Iiyama (UK) Ld ) & Ors v Samsung Electronics Co Ltd & Ors

Article 101 TFEU has territorial limits. A cartel formed outside the EU may infringe Article 101 if implemented within the EU, applying the approach in Ahlström Osakeyhtiö v Commission (Woodpulp I). The alternative qualified-effects approach requires a foreseeable, immediate and substantial effect in the EU.

Indirect purchasers cannot rely merely on downstream EU sales where the cartel was implemented outside the EU. They must plead an arguable causal connection between the EU implementation of the cartel and their loss. At the summary judgment stage, important and developing questions of causation, remoteness and recoverability under Article 101 should not ordinarily be finally determined without fuller investigation.

The claimants sought damages for alleged infringement of Article 101 TFEU, Article 53 of the EEA Agreement and Chapter I of the Competition Act 1998, arising from a worldwide cartel concerning LCD panels. The first and fifth defendants were South Korean companies and the second to fourth defendants were English companies within the Samsung group.

The defendants applied to strike out the claims, obtain summary judgment, and challenge jurisdiction and service out of the jurisdiction. The claimants relied on a European Commission decision finding that the cartel had been implemented in the EU. The central issues were whether the pleaded losses fell within the territorial scope of Article 101, whether the English subsidiaries had an arguable liability, whether the foreign defendants were proper parties, and whether England and Wales was the appropriate forum.

1. Territorial scope. The court accepted that Article 101 is territorially limited. Under Ahlström Osakeyhtiö v Commission (Woodpulp I), the decisive question is where the cartel was implemented. Sales outside the EU, followed by downstream sales inside the EU, do not by themselves amount to implementation within the EU. The court also proceeded on the basis that the qualified-effects approach in Gencor Ltd v Commission could apply where the cartel had a foreseeable, immediate and substantial effect in the EU.
2. The Commission had found that the worldwide LCD cartel was implemented in the EU and had a foreseeable, immediate and substantial EU effect. The claimants therefore had to show that their loss resulted from that EU implementation, rather than merely from an overcharge imposed when the cartel was implemented in Asia.
3. The pleaded case that, absent EU implementation, LCD products would have been available in the EU at non-cartel prices, causing the claimants to purchase at inflated prices outside the EU, was arguable. Questions concerning causation, proximity, remoteness, recoverability and possible reference to the CJEU were unsuitable for summary disposal.
4. English subsidiaries. There was an arguable case that the parent directed the subsidiaries to charge cartel prices, that the subsidiaries complied, and that knowledge of the cartel could be attributed where pricing decisions had been delegated to the parent. The claims against D2 to D4 were therefore neither struck out nor summarily dismissed.
5. Jurisdiction and forum. The claimants had a serious issue to be tried, a good arguable case under paragraph 3.1(3) of CPR PD 6B, and a proper basis under paragraph 3.1(9) for C1. England and Wales was clearly or distinctly the appropriate forum because the claims involved Article 101, the English anchor defendants, overlapping issues and witnesses, and a substantial risk of inconsistent findings if the claims were split between jurisdictions.
6. The court rejected the alleged material non-disclosure. The claimants were not required to anticipate every defence. Permission to serve out was maintained. The applications by D1 and D5 concerning jurisdiction and service, and by D2 to D4 for strike-out or summary judgment, were dismissed. Permission to amend was adjourned.