Arkin v Borchard Lines Ltd. & Ors

In a damages claim for breach of Articles 81 and 82 of the Treaty of Rome, losses caused by the claimant’s unreasonable and substantially independent conduct may cease to be attributable to the defendant’s breach. The question is whether the claimant’s conduct displaced the breach as the predominant cause of the loss. A claimant cannot avoid that conclusion by treating the limitation date as the start of a hypothetical market where the loss in reality flows from earlier conduct. Losses caused by continuing unlawful conduct after a reasonable withdrawal may in principle be recoverable, but a new damages case will not be remitted where it was never advanced, lacks an evidential foundation, and would be unfair or disproportionate.

Mr Arkin, as assignee of claims belonging to BCL Shipping Line Ltd, alleged that shipping Conferences had infringed Articles 81 and 82 of the Treaty of Rome and caused substantial trading losses. Colman J dismissed the claim after a 50-day trial on 10 April 2003, finding no breach and, alternatively, that BCL had caused its own additional losses by irrationally continuing to trade in the market.

Colman J refused permission to appeal because there was no real prospect of success on causation. Mr Arkin renewed the application before the Court of Appeal. The court considered whether the causation finding had a reasonable prospect of being overturned and whether the matter should be remitted for assessment of losses on an alternative basis.

The application for permission to appeal was refused. Waller LJ gave the first judgment, and Lord Phillips agreed. The court was concerned with the prospects of success on causation and did not finally determine whether Articles 81 or 82 had been breached.

1. Causation. The claimant bore the burden of proving the causal link between the breach and the claimed loss. The approach reflected in Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360 required a common-sense inquiry into whether the claimant’s conduct displaced the defendant’s breach as the predominant cause. Relevant considerations included whether the claimant made a choice substantially independent of the breach, the unreasonableness of the conduct, and its effect on the loss. Waller LJ emphasised that the case was fact-specific and did not require determination of a general principle.
2. Limitation and the market position. Because losses flowing from conduct before 18 April 1991 were time-barred, BCL had to show separate loss caused by later conduct. It could not construct a hypothetical market beginning on the limitation date while ignoring the earlier unlawful conduct. The overall position was relevant. The finding that BCL should reasonably have withdrawn before that date could not realistically be challenged.
3. Continued trading. BCL could not recover additional losses caused by irrationally remaining in the market after a rational trader would have withdrawn. A possible claim for losses caused by exclusion from the market after a reasonable withdrawal was not before the court on the pleaded case.
4. Remittal and costs. Remittal was refused because the alternative claim had never been advanced, the evidence needed to calculate it was unavailable, and changing the case would be fundamentally unfair and disproportionate, particularly given the claimant’s impecuniosity. The claimant was ordered to pay the defendants’ costs, subject to assessment if not agreed.

1. Court of Appeal (Civil Division) — Permission to appeal refused in [2004] EWCA Civ 1873. The claimant was ordered to pay the defendants’ costs.
2. High Court of Justice, Queen’s Bench Division, Commercial Court — Colman J dismissed the claim after trial on 10 April 2003 and refused permission to appeal. The judgment citation was not stated in the judgment.