27 Jul 2018

The UK Supreme Court has refused to allow units of LG, Koninklijke Philips and Samsung to appeal the decision of the Court of Appeal, allowing Iiyama's damages claims arising from the EU Commission's decisions in the LCD Cartel and the CRT Cartel to proceed.

According to a spokesperson, the Supreme Court decided the applications for permission to appeal did not raise a point of law of general public importance.

A number of the cartel damages claims brought before the English Courts, in recent years, have raised issues of considerable importance that needed to be resolved. The claims brought by Iiyama have raised the issue as to whether in a claim brought by an EU domiciled claimant in the UK, for breach of Article 101(1) TFEU, for loss allegedly suffered in the EU as a result of the operation of a worldwide cartel, the claim should be prevented from proceeding to trial because the harm caused by the cartel in the EU was too indirect?

In Iiyama's case, the original sales of the LCD Panels/CRT Tubes (i.e. the cartelised products) took place outside the EU/EEA, in Asia. These LCD Panels/CRT Tubes were incorporated into televisions and/or monitors and those televisions and monitors were sold to an entity outside the EU/EEA. That entity sold the televisions and monitors to various Iiyama companies incorporated in the EU, and the Iiyama companies subsequently sold the televisions and monitors to dealers in the EU/EEA. 

A key issue to be determined by the English Courts was whether it could be said the LCD Cartel and/or the CRT Cartel had been implemented in the EU or, alternatively, that the cartels satisfied the qualified effects test? This is a question of fact requiring disclosure of relevant materials. The Court of Appeal held that it was certainly arguable that the cartels had been implemented in the EU and satisfied the qualified effects test. This issue will undoubtedly be examined in great detail, assuming Iiyama's claims are not settled and proceed to trial.

The Court of Appeal's judgment and the refusal by the Supreme Court to grant leave to appeal, are good news for claimants looking to recover damages from cartelists. It is clear from the Iiyama cases that televisions and monitors, containing LCD Panels/CRT Tubes supplied by the cartelists (or companies in their respective corporate groups), were sold into the EU/EEA by various of the claimant companies. Loss was therefore suffered in the EU/EEA, subject to any evidence of pass-on, as a result of the operation of the cartel between the manufacturers of LCD Panels/CRT Tubes. The loss was not so remote as to be unforeseeable, and so in such circumstances, it would be harsh for a Court to refuse to give the claimant the opportunity to demonstrate the basis on which it was entitled to bring its claim.

No doubt, in any substantive hearing of Iiyama's claims, the defendants will seek to persuade the Court that the LCD/CRT Cartel could not be said to have been implemented in the EU/EEA, and that the qualified effects test is not satisfied. In the meantime, Iiyama's claims against the LCD Cartelists and the CRT Cartelists can progress. The refusal by the Supreme Court to grant the defendants leave to appeal may turn out to be the catalyst for a negotiated settlement. For those parties who want clarity on the issue of whether indirect harm in the EU/EEA is sufficient to form the basis for a claim under Article 101(1) TFEU, they will be hoping at least one of the Iiyama claims proceeds to trial and judgment. We shall have to wait and see.