High Court rules that Asian sales are outside EU competition law and dismisses CRT claims

26 May 2016

Iiyama Benelux BV & Ors v Schott AG & Ors

Mr Justice Mann has dismissed claims brought by iiyama in respect of cartels concerning Cathode Ray Tubes (CRTs) and CRT Glass, on the basis that the claims fall outside the territorial scope of EU competition law. The claimants were subsidiaries of iiyama, mostly based in Europe, and alleged that they had purchased completed computer monitors which incorporated CRTs and CRT Glass and which had been subject to cartels. The claims relied on EU competition law, and were initially brought on the basis of two infringement decisions made by the European Commission in relation to CRTs and CRT Glass respectively. However, it later transpired that the CRTs and Glass which were ultimately purchased by the claimants had originally been sold in Asia, and only arrived in Europe through a supply chain with a number of intervening stages.

The Defendants (who were variously parties to the Commission’s decisions relating to CRTs and CRT Glass) applied to have the claims struck out, or for summary judgment, or to have permission to serve out of the jurisdiction set aside, all on the basis that the claim was not properly arguable.

Mann J found that the claim against the Glass Defendants failed because the cartel found by the Commission related only to Europe, and did not cover supplies of CRT Glass in Asia. It was not possible to see how the EU cartel affected sales in Asia, and although the claimant alleged that there might be a worldwide cartel, no such cartel had been found by the Commission, and no such cartel was pleaded.

The Court also found that the claims against both the CRT and Glass defendants fell outside the territorial scope of EU competition law, considering two doctrines of EU law – the implementation doctrine and the qualified effects doctrine. The claimants could not rely on the implementation doctrine, which required that the cartel was implemented in the EU because the relevant sales of Glass and CRTs had been made in Asia. The claimants also could not rely on the qualified effects doctrine – i.e. that the cartel had foreseeable, immediate and substantial effects in the EU – because the supply chain by which they had acquired the products was not immediate.

Tim Ward QC and Rob Williams acted for Schott instructed by Travers Smith LLP. Daniel Beard QC acted for Samsung SDI instructed by Allen & Overy LLP.

The full judgment is available here.