Nokia Corporation v AU Optronics Corporation & Ors

A cause of action is identified at the highest level of abstraction by the material facts creating the claimant’s legal right and remedy. Later particulars or amendments do not introduce a new cause merely because they correct an error, add detail, or specify how the pleaded wrong will be proved. In secret-cartel litigation, initial pleadings should receive a measure of generosity because the relevant facts may be concealed and limitation may be at risk. Defendants remain protected by requests for information, strike-out or summary judgment applications, and abuse-of-process remedies. It is also sufficiently arguable that a company within an undertaking may incur liability for implementing cartel arrangements without its own knowledge, particularly where control by a knowledgeable undertaking is pleaded.

Nokia brought stand-alone and potential follow-on damages claims against LCD manufacturers and suppliers, alleging infringement of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement. The proceedings had been stayed during a European Commission investigation. The Commission’s later decision addressed large LCDs only and made no relevant finding concerning small LCDs for mobile telephones.

Following disclosure in related United States proceedings, Nokia sought permission to amend its Particulars of Claim. The defendants sought strike-out, summary judgment against D22, and orders setting aside service out of the jurisdiction, arguing that the original pleading disclosed no valid causes of action and that the amendments introduced new, potentially time-barred claims. The central issues were whether the original claim form and Particulars of Claim pleaded valid causes of action and whether the amendments merely particularised those claims.

Disposition. The strike-out applications and the application for summary judgment were dismissed. Permission was granted for Nokia to amend its Particulars of Claim. The court also directed a formal request to the European Commission for information about its continuing investigation.

1. Cause of action. Applying the approach in Letang v Cooper [1965] 1 QB 232 and Paragon Finance plc v DB Thakerar & Co. [1999] 1 All ER 400, a cause of action is defined by the material factual situation at the highest level of abstraction. More specific pleas ordinarily provide particulars and do not create a new cause of action.
2. Claim form and amendments. Under the Civil Procedure Rules 1998, a claim form may contain a concise statement of the nature of the claim and may be followed by separately served particulars. The claim form’s reference to infringement of Article 81(1) of the EC Treaty, now Article 101, and damages for LCD purchases adequately identified the cause of action. The amended pleading corrected errors and supplied fuller particulars; it did not add new causes of action. The approach was supported by Berezovsky v Abramovich [2011] EWCA Civ 153, Biddle & Co. v Tetra Pak Ltd [2010] EWHC 54 (Ch) and Toshiba Carrier UK Ltd v KME Yorkshire Ltd [2011] EWHC 2665 (Ch).
3. Secret-cartel pleadings. A measure of generosity was appropriate because cartel arrangements are secret and a claimant may otherwise lose a potentially valid claim before disclosure. The defendants retained procedural safeguards, including requests for further information, strike-out or summary judgment applications, and abuse-of-process or unless orders. The pleading was broad enough to include participation and implementation cases, information exchange as well as price fixing, and both object and effect allegations. The reasoning in Cooper Tire & Rubber Company Europe Ltd v Dow Deutschland Inc. [2010] EWCA Civ 864 was applied.
4. Implementation case. It was not acte clair that EU law excluded a damages claim against a company forming part of an undertaking which participated in and implemented an unlawful cartel, even if that company lacked knowledge of the cartel. The court followed the approach in Provimi Ltd v Aventis Animal Nutrition SA [2003] EWHC 961 (Comm) and treated Aristrain as distinguishable because it concerned attribution for a Commission fine, not civil damages and the balancing of interests between an injured claimant and the undertaking. The issue remained arguable and was unsuitable for strike-out.
5. Further orders. The parties were to agree the terms of the European Commission request. Nokia was to take the initiative in seeking any necessary adjustment to confidentiality restrictions affecting the Samsung SDI defendants, with liberty to apply if difficulties arose.