Related Cases
Neutral Citation Number
Published
Summary
Judgment of the Tribunal in relation to several preliminary issues, namely:
- Is the application of the general legislation on limitation/prescription precluded by the Competition Act 1998 (“CA 1998”) and the Competition Appeal Tribunal Rules (“the CAT Rules”)? (“the Limitation/Prescription issue”).
- If the answer to question (1) is no, does s. 11(2) of the Prescription and Limitation (Scotland) Act 1973 (“PLSA 1973”) apply to the claims insofar as they are governed by Scots law? (“the PLSA s. 11(2) issue”).
- For the purpose of limitation or prescription, what law governs the claims by Class Members in relation to transactions with foreign merchants? (“the Proper Law issue”).
- As a matter of law, is Mastercard entitled to advance a counterfactual based on an alternative, exemptible EEA MIF pursuant to Art 101(3) TFEU? (“the Exemptibility issue”).
The Limitation/Prescription Issue
The relevant period for the claims starts on 22 May 1992. Mastercard contended that in the case of claims governed by English law, insofar as they are based on transactions prior to 20 June 1997 they are time-barred; and in the case of claims governed by Scots law, insofar as they are based on transactions prior to 20 June 1998 they are time-barred. This was said to follow from the effect of, respectively, the English law on limitation and the Scots law on prescription, as at the time when the original s. 47A CA 1998 and the Competition Appeal Tribunal Rules 2003 (the “2003 Rules”) came into force, i.e. 20 June 2003. The Class Representative contended that all the claims are within time, on the basis of s. 47A CA 1998 and rule 31(1)-(3) of the 2003 Rules, applied by reason of rule 119(2) of the Competition Appeal Tribunal Rules 2015 (the “2015 Rules”).
The present proceedings were started after 1 October 2015 but comprise claims which arose before 1 October 2015. Accordingly, they fall within r. 119(3) of the 2015 Rules and are therefore subject to r. 119(2). They are therefore governed by r. 31(1)-(3) of the 2003 Rules. It is on that basis that the proceedings could be commenced on 6 September 2016, just within two years of the judgment of the CJEU. However, the 2003 Rules, which introduced this exceptional “two years after final decision” limitation provision, came into force on 20 June 2003.
The Tribunal considered that s. 47A CA 1998 has to be read as a whole. The statutory requirement to “disregard” limitation or prescription rules is not unlimited but, on the contrary, expressly directed to be “[f]or the purpose of identifying claims which may be made in civil proceedings” and therefore relates back to the jurisdiction of the Tribunal in private actions as defined by s. 47A(1)-(3). The sub-section precludes any argument that the jurisdiction of the Tribunal cannot be engaged because the claim cannot be made in civil proceedings because it is out of time.
The Tribunal concluded that the legislator could not have intended the illogical conclusion of proceedings commenced before 1 October 2015 might be subject to a time bar in respect of claims arising prior to 20 June 1997, whereas proceedings commenced after 1 October 2015 in respect of claims arising in the same period would not be time barred. The relevant legislative provisions should be construed insofar as possible to avoid this result.
The PLSA s. 11(2) Issue
The Class Representative contended that the special rule in s.11(2) applied in this case. Mastercard submitted that it did not.
The Tribunal held that s. 11(2) PLSA applied and the loss and damage are deemed for the purpose of s. 11(1) to have occurred on 21 June 2008, being the date when Mastercard was required to (and did) bring the infringement to an end. In coming to its conclusion, the Tribunal considered and applied Scots law and the conclusion as to Scots law is consistent with the relevant EU law on limitation.
The Proper Law Issue
The parties agreed that the question of proper law needed to be decided in respect of two periods:
- from 1 May 1996 to the end of the claim period, for which it is governed by the Private International Law (Miscellaneous Provisions) Act 1995 (“PILMPA 1995”); and
- from 22 May 1992 to 30 April 1996, for which it is governed by the common law rules.
The Tribunal considered that the assessment of significance should be made on the basis of the significance that the various events will have in the actual proceedings before the Tribunal. The Tribunal held that the general rule of s. 11 leads to the applicable law being English law for claimants in England and Wales (and, in effect, Northern Ireland), and Scots law for claimants in Scotland. The Tribunal additionally considered whether the general rule should be displaced under s. 12 PILMPA 1995 and recognised that as a departure from the general rule, s. 12 should not readily be engaged, and that the threshold is a high one. However, s. 12 is there in the statute because the legislator envisaged that there will be circumstances where it is appropriate to displace the general rule. If the law of the place where the restriction of competition occurred would be the governing law under the general rule, the Tribunal had no doubt that in the particular circumstance of these proceedings that should be displaced for the purpose of determining the issues that arise by the law of the place where the Class Members resided at the time they suffered loss, i.e. the law of England or Scotland as the case may be.
In relation to the common law rules, the Tribunal concluded that this is an unusual case where there are clear and strong grounds for the exception to apply as regards the issue of limitation/prescription, and that the governing law for that issue should be the law of the place where the loss was suffered, i.e. English law for the claims by Class Members resident in England and Wales (and Northern Ireland) and Scots law for Class Members resident in Scotland.
The Exemptibility Issue
The Tribunal noted that it is bound by, and Mastercard therefore cannot challenge, the infringement of Art. 101 TFEU found in the Decision. Mastercard contended that it is open to it to demonstrate that the conditions of Art 101(3) for exemption would have been met in relation to alternative EEA MIFs set at a different level. The Class Representative argued that the only permissible counterfactual is a zero MIF with settlement at par (i.e. a prohibition on ex post pricing) and put its case in two ways: (1) this resulted from the binding effect of the Decision for the purpose of these proceedings; alternatively (2) it was an abuse of process for Mastercard in these proceedings to seek to contend otherwise.
The Tribunal held that Mastercard is not entitled to advance a counterfactual based on alternative, exemptible EEA MIFs pursuant to Art 101(3) TFEU: by reason of the binding effect of the Decision; or, alternatively, because that would be an abuse of process.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.