Thursday 11 October 2018

High Court rules that ABB did not deliberately overcharge BritNed as a result of power cables cartel



The facts really do matter in competition follow-on damages actions, according to the High Court’s ruling in a claim brought by BritNed against ABB arising out of the power cables cartel.
ABB did not dispute its participation in a cartel which was the subject of a European Commission 2014 decision finding an infringement of Article 101 TFEU.  It did, however, deny that BritNed had suffered any loss as a result.
BritNed alleged that it was overcharged for the cable component of the Dutch-UK Interconnector.  The High Court did not accept that claim, finding that there was no deliberate overcharging and that the direct costs for ABB’s tender for the project were honestly and competently compiled.
The High Court did, however, find an overcharge on account of embedded inefficiencies where the cartel was found to have an insulating effect for ABB.  On this reasoning, but for the cartel, ABB would have had to cut costs for the tender.  The High Court also found an overcharge arising from a “cartel saving” where ABB’s common costs were reduced because the cartelists did not have to compete
The High Court rejected BritNed’s claims for loss of profits and compound interest and also ABB’s claims that any damages needed to be assessed by reference to the regulatory cap on BritNed’s earnings.
ABB was ordered to pay approximately €7.5 million for the inbuilt inefficiency and €5.5 million for the efficiency savings arising from participating in the cartel.
BritNed Development Limited v ABB AB and ABB Limited [2018] EWHC 2616 (Ch)

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