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The Supreme Court’s decision in Unwired Planet – what comes next?

Introduction

The UK Supreme Court has handed down its long-awaited judgment in Unwired Planet. Its decision has profound implications for patent owners and implementers alike and is likely to lead to heavily contested jurisdictional disputes going forward.

These joined appeals concern Standard Essential Patents, or “SEPs”: a patent which the owner has declared to be essential to the implementation of certain telecommunications standards, such as 3G. In practical terms such a patent, if essential as declared and if it is valid, is necessarily infringed by technology implementing the relevant standard, notably mobile phones.  The appellants, Huawei and ZTE, manufacture smartphones and other telecommunications equipment, and implement such technical standards. They were defendants in two sets of patent infringement proceedings. The patent owners, Unwired Planet and Conversant, each had a multinational portfolio said to include SEPs in the UK and elsewhere. They had declared SEPs essential to practising technical standards set by the European Telecommunications Standards Institute (“ETSI”), and given an undertaking to ETSI that they were willing to license SEPs to implementers on “FRAND” terms: Fair, Reasonable and Non-Discriminatory.

The Supreme Court decided as follows:

  • Jurisdiction: The English courts have the power to declare that, as the price for avoiding an injunction restraining infringement of a UK SEP, the implementer has to enter into a global licence; and can determine the rates and terms of such a licence and declare them to be FRAND. (§49-91). The contract created by the ETSI policy confers this jurisdiction: it envisages that national courts will assess whether the terms of an offer are FRAND, looking at ‘real world’ commercial practice. (§58, 62). The Court was also not persuaded that damages, rather than an injunction, were the appropriate remedy (§163-169).
  • Forum non conveniens: in the Conversant claim, the implementers contended that England is not the appropriate forum for this dispute. The Supreme Court upheld the lower court’s rejection of China as a suitable alternative forum as, on the evidence, Chinese courts cannot currently determine terms of a global licence unless the parties agree. (§96-97).
  • Discrimination: Unwired did not discriminate against Huawei by failing to offer the same worldwide royalty rates that it had previously agreed with Samsung. The non-discriminatory limb of FRAND means that a single royalty price list should be available to all market participants based on the portfolio’s market value. (§112-114).
  • Competition law: Huawei had not abused a dominant position contrary to Article 102 TFEU and to the CJEU’s decision in Case C-170/13 Huawei v ZTE. Seeking a prohibitory injunction without notice will infringe Article 102 TFEU, but what is required by way of ‘notice’ is fact sensitive. Unwired had not acted abusively: it had shown that it was willing to grant Huawei a licence on whatever terms that the court deemed FRAND. (§150-158)

What’s next?

First, it is now clear that the UK courts have jurisdiction to rule on the terms of global licences. This could lead to a “race to sue”: implementers may opt to commence declaratory proceedings in their preferred jurisdiction (such as China) as soon as licence negotiations start to break down, so as to prevent the English court being seised of the entire portfolio if the SEP owner sues in this jurisdiction. This “race to sue” effect is compounded by the Court’s decision on Issue (4), i.e. its interpretation of the CJEU’s Huawei v ZTE. The factors therein are guidance, not “mandatory requirements” or “prescriptive rules(§151-152; 158), and Unwired did not need to propose a licence on the specific terms which the English court later determined were FRAND. (§158) This may reduce the consultation carried out by patent owners in future, before choosing to sue an implementer in the UK.

Moreover, now that the UK and German courts 75-78) have empowered themselves to settle the terms of global licences, other jurisdictions may well follow suit: notably, China and the USA. We should expect to see some hotly contested jurisdiction disputes in the next few years, centred on:

  • Forum non conveniens: The ratio of the Supreme Court’s decision on this point was narrow, focussing on the current practice of the Chinese courts. However, the Court also indicated, in obiter dicta, its agreement with the lower courts’ characterisation of the dispute (§95-96); namely, that global FRAND determination only arises as an issue in the context of relief for UK patent infringement and that it is up to the patent owner which national patents to assert. It is unclear whether the High Court will in future characterise the UK as the appropriate forum for pursuit of UK patent claims involving global licence disputes. The Supreme Court’s reference to “further issues” that could have arisen if China had been an available alternative forum 98) leaves open the possibility of implementers resurrecting arguments as to the suitable forum.
  • Case management stays: Where there are American or Chinese FRAND proceedings underway, there may be strong arguments to stay UK proceedings. The English courts will no doubt closely scrutinise the comity and propriety of litigating the FRAND assessment here; thereby imposing global terms on multinational companies like Samsung, Huawei and ZTE. The UK generally accounts for only a tiny proportion of relevant sales of such entities: in the Conversant proceedings, Huawei claimed that the Chinese market accounted for 56% of its worldwide sales on which Conversant made claims. The UK market by contrast comprised 1% of relevant sales. As to ZTE, 0.07% of its turnover came from the UK and 60% of its operating revenue came from China. Both entities manufacture in China. 37).

Secondly, the Supreme Court’s decision on non-discrimination is potentially highly important, in practical terms. The Court twice referred to a single royalty “price list” available to all licensees irrespective of their individual characteristics. (§114)  This raises the prospect that going to court could present risks for SEP owners; on the Supreme Court’s approach, once the court has set a fair and reasonable global rate, it appears that the patent owner will then have to offer that rate to all putative licensees.

Thirdly, like the lower courts, the Supreme Court drew succour from the prospect of global “FRAND” licences including a clause which reduces the rate payable if foreign patents are later found to be invalid or inessential. The ‘adjustment’ clause imposed by Birss J in the Unwired proceedings had problems, however ([2017] EWHC 2988 (Pat), §582-592): it only applied to “major markets” and did not provide any adjustment to royalties payable if there was a successful challenge to Unwired’s Chinese patents (§47, 65). Inevitably, the Supreme Court’s decision means that there will be much focus, in negotiating the terms of a global FRAND licence, on the drafting of these ‘adjustment’ clauses.

Conclusion

The Supreme Court’s decision has settled the law definitively on the power of the English courts to determine the terms of global FRAND licences for SEPs. However, it leaves important practical implications unresolved. The judgment, while providing clarity on the jurisdictional aspect, is unlikely to be the last word on questions of comity and the proper role of foreign courts; the dictates of non-discrimination; or the drafting and interpretation of ‘adjustment’ clauses, and how they will operate in practice. Moreover, other national courts may well start asserting jurisdiction over these disputes, particularly in countries which account for a far greater proportion of relevant sales than the UK market. The questions posed by this article are therefore likely to play out before the English courts in coming years.

 

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Jurisdiction after a no deal Brexit

Time for some more speculation about the future which awaits us after 29 March.  The topic this time is jurisdiction.

As the readers of this blog will know, the rules of civil jurisdiction across the EU are currently governed by the Brussels Recast regulation.  The basic framework is:

  1. A defendant domiciled in a Member State can be sued in the court of its domicile and also in various other EU courts under certain specified gateways (e.g. in competition claims, the place where the cartel was concluded – see CDC).
  2. There are strong lis pendens provisions. In general, if the same issue is litigated in more than one Member State, the later proceedings must be stayed.
  3. There is protection for choice of forum contracts in favour of a court of a Member State. The courts of the chosen Member State will accept jurisdiction even if the defendant is not domiciled in that (or indeed any) Member State; and all other courts must stay proceedings in deference to the courts of the chosen Member State.

The proposed Withdrawal Agreement provides that the provisions of Brussels Recast will continue to apply to proceedings instituted during the transitional period.  But, as with most things, if there is no Withdrawal Agreement then things will get more interesting.

No deal Brexit: The law in England

The government’s intention in the event of no deal is that Brussels Recast will continue to apply to cases begun in England before Brexit, but otherwise it will be repealed.  A draft statutory instrument to that broad effect was published in December.

It is worth briefly pausing on this point to note that it is not obvious that the proposed statutory instrument will be lawful.  Under the EU Withdrawal Act 2018, the SI can only be made if it is required to remedy or mitigate a ‘deficiency’ in retained EU law.  The government has proceeded on the basis that Brussels Recast in a necessarily reciprocal arrangement and that the UK could not retain it if the EU does not do so too.  That may be open to debate.

However, assuming that the proposed SI is not challenged, the practical consequence will be that the English common law rules will apply instead of Brussels Recast to all cases commenced in England after exit day.  Whether that is a good thing rather depends on your perspective.

The English rules are certainly more flexible than the Brussels Recast rules.  In theory, there will be some cases which could be litigated in England under the English jurisdictional gateways which you could not litigate here under Brussels Recast.  For example, an English court could allow proceedings to be litigated in England even if there is a jurisdiction clause in favour of an EU Member State.  Other examples were given in Naina Patel and Andrew Scott’s previous blog on this topic.

On the other hand most of the English gateways are discretionary.  This gives rise to much more uncertainty, and in practice it may be somewhat optimistic to think that there are going to be lots of opportunities to bring new claims in England that could not have been brought under Brussels Recast.

No deal Brexit: The law in the EU

It may turn out that the more difficult problems will arise in proceedings in the EU-27.

It is worth starting with the obvious point that Brussels Recast will continue to apply, within the EU, to cases where the Defendant is domiciled in an EU Member State.  So, to take a simple example, an English company could still sue a German company in Germany.  That will give rise to various tactical possibilities for claimants wanting to sue an EU defendant.

  1. They might be able to sue in England, under English rules.
  2. They could sue in the EU. If within one of the Brussels Recast gateways, the EU court would (probably) be obliged to accept jurisdiction.
  3. Note that they could sue in the EU even if there is a jurisdiction clause in favour of England. Brussels Recast gives particular weight to such agreements but only if they are in favour of the courts of a Member State.  We therefore face the prospect of EU Member States being obliged by the Brussels Recast regulation to take jurisdiction over disputes even if there is a contractual agreement in favour of English courts.

Brussels Recast will also still apply, within the EU, to cases where there is a jurisdiction agreement in favour of an EU Member State, regardless of the domicile of the parties.  So for example: a German claimant could still sue an English defendant in the chosen EU court.  This gives rise to similar tactical possibilities as are set out above.

But Brussels Recast will not apply within the EU to cases where the Defendant is domiciled in England and there is no EU jurisdiction agreement.  In this scenario, the national rules of the Member States will apply.  For example: if a German company sues an English company in Germany then, in the absence of any jurisdiction agreement, German jurisdiction rules will apply.

There are therefore various complex means by which jurisdiction may be established in the EU in cases with an English connection.  To make matters more complex, all of this must be understood in light of the fact that the Brussels Recast lis pendens rules do not apply in relation to pending proceedings in third states.  Article 33 of Brussels Recast provides only that Member States may, in certain circumstances, stay proceedings to await the resolution of pending proceedings in a third state.  What this means in practice is that we face the prospect of the same parties being tied up in litigating the same issues in the UK and in the EU.

As to how quickly these changes might happen, the European Commission has recently (18th January 2019) published a Notice to Stakeholders which states that, in the event of a no-deal Brexit, Brussels Recast will continue to apply to cases involving a UK-domiciled defendant which were pending before EU courts on the withdrawal date.  The legal basis for that assertion is not explained, but even if it is true it will affect only a small number of cases.  The Commission has not expressed a view on other scenarios which appear rather more likely, such as whether Brussels Recast would apply to proceedings commenced in the EU post-Brexit but where there were pending proceedings in England pre-Brexit; or whether it would apply to jurisdiction agreements in favour of England entered into pre-Brexit.  The broad expectation appears to be that the UK will immediately cease to be treated as part of the Brussels Recast regime.

 

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Intel Corporation Inc v European Commission

In its recent judgment in Intel, the Grand Chamber shed valuable light on the “qualified effects test” for jurisdiction and on the room for loyalty rebates to be compatible with competition law.

Background

Intel designed computer processors and sold them to original equipment manufacturers (“OEMs”) to use in central processing units (“CPUs”). One of its competitors, Advanced Micro Devices Inc (“AMD”), complained to the Commission that Intel was abusing its dominant position by offering loyalty rebates to its OEMs if they purchased all or most of their processors from Intel.  The Commission agreed and imposed a €1.05 billion fine. The General Court dismissed Intel’s appeal.

On appeal, the Grand Chamber of the CJEU rejected Intel’s complaints about jurisdiction and procedural irregularities but allowed its appeal on the assessment of the rebates as abusive.  That rendered three other grounds unnecessary to consider.

There are two key points of interest arising from the judgment:

  1. Arrangements that are intended to form part of a grander anti-competitive scheme may fall within CJEU jurisdiction, even though they are relatively removed from the EEA, under the “qualified effects” route to jurisdiction.
  2. Loyalty rebates are not automatically anti-competitive; in particular, they can be saved if the undertaking can show that they could not have the effect of foreclosing an as efficient operator from the market.

The qualified effects test for jurisdiction

The Court considered two tests for jurisdiction.

  1. The “implementation test”:  Were the anticompetitive practices implemented in the EEA?
  2. The “qualified effects test”: Would the practices have foreseeable, immediate and substantial effects in the EEA?

The General Court had found that it had jurisdiction over Intel’s agreements with Lenovo (a Chinese OEM) on both tests. Intel unsuccessfully challenged the latter as a valid route to jurisdiction, and the Court’s application of both.

The Court confirmed that the “qualified effects test” is a valid route to jurisdiction.  Although the test had previously been accepted by the General Court in Gencor v Commission (T‑102/96, EU:T:1999:65) at §92, this is the first time it has been recognised by the CJEU.  It explained that it pursues the objective of “preventing conduct which, while not adopted within the EU, has anticompetitive effects liable to have an impact on the EU market”. If EU competition law were confined to the places where agreements were reached or concerted practices engaged in, it would “give undertakings an easy means of evading” Articles 101 and 102 (§§41-45).

How then is that test to be applied?  The Court provided some guidance. The question is whether “it is foreseeable that the conduct in question will have an immediate and substantial effect in the European Union”. In answering that question it is necessary to examine the undertaking’s conduct as a whole.  On the particular facts (§§51-57):

  1. The agreements with Lenovo in China had a “foreseeable” impact on competition, taking account of their “probable effects”.
  2. They had an “immediate” effect, because they formed part of an overall strategy to ensure that no Lenovo notebook equipped with an AMD CPU would be available on the market.
  3. They had a “substantial” effect on the EEA market, having regard to the whole of the conduct.

This last point is the most interesting one. Even though agreements with Lenovo for CPUs for delivery in China would by themselves have had a negligible effect, they formed part of conduct that would have a substantial effect. The Court refused to examine them in isolation on the basis that such an approach would “lead to an artificial fragmentation of comprehensive anticompetitive conduct”.

Loyalty rebates

The main substantive implications of this case arise from the findings that loyalty rebates are not always be abusive: it will depend on their scope and effect.

The purpose of Article 102 is to promote, not inhibit, competition.  So it does not protect undertakings which are not as efficient as the dominant undertaking.  Rather, it prevents illegitimate competition that pushes equally efficient undertakings out of the market.  That includes forcing purchasers to meet their requirements from the dominant undertaking.  It also includes inviting purchasers to undertake a contractual obligation to do so.  By extension, it might include incentivising purchasers to do so through loyalty rebates.  But, the Court has now made clear, that latter category is not inherently abusive.

In order to determine whether it is, it is necessary:

  1. First, to consider all the circumstances, including the level and duration of the rebates, the market shares concerned, and the needs of customers. Most importantly, the Commission must consider the capability of the rebates to foreclose an “as efficient competitor” (the “AEC test”).  That is, could the rebates force such a competitor to sell below cost price?
  2. Second, even if the rebates do have an exclusionary effect, they might still be redeemed if that effect is counterbalanced by efficiency advantages (§§139-140).

There are three key points of interest.

First, it appears that the general rule remains that loyalty rebates are abusive, unless the undertaking can produce evidence to the contrary.  The Court recounted that loyalty rebates have an anti-competitive effect, and “clarified” its case-law to say that undertakings can displace that presumption by showing that they could not have that effect in the particular case.  That brings Article 102 in line with the position under Article 101.

Second, the Court made clear that the AEC test applies generally to assessing whether conduct is an abuse of dominant position. Article 102 is not calculated to come to the aid of less efficient undertakings. Accordingly, to determine whether the practice is illegitimate, it is necessary to determine the effect it would have on a competitor who is as efficient as the dominant undertaking. That principle had been applied to attracting purchasers and excluding competitors by predatory pricing in Post Danmark v Konkurrencerådet (C‑209/10) and AKZO Chemie BV v Commission (C-62/86). In a victory for consistency, it is now clear that it applies more generally, including to attracting purchasers and excluding competitors by loyalty pricing schemes.

Third, in the context of that AEC test the Court said the inquiry was as to the “capability” of the rebates to foreclose an as efficient competitor (§§138, 141), even though Intel’s objection was that the General Court had failed to consider the “likelihood” of the rebates having that effect (§§113-114).  That is a harder task for an undertaking seeking to avoid breaching the Article 102 prohibition.  However, it is also consistent with other cases of actions with an anti-competitive object (which are less easily excused, only if they could not have that effect) rather than those with an anti-competitive effect (which are, for obvious reasons, excused if they are not likely to have that effect).

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Islands of jurisdiction for competition damages claims in a post-Brexit world

By Naina Patel and Andrew Scott

When the UK leaves the EU, the rules governing jurisdiction in cross-border competition damages claims will likely change. Most immediately, this will impact those who had acquired pre-Brexit causes of action for breach of statutory duty under section 2(1) of the European Communities Act 1972, based on Articles 101 and Articles 102 TFEU. The doctrine of acquired rights would preserve such causes of action;[1] but it is unlikely to preserve EU rules of jurisdiction in relation to them. Thereafter, the changes will impact those able to establish post-Brexit causes of action based on foreign laws, as Kieron Beal QC has explained. In either case, Claimants may wish to establish English jurisdiction, including as against EU domiciled defendants. This post considers some of the issues likely to be encountered.

Currently, jurisdiction in such cases is governed by the Recast Brussels Regulation (EU) No. 1215/2012 (the “Recast Regulation”). Despite the Prime Minister’s suggestion that the Great Repeal Bill will convert the entirety of the ‘acquis’ into British law, it seems unlikely that the Regulation will survive without more. It is a prime example of EU legislation predicated on reciprocity and the principle of mutual trust and recognition: see e.g. Recitals (3) and (26) of the Recast Regulation. In the absence of an arrangement between the UK and the rest of the EU to maintain post-Brexit common rules on jurisdiction and the recognition and enforcement of judgments, the premise for the Recast Regulation falls away.

At present, there are no such arrangements in place between the EU and third states.[2] It is true that Denmark entered into an agreement with the rest of the EC in relation to the predecessor of the Recast Regulation, the Brussels I Regulation. But Denmark was and remains a Member State. Whether a similar agreement is sought by or available to the UK as a non-Member State remains to be seen.

An alternative would be for the UK to seek to accede to the Lugano Convention 2007, which applies between the EU and Norway, Switzerland, Iceland and Denmark. However, Article 70 of the Convention restricts accession to members of EFTA, members of the EU acting on behalf of non-European territories which form part of them or for whose external relations they are responsible, and those states that can satisfy the conditions in Article 72, which include the unanimous consent of the Contracting States. It is reasonable to think that a condition of any such consent would include submission in some form by the UK to the jurisdiction of the CJEU in relation to interpretation of the Lugano Convention. Even if such consent were forthcoming, it is worthwhile noting that there are important differences between the Lugano Convention and the Recast Regulation. For example, Article 31(2) of the Recast Regulation has gone some way to disarming (in exclusive jurisdiction clause cases, at least) the “Italian torpedo” which still fires under the Lugano Convention owing to its rigid “first seised” lis pendens rule.  Further, the process of recognition and enforcement of judgments under the Recast Regulation is more streamlined than that which prevails under the Lugano Convention.

Failing either of these options, there is a serious question over whether the UK remains a party to the Brussels Convention, having acceded to it in its own right in 1978.  The Recast Regulation and its predecessor make clear that these instruments superseded the Convention as between Member States, except as regards the territories of the Member States which fell within the scope of the Convention but were excluded from the Regulations pursuant to Article 299 TEC and Article 355 TFEU respectively. The UK was a Member State when these Regulations were adopted and was not excluded from their provisions superseding the Brussels Convention. Brexit will not turn the UK into a territory of a Member State excluded from the Recast by virtue of Article 355 TFEU, only into a country to which TFEU does not apply at all.  It is therefore difficult to see how the application of the Brussels Convention to the UK can be revived. In any event, as Adrian Briggs QC has underscored, no country ratified the Convention after 2001 so it would not create a framework for jurisdiction with all EU Member States.

In the absence of an agreed bilateral framework, the UK will revert to applying its domestic rules on jurisdiction. These would permit the English Court to assume jurisdiction over EU domiciled defendants based on a far broader range of factors than are presently provided for by the Recast Regulation. Defendants with a mere (including fleeting) presence in the jurisdiction would be liable to be served here, even if domiciled elsewhere. Defendants with no such presence would also be liable to service outside the jurisdiction, with the Court’s permission, based on a far broader range of territorial and other connections under CPR r. 6.37 and PD 6B than are presently available under the Recast’s jurisdictional rules.

The purpose of the Recast Regulation and its predecessors is to protect EU domiciled defendants from such national rules of jurisdiction: see Article 5(2). A post-Brexit world in which the EU refuses to agree a new bilateral arrangement on cross-border jurisdiction with the UK will result in the application of English domestic law rules against EU citizens for the first time since accession to the Brussels Convention. Depending on how the English Court’s discretionary powers to stay proceedings or permit service out on forum conveniens grounds are exercised, there is real potential for the English Courts to enlarge their effective jurisdiction over competition law claims against EU domiciled defendants.

To take a few examples:

  • At present, an EU domiciled defendant can only be sued in England in “matters relating to tort etc.” where England is the place where the “harmful event” “occurs or may occurs”: see Article 7(2) of the Recast. That requires showing in a cartel case that England is where the cartel was “definitively concluded” or that England is where “the [victim’s] own registered office is located”: see CDC (C-352/13) [2015] Q.B. 906. The equivalent common law gateway for service out in CPR PD 6B, para 3.1(9) is broader in scope, e.g. it would require only that the damage sustained results from an act committed… within the jurisdiction” (emphasis added). It would likely suffice that some substantial and efficacious aspect of the cartel could be located in England.
  • At present, an EU domiciled defendant can only be joined as a co-defendant to English proceedings where an English-domiciled anchor defendant has been sued here: see Article 8(1) of the Recast. There is no such limitation under the common law necessary or proper party gateway in CPR PD 6B, para. 3.1(3). Thus, if English jurisdiction can be established by service on an anchor Defendant – whether within or outside the jurisdiction – that suffices to expose other Defendants to the risk of joinder to English proceedings. In a cartel case, for example, the requirements of the necessary and proper party gateway will ordinarily not be difficult to satisfy.
  • At present, an applicable jurisdiction clause for another Member State court has a “trump card” status under the Recast. Even if the party able to rely on that clause is one of many sued in England, and even if the sound administration of justice would favour not giving effect to it in the circumstances, the English Court is nonetheless bound to do so under Art. 25(1) of the Recast. Not so at common law, where the Court would retain a discretion – and in an appropriate case could decline to give effect to the clause so as to ensure that the entire dispute remain in the English Court: see e.g. Donohue v Armco [2001] UKHL 64; [2002] 1 All E.R. 749.
  • On account of the common jurisdictional rules in place under the Recast Regulation and the underlying principle of mutual trust, EU law prevents English Courts from granting anti-suit relief in respect of proceedings before courts elsewhere in the EU.[3] In the absence of a similar multilateral arrangement post-Brexit, English Courts are unlikely to feel inhibited from applying ordinary principles on anti-suit relief, e.g. to restrain a party from pursuing in the EU proceedings brought in breach of jurisdiction or arbitration clauses, or proceedings which are vexatious and oppressive or otherwise unconscionable.

Perhaps then, at least in the context of competition damages claims, if the effect of Brexit is that we return to common law rules, there will be some hidden treasure.

So in what direction should clients be advised to row their boats in the run up to Brexit?  English jurisdiction and arbitration clauses are likely to remain valuable tools in dispute resolution so it will continue to make sense to include them in new contracts; it may also be prudent to review old contracts to insert such clauses or to revise those drafted by reference to EU legislation. In doing so, it will be important to pay close attention to the remarks made by Rix LJ and the CJEU respectively in Ryanair Limited v Esso Italiana Srl [2013] EWCA Civ 1450 and the CDC case. The effect of each is that (at least some) tort claims founded on breaches of competition law will not ordinarily be caught by even broadly-worded jurisdiction clauses (e.g. those providing for jurisdiction over “all disputes arising from contractual relationships”): express words will be necessary. The scope of the principles stated in these decisions is likely to be a fertile area of dispute in competition law cases, not least because some claims (e.g. those in a bid-rigging context) have a more obvious connection to contracts containing such jurisdiction clauses than others (e.g. the price-fixing cartel contexts of Ryanair and CDC).

As for litigation strategy more generally, depending on which jurisdictional framework the UK ends up embracing, there may be significant value in re-considering the torpedoes and injunctions which we have seen submerged in EU competition litigation in recent years.

[1] Subject, of course, to any transitional arrangements to the contrary.

[2] While the EU and several third states are party to the Hague Convention on Choice of Court Agreements 2005, it deals only with exclusive jurisdiction agreements.

[3] See, for example, the decisions in Turner v Grovit (C-159/02 [2004] ECR I-3565) and West Tankers (C-185/07).

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Subsidiaries as “branches” for undertakings: a new route to jurisdiction under Article 5(5) of the Brussels Regulation?

Stand alone, follow on and hybrid damages claims arising out of multijurisdictional cartels are generating some of the most novel and interesting current problems in conflicts of laws, both in relation to issues of jurisdiction and applicable law. On the jurisdictional side conventional wisdom has it that there are three main routes by which Claimants can seize English jurisdiction.

First, you can find a so-called “Anchor Defendant” that is a cartelist (and it must be an addressee cartelist if in the CAT so long as Mersen is good law) domiciled here, against which you can proceed as of right under Article 2 of the Brussels Regulation.  Then you can bring in other cartelists under Article 6 (i.e. a defendant against whom the claim is closely connected to that against the anchor defendant such that determining them together avoids the risk of irreconcilable judgments).  Where the Anchor Defendant is an addressee of the decision this tactic is unproblematic. Continue reading

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