- April 15, 2013
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
More than five years after legal proceedings were instituted by one of the victims of an intricate anti-competitive cartel that stretched across the world the High Court has paved the way for the matter to finally come to trial. In a ruling which raised important issues of international law, the court directed disclosure of evidence by a number of French companies who are amongst 22 corporate defendants in the dispute.
The case concerns a substantial and sophisticated cartel relating to the supply of gas insulated switchgear which controls energy flow through electricity grids and is a major component in power substations. In January 2007, the European Commission found that the cartel had lasted for 16 years, between 1988 and 2004, and covered much of the world, including the United States and Canada.
The cartel was engaged, inter alia, in the sharing out of markets and allocation of quotas and market shares and the UK in particular was designated as a ‘home market’, reserved to certain members of the cartel with whom others agreed not to compete on UK projects. In a decision addressed to 20 companies, the commission imposed fines totalling Euros750 million, which was at that time the largest set of fines ever imposed in respect of a single cartel.
In a follow-on damages action for alleged breach of the competition rules contained within article 101 of the Treaty on the Functioning of the European Union, National Grid Electricity Transmission Plc. (NGET) is suing 22 companies said to have been involved in the cartel for sums that it claims to have overpaid for equipment. NGET’s claim runs into several hundred million pounds.
The litigation, which was launched in 2008, has been delayed by various factors, not least difficulties relating to disclosure of the vast quantities of evidence required to assess the quantum of NGET’s claim. Various French companies amongst the defendants had resisted disclosure on grounds that compliance was forbidden under French law. The so-called ‘French blocking statute’ prevents the communication of economic, commercial, industrial, financial or technical documents to foreign individuals or legal entities on pain of criminal sanctions.
However, in ordering the French companies to provide full disclosure, the court ruled that it was ‘virtually inconceivable’ that the French authorities would prosecute those companies for disclosing documents pursuant to an order made by an English Court in a case which arose from ‘an established and serious violation of a fundamental provision of EU law’.
With certain defendants having lodged appeals to the European Court of Justice against the commission’s decision, the substantive hearing of NGET’s case is still not expected to commence before June 2014.
National Grid Electricity Transmission Plc. v ABB Limited & Ors. Case Number: HC08C03243