Samsung Electronics Company Ltd v LG Display Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Lord Justice Snowden,Lord Justice Lewison |
| Judgment Date | 01 April 2022 |
| Neutral Citation | [2022] EWCA Civ 423 |
| Docket Number | Case No: CA-2021-000656 (formerly A4/2021/1107) |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 423
Lord Justice Lewison
Lord Justice Males
and
Lord Justice Snowden
Case No: CA-2021-000656 (formerly A4/2021/1107)
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sir Michael Burton GBE
Royal Courts of Justice
Strand, London, WC2A 2LL
Robert O'Donoghue QC & Tom Pascoe (instructed by Covington & Burling LLP) for the Appellants/Claimants
Daniel Piccinin (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Respondents/Defendants
Hearing date: 16 March 2022
Approved Judgment
This judgment was handed down remotely by circulation to the parties' representatives by email and released to BAILII. The date and time for hand-down is deemed to be at 10.30 a.m. on Friday 1 st April 2022.
The judge below, Sir Michael Burton GBE, was not persuaded that England is clearly the appropriate forum for the trial of this action. Accordingly he set aside the order for service on the defendants out of the jurisdiction. The only issue on this appeal is whether he was wrong to do so. That is not usually an issue suitable for an appeal to this court, involving as it does an evaluative judgment by the first instance judge which requires the weighing of a number of factors, but I was persuaded to give permission to appeal on the basis that a question of principle arose as to the approach to be taken to contribution proceedings in competition claims.
It is generally the case, when an issue about appropriate forum arises, that there will be a range of factors to be considered, some of which will point in favour of English jurisdiction, while others will be neutral or will point to the appropriateness of proceedings elsewhere. It is for the parties to identify the connecting factors on which they rely. It is then for the judge to decide how much weight to give to the various factors and to decide where the balance lies. The test to be applied in a case involving permission to serve out of the jurisdiction is whether the court is satisfied that England and Wales “is the proper place in which to bring the claim” ( CPR 6.37(3). 1 As explained in such well-known cases as Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 and VTB Capital Plc v Nutritek International Corpn [2013] UKSC 5, [2013] 2 AC 337, this means that the burden is on the claimant to satisfy the court that England is clearly the appropriate forum for the claim.
Accordingly it is not enough that the issue is finely balanced, or even that proceedings in England are marginally more appropriate than proceedings elsewhere. England must be clearly the appropriate forum.
Often the question whether this test is satisfied will not have a single right answer. Views may reasonably differ as to the weight to be attributed to the different connecting factors relied on. The fact that this court might (or even would) have reached a different conclusion from the judge below is not in itself a reason to allow an appeal. Rather, this court may only interfere if the judge has made “a significant error of principle, or a significant error in the considerations taken or not taken into account” ( VTB Capital v Nutritek at [69]: similar formulations to much the same effect can also be found in other cases).
Further, it is important to say that the function of this court is to review the decision of the court below. The question is whether the judge has made a significant error having regard to the evidence adduced and the submissions advanced in the lower court. Just as the trial of an action is not a dress rehearsal for an appeal (see the well-known metaphor of Lord Justice Lewison in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 at [114]), neither is an application to set aside an order for service out of the jurisdiction. In general an appellant will not be permitted to rely on material which the judge was not invited to consider or to advance an entirely new basis for saying that the judge's evaluation on the issue of appropriate forum was wrong. A judge can hardly be criticised for not taking something into account if he was never asked to do so. Although no doubt this principle will be applied with some flexibility, bearing in mind that the
ultimate Spiliada question is concerned with “the interests of all the parties and … the ends of justice”, good reason will be required for taking a different approach.Background
The parties to this action were participants in a price-fixing cartel leading to sales of liquid crystal display (“LCD”) panels in the European Union, including the United Kingdom, at inflated prices, contrary to Article 101 of the Treaty on the Functioning of the European Union. LCD panels are the main components of thin, flat monitors used for (among other things) televisions, computers, digital watches and pocket calculators.
The participants in the cartel were mainly based in the Far East, in South Korea and Taiwan. Samsung Electronics Co Ltd and LG Display Co Ltd, respectively the first claimant/appellant and the first defendant/respondent, are both Korean companies. They are the ultimate parent companies of groups operating worldwide in the manufacture and sale of (among other things) LCD panels. I will refer to the appellant claimants as “Samsung” and the respondent defendants as “LG” without distinguishing between companies in the respective groups. There is no need to do so for the purpose of this appeal.
The cartel operated between October 2001 and February 2006. It did so through monthly meetings of senior representatives of the participants which took place in Taiwan. The meetings were conducted in the English language.
Between 2006 and December 2010 the European Commission carried out an investigation into the operation of the cartel. That resulted in a Decision dated 8 th December 2010 (“the Commission Decision”) addressed to (among others) the first two claimants and both defendants. The Commission found that the addressees had infringed Article 101 “by participating … in a single and continuous agreement and concerted practice in the sector of Liquid Crystal Display panels for TV, notebook and monitor application” and ordered them to bring the infringement to an end immediately insofar as they had not already done so. Fines were levied on the participants, although in Samsung's case immunity was granted on the ground that Samsung had sought leniency pursuant to the Commission's Leniency Notice (Commission Notice 2002/C 45/03) and had co-operated with the investigation. LG had also sought immunity, but this was not granted as it was Samsung which had made the first disclosure to the Commission. However, as a result of LG's co-operation, which included extensive disclosure of documents including records of the cartel meetings in Taiwan, its fine was reduced by 50%.
On 9 th July 2015, 42 UK local authorities issued a follow-on claim against Samsung for damages for breach of Article 101, relying on the findings in the Commission Decision. They claimed damages of approximately £5.4 million consisting of the “overcharge” on products containing LCD panels purchased by them from participants in the cartel, including Samsung and LG. They held the Samsung companies jointly and severally liable for all of the losses caused to them by the cartel's excessive pricing, i.e. including losses caused by purchases at excessive prices from other cartel participants.
On 4 th September 2018 the Samsung companies concluded a settlement agreement with the local authorities by which they settled the claim for £1.6 million plus costs. They did so without, by that stage, having sought contribution from any of the other participants in the cartel.
On 17 th August 2020 (i.e. very shortly before the expiry of the two-year limitation period for contribution claims in section 10 of the Limitation Act 1980) Samsung issued a claim for contribution under the Civil Liability (Contribution) Act 1978 against LG. It did so on the basis that the settlement sum was paid in a bona fide settlement with the local authorities; that LG was liable for the same damage under section 1 of the 1978 Act; and that LG's just and equitable share of the damage was £900,000, assessed by reference to its market share. Permission to serve out of the jurisdiction was given by Mr Justice Henshaw.
LG contested the jurisdiction of the English court, submitting that none of the service gateways in paragraph 3 of CPR Practice Direction 6B was applicable and that in any event Samsung had failed to show that England was clearly the appropriate forum for the claim.
The claim for contribution
The 1978 Act provides as follows:
“ 1 — Entitlement to contribution.
(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
…
(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage … shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.
…
(6) References in this section to a person's liability in respect of any damage or references to any such liability which has...
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