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Antitrust damages: Court orders disclosure of documents from Commission's file

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Tolley Louise
Louise Tolley

PSL Counsel

London

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12 July 2011

The English High Court has ordered two defendants to a follow-on damages action to disclose documents originating from two other defendants, which they obtained through access to the Commission's file during a cartel investigation.

The judgment cements the status of England as the jurisdiction of choice for claimants bringing such actions.

Background facts

In January 2007, the European Commission (Commission) published an infringement decision (the Decision) against various companies concerning their involvement in a cartel in the gas insulated switchgear (GIS) sector. National Grid Electricity Transmission plc (National Grid) began a private damages action against some of the addressees of the Decision and certain of their group companies in the English High Court (the Claim).

The Claim has been subject to various applications, including a successful application by National Grid that, despite continuing appeals of the Decision before the European Courts by various of the defendants, the Claim should proceed until at least close of pleadings (see previous alert: Follow-on damages claims in competition cases).

In complying with their disclosure obligations under the Claim:

  • the Siemens group companies disclosed to National Grid all pre-existing documents they held that were submitted to or obtained by the Commission as part of its investigation, as well as a reply to the Commission's Statement of Objections (SO) and responses to the Commission's requests for information (with redactions to remove reference to leniency applications).
  • the ABB group companies disclosed pre-existing documents that were submitted to the Commission as part of the Commission's investigation, but not responses to the SO or the Commission's requests for information on the grounds that both of these categories of documents contained material relating to or supporting ABB's leniency application.
  • Alstom's English subsidiaries (who were not themselves subject to the Decision) agreed to disclose pre-existing documents. Alstom SA, which was an addressee of the Decision, declined to give disclosure on the grounds that it is a French company and French law prohibits such disclosure.
  • Areva's English and Swiss subsidiaries made very limited disclosure. Areva SA and its French subsidiaries declined to give disclosure, relying on the same French law as Alstom SA.
  • All of the defendants that were addressees of the Decision objected to disclosure of the confidential version of the Decision on the grounds that disclosure would conflict with their duty of confidentiality to the Commission. ABB also expressed concern that parts of the confidential version of the Decision contained information submitted as part of its successful leniency application.

The application

Disclosure of documents on the Commission's file

Faced with the difficulty of obtaining documents directly from Areva and Alstom because of the French blocking statute, National Grid applied to the Court for disclosure of certain of Areva's and Alstom's documents on the Commission's file from Siemens and ABB who had obtained them as a result of their access to the Commission's file during the cartel investigation. National Grid excluded from its application documents created specifically for the purpose of a leniency application.

Neither Areva nor Alstom objected to National Grid's application. However, Siemens and ABB did.

National Grid wrote to the Director-General of Competition at the Commission asking whether the Commission had any objection to disclosure of the applicable categories of documents. The Director-General said, in principle, no: "…the Commission would not object to…disclosure in proceedings before the English Court concerning the application of Articles 101 and 102 TFEU of documents obtained through access to the Commission file, provided that the originators of that information (parties from whom the information was obtained by the Commission) are guaranteed protections equivalent to those addressees of a disclosure order enjoy under applicable national law."

Disclosure of the confidential version of the Decision

National Grid also sought disclosure of the confidential version of the Decision. Initially, National Grid asked the Court to request a copy of the Decision from the Commission. However, the ruling of the Court of Justice of the European Union (ECJ) in Pfleiderer was published the day before the hearing of National Grid's application (see previous alert: Disclosure of leniency documents to damages claimants: ECJ declines to provide guidance). In Pfleiderer the ECJ held that decisions about disclosure of documents obtained as a result of Commission investigations should be made by national courts in accordance with their own procedural rules and EU law. Consequently, National Grid sought disclosure of the confidential version of the Decision directly from the defendants.

The ruling

Disclosure of documents on the Commission's file

The Court granted the application for disclosure of Areva's and Alstom's documents by ABB and Siemens, dismissing each of ABB's and Siemens' objections in turn.

First, Siemens and ABB referred the Court to Article 15 of Commission Regulation 773/2004, which provides that "Documents obtained through access to the [Commission's] file…shall only be used for the purposes of judicial or administrative proceedings for the application of Articles [101] and [102] of the Treaty". They argued that disclosure of the documents would undermine the continuing investigation of the cartel given that the Decision was under appeal to the European Courts by some of the addressees. The Court, however, drew a distinction between public distribution of documents which have been obtained more generally through access to the Commission's file and disclosure of these documents in the specific context of a follow-on damages action where a confidentiality ring can be created. In his judgment Mr Justice Roth commented that "…I cannot begin to see how disclosure as between parties to English court proceedings, with the added protection of a confidentiality ring could possibly undermine such an investigation."

Second, Siemens and ABB submitted that granting National Grid's application might impair future Commission investigations because, if successful, it would make parties less willing to submit documents and cooperate with the Commission. Mr Justice Roth commented that this "…argument is misplaced… since what is being sought is disclosure only to the other parties in English court proceedings, subject to the rules governing such disclosure…and with the additional safeguard of a confidentiality ring."

Finally, Siemens and ABB argued that it was more appropriate for National Grid to obtain the documents by a request from the Court directly to the Commission (rather than by way of disclosure). Mr Justice Roth disagreed, noting that it was "neither appropriate nor necessary to involve the Commission…when those documents can clearly be furnished under the domestic rules for disclosure". As there was no overriding objection to disclosure under EU law, Mr Justice Roth felt that it would infringe EU principles of "equivalence" to deny a request for disclosure from another party.

Disclosure of the confidential version of the Decision

The Court went on to consider National Grid's separate application for disclosure of the confidential version of the Decision. In the event, because the Pfleiderer decision had been published only the day before the hearing of National Grid's application, no party objected to the Court giving the Commission the opportunity to make submissions on this point and this part of National Grid's application was adjourned. 

Comment

In its decision in Pfleiderer the ECJ rather side-stepped ruling on the difficult and controversial issue of whether documents on the Commission's file, including leniency applications and confidential versions of Commission decisions, may be disclosed in follow-on actions before national courts. The English Court has, however, addressed the issue head on, making it clear that it considers some aspects of the Commission's file fair game for claimants.

However, this is not a blanket decision: the application for disclosure of the confidential version of the Decision is yet to be heard and, perhaps more importantly, documents specifically created for the purposes of leniency applications were not sought by National Grid. If they had been, the Commission is likely to have raised serious objections to their disclosure. Indeed, in his response to National Grid, the Director-General noted that "The Commission requires a high level of protection of information that has been specifically prepared by the parties for voluntary submission under the Leniency Notice", this protection being "vital" to the Commission's ability to perform its tasks.

Leniency applicants may therefore take heart that their applications remain, as a general rule, unlikely to fall into the hands of private damages claimants. Nevertheless, the ruling adds to the ever growing list of reasons why the English High Court is becoming the jurisdiction of choice for follow-on damages actions in the EU. In particular, the tide seems to be turning in favour of disclosure of documents to claimants. This is something that companies must bear in mind from the outset of any Commission investigation to which they may be subject. To think about it once a Commission decision has been reached or once a follow-on damages action has been filed is too late.