Britned Development Ltd v ABB

A claimant alleging loss from a cartel must prove both an infringement and actionable harm caused by it. In a cartel case, actionable harm may consist of a restriction or reduction of consumer benefit, such as an increased price or diminished genuine competition, without proof of a specific monetary loss at the liability stage.

Quantification is a separate, evidence-driven exercise. The court may use estimation and a broad brush, but must assess the particular transaction and avoid unsupported presumptions. On the evidence, an overcharge arose from inefficient cable design and cartel savings, but not from direct or indirect inflation of the tender price. The lost-profit and compound-interest claims failed.

Britned Development Ltd v ABB claimed damages from ABB’s participation in a cartel concerning high-voltage submarine and underground power cables. The European Commission had established the infringement, which ABB admitted.

The claim concerned an alleged overcharge on a submarine interconnector, lost profit said to result from choosing a 1,000MW rather than a 1,320MW cable, the effect of a regulatory earnings cap, and compound interest. The central issues were whether the cartel caused actionable harm, how any overcharge should be quantified, and whether the counterfactual project would have differed.

1. Liability and actionable harm. A claim for breach of statutory duty arising from competition-law infringement requires an infringement and actionable harm caused by it. In a cartel case, the actionable harm may be a restriction or reduction of consumer benefit, including reduced genuine competition in a tender, rather than proven monetary loss. The cartel caused BritNed to face a materially different and less competitive tender environment. The cause of action was therefore established.
2. Overcharge. The pleaded overcharge was the difference between the agreed price and the price that would have prevailed without the cartel, whether the counterfactual supplier was ABB or another provider. No statutory presumption of harm applied to this claim. The principle of effectiveness did not authorise the court to anticipate the later statutory presumption in Schedule 8A to the Competition Act 1998.
3. The court rejected the econometric model which averaged cartel and post-cartel projects. The model used unreliable proxies, inappropriately combined submarine and underground projects, and depended materially on uncertain time-trend and order-backlog variables. The more focused margin analysis based on comparable submarine projects and ABB’s actual direct costs was preferred, subject to its limitations.
4. ABB’s direct costs and project-specific risk allowances were honestly and competently compiled. The evidence did not establish direct or indirect inflation of the BritNed tender price through the cartel. However, the cartel insulated ABB from a baked-in inefficiency: its cable used excessive copper compared with efficient rival designs. The overcharge attributable to that inefficiency was assessed at €7,516,639. A further €5,492,929 was attributed to cartel savings arising from the reduced costs of competing and the cartel’s allocation of work.
5. The total overcharge was therefore €13,009,568. The 1,320MW option would not have been selected in the counterfactual. The lost-profit claim accordingly failed. The regulatory cap did not reduce the award; any future excess profits were to be dealt with under the regulatory arrangements. The compound-interest claim failed because the additional equity funding cost was suffered by BritNed’s shareholders, not by BritNed itself. BritNed was entitled to simple interest.