend to deal with the following issues: (i) what, after FII, is the applicable test to determine when time begins to run in a case where any fact relevant to the claimant's right of action has been deliberately concealed by...
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