Judgment of the High Court on the territorial scope of EU competition law

24/05/16

On 23 May 2016, Mann J handed down judgment in iiyama Benelux BV & Ors v Schott AG & Ors [2016] EWHC 1207 (Ch), in which he considered the territorial scope of EU competition law in the context of claims for damages arising from two separate cartels with two separate groups of Defendants: a cartel in relation to glass for Cathode Ray Tubes (“CRT Glass”) and a cartel in Cathode Ray Tubes (“CRTs”). CRT Glass and CRTs used to be incorporated into computer monitors.

The Claimants had sold computer monitors containing CRTs in the EEA. The central issue was whether the alleged loss suffered by the Claimants arising from purchases of CRT Glass and CRTs that took place outside the EEA, in Asia, was indirect and too remote to give rise to a claim in damages. The CRT Glass and CRT Defendants argued that the losses claimed by the Claimants fell outside the scope of Article 101 TFEU, and the Judge agreed, ruling that the conduct complained about lacked a sufficient territorial connection with the EU. The Judge held that none of the CRT Glass and CRTs that were the subject of the claim had been sold directly into the EEA. The Judge further held that any effects on competition in the EEA in the market for computer monitors caused by the sale of the Claimants’ computer monitors did not constitute immediate effects of the CRT Glass and CRT cartels in the EEA. In relation to the CRT Glass Defendants, the Judge held that the claim based on a global cartel that the Claimants wished to advance was not one which was pleaded and failed also for that reason. For these reasons, the Judge concluded that all of the Defendants were entitled to summary judgment or striking out of the claims against them, and the Defendants domiciled outside the EU were entitled to have service out of the jurisdiction set aside.

The Judge went on to hold that permission to serve out of the jurisdiction should also be discharged for material non-disclosure, since the Claimants had failed to disclose the material fact that their claims were premised solely on purchases of CRT Glass and CRTs that took place outside the EEA.

The ruling is available here