Mercedes-Benz Group AG & Anor. v Continental Teves UK Limited & Ors.

On applications to stay claims served within the jurisdiction and to set aside service out, the court applies the Spiliada principles. In multi-defendant litigation, the court should ordinarily consider where the proceedings, viewed as a whole, should be tried. The natural forum is identified by the forum having the closest and most substantial connection with the dispute, including the parties’ places of business, the location of the relevant conduct and loss, witnesses, documents, applicable law and procedural facilities. A claimant’s juridical advantage, such as wider disclosure, will not ordinarily determine the forum absent cogent evidence that substantial justice cannot be obtained elsewhere. Germany was the natural and clearly more appropriate forum for this cartel damages claim.

Mercedes brought follow-on damages claims arising from a European Commission Settlement Decision concerning exchanges of competitively sensitive information relating to hydraulic braking systems and after-series components. The claims were brought against English and German companies in the Continental and ZF groups. The English defendants were served within the jurisdiction and the German defendants were served out pursuant to permission under Civil Procedure Rules 1998, rules 6.36 and 6.37 and paragraph 3.1(3) of Practice Direction 6B.

The defendants applied to stay the claims against the English companies and to set aside service on the German companies, contending that Germany was the available natural forum. The central issue was whether England and Wales or Germany was the appropriate forum for the multi-defendant litigation.

1. Applications granted. Service on the Second to Fourth and Sixth and Seventh Defendants was set aside. The action against the First and Fifth Defendants was stayed.
2. The court applied the principles in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. For service-in cases, the defendant must show that England and Wales is not the natural or appropriate forum and that another available forum is clearly or distinctly more appropriate. For service-out cases, the claimant must show that England and Wales is clearly the appropriate forum. The relevant inquiry is the forum in which the case can suitably be tried in the interests of all parties and the ends of justice.
3. Where proceedings involve multiple defendants, the court should treat them as one piece of litigation and decide where the litigation as a whole should be tried, consistently with Lungowe v Vedanta Resources plc [2019] UKSC 20 at [68].
4. Germany was an available forum and had the closest and most substantial connection with the dispute. The parties were predominantly German-domiciled; the alleged infringing conduct, negotiations, witnesses and documents were principally in Germany; and most alleged loss was suffered there. The English defendants were peripheral and their alleged liability was substantially derivative.
5. The Settlement Decision did not eliminate the relevance of the location and nature of the infringement. Causation and the effect of information-sharing on negotiations would require investigation of the cartel’s operation and effects. Econometric evidence would complement, but could not replace, that factual inquiry, as recognised in Peugeot SA v NSK Ltd and Others [2018] CAT 3 at [28].
6. German law was likely to govern material issues, including partnership liability, and the German courts could make a preliminary reference on the interpretation of EU law, whereas English courts could not. These factors pointed towards Germany, although the preliminary-reference point was not decisive.
7. The possible advantages of English disclosure were juridical advantages. Mercedes did not contend that substantial justice could not be obtained in Germany, and those advantages did not outweigh the connecting factors pointing to Germany.

First-instance decision. The judgment does not state any prior appellate decision in the same proceedings.