On 9 April 2014, the UK Supreme Court (Supreme Court) delivered its judgment on an appeal by Morgan Advanced Materials plc (formerly Morgan Crucible) (Morgan), challenging a Court of Appeal (CA) decision, finding that damages actions against it had been brought in time.
In December 2003, the European Commission imposed fines totalling € 101.44 million on several undertakings for having participated between 1988 and 1999 in the carbon and graphite products cartel. Morgan benefited from total immunity from fines under the Commission's 1996 Leniency Notice for having revealed the existence of the cartel to the Commission.
The other participants in the cartel challenged the Commission Decision before the General Court of the European Union (GC). This challenge was rejected and customers subsequently filed follow-on claims for damages with the UK Competition Appeal Tribunal (CAT) for losses alleged to have resulted from the operation of the cartel.
At the heart of the dispute was the precise moment in time when the two-year limitation period for making a follow-on claim before the CAT under section 47A of the UK Competition Act began to run. The answer to this question depended on whether the Commission Decision was viewed as a decision made against Morgan, which it chose not to appeal, or as a decision made against all the cartel members, appealed by most of them, and finally upheld by the GC.
On 25 May 2011, the CAT found that the damages actions against Morgan had not been brought in time as Morgan had not appealed the decision which had therefore become final with regard to Morgan. However, on 21 July 2012, the CA reversed this decision, finding that section 47A generally referred to a "decision" that a relevant prohibition had been infringed, rather than a decision that a particular party or addressee had infringed competition law. The CA therefore considered that the "decision" actually referred to in section 47A was a decision by the Commission that an infringement existed. Consequently, the CA concluded that the claim against Morgan Crucible had not been brought out of time (see VBB on Competition Law, Volume 2012, No. 8, available at www.vbb.com).
In its judgment of 9 April 2014, the Supreme Court has unanimously set aside the CA's ruling and has reinstated CAT's dismissal of the claims brought against Morgan. The Supreme Court concludes that a European Commission decision establishing an infringement of Article 101 TFEU constitutes, in law, a series of individual decisions addressed to its individual addressees. The only relevant decision establishing an infringement in relation to an addressee, who does not appeal, is the original Commission Decision. Any appeal against the finding of infringement by any other addressee is irrelevant to a non-appealing addressee (in this case, Morgan).
Therefore, the two-year time period for the claimants to bring their actions against Morgan began to run in February 2004, when the time for Morgan to appeal the Commission Decision expired. It was not relevant that there were appeals to the GC by other addressees against the Commission Decision. Accordingly, the damages action against Morgan, which was not brought until December 2010, was ruled to be out of time.
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