British Airways v Emerald Supplies Limited & Others [2015] EWCA Civ 1024: new Court of Appeal judgment signals important developments in air cargo litigation

16 Oct 2015

The Court of Appeal has just handed down judgment in two appeals against orders of Mr Justice Peter Smith, in relation to the multi-billion pound damages claims that are presently being pursued against British Airways in the Chancery Division. The underlying claims relate to BA’s alleged involvement in a worldwide cartel in the air cargo sector, and follow a decision of the European Commission in 2010 (presently under appeal before the European courts) which found that BA and a number of other airlines had infringed Article 101 TFEU (and certain equivalent treaty provisions covering the EEA and Switzerland) by colluding on certain elements of the price of air cargo services. This has also attracted the attention of competition regulators throughout the world.

The Court of Appeal’s judgment concerns, on the one hand, the claimants’ reliance on the “economic torts” of unlawful means conspiracy and unlawful interference with trade (alongside their more conventional claims alleging an infringement of the European competition rules). BA sought to strike out the economic tort claims on the basis that the claimants could not show that BA had the requisite “intention to injure”, but that application was dismissed (with BA ordered to pay indemnity costs) by Peter Smith J on the basis, in particular, that it was premature to reach conclusion on BA’s intention prior to disclosure. The Court of Appeal allowed BA’s appeal, and in so doing gave consideration to the intention requirement as previously considered by the House of Lords in OBG v Allan and the Court of Appeal (in a similar, competition damages context) in Newson Holding Ltd v IMI plc. The effect of the Court of Appeal’s judgment (subject to any appeal to the Supreme Court) is that the claimants’ economic tort claims have been struck out.

The Court of Appeal also ruled on the question of whether Peter Smith J had been right to order disclosure to the Claimants of the full, unredacted version of the Commission’s Airfreight decision, albeit within the confines of a confidentiality ring. A number of airlines who are Part 20 Defendants in the claims against BA objected to that order. They did so in reliance on the ruling of the General Court of the European Union in the case of Pergan, which concerned the publication of findings of, or allusions to, liability which could not be challenged before the EU Courts, and the incompatibility of such publication with the presumption of innocence which is enshrined in European law. The Court of Appeal held that “Pergan protection” is absolute, meaning that the national court must afford the same protection which is afforded at EU level to the confidential version of the Commission’s decision, in the context of applications for disclosure by damages claimants (and that, even if there were some discretion on the part of the national court in considering whether to order disclosure of “Pergan materials”, Peter Smith J had failed to strike the right balance with his order for wholesale disclosure).

Jon Turner QC and Michael Armitage are representing BA in the air cargo litigation. Paul Harris QC, Ben Rayment and Anneliese Blackwood are acting for the claimants in the Emerald proceedings. Daniel Beard QC and Thomas Sebastian appeared for Singapore Airlines.

The judgment is available here.