BCL Old Co Ltd & Ors v BASF SE & Anor

For a follow-on damages claim under section 47A of the Competition Act 1998, the relevant Commission decision is the decision establishing infringement. It is distinct from a decision imposing a fine, even where both appear in one Commission document.

Accordingly, proceedings challenging only the penalty do not postpone the expiry of the period in section 47A(8), nor the commencement of the two-year limitation period under rule 31 of the Competition Appeal Tribunal Rules 2003. The statutory purpose is to ensure that the infringement decision which binds the Tribunal is definitive. A pending penalty appeal may justify a stay or an extension of time, but cannot alter that construction.

The claimants brought a follow-on damages claim before the Competition Appeal Tribunal under section 47A of the Competition Act 1998. They relied on a European Commission decision finding that BASF had participated in a vitamins cartel contrary to Article 81(1) of the EC Treaty.

BASF had challenged only the fine imposed by the Commission. The Court of First Instance reduced that fine. The defendants contended that the claim was nevertheless out of time because no proceedings had challenged the finding of infringement itself.

The Tribunal rejected the limitation defence in a preliminary ruling: [2008] CAT 24. The central issue on appeal was whether a penalty-only challenge postponed the section 47A(8) period and therefore the two-year period for bringing the claim.

Appeal allowed unanimously. Richards LJ, with whom Lloyd and Waller LJJ agreed, held that the claim was time-barred unless the Tribunal granted an extension of time.

1. Section 47A distinguishes a decision establishing infringement from a decision imposing a penalty. Section 47A(5)(a) permits a follow-on claim only after a decision listed in section 47A(6) has established the relevant infringement. The references to a decision in sections 47A(7) and (8) must therefore carry the same meaning.

2. The Commission’s single document contained separate decisions: article 1 made the infringement finding and article 3 imposed the fine. In substance, those remained distinct decisions. BASF’s application before the Court of First Instance concerned only the fine. It was not proceedings against the decision establishing infringement.

3. It followed that the section 47A(8) period ended when proceedings challenging the infringement decision could no longer be instituted. The later penalty appeal did not extend that period. Rule 31 of the Competition Appeal Tribunal Rules 2003 therefore required the claim to be brought within two years from that earlier date.

4. Section 47A(9), which makes the Tribunal bound by the infringement decision, confirmed that this construction serves the statutory purpose. The infringement decision must be definitive before proceedings may be brought without permission. Policy concerns about issues arising on a penalty appeal, or delay in publication of a full Commission decision, could not displace the statutory language. In an appropriate case the Tribunal could stay a claim pending a penalty appeal or extend time under its case-management powers.

• Court of Appeal (Civil Division): Allowed BASF’s appeal and reversed the preliminary ruling that the claim was in time.
• Competition Appeal Tribunal: Rejected the defendants’ limitation defence on a preliminary issue: [2008] CAT 24.