European Union: 2014: The Year Air Cargo Took Off

First published on 15 January 2015 in Global Competition Law Review.

Co-authored by Tom Bolster and Oliver Bartholomew

Case Background

On 9 November 2010, the European Commission issued a decision1 fining 11 major airlines almost €800 million for operating a global cartel that affected air cargo services within the European Economic Area between December 1999 and February 2006. The case of Emerald Supplies & Ors v British Airways is one the first and largest of many private damages actions that have now been brought against British Airways Plc, and other airlines in this regard. The claim brings together 565 direct and indirect purchasers of air freight services who claim they paid inflated prices for their air freight as a result of the cartel.

2014 was a very eventful year in the case, resulting in the unprecedented disclosure to the Claimants of a redacted version of the EC's decision before the publication of any version of that decision to the world at large, as well as the handing down of a judgment on the topical issue of the use and viability of economic torts in cartel damage claims. Finally, the year ended with an eventful four day case management conference (CMC) in December, during which the Court imposed wide ranging disclosure Orders on all parties in the proceedings. This article summarises and comments on these developments, considering their potentially wider impact on similar claims in the future.

Court's ruling on redacted version of European Commission's Decision

Faced with a refusal from BA to voluntarily disclose to the Claimants its version of the EC's decision, and the Commission's inability, despite repeated assurances, to disclose a non-confidential version of that decision in a timely manner, the Claimants issued in February 2014 a formal application against BA, in order to access the decision. Following a first CMC in March 2014, the airlines were ordered to make available a first redacted version of the decision, for examination by the Claimants. This was eventually done on 10 July 2014 after the airlines had had an opportunity to redact material they argued could not be disclosed on the grounds that it constituted leniency material or material covered by the protections against disclosure contained in the case of Pergan v Commission.2

In the first of two judgments handed down of 28 October 20143, which arose out of a hearing held on 31 July 2014 following the Claimants' Application dated 22July 2014 for many of the airlines' redactions to be lifted, the English High Court assessed the appropriateness and lawfulness of the redactions made by BA and the other airlines named in the decision. The Court ruled that it would be an impossible task for the judge, even with the help of a judicial assistant, to read the entirety of the decision and decide which redactions were and were not validly claimed. The judgment indicated that if the parties could not decide among them what should be redacted, it was not possible to see why the judge, who was deprived of detailed background information, would be expected to do so.4 On this basis, the Court held that there should be disclosure of the full decision (save for privileged or leniency material) into a confidentiality ring between the parties, among whose members the decision could be shared, with the added safeguard that the claimants would be barred from using the decision to initiate any further proceedings.5 The judgment is currently under appeal by a number of the airlines.

Court's ruling on summary judgment/strike out applications

The High Court's second judgment of 28 October 2014 in the same case6 illustrates the difficulty of seeking the summary determination or striking out of complex claims early in the procedural history of the case, especially where those applications rely at least in part on questions of fact that are unlikely to be revealed prior to disclosure. This judgment arose out of a hearing which took place in early October 2014 following applications that BA and the Claimants had issued seeking the striking out or summary judgment of part of the other's case. The first application, issued in December 2013, was made by BA and concerned the striking out and/or summary dismissal of the claimants' claims in the torts of unlawful means conspiracy and unlawful interference. In the second application, issued in April 2014, the Claimants requested that two contentions of law in BA's Defence be declared incorrect, struck out or summarily dismissed.

The two applications raised three main issues: (1) whether the claimants had adequately pleaded, the necessary intention by BA to injure them for the purpose of the unlawful means conspiracy claims; (2) whether unlawful means in a foreign jurisdiction counted for the purposes of those claims; and (3) if the answer to point 2 is affirmative, whether the claimants were entitled to claim damages in relation to the loss suffered outside of that foreign jurisdiction.

The Judge refused to decide on any of these issues and adjourned both applications, setting them aside to be determined at some point after disclosure and before trial (assuming either party revived them). Most notably, BA's application for strike out and/or summary judgment was adjourned as the judge took the view that it was inappropriate to consider the complicated legal arguments raised by the dispute at the preliminary application stage, particularly without the assistance of documentation that, if available, would likely be relevant to the claims against the airline founded on unlawful means conspiracy and unlawful interference.

Analysis of the Court's two October 2014 Judgments

It is clear that the absence of any published decision from the Commission in this high-profile cartel case, particularly so long after the decision was made, is less than satisfactory. Mr Justice Peter Smith, the author of both judgments, was unsurprisingly critical of the "one speed molasses" approach of the Commission, stating that: "It is a matter of great concern to me that this action has been stymied for many years because of the EC's failure to proceed with anything like reasonable time for making its decisions".7 In relation to a letter the Commission sent to the Judge regarding the delay in publishing a non-confidential version of the Decision, the Judge further expressed his dissatisfaction by outlining that: "It must be self-evident that 4 years even just to consider working out the non-confidential part of the Decision is completely unacceptable, no steps are being made to speed up that process and no indication is given as to when the whole process will be finalised". These arguments are now likely to be debated all over again before the Court of Appeal in the first half of 2015. It will be interesting to see whether that Court shares or distances itself from these strongly-worded views.

Whilst the second judgment was ultimately a simple case management decision to adjourn the applications, prospective claimants may still take heart from the fact that the claimants' economic tort claims in this case were not struck out at this stage. As a result, unless and until this issue is finally determined in BA's favour, new claims are likely to continue to include such economic claims in the near future.

December 2014 Case Management Conference

Following these two judgments of 28 October 2014, a four-day case management conference took place in early December 2014 during which the airlines who are addressees of the Commission Decision were ordered to disclose the Commission's full Case File. In addition, BA and each contribution defendant8 were ordered to disclose the air cargo case files of the other competition regulators that fined the airlines in the US, Canada, Korea, Australia, New Zealand, Brazil, South Africa and Switzerland. The claimants were also ordered to complete an extensive disclosure exercise disclosing their processed air freight spend data, as well as providing expert reports setting out whether they passed-on any overcharge they suffered as a result of the cartel.

Further case management conferences are scheduled to take place in April and July 2015. Should the case go to trial, it is expected that this may happen in the first part of 2016.

1 Summary of Commission Decision of 9 November 2010 relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union, Article 53 of the EEA Agreement and Article 8 of the Agreement between the European Community and the Swiss Confederation on air transport (Case C.39258 — Airfreight).

2 Case T-427/04 Pergan Hilfsstoffe Fur Industrielle Prozesse GmbH v Commission [2007] ECR II-4225.

3 [2014] EWHC 3513 (Ch)

4 [2014] EWHC 3513 (Ch), para. 41

5 Ibid, para. 51, 52, 56

6 [2014] EWHC 3514 (Ch)

7 [2014] EWHC 3513 (Ch), para.3

8 Air Canada, Société Air France, KLM NV, Cargolux Airlines International SA, Cathay Pacific Airways Ltd, Lufthansa Cargo AG, Deutsche Lufthansa AG, Martinair Holland NV, Qantas Airways Ltd, Singapore Airlines Cargo PTE Ltd, Singapore Airlines Ltd, Swiss International Air Lines AG, Scandinavian Airlines System Denmark-Norway-Sweden, Air France KLM, SAS AB, SAS Cargo Group A/S, LAN Cargo SA, LATAM Airlines Group SA, Japan Airlines Co Ltd, Korean Airlines Co Ltd, Thai Airways International Public Co Ltd, Asiana Airlines Inc, Polar Air Cargo LLC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions