High Court rules that Gemalto’s smart card chips competition damages claim is out of time

 

High Court rules that Gemalto’s smart card chips competition damages claim is out of time

The High has handed down a judgment in an action by Gemalto seeking competition law damages from Infineon and Renesas for harm allegedly suffered as a result of the smart card chips cartel.  The Court ruled that the claim, brought in July 2019, was time-barred.

The case concerns a follow-on action based on the European Commission's September 2014 decision on the smart card chips cartel.

The defendants alleged that the claim was time-barred as it had been brought more than six years after the date on which the cause of action accrued under section 32(1)(b) of the Limitation Act 1980.

Section 31(1)(b) provides that where any fact relevant to the right of action has been deliberately concealed by the defendant, the period of limitation shall not begin to run until the claimant has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

The High Court accepted the defendant’s argument that although the case involved concealment, the limitation period time started running at the latest by April 2013 when the Commission announced that it had sent a statement of objections to suspected participants in the cartel.  At that point Gemalto had sufficient information to formulate a reasonable belief as to the essential elements of a claim for damages and without waiting for the Commission to issue and infringement decision.

To rely on section 32(1)(b) it is important to distinguish between essential facts that give rise to a cause of action and the supporting evidence.

So far as section 32(1)(b) is concerned, competition claims are not to be treated differently to any other type of claim.  In Arcadia Group Brands Ltd & 11 ors v Visa Inc & ors [2015] EWCA Civ 883, the Court emphasised that section 32 must be read narrowly in terms of what facts are needed to trigger the limitation period.  A “fact relevant to a plaintiff's right of action” for these purposes is a fact without which a cause of action would be incomplete.  

In terms of the prospects of success of relying on section 32(1)(b) in future cases, I express some caution given that this provision is to be construed narrowly but it remains complex, difficult to interpret and arguably lacking in consistency.  Competing interests are at stake (on the one hand the need for finality and, on the other hand, the public interest in ensuring that claims can be vindicated).  These interests tend to be irreconcilable except on a pragmatic basis.  This represents a significant ‘unknown’ in terms of how this point would be answered in future cases.

Gemalto Holding BV and another v Infineon Technologies AG and others [2022] EWHC 156 (Ch)