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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Samsung Electronics Co. Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 423 (01 April 2022) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2022/423.html Cite as: [2022] 1 CLC 903, [2023] 1 All ER 227, [2022] EWCA Civ 423, [2022] 2 All ER (Comm) 432 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sir Michael Burton GBE
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE MALES
and
LORD JUSTICE SNOWDEN
____________________
(1) SAMSUNG ELECTRONICS CO. LTD (2) SAMSUNG ELECTRONICS TAIWAN CO. LTD (3) SAMSUNG ELECTRONICS (UK) LTD (4) SAMSUNG SEMICONDUCTOR EUROPE LTD (5) SAMSUNG DISPLAY CO LTD |
Appellants/Claimants |
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- and - |
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(1) LG DISPLAY CO. LTD (2) LG DISPLAY TAIWAN CO. LTD |
Respondents/Defendants |
____________________
Daniel Piccinin (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Respondents/Defendants
Hearing date: 16 March 2022
____________________
Crown Copyright ©
Lord Justice Males:
Background
The claim for contribution
"1 - Entitlement to contribution.
(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
...
(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage … shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.
...
(6) References in this section to a person's liability in respect of any damage or references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage; but it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a country outside England and Wales.
2- Assessment of contribution.
(1) … in any proceedings for contribution under section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question."
"The amount of contribution that one person liable in respect of the loss or damage may recover from another must be determined in the light of their relative responsibility for the whole of the loss or damage caused by the infringement."
"The extent of a person's responsibility involves both the degree of his fault and the degree to which it contributed to the damage in question. It is just and equitable to take into account both the seriousness of the respective parties' faults and their causative relevance. A more serious fault having less causative impact on the plaintiff's damage may represent an equivalent responsibility to a less serious fault which had a greater causative impact. The present case is such a case. The judge was entitled to decline to distinguish between the responsibility of the two defendants for the damage to the plaintiffs."
"Where several undertakings infringe the competition rules jointly, as in the case of a cartel, it is appropriate to make provision for those co-infringers to be held jointly and severally liable for the entire harm caused by the infringement. A co-infringer should have the right to obtain a contribution from other co-infringers if it has paid more compensation than its share. The determination of that share as the relative responsibility of a given infringer, and the relevant criteria such as turnover, market share, or role in the cartel, is a matter for the applicable national law, while respecting the principles of effectiveness and equivalence."
The judgment
"18. Mr Plewman [then lead counsel for Samsung] put what he submitted to be such a clear case in paragraph 55 of his skeleton as follows: –
i) The claim is brought pursuant to English law (the Act):
ii) It concerns a settlement agreement concluded in England, governed by English law:
iii) The Third and Fourth Claimants are English companies:
iv) The Settlement related to claims brought in England by 42 UK Claimants, under English law, for damages arising out of a cartel that was alleged to have been implemented in or intended to affect England, and which caused loss to the UK Authorities arising out of goods purchased in the jurisdiction:
v) The English courts have already taken jurisdiction over a whole series of actions relating to the cartel, including a claim to which LGD was a party (iiyama) [iiyama v Samsung Electronics Ltd [2016] EWHC 1980 (Ch), 2016] 5 CMLR 16; [2018] EWCA Civ 220, [2018] 4 CMLR 23].
19. Drilling more deeply, the Claimants submit as follows:
i) Just as in iiyama, relating to this same cartel, where LGD's contentions as to forum failed, the English Court is clearly the convenient forum, as it would have been if the contribution claim had been brought as a Part 20 claim/third party notice while the Authorities' proceedings were still pending.
ii) The Commission has decided that the tortfeasors were equally responsible: see paragraph 277 of the Decision:
'An undertaking which takes part in the common unlawful enterprise by actions which contribute to the realisation of the shared objective is equally responsible, for the whole period of its adherence to the common scheme, for the acts of the other participants pursuant to the same infringement.'
iii) In addressing the question to be asked pursuant to s2(1), namely 'the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question', reference should be made to Recital (37) of the Directive 2014/104/EU of 26 November 2014 relating to damages under national law for infringements of competition law namely:
'Where several undertakings infringe the competition rules jointly, as in the case of a cartel, it is appropriate to make provision for those co-infringers to be held jointly and severally liable for the entire harm caused by the infringement. A co-infringer should have the right to obtain a contribution from other co-infringers if it has paid more compensation than its share. The determination of that share as the relative responsibility of a given infringer, and the relevant criteria such as turnover, market share, or role in the cartel is a matter for the applicable national law, while respecting the principles of effectiveness and equivalence.'
In the case of this cartel the proper approach is by reference to market share which, in the case of LGD, is, as particularised in a confidential Annex to the Particulars of claim, one which leads to a contribution of £900,000. Any dispute as to the market share can and should be best resolved by the Courts of England and Wales, where the infringement took place.
iv) Insofar as there needs to be reference to the events which occurred in the Far East and to documents, the Commission has produced and translated vast quantities of evidence of meetings and communications, and annexed them to the Decision, which are consequently fully available for consideration and assessment. Although Mr Leitch [the claimants' solicitor] included no evidence in this regard in his witness statements, Mr Plewman emphasised in his submissions that if there were contribution proceedings in Korea all of the Commission's Decision would need to be translated into Korean and there would have to be expert evidence as to EU competition law.
v) He submitted that there is effectively a public policy in favour of the infringements being adjudicated in the court where they have occurred, referring to the words of the Court of Appeal in iiyama at [129] that 'it is far more appropriate for ... claims for breach of Article 101 to be litigated in England and Wales than in Asia'.
20. Mr Piccinin for the Defendants submits not only that Samsung have failed to satisfy the onus of proof, or certainly shown that England and Wales is clearly the more convenient forum, but that the Far East (Korea and/or Taiwan) is plainly the more appropriate forum:
i) iiyama was primarily dealing with the issues as to the commission of the infringement, causation and loss, and not at all the issue in these proceedings, which is responsibility inter se between the tortfeasors.
ii) The Commission can have reached no decision that all the tortfeasors were equally responsible inter se. Indeed, this is clear from paragraph 276:
'Although a cartel is a joint enterprise, each participant in the arrangement may play its own particular role. One or more may exercise a dominant role as ringleader(s). Internal conflicts and rivalries, or even cheating may even occur, but will not however prevent the arrangement from constituting an agreement/concerted practice where there is a single common and continuing objective."
The relative responsibility of the tortfeasors was of no interest to the Commission.[2]
iii) Insofar as the Defendants propose to contend that they played a less significant role in the cartel, that question was, as is clear from the Commission Decision, not decided by the Commission, and it must be, as Roth J concluded in Epic v Apple [2021] CAT 4 (a case in relation to American companies based in the USA) a dispute between two large companies where the factual witnesses would all or virtually all be (in this case) in the Far East.
iv) Recital (37) to the Directive cited by Samsung makes it entirely clear that market share is only one of the relevant issues to be assessed. That may be what the Claimants wish to rely on, but the Recital itself refers to the 'relative responsibility of a given infringer' and criteria such as 'role in the cartel'. In Downs v Chappell [1997] 1 WLR 426 (CA) where responsibility fell to be apportioned between defendants, Hobhouse LJ said at 445H that 'it is just and equitable to take into account both the seriousness of the respective parties' fault and their causative relevance.'
v) Such a dispute must be resolved by an assessment of the documents, not limited to those attached to or translated by the Commission Decision. There will need to be consideration as to whether there are other documents, or other documents not translated into English. Analysis of the respective roles will be needed, as for example as to who was the 'ringleader', as per paragraph 276 of the Decision. This would need cross-examination of witnesses and disclosure of documents. All this should be carried out in the Far East, and there was no suggestion whatever made by the Claimants that there could not be a fair trial of the issue of relative responsibility for the infringement. Mr Kelly [the defendants' solicitor] in paragraph 30 of his witness statement asserted that there could be, and there was no response to that at all, just as there was no response to the suggestion in paragraph 29 of the need for witness and documentary evidence. In VTB it was made entirely clear by Lord Mance at [62] that the factor of location of witnesses is 'at the core of the question of appropriate forum'.
21. Following a query from the Court in the light of Mr Plewman's submissions, Mr Piccinin on behalf of LGD gave undertakings to accept in any proceedings both that LGD are bound by the finding of infringement by the Commission Decision and that they are, in accordance with s1(1) of the Act, persons liable in respect of the same damage."
"22. I accept Mr Piccinin's submissions. It is very clear to me that the courts of the Far East are, in order to resolve this issue, namely the relative responsibility between them of the tortfeasors, a more appropriate forum. It is suggested that such a decision may set a precedent for future cases, in that it may lead to Part 20 proceedings being issued and pursued before any settlement, in order that the gateway of 'necessary and proper party' can be achieved. In such a case the fact that the main action would still be continuing would be, whatever the gateway, a powerful if not overwhelming forum conveniens factor. But that is not this case."
Grounds of appeal
Ground 1 – an issue of principle?
Ground 2 – the issues in the contribution claim
Is the Commission Decision binding?
"438. … As regards [LG's] claim concerning its limited role, it can be established that although it did not host meetings itself, it actively participated at the meetings from the first meeting held on 5 October 2001 being rarely if ever absent. It was often represented by high level officials who were, anyway, regularly informed about the meetings.
447. It should be noted that [LG] participated in the infringement from the beginning of [the] infringing period. Its participation was as active as that of the other participants, and does not warrant any reduction of the fine just because the Korean companies were not themselves hosting meetings in Korea. It is also established that high-level management of [LG] was involved and participated in CEO meetings. As the nature of the agreement is, in line with the [Statement of Objections], qualified as a price fixing agreement (see recital 297), the alleged non-participation in an output limitation cannot be considered as a mitigating circumstance. Moreover and in any event, the Commission has established that the parties, including [LG] colluded on production volumes (see for example recitals 102, 107, 120, 149, 154, 156, 171, 192 and 222).
448. Based on the above, it must be concluded that there are no mitigating circumstances applicable in this case. In the absence of aggravating and mitigating circumstances, the basic amounts of the fines to be imposed on each undertaking should not be adjusted."
"276. Although a cartel is a joint enterprise, each participant in the arrangement may play its own particular role. One or more may exercise a dominant role as ringleader(s). Internal conflicts and rivalries, or even cheating may even occur, but will not however prevent the arrangement from constituting an agreement/concerted practice where there is a single common and continuing objective.
277. The mere fact that each participant in a cartel may play the role which is appropriate to its own specific circumstances does not exclude its responsibility for the infringement as a whole, including acts committed by other participants but which share the same unlawful purpose and the same anti-competitive effect. An undertaking which takes part in the common unlawful enterprise by actions which contribute to the realisation of the shared objective is equally responsible, for the whole period of its adherence to the common scheme, for the acts of the other participants pursuant to the same infringement. This is certainly the case where it is established that the undertaking in question was aware of the unlawful behaviour of the other participants or could have reasonably foreseen or been aware of them and was prepared to take the risk."
Is it realistic that there is further material available?
Ground 3 – striking the balance
Disposal
Postscript – confidentiality
Lord Justice Snowden:
Lord Justice Lewison:
Note 1 The rule refers to England and Wales, although in practice Commercial Court cases with an international element involving foreign defendants are invariably tried in London. [Back] Note 2 In fact this was the judge's phrase, not Mr Piccinin’s. Mr Piccinin made the narrower (and, as I shall explain, correct) submission that the paragraphs of the Commission Decision relied on by Samsung were not concerned with the relative responsibility of the parties for the purpose of contribution. [Back] Note 3 Apart from one recital not material to the question of relative responsibility. [Back]