European Union - Rules on competition - European Commission finding defendant companies entering into cartel regarding provision of heavy electrical equipment used in power grids

National Grid Electricity Transmission Plc v ABB Ltd and other companies: ChD (Mr Justice Roth): 4 April 2012

The instant proceedings arose out of a decision issued by the European Commission (the commission) in January 2007 in Case Comp/F38.899 - Gas Insulated Switchgear (GIS) (the decision).

GIS was heavy electrical equipment used to power energy flow in electrical grids. In the decision, the commission found that 20 companies had engaged in a cartel regarding the supply of GIS in breach of article 101 of the Treaty on the Functioning of the European Union. The decision imposed fines totalling more than €750m. The commission’s 2002 leniency notice granted immunity from fine in certain cases subject to application. The decision also contained confidential elements, which were redacted in the form provided to the parties.

The claimant company was a high-voltage electricity system in England and Wales, and regulated the electricity system across Britain. It alleged that it had suffered substantial losses by reason of overcharges resulting from the cartel, in the region of £383m. There were in total 23 defendants to the claim, comprising four groups of companies: ABB, Siemens, Alstom and Areva. By the leniency notice, ABB was granted immunity from fine. Areva and Siemens applied for leniency from the commission but were unsuccessful. In the context of the damages claim for breach of article 101, the claimant commenced proceedings regarding disclosure.

At the time of the instant proceedings, the claimant had obtained very limited disclosure from Alsom and Areva. In July 2011, an order was made which excluded from the scope of disclosure documents that were created for the purposes of a leniency application and permitted redaction from the documents to be disclosed of passages that contained extracts from documents prepared for the purposes of a leniency application.

The claimant made two applications. First, it sought disclosure of documents which included leniency materials. Second, the claimant issued an application under part 18 of the Civil Procedure Rules (the part 18 application), in which it sought answers to a number of questions (see [65] of the judgment). The part 18 request took the place of interrogatories under the RSC 26 as it was not directed at a matter in a statement of case. ABB and Siemens submitted that it would be entirely inappropriate and premature to require the defendants to provide such information at the instant time.

They contended that the defendants were entitled to set out their evidence on the matters in issue in their witness statements and the part 18 procedure ought not to be used to force a defendant in adversarial litigation to provide what amounted to fragmentary witness evidence at the behest of the claimant at an earlier stage in the proceedings.

In considering the first application, the court had regard to the decision in Pfleiderer AG v Bundeskartellamt: C-360/09 [2011] All ER (EC) 979, which dealt with the confidentiality of documents in cartel cases, in particular whether Pfleiderer applied to documents obtained via the commission leniency programme and whether the commission had exclusive jurisdiction to determine the disclosure pursuant to an application under article 15(1) of regulation 1/2003.

The court ruled: (1) The ruling in Pfleiderer clearly applied to the commission leniency programme as well as national leniency programmes. In the absence of binding regulation under EU law on the subject, the question of access to leniency materials by the victim of a cartel was to be determined under national rules. Article 15(1) did not oust the jurisdiction of national courts to determine their procedural rules, such as those relating to the disclosure of documents. The balancing exercise was to be conducted on a case-by-case basis, and was therefore fact-sensitive to the particular proceedings in the context of the national procedural rules (see [28], [29], [60] of the judgment).

In the instant case, on the evidence, it would be appropriate to disclose a number of redacted passages of the decision. An order would be made accordingly (see [58], [59] of the judgment).

(2) The guiding principle in the field was that laid down in rule 1(1) of the RSC order 26, that interrogatories had to be necessary either for disposing fairly of the cause or matter or for saving costs. Necessity was a stringent test. Those observations, although in relation to RSC 26, would apply, mutatis mutandis, to the making of a part 18 request that did not seek further information regarding a pleading (see [73], [74] of the judgment).

The instant case was not one where the further information in question provided a good reason for making a part 18 request at an early stage. The defendants ought not to be compelled to have their witness evidence ready at the instant stage (see [75]-[76] of the judgment). The claimant’s application would be dismissed, save for question 4(a), which was in a different category (see [77], [80] of the judgment).

Jon Turner QC and Daniel Beard QC (instructed by Berwin Leighton Paisner) for the claimant; Mark Hoskins QC (instructed by Freshfields Bruckhaus Deringer) for the first to fifth defendants; Stephen Morris QC (instructed by Hogan Lovells) for the sixth to ninth, 11th, 12th, 22nd and 23rd defendants; Marie Demetriou QC (instructed by Clifford Chance) for the 13th to 21st defendants; Kelyn Bacon (instructed by Shearman & Sterling (London)) for the 10th defendant; Nicholas Khan (Legal Service of the European Commission) for the European Commission by way of written intervention.