Kme Yorkshire Ltd and Others v Toshiba Carrier UK Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Lord Justice Tomlinson,Lord Justice Ward |
| Judgment Date | 13 September 2012 |
| Neutral Citation | [2012] EWCA Civ 1190 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 September 2012 |
| Docket Number | Case No: A3/2011/2818 |
[2012] EWCA Civ 1190
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
CHANCELLOR OF THE HIGH COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Ward
Lord Justice Etherton
and
Lord Justice Tomlinson
Case No: A3/2011/2818
Romano Subiotto QC, Daniel Beard QC and Paul Stuart (instructed by Cleary, Gottlieb, Steen & Hamilton LLP) for the 1st, 2nd, 3rd & 4th Appellants
Kassie Smith (instructed by Hogan Lovells International LLP) for the 9th Appellant
Jon Turner QC & Derek Spitz (instructed by Crowell & Moring LLP) for the Respondents
Hearing dates : 25th and 26th June 2012
This is an appeal from the order of the Chancellor dated 19 October 2011, by which he dismissed (1) the applications of the first, sixth and eighth defendants, which are UK companies, to strike out the claim under CPR 3.4(2)(a) on the ground that there is no reasonable ground for bringing it, or alternatively to summarily dismiss the claim under CPR 24.2(a)(i) on the ground that no claimant has a real prospect of success; and (2) the applications of the second to fifth and ninth defendants, which are foreign companies, for an order under CPR Part 11 declaring that the courts of England and Wales do not have jurisdiction to try the claims against them.
The fifth to eighth defendants are no longer parties to the proceedings. We are concerned, therefore, only with appeals by the first defendant from the dismissal of its strike out and summary judgment application and the appeals of the second to fourth defendants and the ninth defendant from the dismissal of their applications challenging jurisdiction.
The claim is for, among other things, damages for breach of the anti-cartel provisions in Article 101 of the Treaty on the Functioning of the European Union ("Article 101") (which in substance was originally Article 85 of the Treaty of Rome ("Article 85") and then Article 81 EC Treaty ("Article 81")), and from 1 January 1994 Article 53(1) of the EEA Agreement, and equivalent breaches of statutory duty actionable under English law.
If the claim against the first defendant, KME Yorkshire Limited ("KME UK"), is struck out or summarily dismissed, then the remaining defendants claim that, by virtue of Council Regulation EC No. 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters [2001] OJ L12/1, there is no jurisdiction. If the claim against KME UK is not struck out or summarily dismissed, then it is common ground that the courts of England and Wales have jurisdiction over the remaining defendants.
Article 101
Article 101 provides as follows, so far as material:
"1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void."
The Commission's Decision
The background to the proceedings lies in a decision of the Commission of the European Union ("the Commission") published on 16th December 2003 ("the Decision"), which concluded that between 3rd May 1988 and 22nd March 2001 there were various agreements and concerted practices consisting of price fixing and market sharing in the industrial tubes sector. It is a substantial document which runs to 100 pages, 432 paragraphs or recitals and three Articles. In Article 1 of the Decision the Commission held, for the reasons given in the previous paragraphs, that various specified undertakings had infringed the provisions of Article 81 and from 1st January 1994 Article 53(1) of the EEA Agreement by participating in those agreements and concerted practices. By Article 2 the Commission imposed fines for that infringement. The undertakings named in Article 1 and the legal entities on which fines were imposed under Article 2 included the second, third and fourth defendants, each of which is a company in the KME group, and the ninth defendant, Outokumpu Oyj ("Outokumpu"). The second, third and fourth defendants are domiciled in Germany, France and Italy respectively. KME UK, which is domiciled in the UK, is the wholly owned subsidiary of the second defendant. Outokumpu is domiciled in Finland. KME UK was not named in either Article 1 or Article 2 or, indeed, in any other part of the Decision.
The proceedings
Over the period of infringement identified in the Decision the claimants, namely Toshiba Carrier UK Limited and various associated companies, bought substantial quantities of industrial copper tubes or goods incorporating such tubes.
They commenced these proceedings on 15th December 2009 for damages sustained as a consequence of breaches of duty consisting of participation in the unlawful cartel, as described and recorded in the Decision.
The defendants' applications to strike out the claim or for summary judgment and the applications challenging jurisdiction were issued on 4 January 2011.
The judgment of the Chancellor
The Chancellor gave a detailed judgment. It is sufficient, however, to say that he was satisfied that the amended Particulars of Claim are apt to raise against the UK defendants both a so-called "follow-on" claim (where liability is based on the findings in the Decision), and a so called "stand-alone" claim (where, so far as is necessary to establish liability, there is reliance on allegations and facts which are not to be found in the Decision itself): for the difference see Enron Coal Services Ltd v English Welsh and Scottish Railway Ltd [2011] EWCA Civ 2 at paragraph [8] (Lloyd LJ). The Chancellor also found that, in so far as it was necessary to prove knowledge on the part of the UK defendants as to the cartel agreement or arrangements, an initial failure to plead knowledge had been remedied in correspondence between the parties' solicitors. Bearing in mind certain observations of Aikens J in Provimi Ltd v Roche Products Ltd [2003] EWHC 961 (Comm), [2003] 2 All ER (Comm) 683, and of Teare J in Cooper Tire & Rubber Company Europe Ltd v Shell Chemicals UK Ltd [2009] EWHC 2609 (Comm), the Chancellor said he had no hesitation in dismissing the applications of the UK defendants insofar as they were based on CPR 3.4(2)(a).
So far as concerns the applications for summary judgment against the claimants, the Chancellor examined the principal witness statements on behalf of the UK defendants and noted the absence of evidence from the claimants in response to some of them. He concluded as follows:
"51. …But there has been no disclosure. As the Court of Appeal pointed out in Cooper Tire paragraph 43 the strength of the claimants' case cannot be assessed, let alone particularised, until after disclosure of documents. The fact that the claimants do not now have evidence to refute that of Mr Weyler or Mr Herold does not enable me to conduct a mini-trial, let alone, predict the outcome of the actual trial. The fact is that these defendants too were part of the same group and were involved in the same economic activity as the undertaking found by the Commission to have infringed Article 101. In my view these defendants have not shown that the claim against them does not have a real prospect of success."
The appeal
The original and supplementary "skeleton" arguments of the first to fourth defendants on this appeal run in aggregate to 200 paragraphs. There was a further written skeleton argument of the ninth defendant. Substantial oral submissions were made, on behalf of the first to fourth defendants, by Mr Daniel Beard QC and Mr Romano Subiotto QC, ably supported, on behalf of Outokumpu, by Ms Kassie Smith. The oral hearing lasted one and a half days. In the final analysis, I consider that the defendants' applications and this appeal turn on a short point of interpretation of the claim form, the amended Particulars of Claim and some correspondence and a short and clear point of law.
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