Toshiba Carrier Uk Ltd and Others v KME Yorkshire Ltd and Others
| Jurisdiction | England & Wales |
| Judge | THE CHANCELLOR OF THE HIGH COURT,The Chancellor |
| Judgment Date | 19 October 2011 |
| Neutral Citation | [2011] EWHC 2665 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC09C04733 |
| Date | 19 October 2011 |
[2011] EWHC 2665 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Chancellor of the High Court
Case No: HC09C04733
JON TURNER QC and DEREK SPITZ (instructed by Crowell and Moring LLP) for the Claimants
ROMANO SUBIOTTO QC and DANIEL BEARD QC (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the First Defendant and Second, Third and Fourth Defendants
MATTHEW WEINGER (instructed by Herbert Smith LLP) for the Fifth, Sixth, Seventh and Eighth Defendants
KASSIE SMITH (instructed by Hogan Lovells International LLP) for the Ninth Defendant
Hearing dates: 4—6 October 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 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 Chancellor:
Introduction
In a decision promulgated on 16th December 2003 ("the Decision") the Commission of the European Union ("the Commission") concluded that between 3rd May 1988 and 22nd March 2001 there had been a complex of agreements and concerted practices consisting of price fixing and market sharing in the industrial tubes sector. In article 1 thereof the Commission held, for the reasons given in the previous 432 paragraphs, that the undertakings it named in subparagraphs (a) to (f) had infringed the provisions of Article 81(1) of the Treaty and from 1st January 1994 Article 53(1) of the EEA Agreement by participating in that complex of agreements and concerted practices during the parts of the overall period it respectively specified. By Article 2 the Commission imposed the fines in the amounts and on the particular legal entities it specified. Those named both as undertakings in Article 1 and legal entities by which fines should be paid in Article 2 included:
(1) the second, third and fourth defendants each of which is a company in the KME group;
(2) the fifth defendant, a company in the Wieland-Werke group; and
(3) the ninth defendant, a company in the Outokumpu group.
Those defendants are variously domiciled in Germany, France, Italy and Finland but not in England.
Over the period identified by the Commission as that during which the complex of agreements and concerted practices existed each of the claimants bought substantial quantities of industrial copper tubes or goods incorporating such tubes. By a claim form issued on 15th December 2009 they sought damages sustained as a consequence of breaches of duty consisting of participation in an unlawful cartel, as described by the Commission and recorded in the Decision. The defendants to the claim thereby commenced include the first defendant ("KME Yorkshire") and the sixth ("Nemco") and eighth ("WW(UK)") defendants, which are respectively companies in the KME and Wieland-Werke groups. (The claim against the seventh defendant has been discontinued.) Each of those defendants is a company domiciled in England and Wales but was not named in either Articles 1 or 2 of the Decision. The particulars of claim, to which I shall refer in some detail later, were served with the claim form.
On 4th January 2011 the applications now before me were issued. They fall into two groups, namely:
(1) KME Yorkshire, Nemco and WW(UK) (together "the UK Defendants") seek orders (a) striking out the claim against them under CPR Rule 3.4(2)(a) on the ground that there is no reasonable ground for bringing it, alternatively (b) summarily dismissing the claim under Rule 24.2(a)(i) on the ground that no claimant has a real prospect of succeeding on the claim against them.
(2) The 2nd, 3rd, 4th, 5th and 9th defendants ("the Non-Domiciled Defendants") seek orders under CPR Part 11 declaring that the courts of England and Wales do not have jurisdiction to try these claims against them or alternatively declining to exercise it.
Each party relies on witness statements to which I shall refer as necessary later.
It is not disputed that I should deal with the applications of the UK Defendants first as my conclusion on those applications will affect the extent to which the various arguments in relation to the applications of the Non-Domiciled Defendants need to be considered. But before I can deal with either I should (1) set out certain well known provisions of European Law as the backdrop to all of the later issues, (2) describe the Decision in some detail and (3) consider the amended particulars of claim in similar detail.
Relevant provisions of European Law
The provision at the root of this case is Article 101 Treaty on the Functioning of the European Union ("TFEU"). Though the references may have changed (originally article 85 of the Treaty of Rome, then article 81 EC and now article 101 TFEU) its substance has not. So far as material it provides:
"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."
On 2nd July 2003 the Commission decided to initiate the proceedings which culminated in the Decision. Article 16 of Council Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty provides that:
"Article 16
Uniform application of Community competition law
1. When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings. This obligation is without prejudice to the rights and obligations under Article 234 of the Treaty."
Thus, whether the claim in this action is to be regarded as a 'follow-on' or 'stand alone' action, this court must ensure that its decision does not run counter to the Decision. I was not addressed on nor shown any cases dealing with the precise application of that provision, in particular the extent to which, if at all, and the basis on which factual conclusions may be implied in the decision of the Commission and given effect by the national court.
In relation to the applications of the Non-Domiciled Defendants I should refer to Council Regulation EC No 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. With the immaterial exceptions specified in Article 1(1) and (2) it applies in civil and commercial matters whatever the nature of the Court or Tribunal. Article 2 lays down the general rule that persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. Article 3 enables a person domiciled in a Member State to be sued in the courts of another Member State only in accordance with the provisions of specified sections of that Regulation. The two provisions relevant to these applications are laid down in section 2 in Articles 5 and 6.
So far as material they provide:
"Article 5
A person domiciled in a Member State may, in another Member State, be sued:
…
3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;
…"
"Article 6
A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
…".
The claimants rely on both Articles 6.1 and 5.3. If the proceedings are struck out or dismissed, as the UK Defendants contend, then, as the claimants accept, subject to the potential application of the principle referred to in Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2007] I.L.Pr.10, they cannot rely on Article 6.1. The claimants contend that they may in those circumstances rely on Article 5.3. That is denied by the Non-Domiciled Defendants. If, by contrast, any of the claims against the UK Defendants is not struck out or summarily dismissed I did not understand it to be disputed that the claims against the Non-Domiciled Defendants were properly brought under Article 6.1.
The Decision
The Decision is a substantial document running to over 100 pages, 432 paragraphs or recitals and three articles. In the Introduction (paras 1 and 2) the Commission...
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