Commercial Court has jurisdiction over individual defendants in cartel damages claim brought by Brazilian orange farmers

09/11/21

Viegas v Cutrale is a claim brought on behalf of over 1,500 Brazilian orange farmers against two individuals (father and son, both called Jose Luis Cutrale) and their family company Sucocitrico Cutrale, incorporated and based in Brazil.  The individuals and the company admitted participation in cartel activities contrary to Brazilian law between 1999 and 2006 with other producers of frozen concentrated orange juice in Brazil and paid substantial fines to settle proceedings brought by the Brazilian competition authority, CADE.  The farmers’ complaints relate to a conspiracy to allocate territories and growers among the cartelist producers and coordinate on prices to be paid and terms of dealing with the growers, with the result that the claimants suffered losses and in many cases went out of business.  Mr Cutrale Sr has been domiciled in England since ‘dawn raids’ on the company premises in Brazil, although he retains homes in Brazil and elsewhere.  Accordingly, the Claimants proceeded against him in England, as well as the company at premises in Park Lane where various Cutrale-owned companies transact business.  Mr Cutrale Jr is domiciled in Switzerland and the Claimants alleged that the claims against him were sufficiently closely connected with those against his father and the company as to engage Article 6 of the Lugano Convention.  The defendants applied for orders that the English court had no jurisdiction.

In a judgment handed down in the Commercial Court on 5th November, Mr Justice Henshaw held that the Claimants were right as regards the domicile of the individuals but wrong about the company. 

As regards the company the argument turned on the location of its ‘central administration’, the least commonly encountered of the three bases on which jurisdiction may be founded (it being common ground that, as regards the other two tests, the company’s statutory seat and principal place of business were both in Brazil).  Henshaw J’s discussion of the concept of central administration in the English and EU Court of Justice cases and evaluation of the evidence is of great interest and value.  The Claimants’ contention that the test required a determination of the location of the high level entrepreneurial strategy of the company did not find favour.  The Judge also found that the company had not been validly served at the Park Lane address as those premises were not those of the company but of other group companies and the occasional activities carried out there in the company’s interest did not convert the premises to a fixed place of business for the company.  Accordingly, the company had not been validly served and was not domiciled in the jurisdiction.

As regards the individuals, Henshaw J had little difficulty in concluding that Mr Cutrale Sr was domiciled in the jurisdiction (notably because of declarations to that effect that Mr Cutrale had himself made in official documents) or that the claims against Mr Cutrale Jr were more closely linked to those against his father than to those against the company.  As there was no argument from the defendants that there were no serious issues to be tried, the only remaining question was whether there should be a stay as there are proceedings in foot in Brazil in relation to the cartel, although mostly not involving the Cutrale company and none (unlike the Commercial Court proceedings) involving the individuals as infringers of competition law in their own right.  The judge also considered the issue of stay and forum non conveniens in respect of the company and Mr Cutrale Sr in case he were wrong on the domicile and service issues.  Again, the Judge conducted a thorough and careful review of the law and the evidence, and concluded on balance that no stay was appropriate, making some interesting observations on the particular context of competition damages litigation, but that if forum non conveniens had fallen for decision, the balance would have tipped narrowly in favour of Brazil.

The judgment is here.