Iiyama (UK) Limited & Ors. v Samsung Electronics Co. Ltd. & Ors.

A private claim for loss caused by a worldwide cartel should not be summarily dismissed merely because the claimant bought cartelised goods through a supply chain beginning outside the EU. Treaty on the Functioning of the European Union Article 101 may apply where the cartel was implemented in the EU or where its qualified effects there were immediate, foreseeable and substantial.

Those effects must be assessed by viewing the anti-competitive conduct as a whole. A prior sale outside the EU to an innocent third party does not inevitably make later EU effects too remote or insufficiently immediate. Choice of law, causation and territorial connection may require full factual examination at trial.

The iiyama group claimed damages arising from worldwide LCD and CRT price-fixing cartels. The relevant components were first supplied outside the EU or EEA and were later incorporated into monitors sold to iiyama group companies in the EU.

In the CRT action, Mann J struck out the claims, set aside permission to serve foreign defendants out of the jurisdiction and held that the alleged effects lay outside Article 101. In the LCD action, Morgan J allowed a limited claim based on EU implementation to proceed, but excluded loss said to result from Asian implementation. The claimants appealed; Samsung and LG Display cross-appealed.

The central question was whether the claimants had an arguable claim for losses caused by an infringement of Article 101 and Article 53 despite the non-EU stages of the supply chains.

Disposition

1. The Court allowed the CRT claimants’ appeal on all grounds. It allowed the LCD claimants’ appeal against the declaration excluding loss attributed to Asian implementation. It set aside both declarations in Morgan J’s order and dismissed the Samsung and LG Display cross-appeals.

2. Article 101 has two alternative territorial routes. A cartel may fall within its scope if implemented in the EU. Alternatively, under Intel Corporation Inc v European Commission Case C413/14P, jurisdiction may rest on qualified effects which are immediate, foreseeable and substantial. The qualified-effects inquiry requires the cartel conduct to be viewed as a whole.

3. The court held that a worldwide cartel intended to produce substantial, systemic effects in the internal market may arguably satisfy that test even where an earlier sale at an inflated price was made outside the EU to an innocent third party. Directness is not an additional requirement separate from immediacy. The characterisation of an effect as a knock-on effect must follow, rather than replace, a full factual analysis.

4. The territorial and choice-of-law issues were fact-sensitive and legally developing. On the material available, including redacted Commission decisions, they were unsuitable for strike-out or reverse summary judgment. The proposed CRT amendments also had an adequate evidential basis and were permitted.

5. Joint and several liability permits recovery of established loss from a cartel participant only after infringement and liability have been established. It cannot itself establish territorial scope, causation or entitlement to damages.

6. There were good arguable claims against the UK anchor defendants, and the foreign cartel defendants were proper parties under the service-out gateway. England and Wales was the appropriate forum. Although the CRT service-out application involved serious non-disclosure, the order should not be set aside because the Master would still have granted it; the appropriate primary sanction was costs against the CRT claimants.

• Court of Appeal (Civil Division) — allowed the CRT appeal and the LCD claimants’ appeal, set aside both declarations in Morgan J’s order, and dismissed the cross-appeals.

• High Court of Justice, Chancery Division (Mann J) — [2016] EWHC 1207 (Ch). Granted summary judgment or strike-out in the CRT action, held the claims outside the territorial scope of Article 101, and set aside permission for service out.

• High Court of Justice, Chancery Division (Morgan J) — [2016] EWHC 1980 (Ch). Allowed the LCD claim to proceed insofar as it relied on EU implementation, but declared that loss attributed to Asian implementation was not recoverable.