Supreme Court strikes out claim for damages and defines the nature of a cartel infringement decision

09/04/14

Deutsche Bahn AG (Respondents) v Morgan Advanced Materials Plc (Appellant)

On 9 April 2014 the Supreme Court allowed Morgan’s appeal and struck out Deutsche Bahn’s claim for damages on the grounds that it was time barred. The appeal raises the important issue as to whether a cartel infringement decision is addressed collectively to cartel members or individually.

On 3 December 2003 the European Commission adopted a Decision that found that Morgan had participated in a cartel to fix the price of electrical carbon products. Time for appealing to the General Court in Luxembourg expired on 14 February 2004. Several cartel members appealed but Morgan, as whistleblower, did not. The General Court dismissed the appeals and the time for appealing to the Court of Justice expired on 18 December 2008. No appeal to the Court of Justice on liability was made although two members appealed against fines (for the distinction between an appeal against liability and an appeal against penalty see the Supreme Court’s judgment in BCL Old Ltd v BASF plc [2012] UKSC 45).

On 15 December 2010 Deutsche Bahn and others commenced a claim for damages against the cartel members including Morgan. Morgan submitted that the claim against it was time barred as the infringement decision addressed to it had become definitive on 14 February 2004 and, consequently, the 2-year limitation period for by Rule 31 of the Tribunal’s Rules expired on 14 February 2006. By contrast, Deutsche Bahn submitted that (a) the relevant infringement decision was a collective decision (b) the factual basis for the cartel did not become definitive until 18 December 2008 and (c) consequently, the 2 year limitation period against the collective decision only expired on 18 December 2010.

The Court of Appeal reversed the judgment of the Competition Appeal Tribunal which had accepted Morgan’s case and struck out the claim. The Supreme Court restored the Tribunal’s Order. The Supreme Court held that a Commission Decision regarding the existence of a cartel constitutes a bundle of decisions addressed individually to the cartel members and which remain binding or not according to the outcome of any individual appeal. “A successful appeal by one addressee, establishing that there was no cartel, has no effect on the validity and effects of the Decision determining that there was such a cartel and levying a fine as against another addressee who has not appealed” [para 21].

Judgment
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