Deutsche Bahn AG and others v Morgan Advanced Materials Plc

A European Commission decision finding a competition infringement against several addressees is legally a series of individual decisions. An appeal by one addressee affects only the decision concerning that addressee. It does not postpone finality or alter the binding decision against an addressee who did not appeal.

For a follow-on damages claim under section 47A of the Competition Act 1998, the limitation period against a non-appealing addressee therefore runs from the expiry of that addressee’s own time for challenging the Commission decision. Appeals by other addressees are irrelevant to that calculation. The domestic tribunal remains bound by the infringement established against the defendant, although claimants must still prove causation and loss.

The European Commission found that Morgan Advanced Materials Plc and other undertakings had participated in an unlawful carbon and graphite products cartel. Morgan, which had disclosed the cartel, did not appeal. Other addressees unsuccessfully challenged the finding of infringement.

Deutsche Bahn AG and other claimants subsequently brought follow-on damages proceedings under section 47A of the Competition Act 1998. The Competition Appeal Tribunal held that the two-year limitation period ran from the expiry of Morgan’s own time for appealing and struck out the claims. The Court of Appeal reversed that decision in [2012] EWCA Civ 1055; [2013] Bus LR 125.

The central issue was whether the relevant Commission decision became final against Morgan when its own appeal period expired, or only when the infringement appeals pursued by other addressees had concluded.

1. Appeal allowed unanimously. Lord Mance delivered the judgment, with which Lord Neuberger, Lord Sumption, Lord Toulson and Lord Hodge agreed. The Court of Appeal’s judgment was set aside and the Competition Appeal Tribunal’s order striking out the claims was restored.

2. A Commission competition decision addressed to several undertakings is, as a matter of European Union law, a set of individual decisions. Each decision finds the relevant addressee guilty of the infringement and, where appropriate, imposes a fine. An appeal concerns only the aspects relating to the appellant. A successful challenge by one addressee neither annuls nor modifies the binding decision against another addressee who did not appeal. The court applied AssiDomän and Galp Energía on this point.

3. The references in section 47A(5), (8) and (9) of the Competition Act 1998 must be understood consistently with the European law nature of the Commission decision. The relevant decision is not an abstract finding that some unspecified infringement occurred. It is the operative decision that a particular cartel existed between specified parties during specified periods. As against a non-appealing addressee, that decision remains fully effective regardless of appeals by other addressees.

4. Domestic courts and tribunals cannot reach a conclusion inconsistent with a binding Commission finding of infringement. They must nevertheless determine whether the claimant suffered loss and whether the infringement caused that loss. Domestic procedural and limitation rules remain subject to the principles of equivalence and effectiveness.

5. The possibility that successful appeals by other addressees might leave the non-appealing undertaking without parties from whom to seek contribution did not change the construction. Contribution proceedings could, where appropriate, be adjourned pending those appeals. The damages claim must still be determined on the basis of the infringement bindingly established against the non-appealing defendant.

6. Morgan’s time for challenging the Commission decision expired on 13 February 2004. Rule 31 of the Competition Appeal Tribunal Rules 2003 therefore required the follow-on proceedings to be brought within two years after that date. Proceedings commenced on 15 December 2010 were out of time.

1. United Kingdom Supreme Court: The appeal was allowed unanimously. The judgment in [2012] EWCA Civ 1055 was set aside and the Tribunal’s strike-out order was restored.
2. Court of Appeal: In [2012] EWCA Civ 1055; [2013] Bus LR 125, the court held that the limitation period began only after the infringement appeals brought by other addressees had concluded, and restored the claims.
3. Competition Appeal Tribunal: By judgment dated 25 May 2011, the Tribunal held that limitation ran from the expiry of Morgan’s own appeal period and struck out the claims.