Not off the hook: CAT finds that UK is natural forum in farmed Atlantic salmon case

What do car parts and farmed Atlantic salmon have in common? These were the subject of recent proceedings where jurisdiction challenges were mounted. The UK remains a popular jurisdiction for claimants to choose to bring proceedings. As Lord Goff observed in Spiliada, claimants may wish to take advantage of “damages awarded on a higher scale; a more complete procedure of discovery; a power to award interest; a more generous limitation period”.

In this blog post, we consider the recent judgment in Asda Stores Limited and others v Bremnes Seashore AS and others (the “Farmed Atlantic Salmon Decision”), and how the Competition Appeal Tribunal’s (the “Tribunal”) decision compares to the High Court’s judgment in Vauxhall Motors Ltd and others v Denso Automotive UK Ltd and others (the “Car Parts Decision”).

Both claims alleged breaches of Article 101 TFEU and Article 53 of the EEA Agreement. In the Farmed Atlantic Salmon Decision, this related to the alleged coordination of the sale price for farmed Atlantic salmon in the EEA and the UK. Each of the defendants contended that Norway was the appropriate forum for the proceedings. The Tribunal decided that the natural forum for this case is the UK.

In the Car Parts Decision, the alleged conduct related to thermal system components in cars, which either regulate the ambient temperature inside the vehicle, or cool the engine. All of the defendants disputed jurisdiction, arguing that the claims have minimal connection with England and that the most appropriate forum is France. The court decided that the natural forum for the dispute is France.

Forum non-conveniens

Both the Farmed Atlantic Salmon Decision and the Car Parts Decision included service-in and service-out defendants. The court is essentially seeking to identify the jurisdiction in which the claims against all of the defendants may most suitably be tried, and that is “the forum with which the action has the most substantial connection”.

Whilst the outcomes of the Farmed Atlantic Salmon Decision and the Car Parts Decision are different, the court/Tribunal weighed up comparable factors.

• Location of the claimants: in the Farmed Atlantic Salmon Decision, all of the claimants carry on business operating well-known UK supermarkets. By contrast, in the Car Parts Decision, the claimants were incorporated in the UK, Netherlands, France, Germany, Spain, Serbia, Poland, and Brazil. Only one claimant was incorporated in the UK, and this claimant no longer pursued claims in respect of any supplies which have been definitively identified as being within the scope of the claim. Whilst the location of the claimants in the Farmed Atlantic Salmon Decision pointed to the UK being the most appropriate forum, it did not in the Car Parts Decision.

• Location of the defendants: in the Car Parts Decision, the countries of domicile of the defendants included the UK, Japan, Netherlands, Germany and France. The claimants’ pleadings did not include any reference to relevant supplies being made by the UK anchor defendants to the claimants. In the Farmed Atlantic Salmon Decision, one group of defendants were engaged in the business of farming and supplying farmed Atlantic salmon raised in Norway, and the other group of defendants were engaged in the business of farming and supplying farmed Atlantic salmon raised in Scotland (the “UK Defendants”). However, the Tribunal accepted that it was open to them to decline to exercise jurisdiction over the UK Defendants in favour of Norway, and they found that “the inclusion of UK Defendants in the claim has not been a dominant reason for our forming the view that the proper place for this case is the UK”. It appears that the location of the claimants is a more decisive factor than the location of the defendants.

• Markets affected: in the Car Parts Decision, the claimants alleged that the German, French, Italian, Brazilian and UK markets were affected, and accordingly, where loss was allegedly suffered by the claimants. Claims affecting the claimant group headquartered in France accounted for around 72% of the claims during the original cartel period, where losses were said to have been suffered in France and those claims were said to be governed by French law. The remaining 28% of the claims related to supplies made to the claimant group headquartered in Italy, the losses were said to have been suffered in Italy, and the claims were said to have been governed by Italian law. On the other hand, in the Farmed Atlantic Salmon Decision, the Tribunal’s view was that although collusion is said to have taken place in Norway, the damage said to have been suffered by the claimants occurred in the UK. The Tribunal considered that this case concerned the price of a commodity on the UK market, pointing to the UK as the most natural and appropriate forum.

• Applicable law: in the Car Parts Decision, on the claimants’ case, the claims were governed by German law, French law, Italian law and Brazilian law. The claimants did not contend that any part of their claim was subject to the law of England and Wales. On the other hand, in the Farmed Atlantic Salmon decision, the applicable law was said to be English law, and the Tribunal placed weight on the fact that the case concerned “an alleged breach of UK competition law”.

• Witnesses and documents: in the Car Parts Decision, the defendants’ evidence was that its witnesses were in France, Italy and Brazil. The documents were mostly in France, Spain, Italy and Brazil, with the language of those documents likely to be Italian, French or Portuguese. None of the documents were likely to be in the UK. In the Farmed Atlantic Salmon Decision, the Tribunal did see force in the defendants’ submissions that these proceedings would require the Tribunal to review documents in Norwegian, and the hearing of witnesses who speak Norwegian as their first language. However, the Tribunal relied on the fact that many documents had already been translated into English for the European Commission, and insofar as key witnesses are not fluent in English, evidence can be given through a translator.

• Juridical advantages: in the Car Parts Decision, the claimants relied on the fact that a parallel case was proceeding in the Competition Appeal Tribunal. However, the court found that it was not sufficient that the same legal team had been acting for the claimants in a parallel case. Whilst both cases concerned the same overarching sector, the parallel proceedings were brought against different defendants and allege infringement in relation to different products. The real reason for issuing the claim in England was the claimants’ view that their claim could only be proven by obtaining English-style disclosure, which was a deliberate litigation strategy. This was not a sufficient reason for trying the proceedings in this jurisdiction. On the other hand, in the Farmed Atlantic Salmon Decision, the Tribunal agreed with the claimants that it would be advantageous to hear any class action on behalf of consumers in the same court and at the same time as the proceedings brought by these claimants. This would enable a holistic view to be taken on issues such as pass-on, thereby reducing the risk of irreconcilable judgments. However, ultimately, the Tribunal did not place reliance on this factor, because it was premature to do so prior to the authorisation of the separate collective proceedings. Furthermore, the Tribunal did not find arguments on litigation funding persuasive, and did not consider whether the claimants would be prepared to fund the case themselves in a different jurisdiction to be a relevant factor.

These decisions illustrate potential pitfalls for both claimants and defendants when deciding where to issue proceedings, making applications for permission to serve out of the jurisdiction, and when inviting the relevant court/Tribunal to decline to exercise their jurisdiction. The crux of the test for natural forum appears to be consideration of where the claim has the most substantive connection; where a connection is weak, the court will not be persuaded by prospective claimants seeking to issue claims in this jurisdiction to gain perceived tactical advantages.