Digicel (St. Lucia) Ltd & Ors v Cable & Wireless Plc & Ors

On 15 April 2010 Mr Justice Morgan gave judgment after the trial of this action which had lasted all but 80 days between May and November 2009. After a further hearing on 20 April he made the order dated 23 April 2010 giving effect to his decision and dealing with costs against which this appeal is brought.

As can be deduced from the title to the proceedings, this litigation is concerned with matters taking place outside the normal territorial ambit of the court’s jurisdiction. The claimants alleged that they had suffered legal wrongs of various kinds in respect of their attempts to establish mobile telecommunications networks in seven jurisdictions in the West Indies, at the hands of the incumbent monopoly operators. The judge awarded nominal damages in respect of a breach of contract claim in relation to The Turks and Caicos Islands, but otherwise he dismissed all of the claims that had not already been abandoned in the court of the trial, and ordered the claimants to pay costs. He was not asked to give permission to appeal.

The appeal is limited to one of the seven jurisdictions, namely Trinidad & Tobago (T & T), and is brought only by the sixth claimant, which launched a mobile telecommunications network in T & T in April 2006 as a competitor to the incumbent, the sixth defendant. I will refer to that company as the respondent, even though the other defendants are, technically, also respondents because of the possible impact of any order as to costs.

The application for permission to appeal was considered on the papers by Mummery LJ. He had a full skeleton argument from the appellant, identifying eleven grounds of appeal, but he also had a submission from the respondent made in reliance on Jolly v Jay [2002] EWCA Civ 277, and a submission in answer from the appellant. Faced with all this material, he directed a hearing of the application for permission to appeal before the full court, with the appeal to follow if permission to appeal were granted.

In the light of this, we also had a Respondent’s Notice, served contingently, in case permission to appeal were to be granted, and a full skeleton argument from the respondent. Latterly, the appellant also put in a short note indicating how it would respond to the points raised in the Respondent’s Notice. The appellant also revised its grounds of appeal and sought permission to amend for that purpose.

Having examined the appellants’ grounds of appeal, with the benefit of the written submissions on each side, it appeared to us that if the appellant were unable to succeed on one self-contained point, its eleventh ground of appeal, then the appeal must fail. Therefore, at the opening of the hearing we invited Mr Davies Q.C., leading Mr Allen for the appellant, to deal with that point first. He accepted that this point was conclusive, if decided against him. Having heard his arguments, and those of Mr Nourse for the respondent, to whom that ground of appeal had been allocated in the division of tasks between himself and his leader Lord Grabiner Q.C., and also Mr Davies’ short submissions in reply, we concluded that the appellant could not succeed on this point, and therefore could not succeed on the appeal. We therefore informed the parties that we would refuse permission to appeal, for reasons to be given in writing in due course. This judgment sets out those reasons.

The telecommunications market in T & T was opened up to competition under the Telecommunications Act 2001. Until 31 December 2005 the respondent held an exclusive concession under the previous legislation to operate a public telecommunications network. On 31 December 2005 non-exclusive concessions were granted under the 2001 Act to each of the respondent (for a fixed and a mobile network) and the appellant (for a mobile network only). The appellant could not launch its commercial operation as a service available to the public unless and until it was able to interconnect with the respondent’s network, so that its subscribers could call those who subscribed to the respondent’s service, and vice versa. For that, there had to be physical interconnection, which depended on the right equipment being in place (on both sides), and there had to be the right to interconnect or, to put it the other way, an obligation upon the respondent to allow interconnection.

That position was not achieved until 31 March 2006, following which the appellant launched its service on 6 April 2006. Physical interconnection became possible on 31 March 2006. No agreement was reached at that time for the appellant to have the right to interconnect, although negotiations had been under way between the parties for some time. As is common in this sector of the market, there was an intense dispute as to the appropriate rates for interconnection. That was not resolved for a considerable time after April 2006. The appellant gained the right to interconnect as a result of a decision of an arbitration panel on 31 March 2006, as I will explain.

The essence of the appellant’s contention in the proceedings was that the respondent had wrongfully caused the date of the launch of the appellant’s mobile network service to be delayed by up to four months. It claimed very large damages which it said it had suffered as a result. Its cause of action was founded on section 4 of the Protection against Unfair Competition Act 1996, which categorises as an act of unfair competition “any act or practice, in the course of industrial or commercial activities, that is contrary to honest practices”. Section 4(2) gives a private right of action to any person damaged by an act of unfair competition. The appellant claimed to be such a person. Essentially it contended that the respondent had, from a very early stage, adopted the stance that interconnection would not and should not be permitted before 31 March 2006, so as to allow the respondent to improve its competitive position, and that while it had professed to be doing all it could to bring forward the date when rival networks could be launched, in fact it was putting unreasonable, unnecessary or unreal difficulties in their way.

Another undertaking was also preparing to launch a rival mobile network, although in the event it did not; this was known as Laqtel. A further undertaking, more important in the history, was a company called Nortel Networks, which was the supplier of equipment to the respondent and also to the appellant.

An important part of the appellant’s case was that the respondent brought pressure to bear on Nortel to cause deliberate and unnecessary delay in the provision of equipment needed for the purpose of interconnection by the appellant with the respondent’s network. The first allegations of dishonest practices centred on an email from Mr Espinal, CEO of the respondent, to Mr Davy of Nortel dated 21 September 2005 and a letter from Mr Davy to Mr Espinal in reply dated 3 October 2005. The judge held that the respondent had been guilty of conduct “contrary to honest practices” by the influence which it had brought to bear on Nortel in relation to the letter dated 3 October 2005, which was put forward as an accurate assessment of the time needed to effect interconnection but was in reality drafted to adopt the respondent’s pre-existing and continuing position, without being a genuine technical assessment of the time required.

The judge also held that a conversation had taken place at the end of September 2005 between Mr Espinal and Ms Bejar of Nortel which, he held, was for the purpose of persuading Nortel not to permit interconnection before 31 March 2006, and that, in view of the statements which the respondent was making to the appellant, the regulator and the government, this conversation was contrary to honest practices.

However, he held that neither of these acts of unfair competition had caused the appellant’s interconnection to be delayed, and that therefore the appellant had not suffered any loss as a result of these acts.

By the appellant’s appeal, the judge’s conclusion was challenged on a number of fronts, many of which involved questioning his findings of fact. For reasons already mentioned, it is not necessary to go into any of these grounds of challenge except one. I express no view as to any of the others, not having heard oral submissions on them. In part they were directed at showing that the judge was wrong to hold that there was no real or substantial chance that physical interconnection could have been achieved significantly earlier than 31 March 2006.

The one ground on which we did hear argument relates to the procedure by which the respondent came to be under an obligation, which it accepted, to permit the appellant to interconnect, as a result of a decision by an arbitration panel on 31 March 2006. The essence of the appellant’s challenge on this was directed at the judge’s conclusion that he was not satisfied that there was any real or substantial chance that this could have happened earlier. I start by describing the context for the panel’s decision.

On 18 January 2006 the regulator, the Telecommunications Authority of Trinidad and Tobago (TATT), promulgated a document entitled “Procedures for the resolution of disputes in the telecommunications and broadcasting sectors” of T & T. On 19 January 2006 the appellant submitted a notice of dispute to TATT under this procedure. On 20 January TATT confirmed the existence of a dispute. On 27 January the appellant served a document on the respondent setting out the subject matter of its complaint. On 10 February the respondent served a document in response. On the same date TATT held a hearing in relation to the dispute and referred it to arbitration by an arbitration panel. The appellant put in a reply to the respondent’s response, dated 20 February. On 14 March 2006 TATT wrote to Mr Rory Macmillan, a telecommunications expert based in Geneva, who (as appears from the letter) had been selected and had agreed to serve as a member of the arbitration panel, together with two other named persons, who were based in T & T. With the letter confirming his appointment, there were enclosed the agreed list of issues, the parties’ submissions, and a copy of the procedures document. The dispute was to be resolved by arbitration under a particular provision of the procedure; the panel was mandated to produce its decision as soon as possible and in any event within three months of the date of the letter.

Under the procedures document, by paragraph 2.2.1, the parties are required to use their reasonable endeavours to arrive at an amicable resolution of any difficulties or disagreements. Paragraph 2.4 allows for the giving of a notice of dispute to refer to TATT any dispute in respect of any matter arising under the relevant Act or any concession under the Act. TATT is then to serve on all parties a confirmation of the dispute (2.4.4). Then within 7 days the complainant is to serve a document setting out the details of its submissions in relation to the dispute (2.5.1). The respondent has 14 days thereafter in which to serve its response (2.5.2), following which the complainant may serve a reply within 7 days (2.5.4). Under paragraph 2.6.1 TATT is to convene a preliminary hearing within 14 days after the response was due, to deal with the mechanism for resolving the dispute, which may be by mediation or by arbitration. It is to appoint a dispute resolution panel under paragraph 2.7, and to decide on, and serve on the members and the parties, its terms of reference. Various provisions are made, which do not require particular attention now, as to the procedure and proceedings of the panel. Arbitration procedure is governed by paragraph 2.10 which includes a provision requiring the dispute to be resolved within 3 months.

Thus, the appellant referred its dispute to TATT as soon as it could do so, and TATT acted swiftly in accepting the dispute. The appellant took the seven days allowed to submit the details of its contentions, the respondent took the 14 days allowed for its response, and the appellant took a little more than the 7 days provided for as regards its reply. TATT acted very promptly in convening a hearing and referred the dispute to arbitration at that hearing. It took just over a month from that decision for the terms of reference to be sent to the panel. That stage was not explored in evidence at the trial, so we do not know what was happening during that period, other than the identification of the members of the panel and (on 20 February) service of the appellant’s reply document. In his summary of the procedure at paragraph 266 of Annex F to his judgment, the judge referred to a hearing on 9 March 2006, which must have been a hearing by TATT. Counsel were unable to tell us what had happened at that hearing nor why it was held.

Once the arbitration panel had been constituted, on 22 March notice was given to the parties (by TATT, acting on behalf of the panel) that the panel intended to hold its first hearing on the morning of Friday 31 March 2006, the agenda to be advised in due course. On 24 March the appellant submitted an application to the panel for setting interim rates for interconnection. That became the subject-matter of the hearing on 31 March.

To go back to what had been happening between the parties, in the autumn of 2005 the respondent had put forward a draft interconnection agreement, though without any proposed rates at that stage. The text of the draft had been the subject of extensive negotiation. On 27 January 2006 the parties exchanged their formal proposals as regards interconnection rates. Predictably, these proposals were hotly disputed. On 17 March the appellant put forward a proposal for interim interconnection rates. That led to the application to the arbitration panel to fix those rates.

The panel heard argument on 31 March 2006 and announced its decision there and then, in outline, confirming it later in writing with its reasons. It held that it had the power to decide on interim interconnection rates, contrary to the arguments on behalf of the respondent, but said that it would not come to such a decision at that stage, for lack of adequate evidence. Instead, in order to enable immediate interconnection, it directed that, until otherwise agreed by the parties, decided by the panel or directed by TATT, the principle of “sender-keeps-all” was to apply to all services between the parties. Thus, the operator of the network on which a call was initiated would not have to pay anything to the network to which the call became connected in respect of the service of (as it is called) terminating the call, i.e. connecting it to the intended recipient. The panel also gave procedural directions for the resolution of the disputes between the parties.

In its written reasons, the panel explained why it considered that it had power to decide on interim interconnection rates, both in principle and as being part of the subject-matter of the dispute which had been referred to it. In the course of its reasons, the panel discussed urgency both at paragraphs 2.2 and 2.3 and also at paragraph 3.3.

In explaining the stop-gap measure that it adopted so as to allow interconnection to take place, the panel said this at paragraph 4:

The respondent accepted that ruling to the extent that it allowed interconnection to take place as of that date. However, it challenged the decision of the panel that it could decide on interim rates, and it obtained a ruling in judicial review proceedings which precluded the panel from proceeding to set interim rates.

The appellant contended that it had suffered loss by reason of the respondent’s unlawful acts of unfair competition, and that it could prove that loss on the balance of probabilities. It did not put forward a case based on the loss of a chance, in this respect or in any other, despite the fact that its case depended partly on showing what third parties would have done in certain alternative events. Only in its closing submissions did the appellant seek to rely on the loss of a chance as a fall-back basis of proving that it had suffered damage.

No attention was devoted during the evidence at the hearing to the dispute procedure before TATT and before the arbitration panel, as to whether it might have been conducted more swiftly if it had been possible or likely that physical interconnection could have been achieved significantly earlier than 31 March 2006. This was pointed out in the respondent’s written closing submissions, leading to the point being addressed briefly on behalf of the appellant in closing oral submissions. The judge quizzed Mr Davies in the course of those submissions as to what he said about the timetable. Mr Davies said he would provide any references to the documents that might be useful to the judge for this purpose in a further written submission he was to put in. In the event no further point or reference was put forward in that way.

The judge dealt with the point at paragraphs 347 and 348 and in part of paragraph 350 of Annex F to his judgment:

That was part of the reasoning which led him to the conclusion that the appellant had not shown that it had suffered any damage as a result of the respondent’s acts of unfair competition, and therefore to his dismissing this part of the claim on causation.

By the relevant ground of appeal the appellant contended that the judge was wrong in law and in fact to hold that the chance of the arbitration panel making an interim ruling to enable the appellant to launch its service upon or shortly after any earlier date for physical interconnection was merely speculative.

For the appellant, Mr Davies pointed to the panel’s references to the urgency of the situation, and to the pressure which the regulator had been concerned to bring to bear on the situation with a view to avoiding delay in the launch of the new service. He argued that, if there had been a realistic possibility of an earlier date for physical interconnection, then it stood to reason that the regulator and the panel between them would have been willing and able to act earlier, and that it was wrong and unnecessary to expect a focus on individual steps in the process, or to expect evidence as to what might have happened otherwise. He had to adopt that stance, since there had been no attention to this point during the evidence, so that at best the court could look at the documents which were in evidence, showing what did happen, in order to draw inferences from them as to what might have happened in other circumstances.

He also argued that the judge had been wrong to give the benefit of any relevant doubt to the respondent rather than to the appellant. It seems to me that this argument fails because the judge did not do what it is said he should not have done. The passage relied on is paragraph 344 of the judgment, as follows:

That seems to me to be a fully legitimate comment on the appellant’s forensic position, and no more than that. The judge did not give “the benefit of the doubt” to one party or to the other, except in the sense that he required the appellant to prove its case to the necessary standard, whether it was to be proof of the fact of loss in the ordinary way, or proof of the loss of a real and substantial chance, in either case on the balance of probability. That was not a misdirection.

Mr Davies accepted in the course of argument that his proposition would have a curious effect on loss of chance cases. Unless the evidence showed that there was really no chance at all of the claimant securing the benefit which it contends that it should have had, there must be a degree of doubt as to the position. If the rule is that, where there is any doubt, it must be resolved in favour of the claimant as the injured party, that would convert all loss of chance cases into cases where, by virtue of a presumption, the claimant could show that it had in fact suffered the loss on the balance of probability, rather than merely having lost a chance of obtaining a better outcome.

Going back, however, to Mr Davies’ other arguments, it seems to me that the judge was plainly right to require detailed attention to be paid to the successive stages of what happened, so as to consider what might have happened in other circumstances. Mr Davies accepted that the appellant could not have initiated its dispute procedure before the date on which it did so, because the procedure had not existed before that date. We were told that the appellant had in fact tried to refer a dispute to TATT a little earlier, but that this had not led to anything, because there was at that time no procedure to invoke. Accordingly, the starting point could not have been earlier than 19 January.

Realistically, Mr Davies accepted that, starting on that date, the procedure could not have been accelerated by much. The steps provided for by the dispute resolution procedure were bound to take some time. Several of them were undertaken as quickly as they could have been, in particular some of those falling to TATT. The panel seems to have acted as quickly as could have been expected, once it was constituted by the Terms of Reference on 14 March. The appellant was not correct in its skeleton argument in submitting that the hearing on 31 March was convened in order to deal with the application as regards interim rates, and that it was brought forward because of the urgency of that issue.

Two of the earlier steps in the process might possibly have taken less time than in fact they did; one was the service of the appellant’s reply, after 10 days rather than the 7 days provided for (though this may not have affected the timetable overall), and the other was the issue of the Terms of Reference to the panel. Because there was no evidence as to what was happening in that regard between the reference to arbitration on 10 February and the issue of the Terms of Reference on 14 March, the judge did not know, and we do not know, whether it would have been feasible for that process to have been completed more quickly, and if so by how much. As I have mentioned, the judge said that a hearing took place on 9 March but he said nothing about its nature or purpose, and we know nothing about that.

Mr Davies accepted that he could not argue for a hypothetical acceleration of the panel hearing dealing with interim rates to a date earlier than 15 March 2006, so at most 16 days earlier than the actual hearing.

I do not accept the submission that there was no evidence that could usefully have been called to assist the judge in deciding whether any, and if so what, acceleration of the hearing date would have been possible. As I have said, the critical stage is the period between the reference of the dispute to arbitration on 10 February and the issue of the terms of reference on 14 March. It would have been possible to call evidence as to what was going on during that period, whether from the parties or, probably more usefully, from TATT. I would accept, as a general proposition, that, in the field of international commercial arbitration, panels can be constituted and hearings convened swiftly. However, given that TATT acted very promptly in other respects, it does not seem to me that it could be a reasonable inference that, at this stage, they were acting in a dilatory manner and that they could have moved significantly faster if they had put their mind to it. Evidence would have been needed if the appellant was to persuade the court that TATT could and would have acted more quickly in other circumstances. Absent any such evidence, it seems to me that the judge was entirely justified in saying what he did at paragraph 350 of Annex F, as quoted above, holding that, even if physical interconnection could have been brought forward by a few weeks, there was only a speculative chance that the arbitration procedure could have been speeded up so as to produce a decision from the panel on a date earlier than 31 March.

Mr Davies suggested that, the respondent not having flagged the point before the stage of putting in its closing written submissions, it was unreasonable to expect the appellant to have adduced evidence on this one among the very many points that arose. I disagree. He accepted, of course, that the burden of proof lay on the appellant to prove all aspects of its case. Where a party puts forward a case based on a hypothesis, elaborate or not, as to what might have happened, it is for that party to identify all the counterfactuals that it needs to address, and that party is at risk if it does not call the relevant evidence on which the court can decide whether the case is made out.

For the respondent, Mr Nourse made other valid points against the appellant’s contentions in this respect, but it seems to me that what I have said suffices to explain the conclusion which we had reached at the end of the argument on this ground of appeal, namely that the judge was plainly right on this point, and that accordingly, even if the appellant had been able to satisfy us on all the other points in the appeal, it could not succeed in overturning the judge’s final conclusion that the appellant had not shown that it had suffered any loss as a result of the respondent’s actions, because it could not have got to the stage of being able to launch its mobile network any earlier, whatever had happened.

Those are our reasons for refusing permission to appeal to the appellant.

This judgment does not purport to establish a new principle or to extend the present law. Accordingly, being given on an application for permission to appeal, it is governed by paragraph 6.1 of the Practice Direction (Citation of Authorities) dated 9 April 2001 (see [2001] 1 W.L.R. 1001) and it may not be cited.

I agree.

I also agree.

The Appellant’s application for permission to appeal be dismissed.

The Appellant do pay the Respondents’ costs of and occasioned by the Application for permission to appeal, including, for the avoidance of doubt, the Respondents’ costs of preparation for the appeal had permission been granted and the Respondents’ costs of the Respondents Notice and costs related to that Notice, such costs to be assessed on the standard basis if not agreed.