Cooper Tire & Rubber Company Europe Ltd & Ors v Dow Deutschland Inc & Ors

Under Article 6(1) of the Judgments Regulation, claims against a foreign defendant may be joined to claims against an English-domiciled anchor defendant where the latter disclose a real issue which cannot be struck out and the claims are sufficiently connected to risk irreconcilable judgments.

When deciding whether to stay related proceedings under Article 28, the court undertakes an overall balancing exercise. Relevant matters include relatedness, the stage and likely progress of each action, geographical proximity and whether proceedings will continue locally in any event. The court first seised has no presumptive primacy.

Lis pendens between courts of EU Member States is governed by the Judgments Regulation, regardless of a party’s Swiss domicile.

The European Commission found that several corporate groups had participated in a Europe-wide synthetic-rubber cartel. Tyre manufacturers subsequently claimed damages in England against members of those groups. Only three defendants were domiciled in England, and the claimants relied on them as anchor defendants for jurisdiction over the foreign defendants under Article 6(1) of the EC Council Regulation 44/2001.

Some cartel participants had previously begun negative declaratory proceedings in Milan. Those proceedings were dismissed at first instance, although an appeal remained pending.

Teare J, in [2009] EWHC 2609 (Comm), upheld jurisdiction and refused a discretionary stay under Article 28. He separately stayed the claim against the Swiss-domiciled Dow Europe under Article 21 of the Lugano Convention. The Dow defendants appealed against the jurisdiction and Article 28 rulings. The claimants cross-appealed against the stay granted to Dow Europe.

1. The Dow defendants’ appeal was dismissed. The pleaded case was not confined to asserting liability merely because the English anchor defendants belonged to the same economic undertakings as the cartel participants. It also alleged that each defendant coordinated and implemented the arrangements. The pleadings therefore permitted the claimants to prove that the anchor defendants participated in, or knew of, the cartel. That case could not properly be struck out before disclosure, given the secrecy inherent in anti-competitive arrangements.

2. The claims against the foreign Dow defendants and those against the anchor defendants were sufficiently closely connected for Article 6(1) of the EC Council Regulation 44/2001. Determining them together was expedient to avoid irreconcilable judgments. It was consequently unnecessary to decide whether an innocent subsidiary could incur liability solely because another entity within its undertaking infringed Article 81.

3. On that unresolved question, the approach in Provimi was arguable, but the contrary view was also arguable. It was not obvious that a subsidiary should be liable for conduct by its parent or a fellow subsidiary when it neither participated in nor knew of that conduct. Had the point been decisive, a reference to the European Court of Justice would probably have been necessary.

4. Teare J made no error in refusing a discretionary stay under Article 28. He properly balanced the close relationship between the actions, their respective stages and likely progress, their geographical connections, and the continuation of proceedings in England against defendants who had submitted to jurisdiction. Italy’s status as the court first seised was neither a trump card nor necessarily the primary consideration. When assessing the stage of competing proceedings, a court may consider when a decision is realistically likely to be reached. That factual assessment implies no criticism of the foreign judicial system.

5. The claimants’ cross-appeal was allowed. The competing courts were in England and Italy, both EU Member States. The lis pendens issue was therefore governed by the Judgments Regulation, notwithstanding Dow Europe’s Swiss domicile. The position of Dow Europe was consequently indistinguishable from that of the other Dow defendants.

1. Court of Appeal (Civil Division): The Dow defendants’ appeal was dismissed and the claimants’ cross-appeal was allowed: [2010] EWCA Civ 864.

2. Commercial Court: Teare J upheld jurisdiction under Article 6(1) of the EC Council Regulation 44/2001 and refused a discretionary stay under Article 28. He granted Dow Europe a stay under Article 21 of the Lugano Convention: [2009] EWHC 2609 (Comm).