Court of Appeal applies FII and upholds Bacon J’s judgment that Smart Card Chips Damages claim is time-barred

10/06/22

The Court of Appeal (Vos MR, Green LJ, Birss LJ) handed down judgment today in an appeal concerning whether a claim for damages arising out of the Smart Card Chip (“SCC”) cartel was time-barred.

In September 2014 the European Commission found the Defendant groups, Renesas and Infineon, to have participated in a cartel that covered SCCs, a product used in the SIM cards of mobile phones and payment cards, from 2003 to 2005.  Gemalto was a SIM card manufacturer who purchased SCCs during that period. In July 2019, just under six years from the date of the Commission’s infringement decision, Gemalto issued a claim for damages of around €280 million, excluding interest.

The Defendants pleaded that the claims were time-barred and a preliminary issue on limitation was ordered. At first instance Mrs Justice Bacon DBE held that the claim had been brought out of time.

The Court of Appeal upheld that judgment. It found that the proper approach to limitation, in cases concerning concealment under section 32(1)(b) of the Limitation Act 1980, is the same as that set out by the Supreme Court in relation to cases of mistake in Test Claimants in the Franked Investment Group Litigation & Ors v. HMRC [2020] UKSC 47 (“FII”). Time will start to run when a Claimant knows that it has a “worthwhile claim” such that it can “embark on the preliminaries” to issuing a claim.

In this particular case, Gemalto knew that it had a worthwhile claim, at the latest, following publication of a press release associated with a Statement of Objections (“SO”), which stated that the Commission had reason to believe there had been a cartel in SCCs. The identity of the parties to the investigation was widely known and was in the public domain at that time. The Court of Appeal held that a claim could have been pleaded in reliance on this information and would not have been be struck out.

The Court rejected the Appellant’s submission that a prospective claimant only knows that it has a “worthwhile claim” once it knows that an investigation has come to an end and a final Commission decision has been reached.

The Judgment is available here.