Court of Appeal rules that English jurisdiction clause does not cover tortious damages claim in respect of Italian jet fuel cartel

20 Nov 2013

The Court of Appeal has given a significant judgment on the scope of an English jurisdiction clause, including whether that clause covered an English law  breach of statutory claim under Article 101 TFEU against a member of an Italian jet fuel cartel.

The underlying claim was brought by Ryanair, the well-known Irish airline, against Esso Italiana (“Esso”), part of the ExxonMobil group. The Italian Competition Authority had found that Esso and certain other oil companies selling jet fuel at various Italian airports had engaged in information sharing agreements in breach of Article 101 TFEU, with an inflationary effect on prices. Ryanair claim was based on both (a) a breach of a provision in its contract with Esso for the supply of jet fuel, and (b) a breach of statutory duty, which included a claim that Esso should be held jointly and severally liable  for all the losses resulting from the cartel. Ryanair alleged that because its contractual claim was subject to the jurisdiction of the English courts, the same must apply to its breach of statutory claim. At first instance, Eder J ([2012] EWHC 200 (Comm)) agreed.

In allowing Esso’s appeal, the Court of Appeal held that, on its proper construction, the contractual clause on which Ryanair relied for its breach of contract claim did  not, in fact, cover a claim in respect of losses suffered as a result of Esso’s involvement in the cartel in breach of Article 101 TFEU. In those circumstances, the submission by Ryanair which had found favour with Eder J – that a rational businessman would have intended the English jurisdiction clause to cover both its breach of contract claim and its breach of statutory duty claim  – simply fell away, since it critically depended on the fact that Ryanair actually had a contractual claim within the scope of the English jurisdiction clause in its agreement with Esso. In addition, however, the Court of Appeal considered the broader question of whether an English jurisdiction clause expressed as covering “disputes under this Agreement” could extend to a breach of statutory duty claim for damages suffered at the hands of an Italian cartel in relation to the sale of fuel at Italian airports. In a judgment with which the other members of the Court of Appeal agreed, saw nothing in cases (such as The Fiona Trust) on the presumption of “one stop adjudication” to suggest that a pure breach of statutory duty claim against a member of an Italian cartel should fall within the jurisdiction provisions of an English law contract, irrespective of the availability (or otherwise) of any parallel contractual claim governed by English law. The decision therefore suggests that English courts may be slow to accept jurisdiction over cartel damages claims based on Article 101 TFEU when the cartel in question is more obviously connected with another EU Member State.

Daniel Beard QC acted for the successful appellant.

Michael Armitage wrote the following case note on Ryanair v Esso