National Grid Electricity Transmission Plc v ABB Ltd & Ors [2009] EWHC 1326 (Ch)

[2009] EWHC 1326 (Ch)Case No HC08C03243
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 12 June 2009
Before
THE CHANCELLOR OF THE HIGH COURT
Between
NATIONAL GRID ELECTRICITY TRANSMISSION PLCClaimant(1) ABB LIMITEDDefendants(2) ABB POWER T & D LIMITED(3) ABB LIMITED(4) ABB HOLDINGS LIMITED(5) ABB ASEA BROWN BOVERI LIMITED(6) ALSTOM SA(7) ALSTOM LIMITED(8) ALSTOM UK HOLDINGS LIMITED(9) ALSTOM HOLDINGS SA(10) AREVA SA(11) AREVA T & D LIMITED(12) AREVA T & D HOLDINGS SA(13) SIEMENS AG(14) SIEMENS TRANSMISSION & DISTRIBUTION LTD(15) VA TECH REYROLLE DISTRIBUTION LIMITED(16) SIEMENS PLC(17) VA TECH (UK) LIMITED(18) SIEMENS HOLDINGS PLC(19) VA TECH SCHNEIDER HIGH VOLTAGE GMBH(20) VA TECH TRANSMISSION & DISTRIBUTION & CO KEG(21) SIEMENS AKTIENGESELLSCHAFT ÖSTERREICH
MR J TURNER QC & MR D BEARD (instructed by Berwin Leighton Paisner LLP) for ClaimantMR M HOSKINS QC (instructed by Freshfields Bruckhaus Deringer LLP) for 1st -5th DefendantsMR S MORRIS QC (instructed by Lovells LLP) for 6th – 9th DefendantsMR M BRINDLE QC & MS K BACON (instructed by Shearman & Sterling (London) LLP) for 10 th– 12 th DefendantsMR M BREALEY QC & MS M DEMETRIOU (instructed by Clifford Chance LLP) for 13th - 21st DefendantsHearing Hearing date: 3 June 2009
JudgmentThe ChancellorIntroduction
[1]The claimant (“NGET”) is an indirect wholly owned subsidiary of National Grid plc. It owns and maintains the high-voltage electricity transmission system in England and Wales and operates such system across Great Britain. For that purpose it needs Gas Insulated Switchgear (“GIS”) to control energy flow in electricity grids. GIS is sold internationally as a part of “turnkey” power substations and separately for integration into a power substation.[2]In the light of certain information provided to the European Commission by the first defendant ABB Ltd on 3rd March 2004, obtained from unannounced inspections at the premises of other institutions on 11th and 12th May 2004 and promises of co-operation from the 10th defendant (“Areva SA”), and the 13th defendant (“Siemens AG”) given on 14th and 17th May 2004 respectively, on 20th April 2006 the European Commission instituted proceedings under Article 81 of the EC Treaty and Article 53 of the EEA Agreement in relation to GIS under the title Case COMP/F/38.899 – Gas Insulated Switchgear. The decision of the European Commission (“the Decision”) was promulgated on 24th January 2007. I shall refer to the Decision in more detail later. For present purposes it is sufficient to note that the Commission concluded that there had been, between 15th April 1988 and 11th May 2004 very serious infringements of Article 81 EC Treaty and Article 53 EEA Agreement, the illegality of which the undertakings participating therein were or should have been aware. Such undertakings included one or more members of the four groups represented by the defendants to this action, namely ABB (defendants 1-5), Alstom (defendants 6-9), Areva (defendants 10-12) and Siemens (defendants 13-21). By Article 2 substantial fines were imposed on Alstom, both individually and jointly and severally with Areva, and Siemens. ABB had been found to be a participant but was granted immunity from a fine of €215m because of its co-operation with the Commission. By Article 3 the undertakings to which the Decision was addressed were directed to bring the infringements to an end and refrain from any similar conduct in the future.[3]Between 16th and 19th April 2007 Alstom, Areva and Siemens, amongst others, appealed to the Court of First Instance (“CFI”) seeking the annulment, so far as concerned each of them respectively, of the Decision. The fact of such appeals and a brief description of the grounds relied on were published in the Official Journal (C140/28) on 23rd June 2007. A redacted version of the Decision was obtained by NGET in August 2007. NGET instructed their present solicitors in May 2008.[4]The claim form instituting the proceedings with which I am concerned was issued on 17th November 2008 and served with substantial Particulars of Claim on and after 19th November 2008. The action is a ‘follow on’ action, in that it relies on the Decision for establishing the infringements on which it relies by reason of Articles 10, 81 and 249 EC Treaty and Council Regulation 1/2003/EC of December 2002. NGET claims damages in the sum of £249m. I shall refer to the Particulars of Claim in greater detail later.[5]Between 18th February and 5th March 2009 all the defendants to the action issued applications seeking a stay of all further proceedings in the action pending the conclusion of their applications to the Court of First Instance and of any subsequent appeals to the European Court of Justice (“ECJ”) . I should add that:(1) By agreement, the claim against the 11th defendant Areva T&D UK Ltd has been struck out.(2) Siemens seeks an order for further information to be provided by NGET but, subject to its satisfactory provision, is content to serve its defence before the stay takes effect.(3) All other defendants contend that the stay should take effect immediately and before any of them has served a defence.(4) NGET accepts that, in the light of the decision of the European Court of Justice in Masterfoods Ltd v HB Icecream Ltd [2000] ECR I-11369, its claim may have to be stayed at some stage, so as to ensure that before its trial there is a definitive decision on the appeals now pending before the CFI and any subsequent appeal to the ECJ, but contends that that stage has not yet arrived.[6]Thus the issues before me are(1) when the stay sought by the defendants should take effect, and(2) whether NGET should be ordered to provide the further information sought by Siemens. Before I can deal with those issues it is necessary to describe and explain the defendants, the Decision and the parties’ appeals therefrom and the Particulars of Claim in greater detail.

The Defendants

[7]The first defendant is the parent company of the ABB Group. The second to fifth defendants are its wholly owned direct or indirect subsidiaries. The Decision was addressed to the first defendant alone. In recital (341) the Commission concluded that ABB Ltd had participated in the collusive behaviour therein described from 15th April 1988 to 2nd March 2004. As I have recorded, but for the immunity to which the Commission found it to be entitled, it would have been liable for a fine of €215m. In paragraphs 6 and 7 of the Particulars of Claim NGET contends that all five ABB defendants were, in the relevant period, engaged or involved in the manufacture, sale and installation of GIS and the design, manufacture, sale and installation of systems involving GIS and that it had purchased such switchgear from the second defendant, either alone or as comprised in various specified projects.

Alstom

[8]The sixth defendant Alstom SA is the holding company of the Alstom Group. The seventh to ninth defendants are its wholly owned direct or indirect subsidiaries. Until 8th January 2004 the Alstom Group was likewise engaged in the design, manufacture, sale and installation of GIS or systems incorporating GIS. NGET contends that until that date it bought GIS or installations incorporating GIS from a further wholly-owned subsidiary, Alstom T&D Systems Ltd. Alstom SA sold that subsidiary and the whole of its electricity transmission and distribution business (including the production and sale of GIS) to the 10th defendant, Areva SA, on 9th January 2004. Alstom T&D Systems Ltd was dissolved on 6th September 2005, its business and assets having been assimilated into other parts of the Areva Group. The Decision was addressed to Alstom SA alone. The fine imposed on Alstom was €65m of which, for the reasons summarised in paragraph 11 below, €53.5m was expressed to be a joint and several liability with Areva T&D SA.

Areva

[9]Areva SA is the parent company of the Areva Group. The twelfth defendant is its wholly owned subsidiary. (As I have already noted the claim against the 11th defendant has been struck out.) NGET contends that by its acquisition of the electricity and transmission business of Alstom and the shares in Alstom T&D Systems Ltd as from 9th January 2004 Areva was likewise engaged in the design, manufacture, sale and installation of GIS or systems incorporating GIS.[10]The Decision was addressed to Areva SA and Areva T&D Holding SA, the 10th and 12th defendants as well as two other Areva group companies which are not parties to these proceedings, namely Areva T&D AG and Areva T&D SA. In recitals (362) to (370) the Commission explained the complications arising from the transfer of business from Alstom to Areva and its subsequent assimilation into other parts of the Areva group. It considered at some length the rival arguments advanced by interested parties. The Commission’s conclusions expressed in recital (371) were: “For the reasons explained above as well as in recitals (333) to (337) and (345) to (358): a) AREVA T&D SA should be held jointly and severally liable with ALSTOM (Société Anonyme) for their involvement in the infringement between 7 December 1992 and 22 December 2003; b) AREVA T&D SA, ALSTOM (Société Anonyme) and AREVA T&D AG should be held jointly and severally liable for their involvement in the infringement between 22 December 2003 and 8 January 2004; and c) AREVA SA, AREVA T&D Holding SA, AREVA T&D SA and AREVA T&D AG should be held jointly and severally liable for their involvement in the infringement from 9 January 2004 until 11 May 2004. a) AREVA T&D SA should be held jointly and severally liable with ALSTOM (Société Anonyme) for their involvement in the infringement between 7 December 1992 and 22 December 2003; b) AREVA T&D SA, ALSTOM (Société Anonyme) and AREVA T&D AG should be held jointly and severally liable for their involvement in the infringement between 22 December 2003 and 8 January 2004; and c) AREVA SA, AREVA T&D Holding SA, AREVA T&D SA and AREVA T&D AG should be held jointly and severally liable for their involvement in the infringement from 9 January 2004 until 11 May 2004.[11]These conclusions were translated by the Commission into the fine of €53.5m imposed on Areva T&D SA jointly and severally with Alstom of which €25.5m was to be a joint and several liability of all four Areva companies named in recital (371) c). No immunity from any part of its liability was granted to Areva because, in the words of the Commission (recital (532)), it had not provided information of any significant added value. Although I understood from counsel for NGET that an application to join Areva T&D SA and Areva T&D AG as defendants to this action is likely to be made, none was made to me.

Siemens

[12]Siemens AG is the holding company of the Siemens Group. The 14th to 21st Defendants are its direct or indirect wholly owned subsidiaries, having been acquired at various times during the period of the infringement as found by the Commission. NGET contends that the Siemens Group was throughout the relevant period engaged in the design, manufacture, sale and installation of GIS or systems incorporating GIS. The Decision was addressed to only five companies in the Siemens Group. The fine imposed on Siemens AG was €396.5m. A fine was also imposed on the 14th defendant Siemens Transmission & Distribution Ltd of €22m, of which €17.5m was imposed jointly and severally on other companies in the group. No immunity from any part of its liability was granted to Siemens because, in the words of the Commission (recital (537)), it had not provided information of any significant added value either.

The Decision and the Defendants’ Appeals

[13]Counsel for NGET emphasises that decisions of the Commission are presumed to be lawful until annulled or withdrawn, see Masterfoods p.11429 para 53. Further the decision is to be seen “as a bundle of individual decisions finding against each of the addressee undertakings, the infringement or infringements established against them...”, see JFE Engineering Corpn and others v Commission (2005) 4 CMLR 2, 144 para 413. Thus, so he asserts, the Decision constitutes a series of findings going to a conclusion of infringement of the relevant articles against each defendant. By contrast counsel for Siemens suggested that as the Commission is not a court of law it is entitled to have the Decision reviewed by the CFI pursuant to Article 6 European Convention on Human Rights. Be that as it may the Decision is more than unsubstantiated allegations; but, as is common ground, it would be inappropriate for me to consider the likelihood or otherwise of any part of the Decision being annulled for that is a matter within the exclusive jurisdiction of the CFI or ECJ.[14]The Commission summarised its conclusions in paras A2 and 3 in these terms: “2. SUMMARY OF THE INFRINGEMENT (2) The addressees of this Decision participated in a single and continuous infringement of Article 81 of the Treaty and, from 1 January 1994, Article 53 of the Agreement on the European Economic Area (hereinafter ‘EEA Agreement’), covering the EEA territory, by which they agreed as regards the sale of Gas Insulated Switchgear ('GIS') projects on the following:(a) the sharing of markets;(b) the allocation of quotas and maintenance of the respective market shares;(c) the allocation of individual GIS projects to designated producers and manipulation of the bidding procedure for those projects (bid-rigging) in order to ensure that the assigned producers were awarded the contract in question;(d) the fixing of prices by means of complex price arrangements for projects which were not allocated;(e) the termination of license agreements with non cartel members;(f) the exchange of sensitive market information. (3) The cartel was worldwide in scope, although certain territories were excluded, and lasted from 15 April 1988 until 11 May 2004.[3]WORLDWIDE MARKET VALUES (4) The annual worldwide market value of the product concerned by this Decision was approximately EUR 1700-2300 million during the years 2001-2003. The EEA market value amounted to EUR 320 million in 2003.” (b) the allocation of quotas and maintenance of the respective market shares; (c) the allocation of individual GIS projects to designated producers and manipulation of the bidding procedure for those projects (bid-rigging) in order to ensure that the assigned producers were awarded the contract in question; (d) the fixing of prices by means of complex price arrangements for projects which were not allocated; (e) the termination of license agreements with non cartel members; (f) the exchange of sensitive market information. (3) The cartel was worldwide in scope, although certain territories were excluded, and lasted from 15 April 1988 until 11 May 2004. (4) The annual worldwide market value of the product concerned by this Decision was approximately EUR 1700-2300 million during the years 2001-2003. The EEA market value amounted to EUR 320 million in 2003.”[15]In Part B the Commission considered the market for GIS and the undertakings subject to the proceedings. In Part C it described the course the proceedings had taken. Part D contains its description of the relevant events. It sets them out at considerable length in recitals (112) to (216) some of which have been redacted. Part E section 7, comprising recitals (217) to (468), contains the Commission’s Legal Assessment in which it considers the application of the relevant principles both generally and in relation to particular undertakings. In Part E section 8, comprising recitals (469) to (552) the Commission considered the available remedies. In that context it considered the gravity of the infringements and concluded:
“(475) The infringement in this case consisted of the following. The major Japanese and European providers of GIS coordinated the allocation of GIS projects worldwide according to agreed rules, thereby respecting quotas largely reflecting estimated historic market shares and fixing price levels, while reserving some territories to certain producers (see section 6.1). These kinds of restrictions are, by their very nature, among the worst kinds of infringements of Article 81 of the Treaty and Article 53 of the EEA Agreement. The case law has confirmed that agreements or concerted practices involving the kinds of restrictions that were found in this case may warrant the classification ‘very serious’ solely on the basis of their nature, without it being necessary for such conduct to cover a particular geographical area or to have a particular impact. (476) The undertakings involved in this infringement were or should have been aware of the illegal nature of their activities. The measures taken to conceal the cartel show that the participants were fully aware nature of the activities [sic] (see recitals (170)-(176) above).”
I have already noted the fines imposed on the respective defendants to this action and need not repeat them.[16]As I have also already noted ABB does not appeal against the Decision against it. Alstom does on a number of grounds summarised in paragraph 8.4 of the witness statement made by its solicitor, Mr Chaplin, in support of its application for a stay. They are directed primarily at the Commission’s attribution to Alstom of liability for infringements effected by others rather than at the fact of such infringements. Similarly the four Areva addressees appealed to the CFI seeking the annulment of the Decision as against them. As in the case of Alstom their attack is directed primarily to the Commission’s attribution to them of infringements committed by others, that is the Alstom group, rather than to the facts of the infringements themselves. Siemens’ appeal criticises the actual findings of infringement and the alleged misapplication of the law in relation to the computation of the fine. The oral hearing of the appeals of Alstom and Areva took place on 24th March 2009. It is common ground that the judgment of the CFI on the appeals of Alstom and Areva may not be given in less than one year from that date. I was not told when the oral hearing of the appeal of Siemens was likely to come on. It was common ground that any subsequent appeal of a losing party to the ECJ would be likely to take at least another two years. It follows that the Decision will not be indisputable for a period of not less than one year and possibly more than three.

The Particulars of Claim

[17]In paragraphs 1 to 29 NGET describes the parties, their respective businesses and GIS. In paragraphs 30 to 41 it summarises and quotes from what it considers to be the material parts of the Decision. In paragraphs 42 and 43 it asserts what it contends to be the effect of the Decision in terms which, taken in isolation from what follows, I did not understand to be controversial. But in paragraphs 44 to 46 NGET asserts that by reason of the facts set out in the Decision the conduct of those defendants to whom the Decision was addressed and the undertakings of which they formed part contravened Article 81 EC Treaty so as to constitute actionable breaches of statutory duty under s.2 European Communities Act 1972. In paragraph 46 NGET adds that each of the defendants to whom the Decision was addressed and/or the economic undertakings of which they were part were parties to those breaches of statutory duty.[18]In paragraphs 47 to 57 NGET sets out its claim for loss and damage. They include the “best particulars which the claimant can presently provide” in relation to the parties from whom it acquired GIS and the various projects in which GIS was concerned. The total expenditure under those projects is asserted to have been £470,150,538 of which the overcharge on GIS due to the infringements relied on is estimated to have been £108,496,278. In paragraph 57 NGET contends that each defendant is either a person to whom the Decision was addressed, a corporate entity controlled by such a defendant or member of an economic undertaking to which the Decision was addressed and in any such case is jointly and severally liable for the whole of such loss.[19]In paragraphs 58 to 60 NGET seeks interest on £108m. Its principal claim is for such a rate of interest as would reflect the present value of its loss by reference to its cost of capital over the period since the loss first accrued. It is suggested that such cost can be ascertained from the weighted average cost of capital used by its regulator OFGEM. It seeks compound interest at that rate calculated to amount to £140,890,518, producing its total claim of £249,386,796. In the alternative it seeks simple interest.

The parties’ submissions and my conclusions

[20]It was common ground that the starting point for my consideration of these applications must be the judgment of the ECJ in Masterfoods. In that case Masterfoods had instituted proceedings in the High Court of Ireland seeking declarations that the exclusivity agreements relied on by the defendant HB Ice Cream to exclude Masterfoods from the ice cream market in the Republic of Ireland were contrary to Articles 85 and 86 of the EC Treaty (now articles 81 and 82) and in parallel with those proceedings lodged a complaint with the European Commission. The High Court of Ireland dismissed Masterfoods’ action and granted an injunction to HB Ice Cream. Masterfoods appealed to the Supreme Court of Ireland. Before the appeal came on for hearing the Commission decided that the agreements on which HB Ice Cream relied were indeed infringements of Article 85. HB Ice Cream then appealed to the Court of First Instance. At that point the Supreme Court of Ireland referred to the ECJ for a preliminary ruling the question:
“(a) Does the obligation of sincere cooperation with the Commission as expounded by the Court of Justice require the Supreme Court to stay the instant proceedings pending the disposal of the appeal to the Court of First Instance against the aforesaid decision of the Commission and any subsequent appeal to the Court of Justice?”
[21]In paragraphs 46 to 53 the ECJ explained the relationship between the jurisdiction of the Commission and of the national courts in relation to alleged breaches of articles 81 and 82. In that context the court observed in paragraphs 51 and 52: “51. The Court has held, in paragraph 47 of Delimitis, that in order not to breach the general principle of legal certainty, national courts must, when ruling on agreements or practices which may subsequently be the subject of a decision by the Commission, avoid giving decisions which would conflict with a decision contemplated by the Commission in the implementation of Articles 85(1) and 86 and Article 85(3) of the Treaty.[52]It is even more important that when national courts rule on agreements or practices which are already the subject of a Commission decision they cannot take decisions running counter to that of the Commission, even if the latter's decision conflicts with a decision given by a national court of first instance.”[22]The answer to the question posed by the Supreme Court of Ireland was contained in paragraphs 55 to 58 in the following terms: “55. If, as here in the main proceedings, the addressee of a Commission decision has, within the period prescribed in the fifth paragraph of Article 173 of the Treaty, brought an action for annulment of that decision pursuant to that article, it is for the national court to decide whether to stay proceedings until a definitive decision has been given in the action for annulment or in order to refer a question to the Court for a preliminary ruling.[56]It should be borne in mind in that connection that application of the Community competition rules is based on an obligation of sincere cooperation between the national courts, on the one hand, and the Commission and the Community Courts, on the other, in the context of which each acts on the basis of the role assigned to it by the Treaty.[57]When the outcome of the dispute before the national court depends on the validity of the Commission decision, it follows from the obligation of sincere cooperation that the national court should, in order to avoid reaching a decision that runs counter to that of the Commission, stay its proceedings pending final judgment in the action for annulment by the Community Courts, unless it considers that, in the circumstances of the case, a reference to the Court of Justice for a preliminary ruling on the validity of the Commission decision is warranted.[58]If a national court stays proceedings, it is incumbent on it to examine whether it is necessary to order interim measures in order to safeguard the interests of the parties pending final judgment.”[23]It is clear from paragraphs 55 and 57 that this court should take all the steps required to ensure that the trial does not come on before all appeals to the CFI and, if brought by any party, to the ECJ have been finally concluded. Accordingly the minimum requirement of this court at this stage is an order to ensure that the action is not fixed for trial against any defendant before, say, three months after the exhaustion of all rights of appeal of that defendant from the Decision. As I have indicated the defendants contend that such a minimum order is not sufficient to protect them.[24]At one stage counsel for Areva submitted that the terms of paragraph 58 of the ECJ’s judgment in Masterfoods required the national court to abstain from any further proceedings in the action save any which could properly be described as “interim measures to safeguard the interests of the parties pending final judgment”. He submitted that any requirement for service of defences, disclosure of documents or other normal interlocutory steps in preparation for a trial were outside the scope of what the ECJ considered to be permissible. I reject that submission. First, the terms of paragraphs 55 and 57 show that it is for the national courts to decide when to stay its proceedings. The object is to avoid any decision running counter to that of the Commission or the community courts. Paragraph 58 deals only with the position when the national court has stayed the proceedings. It says nothing about the obligations of the national courts before that stay has become effective. Indeed it would be contrary to the very division of functions to which the ECJ referred in paragraphs 47 to 49 to conclude that it had the jurisdiction to interfere with the procedures of the national courts in areas where there was no risk of conflicting decisions. Given that objective it is for the national court to consider, in accordance with its own procedures, how best to achieve it.[25]By s.47A Competition Act 1998, inserted by s.18 Enterprise Act 2002, a claim for damages or other sum of money may be brought in the Competition Appeal Tribunal (“CAT”) by a person who has suffered loss or damage as a result of an infringement of, amongst other provisions, Article 81 EC Treaty provided that, amongst others, the European Commission has decided that such provision has been infringed. But even then such a claim may not be brought otherwise than with the permission of the CAT at any time before the proceedings before the Commission and on appeal to the European Court have been finally concluded, see s47A(1), (5)-(9). In the event of such a claim being made a special limitation period is applied by subsection (3). It is made clear by subsection (10) that the right to make a claim in accordance with the provisions of that section does not affect the right of that person to bring other proceedings in respect of the claim in the High Court.[26]The evidence of NGET establishes that its proceedings were brought in the High Court for the purpose of establishing its jurisdiction as that of the court ‘first seised’ of the matter. Such a course is designed to avoid what is colloquially known as the ‘Italian Torpedo’ whereby proceedings more naturally associated with one jurisdiction are tried in another merely because the proceedings in that other jurisdiction were instituted first. This led to the submission of the defendants that the discretion as to a stay exercisable by the High Court should be exercised in the same manner as it would be exercised by the CAT in determining whether to grant permission for the institution of a claim to the Tribunal before the expiration of the period prescribed by subsection 47A(8). It was suggested that if the discretions were exercised in accordance with different principles it would lead to undesirable ‘forum shopping’. The purpose of this submission was to justify introducing into the exercise of my discretion in this case the various considerations which weighed with the CAT in follow on cases before them, in particular Emerson III [2008] CAT 8.[27]In that case the Commission had made a decision finding infringements of Article 81 by Morgan Crucible, Schunk GmbH, Le Carbone Lorraine and others. There were applications for annulment brought by Schunk and Le Carbone pending before the CFI when Emerson sought the permission of the CAT to commence a claim for damages in that Tribunal. The Tribunal considered the background and CFI appeals, the relevant domestic legal framework and the previous proceedings before the Tribunal in some detail. They dealt with the permission issue in Part VI under the headings of the parties’ submissions and the Tribunal’s analysis. In the event permission was refused.[28]In paragraphs 79, 80 and 86 the Tribunal set out three principles it considered should be applied. They are: “79. In our judgment, the principles to be applied are these. First, given that this is a matter that is a precursor to the commencement of a claim, the overriding consideration is whether granting permission enables a case to be dealt with justly. In determining claims for damages, rule 44 of the Rules expressly provides that the Tribunal shall use its powers "with a view to ensuring that the case is dealt with justly".[80]Second, it is legitimate, where permission is sought, to consider the nature and extent of particular prejudice that either party will suffer as a result of granting permission. That is because, for example, the greater the degree of prejudice a would-be claimant is likely to suffer pending the outcome of any appeal(s), the greater will be the risk of injustice if permission is refused. .....[86]Third, in considering whether to grant permission, the nature and ambit of the appeal, or appeals, against the decision on which a proposed claimant seeks to rely may, in certain cases, be significant. Where an appeal seeks to set aside a decision, in whole or in part, or challenges findings in a decision which are germane to the nature and extent of a finding of infringement or the loss caused by that infringement, granting permission carries a greater risk of injustice and inefficiency, particularly if the decision were to be annulled or its scope significantly curtailed.”[29]The Tribunal’s conclusion on the exercise of its discretion whether to grant permission to institute the claim before the Tribunal before all applications for annulment of the Commission’s decision had been finally determined was expressed in paragraph 87 in these terms:
“All of the proposed defendants submit that it would be inappropriate to grant permission in the present case because, if the CFI were to annul the Decision in its entirety or in respect of each or one proposed defendant, the basis of any claim for damages against them or one of them would fall away. Having carefully considered the proposed defendants' applications for annulment, we consider it would not be appropriate in this case for the Tribunal to grant permission pending the determination of these CFI appeals. We note, first of all, that in the form of order sought from the CFI, each of the proposed defendants is seeking not only a reduction in the fine but also the annulment of the Decision, either in its entirety or in so far as it applies to that proposed defendant. In this regard, the likelihood or otherwise of the proposed defendants actually obtaining annulment is irrelevant to our decision since that is solely a matter for the CFI and, ultimately, for the ECJ (as the case may be).”
[30]I see nothing in the expression in paragraphs 79, 80 and 86 of the principles to be applied with which to quarrel. Equally it is clear that the question to be determined was different, whether or not to allow the claim to be commenced as opposed to when the existing action should be stayed and that it was determined, as one would expect, in the light of all the relevant circumstances of that case. It is not appropriate to rely on that decision as predicating the answer to the different question I have to determine in this case in the light of different circumstances.[31]Counsel for Alstom submitted that in exercising the discretion when to stay the proceedings in a follow on action the court should approach the matter on the basis that in the absence of special circumstances the stay should be immediate and that the onus of demonstrating special circumstance lies on the claimant. He too relied on Emerson III and the decision of Toulson J in Morgan Stanley Dean Witter Bank Ltd v Visa International Service Association 2nd May 2001 (unreported). In the latter case Toulson J when faced with a problem similar to that facing me, specifically noted in point 4 on page 6 that “it is a matter for the national court, applying its own domestic law, to decide the stage at which the proceedings before it should be stayed. The present case is how I should exercise that discretion.” He concluded on the facts of that case, which were different from the facts of this, that he should stay the follow on action forthwith.

The present case is how I should exercise that discretion.”

[32]I reject the submission that I should approach the exercise of my discretion in the manner suggested by counsel for Alstom. This court has a general discretion to be exercised in the light of all the relevant circumstances having regard to the object to be attained, namely the avoidance of any decision running counter to that of the Commission or the community courts. In exercising its discretion it is to have regard to the overriding objective to deal with the follow on action justly. That includes “...so far as is practicable –(a) ensuring that the parties are on an equal footing;(b) saving expense;(c) dealing with the case in ways which are proportionate – (i) to the amount of money involved; (ii) to the importance of the case; (iii) to the complexity of the issues; and (iv) to the financial position of each party;(d) ensuring that it is dealt with expeditiously and fairly; and(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.” (a) ensuring that the parties are on an equal footing; (i) to the amount of money involved; (ii) to the importance of the case; (iii) to the complexity of the issues; and (iv) to the financial position of each party; (d) ensuring that it is dealt with expeditiously and fairly; and (e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.”[33]In this case the defendants rely primarily on saving expense whilst NGET relies on the need to ensure that it is on an equal footing with the defendants and ensuring that the follow on action is dealt with both expeditiously and fairly. In the latter context NGET relies on the decision of the Court of Appeal in MTV Europe v BMG Records (UK) Ltd [1997] 1 CMLR 867. It is true, as the defendants pointed out, that this case was decided under the old rules and before the decision of the ECJ in Masterfoods, but I see nothing in it inconsistent with either the decision of the ECJ in Masterfoods or the provisions of the Civil Procedure Rules. Thus, at paragraphs 28 and 29 Sir Thomas Bingham MR said:
“[28] There is, in my judgment, nothing which suggests that in a case where the answer is not clear in favour of the plaintiff or the defendant, the national court must at once stay the proceedings pending a decision by the Commission. The Court's concern is to avoid inconsistent decisions. There is no ground for seeking to prohibit the preparation of an action for trial so long as it does not lead to a decision in advance of a decision by the Commission. [29] [After referring to the case of C-250/92, Gøttrup-Klim Grovvareforening v. Dansk Landbrugs Grovvareselskab A mbA. The Master of the Rolls added] “That reasoning is, as it seems to me, entirely consistent with earlier authority, but I find nothing in it to suggest that the European Court of Justice was intending to forbid national judges, in cases where the outcome was not clear, from allowing the preparation of proceedings to go ahead until a point short of decision. Moreover I can, for my part, see no reason why the Court of Justice should seek to intrude into that area. The Court of Justice has always respected the power of national courts to order their own procedure so long as no Community interest is adversely affected, and I can see no reason why it should wish to step in here.”
[34]Millett LJ, in paragraphs 32 and 33 agreed. He said: [32]...It is incumbent on a national court to avoid the risk of reaching a decision which conflicts with a ruling, or future ruling, of a Community institution. To that end it may grant an immediate stay of proceedings before it, or take whatever other measures are open to it under the national rules of procedure. [33] In the present case, the Judge recognised the risk that premature judgment in the action might conflict with a later ruling of the Commission. He decided that it was sufficient to direct that the action should not be set down until one month after the Commission had published its decision. I am unable to comprehend why it should be thought that he had no jurisdiction to make such an order.”[35]It follows that I should consider the applications for a stay in the light of all relevant circumstances, the object to be achieved and the balance indicated by the terms of the overriding objective. Does such consideration lead to a conclusion that the stay should take effect before the latest appropriate point as indicated in paragraph 23 above? This involves a comparison of the position of the parties if a stay is granted with immediate effect and if it is not. That comparison must be made on two alternative hypotheses, namely, that the applications of the defendants to the CFI and subsequently on appeal to the ECJ are or are not successful in whole or in part. In their baldest terms the defendants submit that the stay should be immediate because if their applications or appeals subsequently succeed substantial time and expense involved in preparing for the trial of this follow on action will be wasted because its foundation, namely the Decision, will have been removed. The response of NGET is to suggest that even if the annulment applications are successful the follow on action is likely to proceed in some form and the defendants will be adequately compensated in costs but if it is not annulled NGET will have lost valuable preparation time for the immediate trial of the follow on action after the final dismissal of the applications or appeals to the CFI or ECJ, with the inherent risk that relevant documents and other evidence may be lost or destroyed. To which the defendants reply that they have offered adequate undertakings for the preservation of documents, many of which are confidential to the Commission, costs would not be a sufficient protection and the risks to which NGET refers are more theoretical than real.[36]These submissions contain a number of separate elements which need evaluation. But first it is necessary to consider the issues to be determined in the follow on action if it is to proceed. The Decision establishes the infringement of Article 81 by the persons or undertakings to which it is addressed. This is the breach of statutory duty on which NGET relies. But to prove its claim it must also establish that it sustained damage in the amount claimed in consequence of that breach of statutory duty. At the least this involves proving that the price it paid for the GIS equipment it bought was more than it would have had to pay if the cartel had not existed. This essential fact is not established by the Decision and the evidence and documents relevant to it must be primarily in the possession of the defendants. In addition it is apparent from the evidence of the defendants that they, or some of them, will seek to establish that even if the price paid by NGET was inflated by the existence of the cartel and the effect of its activities even so NGET suffered no loss because it was permitted by its regulator to, and did in fact, pass on those inflated prices to its consumers of electricity. This will involve prolonged consideration of the pattern of NGET’s trade in the period of the infringement namely April 1988 to May 2004. The documents and evidence in relation to that issue may be primarily in the hands of NGET but if the issues are not clarified now and the documents in relation to it are not disclosed now, the eventual trial, if there is one, will be substantially delayed even beyond that which has already occurred and the further period of more than three years which may elapse before the outcome of the applications of the defendants is known.[37]What then is the likelihood of such a trial being held? The defendants contend that I cannot prejudge the outcome of the applications to the CFI or of any subsequent appeals. I agree, but NGET submits that it does not follow that, even if successful, the Decision will be wholly annulled. It points to the fact that ABB has made no application for annulment and was granted immunity from liability for a substantial fine due to its co-operation with the Commission. In addition it relies on the fact that both Areva and Siemens applied for leniency. It submits that I should not assume that their applications did not in some degree involve the disclosure of evidence of the existence of the cartel and of their involvement in its affairs. The defendants, or some of them, dispute this on the basis that undertakings frequently provide information to the Commission in connection with an application for leniency whilst denying any liability.[38]I am not in a position to comment on any such practice but unless the information and co-operation provided to the Commission is of assistance in establishing the facts relating to the alleged infringements the applicant is most unlikely to be able to comply with the provisions of paragraphs 3, 6, 8 and 11 of the Commission Notice on immunity from fines and reduction of fines in cartel cases (2002/C 45/03). Given that three of the four defendants sought leniency and that one of them, ABB, was successful and has not appealed I cannot assume that a successful application to the CFI or appeal to the ECJ would necessarily involve the complete annulment of the Decision and failure of the follow on action as against, at least, those three defendants.[39]If and insofar as it did, then it is probable that NGET would be liable for the costs of the defendants either of the action which had failed or the costs thrown away by any need to amend its Particulars of Claim in the light of any amendment necessitated by the orders of the CFI or the ECJ. NGET accepts, rightly in my view, that the remedy of costs is a palliative and not a complete cure. This is because under the normal provisions for assessment not all the costs usually incurred are recovered. Nor is there any compensation for the waste of executive time in defending such proceedings. Those were considerations which weighed with Toulson J in Morgan Stanley Dean Witter Bank Ltd v Visa International Service Association at p.17. Nevertheless some palliative is better than none.[40]It follows that if I do not order an immediate stay the defendants will sustain some prejudice because they will be required to prepare for a trial which may not occur and if it does not they will not be fully compensated for the waste of time and money involved in its preparation. The severity of that risk is lessened by the possibility that the Decision may not be completely annulled as against three of the four defendant groups, even if otherwise successful, and ameliorated by the availability of some compensation by an award of costs.[41]In its evidence in opposition to these applications NGET suggests that without any defences to its Particulars of Claim it cannot know with any precision the issues for which it should prepare if the follow on action is to proceed, nor is it in a position to quantify its losses without disclosure by the defendants of the documents relevant to the extent to which the activities of the cartel distorted the market in GIS. It fears that further delay will further affect the availability and credibility of the evidence and that at least some steps should be taken to prepare for a trial of the follow on action. It proposed the service of defences, followed by a meeting to discuss the scope of the disclosure which should be given now followed by a case management conference to be held thereafter to consider what further steps could and should be taken in advance of the decisions of the CFI and ECJ.[42]These seemingly modest proposals were opposed by the defendants. On 1st June 2009 the solicitors for NGET wrote to those for each of the defendants commenting on their clients’ failure to explain how their proposals for an immediate stay would preserve the relevant evidence during the period of the stay and asking them to explain precisely what steps they had taken since service of the claim form and what further steps they proposed to take to preserve all relevant evidence whether or not an immediate stay was imposed. The solicitors for Areva wrote the same day confirming that they would preserve all relevant documents in their possession. The solicitors for ABB had earlier in the correspondence indicated that there would be issues of public policy in relation to certain disclosure. In the witness statement of Mr Lawrence the solicitors for ABB confirmed that they were aware of their professional obligations and were working with ABB to identify and secure documents likely to be relevant to the proceedings. The solicitors for Alstom responded to the effect that, following the sale of the GIS business to Areva, Alstom had no relevant documents but, insofar as it did, it had taken steps to preserve them and would continue to do so. The solicitors for Siemens replied to the effect that Siemens would preserve all relevant documents in their possession. As I have already recorded Siemens has no objection to serving its defence provided that it gets answers to its requests for further information. It opposed the suggested disclosure as, in effect, premature. All the defendants relied on the extent of the requisite disclosure and its expense and indicated that there would be issues of confidentiality with regard to documents in the possession of the Commission and otherwise.[43]In these circumstances it is not self-evident that disclosure now of the documents which have been identified and preserved by the defendants, as indicated by their respective solicitors, would be unduly oppressive or expensive. Insofar as there may be disputes as to the extent to which a defendant is entitled to object to production because of, for example, confidences owed to the Commission or public interest privilege then it may be that the court would consider that such disputes do not need to be resolved in advance of the conclusion of the proceedings before the CFI and ECJ. But such uncertainties do not justify the grant of an immediate stay so as to prevent the crystallisation of the issues and the disclosure of the relevant documents as to which no such dispute relates. Accordingly if I were to grant an immediate stay now I consider that NGET would sustain some prejudice from the further delay which would ensue before its claim could be heard. The extent of that prejudice on, for example, the availability of evidence, cannot be foreseen. It is certain that, if it occurs, it cannot be compensated.[44]In these circumstances the proper balance, in my judgment, requires me to allow this action to proceed at least to the close of pleadings. In addition I consider that it is premature to decide that no disclosure should take place before the conclusion of the applications and appeals to the CFI and the ECJ. In principle, therefore, I accept the submissions of counsel for NGET that the action should proceed to the stage of the close of pleadings, the parties advisers should meet to consider the scope and basis for proceeding with disclosure and that that topic and the need or desirability for other directions should be reconsidered at a case management conference to be held in October 2009. I reach this conclusion because I consider that in the circumstances of this case, in particular the time which has already elapsed since the occurrence of the relevant events, the need for the follow on action to be processed so as to be as ready for trial as soon after the conclusion of the proceedings before the CFI and ECJ are concluded as is reasonably possible outweighs the need to avoid expenditure which may be wasted if and to the extent that it is not compensated for by an award of costs. Unless the preparation of the follow on action continues then the parties will not be on an equal footing because NGET will not know what are the relevant issues or what documents relevant to those issues, particularly causation, are available.[45]There remains the question whether I should order the provision of further information by NGET to Siemens as sought in its requests served on 27th February and 19th May 2009. The first set of requests relates to the allegation in paragraph 45 of the Particulars of Claim that “...by reason of the facts set out in the Decision the conduct of the addressee defendants and the undertaking of which they formed part contravened Article 81 so as to constitute and actionable breach or breaches of duty under s.2 European Communities Act 1972.” The information sought by the request was “full particulars of(a) the precise conduct engaged in or matters which the Claimant alleges gives rise to the actionable breach of statutory duty by each of the 13th to 21st Defendants;(b) In respect of each of the 13th to 21st Defendants, the period in which this conduct was engaged in.” The response of NGET was to the effect that, at this stage at least, the existence of the Decision and its legal consequence is sufficient.[46]This is disputed by counsel for Siemens on the basis that the particulars given would not be considered adequate if this action had been brought in the CAT because they fail to comply with the CAT Practice Directions, in particular paras 6.73, 6.81 and 6.82. In my view this is beside the point. This action is in the High Court not the CAT. In any event that practice would, by definition, apply to proceedings in the CAT at the later stage at which the annulment proceedings had been finally determined not at the earlier stage with which I am concerned when they are still pending. In any event NGET has referred at some length in paragraphs 30 to 41 to the parts of the Decision on which it particularly relies.[47]The second set of further information sought relates to the allegations of loss and damage set out in paragraphs 52 to 58 of the Particulars of Claim. The information sought is the basis on which NGET suggests that the overcharge amounted to 30% and was not passed on. This is likely to depend in part on the documents disclosed by the defendants. I can see no reason why NGET should be required to provide further information at this stage before Siemens has served any defence at all. Accordingly I dismiss the requests of Siemens for Further Information as set out in its request dated 27th February and 19th May 2009.

Conclusions

[48]For these reasons I will order that: (1) This action be not fixed for hearing against any defendant until after the period of three months has elapsed from the exhaustion by that defendant of its rights of application for annulment to the CFI or of subsequent appeal to the ECJ. (a) each of the defendants is to serve its defence to this action on or before Friday 26th June 2009; (b) NGET is to serve its replies thereto (if any) on or before Friday 24th July 2009; (c) the solicitors for the parties are to meet during August or September to consider and, if possible, agree on the scope of disclosure and inspection to be given and allowed pending the conclusion of the proceedings before the CFI and ECJ previously referred to; (d) an application for a case management conference to be held in October 2009 is to be made by NGET at which the court will consider what further directions should be given with regard to the continued preparation of this action for trial in due course. (3) I dismiss the application of Siemens for an order that NGET provide the further information sought in its requests served on 27th February and 19th May 2009.[49]I am prepared to consider variations in the detail of any such order, for example, as to the times by when a particular step is to be taken. Accordingly I invite counsel for all parties to consider my order in that light and to agree a minute of order to give effect to it.

Cited in 15 later judgments

and 6 more of the most senior