Cooper Tire & Rubber Co & Ors v Shell Chemicals UK Ltd & Ors

For the purposes of European competition law, an undertaking is an economic unit which may comprise several legal entities. Where one entity within the undertaking forms an infringing agreement and another entity within the same undertaking implements it by selling the cartelised products, the implementing entity may be liable without proof that it knew of the agreement.

For Article 27 of the Judgments Regulation, parties are the same only where their interests are identical and indissociable. Joint tortfeasor status alone does not necessarily satisfy that test. A stay under Article 28 remains discretionary and requires assessment of relatedness, litigation stage and proximity, together with the risk of inconsistent decisions.

The claimants brought English proceedings for damages arising from a European Commission decision concerning a Europe-wide cartel in butadiene rubber and emulsion styrene butadiene rubber. Most defendants were domiciled outside England. Jurisdiction was asserted over several defendants through English-domiciled subsidiary companies alleged to have implemented the cartel arrangements by making sales in England.

Some defendants challenged jurisdiction under Articles 2, 5(3) and 6(1) of the Judgments Regulation. They also sought mandatory or discretionary stays because related proceedings had first been commenced in Italy by Enichem, an alleged cartel participant. Two Swiss-domiciled defendants relied on the Lugano Convention. The central issues were whether the English court had jurisdiction, whether the Italian and English proceedings involved the same parties, and whether a discretionary stay was appropriate.

1. Jurisdiction under Article 6(1). The claimants had a good arguable case that the English anchor defendants had implemented infringing arrangements by selling the cartelised products. An undertaking is an economic unit for competition-law purposes and may comprise several legal entities. Following Provimi Ltd v Roche Products Ltd, a subsidiary forming part of the undertaking may be liable for implementation by the undertaking without proof of its separate knowledge or concurrence of wills. Akzo Nobel did not decide this issue and was not inconsistent with that conclusion.
2. The court therefore had jurisdiction over the Dow defendants under Article 6(1). Jurisdiction under Article 5(3) was available only for damage occurring in England, since the Europe-wide cartel had no readily identifiable single place of harmful event.
3. Article 27. The English and Italian proceedings were not between the same parties. Although Enichem and the English defendants shared an interest in denying loss, their interests diverged because Enichem faced potential contribution claims and was entitled to conduct its own defence. The English proceedings were therefore not subject to a mandatory stay under Article 27.
4. Lugano Convention. A mandatory stay was required under Article 21 for claims against Dow Europe brought by claimants who were already parties to the Italian proceedings when Italy was first seised. The English court could not treat itself as seised of claims against a Lugano defendant merely because related entities were already defendants under the Judgments Regulation. No discretionary stay was available under Article 22 because the Italian proceedings were no longer pending at first instance.
5. Article 28. The time limit in CPR 58.7(2) was a procedural rule compatible with Article 28; an extension was granted to the Bayer and Lanxess defendants. The discretion to stay was nevertheless refused. The relevant factors were the degree of relatedness and risk of conflicting decisions, the stage reached in each jurisdiction, and the proximity of each court to the dispute. The Italian proceedings had been dismissed at first instance, were unlikely to reach a merits decision before the English proceedings, and did not place the centre of gravity of this Europe-wide dispute in Italy.
6. The court declined to determine waiver of contractual jurisdiction and arbitration clauses because the applications and the alleged waiving conduct had not been sufficiently particularised and the relevant contractual laws had not been established.

First-instance decision of the High Court (Commercial Court). The judgment itself records that the Italian proceedings had been dismissed at first instance and were under appeal, but gives no later appellate disposition of this English decision.