Flavio de Carvalho Pinto Viegas & Ors v Rosana Falcioni Cutrale & Anor

Where the highest relevant foreign court has repeatedly determined an issue of foreign law, an English court should follow that law unless the evidence shows that the foreign decisions misstated the law and would be corrected if the issue arose again.

A competition damages claim is a follow-on claim only where the claimant can rely on findings by the regulator establishing the relevant unlawful conduct. A cease-and-desist agreement containing limited and qualified admissions, followed by closure of the regulatory investigation without condemnation, does not suffice.

For a stand-alone claim, limitation begins when the claimant knew, or could reasonably have known, of the possible infringement, possible loss and possible wrongdoer. Full knowledge of liability or the precise loss is unnecessary.

More than 1,500 Brazilian orange growers, or representatives of their estates, brought claims in England against individuals associated with Sucocítrico Cutrale Ltda. They alleged that an unlawful cartel reduced the prices paid for oranges and increased production and logistics costs.

The claims were governed by Brazilian law. The defendants applied for determination of a preliminary issue, contending that the claims were barred by the three-year limitation period under the Brazilian Civil Code. The claimants argued that the claims were follow-on claims based on a 2018 decision of the Brazilian Competition Authority, CADE, and that time therefore began to run only when that decision was published.

The central issues were whether the CADE decision and related cease-and-desist agreement established a follow-on claim, when limitation began for any stand-alone claim, and whether the alleged losses constituted continuing damage.

1. Foreign law methodology. The function of an English court receiving foreign-law evidence is to predict the likely decision of the foreign court. A clear and consistent determination by the highest relevant foreign court carries substantial weight. It should be followed unless the evidence demonstrates that the foreign court misstated or misapplied its law and would reach a different conclusion if the issue arose again.
2. Follow-on and stand-alone claims. A follow-on claim depends on findings by the relevant competition authority which establish the unlawful conduct, leaving the claimant principally to prove causation and loss. A claim in which liability must be proved directly in court is a stand-alone claim. The distinction affects the commencement of limitation.
3. TCC and CADE decision. The 2016 cease-and-desist agreement admitted only that information may have been shared in sectoral discussions. Its language was limited and qualified. It did not admit participation in the alleged cartel or the unlawfulness of the conduct. Article 185 of CADE’s Internal Regulations did not require the agreement to be construed as containing a wider admission. CADE’s 2018 decision closed the investigation following compliance with the agreement and was not a condemnatory decision. The claims were therefore not follow-on claims.
4. Limitation for stand-alone claims. Under the Brazilian actio nata principle, time begins when the claimant has, or could reasonably acquire, unequivocal knowledge of the possibility that its rights were infringed, the possible resulting loss and the possible responsible party. Certainty that an infringement occurred, knowledge of the full extent of loss, and a final regulatory determination are unnecessary.
5. The relevant information was publicly available by February 2006, following Operation Fanta and publication of the notice expanding the CADE investigation to include the defendants and Sucocítrico Cutrale. Alternatively, limitation began when a relevant supply contract was entered into after that date. The claims issued in 2019 were therefore time-barred.
6. The alleged losses were successive or periodic rather than permanent. Each new supply contract generated a distinct loss and a corresponding limitation period. The claimants’ continuing-damage argument was rejected.

The claims as presently pleaded were dismissed as statute barred.