Air Canada & Ors v Emerald Supplies Limited & Ors

A national court hearing an EU competition damages claim must protect material in a European Commission decision which alleges an infringement but cannot be challenged before the EU courts. The protection arising from the presumption of innocence is not displaced by disclosure into a confidentiality ring, the opportunity to defend domestic proceedings, or the evidential value of the material.

The economic torts of unlawful-means interference and unlawful-means conspiracy require an intention to injure the claimant. Foreseeable or probable loss is insufficient. Where an alleged cartel raises prices but does not know whether an indirect purchaser will retain or pass on the increase, it lacks the required intention to injure that purchaser.

Some 565 air-freight shippers claimed against British Airways plc for losses allegedly caused by a worldwide price-fixing cartel. Their claims alleged infringements of article 101 TFEU and article 53 of the EEA Agreement, unlawful-means interference and unlawful-means conspiracy. British Airways brought contribution proceedings against other airlines.

Peter Smith J ordered disclosure within a confidentiality ring of an unredacted European Commission decision, including material protected under Pergan. He also adjourned applications to strike out the economic tort claims until after disclosure and awarded the claimants indemnity costs.

The airlines appealed. The principal questions were whether a national court could disclose protected Commission findings which the affected airlines could not challenge before the EU courts, and whether the alleged cartel disclosed the intention to injure required for the economic torts.

1. The Pergan appeals were allowed. A national court implementing EU competition law must afford addressees and non-addressees the protection which EU law gives to incriminatory findings or allusions in a Commission decision that they cannot challenge before the EU courts. Article 48 of the Charter of Fundamental Rights of the European Union applies to national proceedings implementing article 101 TFEU. Pergan therefore extends beyond publication by the Commission.

2. The presumption of innocence is distinct from the right to defend domestic proceedings. An opportunity to rebut allegations in an English damages action cannot cure the dissemination of Commission statements which have never been open to judicial challenge and cannot be regarded as established in law. A confidentiality ring may reduce reputational harm, but it does not prevent protected information from informing, enlarging or generating private damages and contribution claims.

3. The duty of sincere cooperation under article 4(3) TEU required the English court to avoid a real risk of conflict with the Commission and EU courts. The judge's disclosure order irreversibly gave the claimants access to material which the Commission had protected. Commission delay did not release the court from that duty. The provisional non-confidential decision governed disclosure, and the English court could not conduct a parallel redaction review.

4. The strike-out appeals were allowed. Both unlawful-means interference and unlawful-means conspiracy require an intention to injure the claimant. The claimant's loss must be a desired end or a means of achieving the defendant's end. Foresight that loss may or probably will occur is insufficient. The decision in Newson Holding Ltd v IMI plc [2013] EWCA Civ 1377 was binding and consistent with OBG Ltd v Allen [2007] UKHL 21.

5. The airlines could not know where an increased freight charge would ultimately fall within the distribution chain. The possibility that freight forwarders or shippers might absorb or pass on the increase concerned intention as well as damages. The airlines therefore could not be said to intend injury to the particular claimants. Further disclosure could not alter that legal conclusion. The claims in unlawful-means interference and unlawful-means conspiracy were struck out.

6. The indemnity costs order could not stand. The appropriate replacement costs orders were left for written submissions.

1. Court of Appeal (Civil Division): The Pergan and strike-out appeals were allowed. The disclosure orders and relevant proviso were set aside, the economic tort claims were struck out, and the indemnity costs order could not stand.
2. High Court, Chancery Division: Peter Smith J ordered disclosure of the unredacted Commission decision within a confidentiality ring, adjourned the strike-out application until at least after disclosure, and awarded the claimants indemnity costs. No neutral citation for those judgments is stated.