The claimants, a number of air freight shippers, brought claims against the defendant that they had been overcharged by it and other airlines for freight services because those airlines were parties to a covert cartel whereby they agreed with each other about the level of certain surcharges to be applied to charges for the carriage of freight. The claimants sought damages for loss arising from those alleged overcharges in respect of freight carried not only between destinations within the European Union but also on flights between an airport within the European Union and an airport in a third country. The losses claimed dated from 2001 onwards. The defendant, together with the other airlines who were defendants to the Part 20 claim, contended that as a matter of law there could be no claim for damages arising from the cartel in so far as it affected freight charges between the European Union and third countries on flights before 1 May 2004, being the date on which air transport between the European Union and third countries was brought within the regime implementing the European Union competition rules set out in Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in articles 81 and 82 of the Treaty. The claimants claimed that the High Court had the power to decide the compatibility of the cartel agreement with article 85 of the EEC Treaty in so far as it related to flights between the European Union and third countries prior to 1 May 2004 (i) pursuant to article 88 of the Treaty, being “a national authority” within the meaning of that article; and (ii) via the doctrine of direct effect. The court was asked to determine, as a preliminary issue, whether the claimants had reasonable grounds for bringing the claim, and/or a real prospect of succeeding on the claim.
On the preliminary issue—
Held, a United Kingdom national court could not, before 1 May 2004, have purported to exercise a jurisdiction derived from article 88 of the EEC Treaty. The domestic regulations implementing the UK’s obligations under article 88 set out exhaustively on which institutions the United Kingdom had decided to confer that function and how those institutions were required to go about exercising that function. They did not include any role for the national courts with general jurisdiction over competition law matters. Therefore, the High Court could not, prior to 1 May 2004, have taken a decision pursuant to article 88 of the Treaty that an agreement relating to air transport between the EU and a third country was an infringement of article 85. Further, that the doctrine of direct effect did not, before 1 May 2004, confer on a national court jurisdiction to rule on the compatibility of an agreement with article 85 in the absence of either implementing measures adopted under article 87 or a prior decision taken under the transitional regime in articles 88 or 89 of the Treaty. At that time that function was conferred only on the Commission or on the relevant national authority, which, in the case of the United Kingdom, was not the High Court (paras 42, 48, 52, 63).
Bosch v van Rijn [1962] ECR 47, Ministere Public v Asjes (Cases C-209/84 to C-213/84) [1986] ECR 1457 and Ahmed Saeed Flugreisen v Zentrale zur Bekämpfung unlauteren Wettbewerbs (Case 66/86 ) [1989] ECR 838 applied.
Philip Moser QC, Ben Rayment and Conor McCarthy (instructed by Hausfeld & Co llp and DAC Beachcroft llp) for the Emerald, Hyundai, Kodak and Allston claimants.
Fergus Randolph QC (instructed by Edwin Coe LLP) for the La Gaitana claimants.
Jon Turner QC, Conall Patton, Gideon Cohen and Michael Armitage (instructed by Slaughter and May) for the defendant and Part 20 claimant.
Daniel Beard QC and Thomas Sebastian (instructed by Latham & Watkins (London) LLP, Hogan Lovells International LLP, Squire Patton Boggs (UK) LLP, Linklaters LLP, O’Melveny & Myers, Shearman & Sterling (London) LLP, Steptoe & Johnson UK LLP, Wilmer Cutler Pickering Hale and Dorr LLP, Macfarlanes LLP, Shepherd and Wedderburn LLP and Gowling WLG (UK) LLP) for the Part 20 defendants.