La Gaitana Farms SA & Ors v British Airways Plc

Under the transitional regime in Articles 104 and 105 of the Treaty on the Functioning of the European Union, a national court had no jurisdiction to determine that conduct infringed Article 101(1), or to award damages on that basis, without a prior determination by the competent national competition authority or the Commission. This applied to all Article 101 cases, even where exemption under Article 101(3) appeared unlikely. Articles 1 and 6 of Regulation 1/2003 made a substantive change by creating a new right to sue in national courts. They did not operate retrospectively. Later findings concerning related cartel conduct did not alter that conclusion.

The appellants claimed damages for alleged overcharges arising from an air-freight cartel. The preliminary issues concerned flights between the European Union and third countries before 1 May 2004, and corresponding EEA flights before 19 May 2005. Mrs Justice Rose dismissed those claims, holding that the High Court lacked jurisdiction under the transitional competition regime and that Regulation 1/2003 was not retrospective.

The appeal concerned the scope of the national court’s jurisdiction, the effect of Article 101(3), the temporal application of Articles 1 and 6 of Regulation 1/2003, and whether a reference under Article 267 was required.

Flaux LJ gave the leading judgment. Bean LJ and the Master of the Rolls agreed. The appeal was dismissed.

1. Under Articles 104 and 105 of the Treaty on the Functioning of the European Union, the transitional regime reserved determinations under Article 101 to the competent national competition authority and the Commission. The rule established in De Geus v Bosch & Van Rijn, Asjes and Ahmed Saeed was not confined to cases seeking automatic voidness under Article 101(2). Article 101 was an indivisible whole, and pleading concerted practices or damages did not avoid the jurisdictional restriction.
2. The possibility of exemption under Article 101(3) was a generic reason for the transitional regime. It was not necessary, or permissible, for the Court to decide whether exemption was factually likely in the particular case. Later Commission findings about related conduct were relevant, but did not determine the position for the period and routes which the Commission had not considered. The incremental implementation of competition rules in international air transport reinforced that conclusion.
3. Articles 1 and 6 of Regulation 1/2003 were substantive rather than procedural. They removed the prior-decision requirement, gave national courts full jurisdiction to apply Article 101 and created a new right to sue for damages. Under the established non-retroactivity principle, substantive rules apply to earlier situations only where that result clearly follows from their terms, objectives or general scheme. Nothing in the Regulation produced that result.
4. The future-effects principle did not assist the appellants. Their alleged overcharges and causes of action concerning pre-1 May 2004 conduct were complete before the Regulation came into force. The later continuation of the cartel did not make the earlier legal situation an uncompleted one.
5. The existing European case law clearly resolved the jurisdictional and temporal questions. No reference under Article 267 was required, and the Court would not defer judgment pending the decision of another national court on a possible reference.

• Court of Appeal (Civil Division): in [2019] EWCA Civ 37, dismissed the appeal.
• Business & Property Courts, Competition List (Chancery Division): Mrs Justice Rose’s order dated 1 December 2017 dismissed the relevant claims concerning pre-1 May 2004 EU–third-country flights and corresponding pre-19 May 2005 EEA claims.