Roche Products Ltd. & Ors v Provimi Ltd

In May 1999 the European Commission started an investigation into the vitamins and pigment markets in Europe. On 21 November 2001 the European Commission (“the Commission”) made a Decision, (“the Decision”) which was published on 10 January 2003. The Decision held that various manufacturers of vitamins had operated cartels, contrary to Article 81 (formerly Article 85) of the EC Treaty (Footnote: ¹), in relation to the sale of vitamins (Footnote: ²) within the EU and the European Economic Area (“EEA”) for periods of up to ten years between 1989 and 1999. The Decision held that F. Hoffmann – La Roche AG (“Roche Switzerland”), a Swiss company, had participated in the cartels in relation to all the vitamins covered by the investigation. It also held that Aventis SA (which was known at the time as Rhône – Poulenc SA) was responsible for an infringement of Article 81 through the participation of its subsidiary, Rhône – Poulenc Animal Nutrition (which has since become Aventis Animal Nutrition SA – “AAN France”). AAN France was involved in the same cartels as F. Hoffmann – La Roche AG, but in relation only to vitamins A and E. I will refer to companies in the Hoffmann – La Roche group of companies as “the Roche” group. I will refer to companies in what was the Rhône – Poulenc group (now called Aventis) as “the Aventis” group.

In 1999 criminal proceedings were started in the USA, alleging that F Hoffmann – La Roche AG had taken part in various cartels for vitamins sold in the US and elsewhere in the world. There were also investigations in the USA against Aventis companies. There have been proceedings in Canada and investigations in Australia concerning vitamin cartels in which it is said that Roche and Aventis companies were participants.

The Commission’s Decision resulted in four actions in the Commercial Court against various companies in the Roche and Aventis groups. The actions were started in May 2002. The claimants are two English companies and a German company. Those companies were all direct purchasers of vitamins from companies within the Roche and Aventis groups. The defendant companies are sellers and associated companies in those two groups. The claimants’ principal allegation in all the proceedings is that the defendant companies participated in various cartels, contrary to Article 81 of the EC Treaty, and that the claimant companies have suffered damage because vitamins were sold at an inflated price as a result of the formation and implementation of the cartels. This is alleged to give the claimants a right to damages for breach of a statutory duty not to infringe EC competition laws, in particular Article 81. (Footnote: ³)

In the present series of applications before the court, the defendants’ aim is to strike out and/or set aside part of these proceedings. The applications are made on the grounds that the claimants do not have an arguable case and/or that the English Courts do not have jurisdiction to determine these claims against most, but not all defendants. The applications raise issues about what a claimant has to prove to succeed in a claim for damages said to arise out of a breach of Article 81. They also raise questions on the proper application of EC Regulation 44 of 2001 (“Regulation 44” or “the Regulation”) (Footnote: ⁴) and the Lugano Convention, in circumstances when one side alleges that a foreign jurisdiction clause applies and this is challenged.

The questions argued in these applications are complex, not least because of the multiplicity of actions and parties. (Footnote: ⁵) This was not one of those jurisdiction challenges where I could read the papers in my room and hear only short oral argument. (Footnote: ⁶) The helpful submissions of Mr Hoskins (for the Roche group of defendants), Mr de la Mare (for the Aventis group of defendants) and Mr Carr QC for the claimants lasted six days. I am very grateful to them all. I will consider the applications under the following broad headings: (A) The Commission Decision; (B) the actions and the jurisdictional framework; (C) the parties, the allegations, the applications and the issues that arise; (D) the applications to strike out parts of the cases or dismiss them as having no reasonable prospect of success; (E) the challenges to the jurisdiction based on Article 17 of the Lugano Convention and Swiss jurisdiction clauses; (F) the challenges to the jurisdiction based on Article 23 of Regulation 44 and German jurisdiction clauses; (G) the challenges to the jurisdiction based on Article 23 of Regulation 44 and French jurisdiction clauses; (H) conclusions.

The Commission Decision (Footnote: ⁷)

This is central to the case, so it is necessary to set out some of the details.

The actions and the jurisdictional framework

There are two groups of proceedings. Each group consists of two actions. In each of the two groups one action is brought by Provimi Limited (“Provimi UK”), an English company. The other action is brought by two companies in the Trouw group. These are Trouw (UK) Limited (“Trouw UK”), which is an English company and Trouw Nutrition Deutschland GmbH (“Trouw Germany”), which is a German company. The defendants in one group of actions are companies in the Roche group. The defendants in the other group of actions are or were companies in the Aventis group.

I have therefore divided the actions according to which defendants are being sued. I have called Group A “the Roche Actions” and Group B “the Aventis actions”.

It is accepted by all sides that the question of whether the English Court has jurisdiction to hear these claims is to be determined by either Regulation 44 or the Lugano Convention. (Footnote: ¹⁷) It is also accepted that each of the defendants in the four actions is domiciled in a Member State of the EU or EFTA. Therefore everyone accepts that the general jurisdictional rule is that a party should be sued in the courts of the Member State in which it is domiciled. (Footnote: ¹⁸)

But the Roche and Aventis defendants also acknowledge that defendants domiciled in one Member State may, in another Member State, be sued, in matters relating to tort, “in the courts of the place where the harmful event occurred or may occur”. (Footnote: ¹⁹) The Roche and Aventis defendants are prepared to accept, for the purposes of these applications, that there is a “good arguable case” (Footnote: ²⁰) that if the tort alleged is established, then “the harmful event”, that is the damage to the claimants, occurred or may have occurred in England in a case when the claimant concerned is domiciled in England.

It is also accepted that claimants can rely on Article 6 (1) to found jurisdiction; ie. if one defendant is domiciled in England (being a Member State) and is sued here, then, if the Lugano Convention applies, another defendant may then also be sued in England. However, if Regulation 44 applies then the claimants accept that that they can only utilise Article 6(1) of the Regulation if they also establish that there is a good arguable case that:

“…the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. (Footnote: ²¹)

The claimants accept that Articles 5 and 6 can be overridden by the jurisdictional rule in Article 23 of Regulation 44 (or Article 17 of the Lugano Convention). But a defendant must demonstrate that the requirements of Article 23 of the Regulation are fulfilled, (Footnote: ²²) and that the scope of the particular jurisdiction clause is wide enough to cover the dispute in question.

I set out below how this jurisdictional framework applies to each of the four actions. I have also noted the jurisdictional challenges and the challenge based on “no arguable case” that are made by the various defendants. Mr Hoskins and Mr de la Mare both produced very helpful illustrations which set out the various challenges in diagrammatic form. I have made these Annexes 1 to 4 of this judgment.

Group A: “The Roche Actions”: Folios 473 and 476.

Group B: “The Aventis Actions”: Folios 470 and 475.

The allegations, the applications and the issues that arise

The format of the claims in each of the four actions is similar. But it is necessary to set out some details of each case because of the different parties involved, their different domiciles and the different applications that are made in each case.

Group A: “the Roche Actions”: Folios 473 and 476 of 2002.

Folio 476:

Group B: Folios 470 and 475 of 2002: “the Aventis Actions”: Folio 470

Folio 475:

The Issues that arise

(1) The applications to strike out/dismiss as having no reasonable prospect of success as a matter of law

There is no dispute as to the legal test to be applied in relation to this part of the applications. If the claimants have a reasonably arguable claim, then it must be allowed to proceed. The Roche and Aventis defendants also both accept that where the nature of the claim raises new issues of law, then the court has to be careful before dismissing the claim as unarguable.

The Claimants’ argument: Mr Carr QC for the claimants submits that the claims of Trouw Germany against Roche UK and Rhodia Ltd have a reasonable prospect of success. He puts the claimants’ case as follows:

The Defendants’ arguments: The main submissions on this point were made by Mr Hoskins, but Mr de la Mare adopted them and added some of his own points. Their arguments were as follows:

Discussion: Everyone assumed in argument that English law applied. (Footnote: ⁸⁴) The nature of the cause of action, characterised according to English law, is that of a private law claim for damages for the tort of breach of statutory duty: see the Garden Cottage case. So the broad issue is: what are the ingredients of a cause of action (in English law) for damages for infringing Article 81(1) of the Treaty. It is clear that the cause of action is a mixture of EU Competition law and English “domestic” law. Thus what is a breach of Article 81(1) is a matter of EU law. But a claim for breach can only be made against an entity recognised by English domestic law. That entity must be shown to have been in breach of Article 81(1). And it must be shown, as a matter of English law, that the entity that is in breach of Article 81 is liable in damages to this particular claimant for that breach.

The decision of the European Court in Re Woodpulp Cartel (Footnote: ⁸⁵) indicates that the implementation of an infringing agreement is itself an infringement of Article 81(1) by a company. But the defendants say, relying on the Viho case, that there is no infringement if the implementation of the agreement consists simply of obeying the orders of a parent company to sell at “cartel” prices that have been agreed by the parent (with other “undertakings” in the cartel) without the knowledge of the subsidiary. (Footnote: ⁸⁶)

In my view the principle in the Viho case is not relevant to the present situation. In that case the prices were not set by a cartel consisting of the parent company and other, independent, “undertakings”. They were set only by the parent and then implemented by subsidiaries which were part of the same economic unit. The subsidiaries had no independence of action. I would have thought that it is obvious that one economic unit cannot be said to prevent or distort competition under Article 81 when it is only controlling prices within its own economic unit and not dictating those of (or paid by) other “undertakings”.

But in the present cases the issue is whether there is an infringement by a subsidiary when it carries out the cartel agreement which has been entered into by the parent and other, independent, “undertakings”. I understand that the defendants accept that if it were shown that there was a “concurrence of wills” as between Roche UK or Rhodia UK and other “undertakings” that are a party to the infringing agreements, then, (if they are wrong on the Viho point), it is arguable that Roche UK or Rhodia UK would themselves be infringing Article 81(1). I also understand that the defendants accept that there would be a cause of action for damages against any legal entity that knew or ought to have known of an agreement that infringes Article 81(1).

In both Folios 475 and 476 it is pleaded that particular legal entities, Roche UK and Rhodia Ltd, “implemented” the cartel by selling vitamins at prices that were fixed as a result of infringing agreements entered into by “parent” companies in their respective groups, ie. Roche Switzerland and Aventis France. But there is no plea that Roche UK or Rhodia Ltd had express, implied or imputed knowledge of the infringing agreements entered into by the “parent” companies.

Therefore the point comes down to this: what knowledge of the infringing agreement by the legal entity being sued, if any, does a claimant have to plead and prove in order to succeed in a claim for damages for infringement of Article 81(1)? There are no cases or even textbook opinions to provide me with a ready answer. Moreover there is a tension between English law and EU Competition law concepts. In English law the separate identity of corporations is respected and knowledge of one corporation will not be readily imputed to another. But EU Competition law maintains the concept of an “undertaking”, which is more flexible than a legal entity. It can embrace a number of legal entities, so long as they act as a single economic unit and no legal entity acts independently for any relevant purpose.

It seems to me to be arguable that where two corporate entities are part of an “undertaking” (call it “Undertaking A”) and one of those entities has entered into an infringing agreement with other, independent, “undertakings”, then if another corporate entity which is part of Undertaking A then implements that infringing agreement, it is also infringing Article 81. In my view it is arguable that it is not necessary to plead or prove any particular “concurrence of wills” between the two legal entities within Undertaking A. The EU competition law concept of an “undertaking” is that it is one economic unit. The legal entities that are a part of the one undertaking, by definition of the concept, have no independence of mind or action or will. They are to be regarded as all one. Therefore, so it seems to me, the mind and will of one legal entity is, for the purposes of Article 81, to be treated as the mind and will of the other entity. There is no question of having to “impute” the knowledge or will of one entity to another, because they are one and the same.

In my view the fact that, in the Decision, the Commission identifies only one particular legal entity as the “infringing undertaking” does not detract from my conclusion. EU competition law has to bow to the practical fact that in national laws it is legal entities that exist; and it is legal entities that own the funds from which fines are paid. So particular entities need to be identified in order to enforce the Decision. But those practical considerations cannot determine a prior question which is whether, if one entity of an undertaking is an infringer by agreeing to fix prices, another entity that has implemented the same infringing agreement, is also an infringer.

I have not forgotten the fact that the claimants have removed from their pleadings the allegation that the agreement to implement the cartels, made between the defendants in each group is, by itself, a breach of Article 81. (Footnote: ⁸⁷) Given the decision in the Viho case, they were bound to do so. But the claimants have maintained their case that the UK company in each of the groups “implemented” and “gave effect” to the cartel agreements entered into by the “undertaking” identified in the Decision. If my analysis of the legal position under EU competition law is correct, that is all the claimants have to plead.

Accordingly I have concluded that the claimants (in particular Trouw Germany) have an arguable case against Roche UK and Rhodia Ltd. It is that those companies are infringers of Article 81(1), as a matter of law. If so, then it must be arguable that Roche UK and Rhodia Ltd are in breach of a statutory duty not to infringe Article 81(1), following the Garden Cottage case. The next question must be whether Trouw Germany can recover damages from Roche UK and Rhodia Ltd, given that Trouw Germany did not buy vitamins from either company.

(2) The Causation Argument

The response of both sets of defendants is that this hypothesis fails to take account of the way prices would have been set in the two groups even if there had been no cartels. Both groups of defendants say that a group price would have been set; individual companies, trading in different countries, would not have been free to set their own price levels below those of others in the same group. (Footnote: ⁹⁰) That practice, provided it is confined to the group, does not infringe Article 81: see the Viho case. Therefore there would not have been any price undercutting by one company in the group as against another one. Therefore participation in the cartel by individual companies cannot have caused any loss to Trouw Germany.

At this stage all that the claimants have to do is satisfy me that there is an arguable case or “triable issue” on the merits of their claim. It seems to me that the right question to ask is: what would the situation have been if there had been no cartels? There may still have been centralised pricing within the groups of companies. If so, then Mr Aries’ argument would be met by the answers given by Mr Daniels in his statement. But it must be arguable that, without the cartels, there would have been competition between, say, the Roche group and the Aventis group. As a consequence, the various claimants, including Trouw Germany, may have been able to buy vitamins from another group at a lower price than the price fixed by the cartels.

If, as I have held, it is arguable that all companies within an “undertaking” who “implemented” the cartel are infringers of Article 81, then their action in “implementing” the cartel could cause the loss that the claimants allege. On this analysis, each infringing entity is a tortfeasor. I do not think it matters whether they are to be regarded as joint or several tortfeasors for the purpose of the causation argument. Each entity would have contributed to a situation where it took part in the cartel, upheld the cartel prices and so (arguably) caused loss.

The claimants have pleaded both the particular point set out in Mr Aries’ witness statement and a more general plea of causation of loss. (Footnote: ⁹¹) In my view, even if there are problems with the particular argument set out by Mr Aries, at the lowest the more general plea is arguable.

Accordingly I have concluded that there is a “real issue” (Footnote: ⁹²) as between Trouw Germany and Roche UK and Rhodia UK. Therefore those claims by Trouw Germany are not artificial or advanced solely so that Trouw Germany can take advantage of Article 6(1) of the Lugano Convention or Regulation 44 so as to bring proceedings in England against other, non UK domiciled defendants. However, that still leaves the third part of this jurisdiction argument to be dealt with.

(3) Do the claimants satisfy the terms of Article 6?

The new wording only applies to defendants that are affected by Regulation 44. This means that in Folio 476, Roche Vitamins Switzerland and Roche Switzerland (the second and third defendants) cannot take advantage of it, as Switzerland is still governed by the Lugano Convention. Perhaps because of their position, Mr Hoskins did not address any argument on this “Article 6(1) point” to me on behalf of Roche Germany, the fourth defendant in Folio 476.

However, Mr de la Mare submitted, on behalf of AAN France, Aventis France and Rhodia Germany, (Footnote: ⁹⁵) that Article 6 is a “Special Jurisdiction” which derogates from the general jurisdictional rule of the defendant’s domicile which is established by Article 2 of Regulation 44. Therefore Article 6 must be construed so as to interfere with the general rule as little as possible. Thus there had to be a very close connection between the claims against the different defendants. Further, the risk of irreconcilable judgments resulting from separate proceedings had to be substantial, rather than just a possibility. Mr de la Mare pointed out that Trouw BV, the parent company of Trouw Germany, had started proceedings in the Netherlands claiming damages in respect of the same alleged infringements of Article 81. He submitted that this action showed that the Trouw group as a whole must be unconcerned with the prospect of irreconcilable judgments on the same topic. Mr de la Mare submitted that there was no risk of German, French and English Courts taking different views on what constituted an infringement of Article 81 or whether Trouw Germany was entitled to damages from AAN France, or Aventis France or Rhodia Germany.

Mr de la Mare submitted that a claimant must show that it has “much the better of the argument” that the requirements of the proviso of the new Article 6(1) are satisfied before it can invoke that jurisdiction. I will assume that is the correct test for the present. (Footnote: ⁹⁶) Mr de la Mare pointed out that there was no evidence of how French or German courts might approach the issue of infringement of Article 81 or whether the claimant could maintain a private law claim for damages for infringement against companies within an “undertaking” for breach of Article 81.

Although there is no such evidence, I think that the claimants have amply demonstrated that they have the better of the argument that the requirements of the proviso of Article 6(1) are satisfied. First, the claims of Trouw Germany against all the defendants in Folio 475 are very closely connected. They all arise out of the same alleged infringements of Article 81. They are all private law claims for damages for those infringements. The nature of the claims against all the defendants is identical.

Secondly, as counsel for both the Roche and Aventis groups have had to accept in argument, the law on the scope for making claims of this type is very undeveloped. I was not shown any French or German case law on this topic. (Footnote: ⁹⁷) So I have no idea how German or French courts might approach the issue of when or how a company within an “undertaking” would infringe Article 81; nor the circumstances in which a claimant could recover damages for an infringement. In particular I have no idea how those courts might approach the key issue of “knowledge” which I have discussed above. Therefore it seems to me that it is highly arguable that different courts would take different approaches to these issues and that those different approaches could result in irreconcilable judgments.

Thirdly, therefore, I think that it must follow that it is expedient to hear and determine all these claims together to avoid the risk of irreconcilable judgments. Ultimately the question of when and how an infringement of Article 81 takes place and the circumstances in which a private law claim for damages can be maintained may need to be considered by the European Court. But it does not seem sensible to me that, in the meantime, there should be different views from different national courts which are given in relation to the same factual background and the same cartels, simply because the different defendants are of different domiciles. Therefore I reject Mr de la Mare’s argument that the claimants have not satisfied the tests in the proviso of Article 6(1) of Regulation 44.

Conclusion on the application to strike out or dismiss claims as having no reasonable prospect of success

The effect of these conclusions is as follows:

Challenges to the English Court’s jurisdiction based on Swiss Jurisdiction Clauses

Swiss jurisdiction clauses appear in the following contracts:

Article 17 of the Lugano Convention provides:

“If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction. Such an agreement conferring jurisdiction shall be either:

(a)

in writing or evidenced in writing; or

(b)

in a form which accords with practices which the parties have established between themselves; or

(c)

in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned”.

The Defendants’ arguments: Mr Hoskins, for the Roche defendants, made the following principal submissions:

The Claimants’ arguments: Mr Carr QC, for the Claimants, submitted that:

Issues between the parties

Discussion: (1) The proper approach

The application of these tests is more difficult when I have not been able to evaluate the experts on foreign law by seeing and hearing them in the witness box. They are all distinguished jurists on their own laws. None have put forward palpably false or flawed arguments. And in the case of the Swiss jurisdiction clauses it is accepted that the Swiss Courts have not had to rule on the scope of a Swiss jurisdiction clause when the claim in question is one for damages for the infringement of anti – cartel laws.

(2) What is the “applicable law”?

(3) Principles of construction of jurisdiction clauses under Swiss Law: Professor Vischer and Professor Schwander agree that in Swiss law a contract is always to be construed according to the “declared true intention” of the parties. (Footnote: ¹¹³) They also agree that Swiss precedent gives significant importance to the principle of “bona fides” as between contracting parties. Professor Schwander also appears to accept that in some circumstances this will limit the extent of a provision in a contract to what the opposing party may have “foreseen” at the time that he entered the contract. But he takes the view that this principle is not relevant in the context of a jurisdiction clause. This is because Article 17 of the Lugano Convention does not impose a requirement of “foreseeability”. (Footnote: ¹¹⁴)

There is some confusion here, in my view. Article 17 of the Lugano Convention is concerned with what English lawyers would probably call the “formal” and “material” validity of a jurisdiction clause. (Footnote: ¹¹⁵) It is clear that Article 17 defines the necessary and sufficient requirements for formal and material validity of jurisdiction clauses. Those requirements replace any requirements imposed by the various national laws. (Footnote: ¹¹⁶) But neither party argued, at least in relation to the Swiss jurisdiction clause, that the jurisdiction clause lacked either formal or material validity. The only issue is as to its scope. On that issue Article 17 is irrelevant, because the European Court of Justice has made it clear (Footnote: ¹¹⁷) that this issue is to be determined by the “applicable law”, as opposed to any autonomous principles of construction or application laid down by the European Court of Justice.

So it seems to me that on this point Professor Vischer has “much the better of the argument”. In other words, I accept that much the better argument is that the scope of the Swiss jurisdiction clause is limited to the types of claim that the opposing party could reasonably foresee when entering the contract that contains the jurisdiction clause.

Professor Vischer and Professor Schwander disagree on the topic of whether, in Swiss law, a jurisdiction clause intended to cover a claim in tort can be agreed in advance of the alleged tortious act. I am not going to take sides on that issue, because the factual position here is that if the defendants had infringed Article 81(1), then they must have done so before the contracts were concluded. Moreover, I think I must also assume that because the cartels were secret, then the claimants did not (and could not) know of the infringements at the time that they entered the contracts with the defendants.

Both experts agree that there is a Swiss law principle of construction that a jurisdiction clause will only cover a claim in tort if those claims arise in connection with the contract that contains the clause. (Footnote: ¹¹⁸) Professor Schwander accepts that there is a difference of views amongst writers on Swiss law as to the necessary degree of connection. He relies on some German authority for a view that the connection need not be close. But in doing so he appears to stray from principles of Swiss law on the construction of jurisdiction clauses and invokes both German law and Article 17 of the Lugano Convention. There is no positive support amongst the authors cited by Professor Schwander (Footnote: ¹¹⁹) for the view that the connection between the contract and the tortious act need only be broad or loose.

Professor Schwander expresses the view that the jurisdiction clause will cover a claim in tort if the claim in tort could not have arisen “but for” the existence of the contract containing the clause. (Footnote: ¹²⁰) He argues that the fact that the claim in tort would not have arisen “but for” that contract provides sufficient connection between the tort and the contract for the clause to cover that type of claim. This is, so far as I can see, only his opinion, which is not based on any particular decision of the Swiss Courts. Nor is it the unanimous or even majority view of Swiss jurists.

Where does this all lead to? It seems to me that the crucial issue is: what, as a matter of construction and application, is covered by the phrase “any controversies” in clause 9(b) of the standard terms and conditions. If this phrase is given its widest construction, then it must include any and all disputes that have arisen between the two parties to the contract that contains this provision. That must include a dispute on whether one party to the contract can claim against the other damages for infringing Article 81(1) of the Treaty.

But it seems to me that, on the material available to me, “much the better of the argument” on the Swiss law principles of construction and application leads to a narrower construction of the wording of clause 9(b) of the Swiss terms and conditions. I think that the highest Swiss Courts would hold that the phrase “any controversies” must be confined to those controversies that would be foreseen by the parties at the time that they concluded the relevant contract. I think it fair to assume that when the present claimants entered the contracts for the supply of vitamins, they would have assumed that there were no secret cartels on price and market fixing and that the prices that they would have to pay for vitamins were not those fixed by a secret cartel that infringed Article 81. I have concluded that “much the better of the argument” on the proper construction of the clause 9(b) of the terms and conditions leads to the conclusion, based on Swiss law principles, that a claim for damages for infringement of Article 81(1) of the Treaty is not within the scope of the phrase “any controversies” in the jurisdiction clauses 9(b).

Conclusion: I conclude, on the basis of the material available to me now, that the scope of the Swiss jurisdiction clauses is not sufficiently wide to include the present claims, in tort, for damages for infringement of Article 81(1). Therefore the defendants cannot invoke Article 17/23 and the claimants can invoke Article 5(2) and/or 6(1) of the Regulation/Convention and sue the defendants in England.

Challenges to the English Court’s jurisdiction based on German Jurisdiction Clauses.

German jurisdiction clauses appear in the following contracts:

Article 23(1) of Regulation 44 provides as follows:

“If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:

(a)

in writing or evidenced in writing; or

(b)

in a form which accords with practices which the parties have established between themselves; or

(c)

in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned”.

The difference in the wording between Article 23(1) of Regulation 44 and that of Article 17(1) of the Lugano Convention is not material in these cases.

The Roche defendants’ arguments: Mr Hoskins’ principal submissions were as follows:

The Aventis defendants’ arguments: Mr de la Mare’s principal submissions were:

The claimants’ arguments in response: Mr Carr’s submissions were:

In his first report for both groups of actions Professor Wolf raised a further argument. This is that because the contracts were between two German companies, (Footnote: ¹⁴⁰) the jurisdiction clause is confined to where, as between possible German courts, disputes should be heard. He argued that the clause does not determine issues of international jurisdiction, eg. between English and German courts. Therefore, he submitted, Article 23 of Regulation 44 does not apply at all. So, issues of the validity and scope of the clauses must be dealt with exclusively by German law. (Footnote: ¹⁴¹) Dr Seiler and Professor Welter responded to this in detail and Professor Wolf returned to the matter in his second reports.

In his oral submissions Mr Carr did not take up the arguments of Professor Wolf that the clauses dealt only with national jurisdictional issues, so that Article 23 was irrelevant. He was, in my view, correct not to do so. First, Article 23 of Regulation 44 does not contain a requirement that the “agreement conferring jurisdiction” should expressly relate to international jurisdiction issues. Nor is there any case law of the ECJ that has held that Article 23 (or its predecessor Article 17) only applies to jurisdiction clauses that refer expressly to international jurisdiction issues. In my view the wording of Article 23 is sufficiently broad to apply to all jurisdiction agreements. It would be contrary to the objective of providing legal certainty if some jurisdiction agreements were within Article 23 but some fell outside its scope and their validity were to be determined by national laws. Therefore, secondly, all issues of formal validity and, I think, material validity (Footnote: ¹⁴²) of the jurisdiction clauses, must be dealt with by reference only to the requirements of Article 23, rather than the requirements of any system of national law.

Professor Wolf also argues that on the proper construction of the jurisdiction clauses they are intended only to decide where, within Germany, disputes should be determined, as opposed to determining where, internationally, they should be heard. This might be the case, but it seems to me that this is an issue as to the scope of the clauses. That issue must be dealt with in accordance with the “applicable law”, ie. any German law rules of construction as applied (by the English court in this case) to the contracts. I deal with this below.

The Issues between the parties on the “German jurisdiction clauses”.

Discussion: (1) relevance of national law to the validity of the clauses.

But Mr de la Mare’s argument was, in effect, that all issues as to the “material validity” (Footnote: ¹⁴⁶) of a jurisdiction clause are also to be determined exclusively by the rules laid down in Article 23, making national law irrelevant on that issue as well. He pointed in particular to passages at paragraphs 49 to 51 of the ECJ’s judgment in the Hugo Trumpy case.

In that case the ECJ was concerned with the effect of a jurisdiction clause set out on the reverse of bills of lading. Claims were brought by the receivers of the goods which had been shipped from Buenos Aires to Savona, Italy. The receivers had brought proceedings for compensation against Hugo Trumpy in the Genoa courts. Trumpy relied on a jurisdiction clause on the reverse of the bills of lading and claimed that the proceedings should have been brought in the High Court in London. The Corte Suprema di Cassazione posed fourteen questions to the ECJ. The only relevant ones for present purposes are the seventh and sixth questions. These are summarised in paragraph 46 of the ECJ’s judgment as being:

“…whether the court seised may review the validity of the clause as well as the intention of the party which inserted it and whether the fact that the substantive provisions applicable before the chosen court tend to reduce that party’s liability may affect the validity of the jurisdiction clause”.

The Court stated, in paragraphs 48 to 51 of its judgment:

“[48]…..In Benincasa, at paragraphs 28 and 29, the Court explained that the aim of securing legal certainty by making it possible reliably to foresee which court will have jurisdiction has been interpreted, in connection with Article 17 of the Convention, by fixing strict conditions as to form, since the purpose of that provision is to designate, clearly and precisely, a court in a contracting State which is to have exclusive jurisdiction in accordance with the consensus between the parties.

[49] It follows that the choice of court in a jurisdiction clause may be assessed only in the light of considerations connected with the requirements laid down by Article 17.

[50] (There is no need for any relationship between the dispute and the court selected).

[51] For the same reasons, in a situation such as that in the main proceedings, any further review of the validity of the clause and of the intention of the party which inserted it must be excluded and substantive rules of liability applicable in the chosen court must not affect the validity of the jurisdiction clause”.

As I read those passages they state that the material validity of a jurisdiction clause has to be determined exclusively by reference to the terms of Article 23. Thus there has to be an “agreement conferring jurisdiction” which is one to settle any disputes “which have arisen or which may arise in connection with a particular legal relationship”.

In Powell Duffryn plc v Wolfgang Petereit (Footnote: ¹⁴⁷) the ECJ held that the phrase “agreement conferring jurisdiction” had an autonomous meaning, so was not to be interpreted according to national laws. (Footnote: ¹⁴⁸) However, in the same case the ECJ has also held that there is still scope for national laws to determine two particular questions concerning an “agreement conferring jurisdiction”. The first is whether the dispute in issue arose out of the legal relationship in connection with which the jurisdiction agreement was made. That “is a question of interpretation which is a matter for the national court to resolve”. (Footnote: ¹⁴⁹) The second question is whether the scope of the jurisdiction agreement applied to the dispute before the court. The ECJ held that “it is for the national court to interpret the clause conferring jurisdiction invoked before it”. (Footnote: ¹⁵⁰)

Given these pronouncements of the ECJ I must conclude that when a jurisdiction clause is subject to Article 23, then the court seised of the issue of whether it is valid and applicable in the instant case must not apply national laws at all to the issue of the validity of the clause. So national laws are irrelevant to the issue of whether a clause can be valid at all if invoked in a dispute where fraud is alleged or it is alleged that the dispute concerns a tort of intent.

However the ECJ’s judgment in the Powell Duffryn case establishes that relevant national laws will determine two issues. The first is whether the dispute concerned arises out of the legal relationship in connection with which the jurisdiction agreement was made. The second is the scope of the jurisdiction agreement when applied to the dispute before the court. In relation to the German jurisdiction clauses, there was no dispute that German law should be considered on those two issues if there were any relevant German law principles involved.

(2) The German law rules as to the interpretation of jurisdiction clauses.

(3) How are the German law principles of interpretation to be applied?

The Aventis jurisdiction clause: The scope of the Aventis group clause is not at all clear. It does not attempt to define the types of dispute that are within the “agreed place of jurisdiction”. There is certainly nothing to indicate that the parties have agreed that a dispute concerning a claim for damages for breach of Article 81(1) of the Treaty would be within its scope. As the scope of the clause is not clear, then the next principle of interpretation of contract terms under German law is that the clause must be given a meaning according to the understanding of typical and reasonable customers, under the special circumstances of the case. I think that a reasonable customer would assume that the other party would have entered the contracts acting in good faith. The issue is, therefore, whether one party would have intended to agree to the jurisdiction of a particular court in respect of a claim that arises from the fact that, at the time the contracts were concluded, the other party was also party to a secret cartel and fixed the sale prices under the contracts accordingly. I think that if the question was asked: was it the underlying intention of the parties that a claim based on excessive prices resulting from a cartel should be within the scope of this jurisdiction clause, the answer would be likely to be “no”. If there are any doubts about the clause’s scope, then they have to be resolved in favour of the party who did not introduce the general terms, ie. Trouw Germany.

Therefore I have concluded that, in relation to the Aventis group jurisdiction clause, the claimant has “by far the better of the argument” as to the scope of the jurisdiction clause. I think that it does not apply to claims for breach of Article 81(1) of the Treaty.

The Roche group clause: Roche argues first, that “all” must be interpreted literally as “all” (Footnote: ¹⁵²) and secondly, that the current disputes arise out of the contracts between Trouw Germany and Roche Germany that contain the jurisdiction clauses. This is because if no contracts had been concluded, then there could not be any claims. Therefore, applying German principles of interpretation, two results must follow. First, the scope of the jurisdiction clause was broad enough to include the current claims. Secondly, the present disputes arose out of the legal relationships in connection with which the jurisdiction clause was made.

Although the arguments are closer in the case of the Roche group clauses, I have concluded that ultimately the claimants have “much the better of the argument” to the extent that I am satisfied that the jurisdiction clause should not prevail over the jurisdiction provisions of Articles 5 and 6 of the Regulation. This is for a number of reasons.

First, I have concluded that the claimants have much the better of the argument on the issue of whether the jurisdiction clause applies at all to cartel matters. This is a matter of construction of the clause, bearing in mind that it has to be interpreted according to the will of the parties. The parties have agreed to give jurisdiction for all disputes arising out of the legal relationship to two named courts. It is agreed by Professor Wolf and Dr Seiler that those courts do not have jurisdiction to hear cartel matters. The parties may not choose the Local Court of Lörrach or the District Court of Freiburg to hear a claim based on breach of Article 81(1) of the Treaty. The court nominated in the appropriate regulations to deal with cartel claims, including alleged breaches of Article 81(1) of the Treaty, is the District Court of Mannheim. (Footnote: ¹⁵³)

Dr Seiler suggests (Footnote: ¹⁵⁴) that if the Commission has already decided that there has been a breach of Article 81, then the choice of the local courts will be upheld because the expertise of the District Court will not be needed. But the issues of whether Roche Germany is in breach of Article 81(1) and whether Trouw Germany has a private law claim against Roche Germany, are very much in issue. So this argument has no force.

Dr Seiler then suggests that the jurisdiction clause will be valid :

“if it is possible to interpret the jurisdiction clause so as to determine the natural will of the parties according to Arts. 133, 154 BGB, or to convert the invalid jurisdiction clause into a valid one by way of re – interpretation according to Art. 140 BGB. That provides:

Conversion. If a void legal transaction meets the requirements of another legal transaction, then this latter shall be valid if it can be presumed that the parties [had] they had knowledge of the invalidity would have wanted its validity.”

Dr Seiler argues that as the designation of particular courts to hear special types of dispute is determined by “mere ordinances issued by the respective governments of each Federal State” which can therefore change that law easily, therefore:

“the possibility to reinterpret and convert a jurisdiction agreement guarantees that this kind of agreement can be adjusted to the changes in the law”. (Footnote: ¹⁵⁵)

Dr Seiler suggests that the only reason that the parties chose the Local Court of Lörrach or the District Court of Freiburg was so that disputes could be heard by the courts nearest to Roche Germany’s business seat. Otherwise, he speculates, they would have chosen the District Court of Mannheim, which does have jurisdiction to hear cartel matters.

I find these arguments very unsatisfactory. I note that the jurisdiction clause refers to two courts; one local and one district. Those were presumably chosen to reflect the jurisdictions that they have. It shows that Roche Germany was sufficiently astute as to the jurisdictional limits of the various courts. If there had been any intention to give a particular court jurisdiction over cartel matters then I would have expected some thought to be given to choosing an appropriate court, ie. the District Court of Mannheim in this case. (Footnote: ¹⁵⁶) The fact that this was not done suggests to me strongly that neither party was considering cartel disputes at all in framing this jurisdiction clause.

Furthermore I find equally unsatisfactory the argument that the clause could be “manipulated” or re – written so that if there is a cartel dispute then the clause should be read so as to refer to the Mannheim court. It goes against the general rule of German law as to the interpretation of contracts that the courts do not remake contracts for the parties. There has been no change in the law or the relevant circumstances under which a court could consider rewriting the contract in order to fit in with the new circumstances. Moreover, as Dr Seiler accepts, such rewriting is only permissible in order to reflect the intention of the parties. (Footnote: ¹⁵⁷) But there is nothing either in the contract or anywhere else to signify that the parties “….wanted to confer jurisdiction in cartel matters to the District Court of Mannheim”. (Footnote: ¹⁵⁸)

My second reason for concluding that the claimants have much the better of the argument that the jurisdiction clause does not apply to this type of dispute is based upon the German courts’ approach to the scope of jurisdiction clauses in cases involving fraud or torts of intent. Professor Wolf relied on two cases in particular: the decision of the Higher Court of Hamburg of 12 December 1981 (“the Hamburg case”), (Footnote: ¹⁵⁹) and the decision of the Higher Court of Stuttgart of 14 December 1973 (“the Stuttgart case”). (Footnote: ¹⁶⁰) Dr Seiler said that the Hamburg case could be distinguished, because it was dealing with an issue of fraud (the issue of fraudulent bills of lading), whereas the claims here are in tort, which is something different. Moreover the court’s decision was “motivated” by the fact that the jurisdiction clause nominated the Ethiopian courts and the court hesitated before forcing a claimant to sue in such courts. (Footnote: ¹⁶¹)

In my view the Hamburg case cannot be so easily dismissed. The jurisdiction provision stated that “all actions under this contract of carriage must be brought before the Ethiopian Court”. The claimant sued the shipowners, “a state owned shipping company”, and asserted that there had been a “wilful false issue of the bill of lading”. The court accepted that the parties would have intended that disputes concerning the terms of the bill of lading fell within the jurisdiction clause and also “unlawful acts” such as damage to the cargo, even if done wilfully. The court’s judgment continued:

“They [ie. the parties] have certainly not intended to regulate for the case that the consignor committed fraud to the detriment of the recipient of the cargo as early as the stage of issuing the bill of lading; it would appear quite unusual and would offend absolutely the sense of decency of any person who thinks reasonably and justly(Arts. 133, 15, 138(1) German Civil Code)….”

That reasoning indicates, at the least, that a German court would not give a broad interpretation to the words “all actions under this contract” so as to include claims based on the issue of a fraudulent bill of lading.

The Stuttgart case goes further. In that case the contract contained a clause “place of performance and venue are both Munich”. So far as I can tell from the translation of the report, the claimant alleged that it had been induced into concluding a contract through “wilfully illegal conduct”. The issue was whether the claim was within the scope of the jurisdiction clause or the general rules for jurisdiction in section 32 of the German Code of Civil Procedure prevailed. The court held that the claim did not come within the scope of the jurisdiction clause. It stated the procedural law provided the jurisdictional rules for a claim both in contract and for “unlawful acts”. If these were to be replaced by the agreement of the parties, then:

In my view these two cases show that the German courts’ approach to the interpretation of jurisdiction clauses is much more restricted than that of the English courts. The German courts require a clear and unambiguous indication from the parties that claims involving either fraud or some tort of intent are to be within the scope of a jurisdiction clause that has been agreed. In this case there is no clear indication that the parties have agreed that a claim for breach of Article 81(1) should fall within the jurisdiction clause. The claim is founded on the allegation that before the contracts were concluded, Roche Germany was party to a secret cartel to impose an illegal price regime on all contracts concluded thereafter. The claim is effectively based on an allegation of fraud by Roche Germany; or at least a deliberate intent to deceive Trouw Germany into thinking that the contracts, including the price, were on competitive terms and had been agreed after a free bargaining process.

Therefore I have concluded that the claimants have much the better of the argument with their proposition that, following German principles of interpretation, this jurisdiction clause is insufficiently clear and unambiguous to include within its scope disputes concerning claims for breach of Article 81(1) which are based on allegations of fraud or a tort of intent.

The third reason for my conclusion that the claimants have much the better of the argument is that I think that, looking at things from a German court’s point of view, it would be more likely to conclude that the current dispute does not “arise out of the legal relationship in connection with which the jurisdiction agreement was made”. (Footnote: ¹⁶²) Obviously in one sense the dispute arises out of the contracts because if there had been no contracts there would have been no claims. But the claims can also be said to arise out of the fact that, as the claimants allege, before the contracts were concluded Roche Germany was party to a pre – existing cartel which had fixed vitamin prices. (Footnote: ¹⁶³) As I have already noted, it seems to me that the German courts’ approach to the interpretation of phrases such as “arises out of the contract” is not as broad as the English courts’ might be when considering arbitration or jurisdiction clauses. (Footnote: ¹⁶⁴) In my view it is more likely that German principles of interpretation would lead to a German court concluding that the present dispute did not arise out of the legal relationship in connection with which the jurisdiction clause was made (ie. the contracts). Rather, it arose out of the fact that Roche Germany had entered into an unlawful price -fixing agreement with others. (This assumes, as I think I must for this purpose, that the claimants’ allegation that Roche Germany was in breach of Article 81(1) is at least arguable).

I should emphasise that in the preceding discussion I have been considering the intention of the parties as a guide to determine the scope of the jurisdiction clauses. I am conscious of the statement of the ECJ in the Hugo Trumpy case at paragraph 51 that the intention of the parties or the party that inserted the jurisdiction clause is not to be considered when determining the validity of the clause. I have not done so in my analysis. But it is quite clear that the intention of the parties is something that can be taken into account when considering the scope of the clause, if that is permitted by the relevant national law.

Conclusion: I conclude, on the basis of the material available to me now, that the scope of the German jurisdiction clauses is insufficiently wide to include the present claims, based on a tort of intent and, effectively, fraud, for breach of Article 81(1) of the Treaty. Therefore the defendants Roche Germany and Rhodia Germany cannot invoke Article 23 of the Regulation and rely on the German jurisdiction clauses. It follows that the claimants can rely on Article 6(1) of the Regulation to sue those defendants in England.

Challenges to the English Court’s jurisdiction based on French jurisdiction clauses.

French jurisdiction clauses appear in the following contracts in the Aventis group actions only:

The Aventis’ defendants’ arguments: Mr de la Mare’s principal submissions were as follows:

The claimants’ arguments: Mr Carr’s main submissions were:

Discussion

The problem of “characterisation” of the claim. Both parties’ French law experts have written reports analysing the nature of the claims, upon which, they both say, depends whether the jurisdiction clauses will apply to the claims as characterised by each expert. I asked both Mr Carr and Mr de la Mare whether there was any guidance, either from the ECJ, or in English domestic law, on which system of law should be used in the current circumstances to decide on the nature, or characterisation, of the claims made by the claimants for the purposes of determining whether the claims were within the scope of the jurisdiction clauses.

Both replied that they were unaware of any case law on the subject, other than the broad principles laid down by the ECJ in the Powell Duffryn, Benincasa and Hugo Trumpy cases. They do not take the matter beyond the general observations that it is for a national court to consider, according to its laws, the issues of (a) whether the dispute arises out of the legal relationship in connection with which the jurisdiction agreement was made and (b) the scope of the jurisdiction agreement.

Traditionally the process of “characterisation” of a claim or an issue has been undertaken by courts in order to decide which rule of conflicts of laws applies to provide the “connecting factor” between the issue and the system of law to determine it. Then the appropriate choice of law will be applied. (Footnote: ¹⁷⁵) It is accepted in English conflicts of laws that the question of “characterisation” should be undertaken using the concepts of the law of the forum. But when an English court has the task of finding the appropriate law to apply to a particular issue it should employ a “broad internationalist spirit” (Footnote: ¹⁷⁶)

In the present case the aim is not to decide and apply the correct system of law to an issue. It is to decide whether jurisdiction clauses in various contracts, governed by French law and entered into by parties of different domiciles, cover a claim that has been framed in English proceedings according to English law concepts. For the present the defendants have not attacked the conceptual basis on which the claimants have put their case for damages for breach of Article 81. In other words the defendants appear to accept that it is theoretically possible for these claimants to make a claim against some or all of these defendants for damages for breach of Article 81, using the English law concept of a claim for breach of statutory duty. (The defendants have, of course, argued that the claimants cannot establish the necessary ingredients in order to succeed against some defendants, but that does not detract from their acceptance of the “cause of action” in English law in principle).

It seems to me that, given the general guidance of the ECJ in the cases referred to above, I have to start the enquiry by asking: what is the particular issue at stake here? The answer is: the scope of the jurisdiction clauses in contracts which, it has been assumed, are governed by French law.

The next question must be, I think: are there any principles by which the French courts determine the scope of a jurisdiction clause in contracts. The answer, which is implicit in the approach of both French law experts, although neither of them spells it out, is: the character of the claim must be ascertained. That “characterisation” will assist in answering whether the particular dispute falls within the scope of the jurisdiction clause in question.

At one stage in the argument it seemed to me (although not encouraged by either side) that this issue of “characterisation” should be done by asking, what is the nature of the principal claim as characterised by the law of the forum, ie. English law. (Obviously, if the claimants’ principal claim were characterised using English law concepts then it would be regarded as a claim in tort). But I have concluded that this approach would be wrong. It forgets the object of the exercise, which is to determine whether the present dispute falls within the scope of the jurisdiction clauses being considered.

Approach of the French Experts: There is an immediate difficulty for the French lawyers, of course, because the claims are pleaded in exclusively English law terms. There is the further difficulty in that, whilst both Professor Lécuyer and Professor Gaudemet – Tallon have said that the key issue is the nature of the claim, neither has analysed the claim by reference to the pleadings in the Aventis actions. Moreover, neither expert has pointed to any Articles in the French Civil Code or other general doctrine of French law which might assist me in ascertaining the principles on which a French court would proceed when characterising the present claim. Effectively each has simply argued that a French court would regard the claim as either tortious or contractual in nature.

On consideration of the arguments, I do not find those of Professor Gaudemet - Tallon convincing. On the first assumption Professor Gaudemet – Tallon makes, that the contracts were valid and subsisting, she argues that the claim must be contractual in nature because the Cour de Cassation has stated, (in its decision of 1 December 1995), that if there has been an abuse in setting a price that can only give rise to a claim for rescission of the contract or for compensation. (Footnote: ¹⁷⁷) But that was a case where the price was fixed unilaterally after the conclusion of a valid contract. It is not this case. (Footnote: ¹⁷⁸)

Professor Gaudemet – Tallon’s alternative suggestion is also not persuasive. The claimants have not asserted that the contracts were invalid, or that they seek rescission of them. (Footnote: ¹⁷⁹) Moreover, Professor Gaudemet – Tallon does not positively assert that this is the proper analysis of the claim using French law principles. On the contrary, she specifically “makes no comment as to which one is to be accepted”. (Footnote: ¹⁸⁰)

In her second report, Professor Gaudemet – Tallon suggests that, by virtue of some principle of law of the ECJ, it must be concluded that the current claim is contractual. (Footnote: ¹⁸¹) This is not a matter of French law, but EU law and so not a matter for her to comment upon. However I also note that there is no authority backing this statement, which seems to me to be clearly contrary to the principles laid down by the ECJ that the scope of jurisdiction clauses is a matter for national laws.

As for Professor Lécuyer’s argument, my reaction, inevitably considered from an English lawyer’s standpoint, is that it appears to be more persuasive. The points are not developed much in his two reports, but then there is not much to develop. Overall, for the reasons that Professor Lécuyer has given, I conclude that the probability is that a French court would hold that the nature of the claim in these actions is one in tort.

Have the present disputes arisen out of the relationship in connection with which the jurisdiction agreement was made?

An English court would almost certainly conclude that the present disputes have arisen out of the legal relationship in connection with which the jurisdiction clauses were made. That is because an English court would say that, broadly speaking, the present disputes arise out of the contracts for the sale of the vitamins. But I doubt whether I am entitled to take simply the English court’s approach. I think that I have to have regard to the fact that if the nature of the claim is tortious, then a French court would be inclined to say that the dispute arises out of the tort, ie. the fact that the sellers allegedly entered into illegal cartels and imposed illegal prices as a result. However, I propose to leave this issue as undecided, given the lack of French expert evidence on the point.

What is the scope of the jurisdiction clauses?

The 1998 wording is undoubtedly not as broad as the 1999 wording. It gives exclusive jurisdiction to various French courts for “any disputes relating to the fulfilment or interpretation of our sales agreements”. If I were interpreting this clause simply from the standpoint of English law, then I would hold that it is insufficiently broad to encompass a claim for damages based on an alleged breach of statutory duty because of an infringement of Article 81. A dispute about such a claim does not relate to the “fulfilment” or the “interpretation” of he sales contract. It relates to the alleged fixing of prices before the contracts were concluded by virtue of an illegal cartel.

There is nothing in any of the French experts’ reports to indicate that the French courts would interpret the scope of the clause any more widely. So I hold that the scope of the 1998 edition is insufficiently wide to cover a claim for breach of statutory duty based on an infringement of Article 81. I reach the same conclusion, for comparable reasons, insofar as the claim is based on unjust enrichment.

The 1999 edition wording is broader. It provides for exclusive jurisdiction over “all and any disputes arising herefrom”. “All and any disputes” is a very broad phrase. So the issue is how to interpret the words “arising herefrom”. As I have already stated, an English court might well hold that the present dispute arises from the contracts for the sale of the vitamins. Historically the courts have given the words “arising from” a broad meaning, particularly in the context of arbitration clauses. However, there can be debate on whether a dispute over a claim for damages for breach of statutory duty based on infringement of Article 81 constitutes a dispute “arising from” a contract. It can be argued that the dispute arises from the pre – existing illegal cartel which set the allegedly exorbitant prices for the vitamins. If, as I have held, such a claim would be characterised by a French court as tortious, then it is implicit in the approach of both French law experts that a French court would hold that the 1999 edition of the jurisdiction clause is insufficiently broad in scope to cover the present claims.

Conclusion: Looking at the position overall I have to ask: have the claimants got “much the better of the argument” that the French jurisdiction clauses do not apply to the claim as it is currently pleaded? In my view they have. My conclusion is based, ultimately, on two points. First, that the principal claim is a tortious one, not a contractual one. Secondly, given that characterisation of the claim, then the scope of the two forms of jurisdiction clause, as they would be interpreted by a French court, is insufficiently wide to embrace the claims as pleaded. Accordingly AAN France is not entitled to rely on Article 23 of the Regulation and the French jurisdiction clauses. Therefore the claimants Provimi UK (in Folio 470) and Trouw UK and Trouw Germany (in Folio 475) can rely on Articles 5(3) and/or 6(1) of the Regulation to sue AAN France in England.

Overall Conclusions

My conclusions on the various issues are therefore as follows:

Once again I express my thanks to all counsel for their helpful and very interesting submissions in this case.