UK: UK Supreme Court Clarifies Deadline For Follow-On Antitrust Damages Claims In Vitamins Cartel Ruling

On 24 October 2012, the UK's Supreme Court handed down a judgment upholding an earlier Court of Appeal judgment, in which BCL's follow-on antitrust damages claim against BASF in relation to the Vitamins cartel case had been declared time-barred.

In 2001, the European Commission fined producers of various vitamin products, including BASF, a total of € 855.22 million for taking part in an illegal market-sharing and price-fixing cartel, in breach of Article 101 TFEU (at that time, Article 81 EC). BASF subsequently appealed against the level of the fine, but importantly, not against the Commission's finding of infringement, before the EU General Court ("GC"), which reduced the fine in March 2006 (see VBB on Competition Law, Volume 2006, No. 3, available at www.vbb.com).

Several purchasers of vitamins, including BCL, subsequently brought actions for damages against the cartel members before the UK Competition Appeal Tribunal ("CAT"). Under Section 47A of the Competition Act 1998, parties that have suffered damages as a result of a competition law violation are allowed to claim compensation before the CAT on the basis of a decision of the European Commission or of the Office of Fair Trading ("OFT") finding an infringement of EU and/or UK competition rules. Such damages actions are subject to a two-year time limit, which is stated to run from the end of the period during which an appeal can be brought against the relevant Commission or OFT decision or, if such an appeal is brought, the determination of that appeal.

In its decision concerning BCL's damages claim, the CAT found that, where an appeal is brought against a Commission or OFT decision, it is irrelevant to the computation of the limitation period whether the appeal is brought against the finding of an infringement or only against the penalty imposed. Thus, the CAT accepted BCL's argument that the limitation period began to run on 25 May 2006 (i.e., 2 years after the end of the period during which BASF could have appealed against the GC's judgment) and was therefore not time-barred.

In May 2009, the Court of Appeal ("CA") overturned the CAT's ruling and clarified the application of the time limits relating to damages actions brought under section 47A (see VBB on Competition Law, Volume 2009, No. 5, available at www.vbb.com). According to the CA, as section 47A actions are based on the Commission's or OFT's finding of an infringement, only appeals against the finding of an infringement, rather than those only directed against the imposition of a penalty, are taken into account for calculating the limitation period. This meant that the two-year period for the commencement of BCL's claim had begun to run at the end of January 2002 (i.e., the last date for BASF to appeal against the Commission's decision that it had infringed Article 101 TFEU) and that, consequently, BCL's claim had been brought out of time.

BCL appealed against the CA's decision to the Supreme Court arguing, among other things, that the operation of the relevant limitation period for bringing follow-on damages claims was legally uncertain, thereby breaching the EU principle of effectiveness according to which national courts may not lay down detailed procedural rules that "render practically impossible or excessively difficult" the exercise of EU rights.

In its recent ruling, the Supreme Court dismissed BCL's arguments outright. According to the Supreme Court, BCL's right to legal certainty was not breached: the procedural rules governing follow-on damages claims were not, on the facts, insufficiently certain or prone to making the bringing of a claim in time excessively difficult. In that respect, the Supreme Court took the view that EU law did not require the relevant legal provisions on time limitations to be "clear beyond doubt", but rather that they be "sufficiently clear, precise and foreseeable" so as to allow parties to exercise their rights. The Supreme Court also did not accept BCL's requests for an extension of the time limitations, there too considering that national law was sufficiently clear. Finally, the Supreme Court briefly addressed the issue of appropriate relief in the hypothetical event where the principles of effectiveness and legal certainty had been breached. In the Supreme Court's view, if the national legal provisions had not been clear, the only form of compensation would have been a State liability claim against the UK. For all the above reasons, therefore, the Supreme Court rejected BCL's appeal, which means that its follow-on antitrust damages claim against BASF has become time-barred.

This was the first antitrust case to reach the UK Supreme Court since its establishment in October 2009.

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