On 29 July 2016, the High Court of England and Wales delivered its judgment dismissing the applications of two defendants to strike out a follow-on damages case in which the claimant, iiyama, asserts that it suffered losses as a result of the defendants' alleged participation in the LCD cartel. Iiyama v Samsung [2016] EWHC 1980 (Ch).
The claim follows on from the European Commission's decision of 8 December 2010, which found that six LCD panel producers had entered into a world-wide price fixing cartel and had implemented that cartel within the EU. The Commission had been satisfied that the agreement related to direct and indirect sales of LCD panels to companies in the EU. It also found that the participants in the cartel had sought to implement the cartel within the EU, even if price negotiations took place outside the EU.
The question Mr Justice Morgan had to address was whether it could be shown that iiyama suffered harm by reason of the cartel's implementation in the EU. The focus of iiyama's claim, however, had been on harms it suffered as an indirect purchaser downstream from the implementation of the cartel in Asia. Putting the case that way, Mr Justice Morgan stated that without more iiyama's claim would fall outside the territorial scope of Article 101 TFEU. In this regard, Mr Justice Morgan referred to a recent High Court ruling that had struck out a similar case brought by iiyama against cartelists in the cathode-ray tube sector. Iiyama v Schott [2016] EWHC 1207 (Ch). In that case, Mr Justice Mann had ruled that even if sales outside the EU have an indirect effect within the EU, those sales are not an implementation of the cartel within the EU.
Ultimately, iiyama's case was saved by one paragraph in its draft Amended Particulars of Claim. In that paragraph, iiyama argued that if the cartel had not been implemented within the EU then LCDs and products incorporating LCDs would have been available within the EU at prices which were not inflated by the world-wide cartel. Iiyama further submitted that if the cartel had not been implemented in Europe, it would have collapsed elsewhere in the world. Mr Justice Morgan ruled that theory of the case was pleadable even though there appeared to be little evidence supporting the plea.
The judge rejected other arguments submitted by the defendants, including the defendants' position that indirect losses claimed by iiyama were not sufficiently direct or proximate to the losses suffered by the LCD panel purchasers in Asia. Mr Justice Morgan did note, however, that this point raised important questions of policy as to the operation of Article 101 TFEU, which may require a reference to the EU Court of Justice.
In the wider context, the case shows that the UK courts remain open for antitrust damages cases based on cartels with a centre of gravity outside the UK or the EU. It also shows that defendants face a steep hurdle to have cases struck out due to lack of nexus with the UK.
The judgment is available here.
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