In the Air Cargo Cartel proceedings claiming damages against British Airways, the English High Court has ordered the disclosure of the confidential version of the EU Commission’s 2010 Air Cargo Cartel Decision to the Claimants within a confidentiality ring, thereby putting it on a collision course with the EU Commission.

The EU Commission had informed the High Court that it was not in a position to publish a non-confidential version of the Cartel Decision due to the number of confidentiality claims made by addressees of the Decision which were still outstanding some four years after the Decision had been handed down. The Commission asserted that it was not able to simply over-ride these confidentiality claims and referred to the position taken by the European Courts in the Pilkington case over the publication of a cartel decision.

Despite the EU Commission’s position, the High Court went on to rule that this delay was completely unacceptable and criticised the Commission for not taking steps to speed up the process or giving any indication as to when the whole process will be finalised. The Court added that awaiting agreed redaction would mean that these proceedings could remain paralysed for many years.

The Claim

565 claimants throughout the world brought a damages action against British Airways plc (BA) in respect of losses they allegedly incurred as a result of an illegal Air Cargo cartel. The claimants identified 31 airlines that allegedly took part in the global cartel but brought proceedings against BA which as a cartelist was jointly and severally liable for the losses caused by whole cartel. BA brought contribution proceedings under Part 20 of the English Civil Procedure Rules against 23 other airlines (the Part 20 Defendants).

The claims relate to alleged overcharges on air routes between large numbers of territories across the entire world during the period of at least 1999 to 2007. These include 1,362 routes where one or both of the origin or destination is in the EU/EEA and 885 routes where neither the origin or destination is in the EU/EEA. The total value of the claims is in excess of £1 billion, over £500 million of which relates to claims outside the EU/EEA.

The claim was originally based on an alleged breach of EU and UK competition law. However the claim was extended to include claims of conspiracy and interference with the claimants’ businesses aimed at recovering the damage suffered outside the European Union. This accounted to nearly 50% of the monetary value of the claim.

In November 2010, the European Commission issued a decision that 11 airlines, including BA, had breached Article 101 of the Treaty on the Functioning of the European Union through their involvement in a price-fixing cartel. The Commission held that 11 air cargo carriers had been involved in a worldwide cartel which affected cargo services within the EEA. The Commission found that the carriers coordinated their action on surcharges for fuel and security over a six year period from December 1999 to February 2006. The arrangements involved bilateral and multilateral contacts between carriers covering flights to, from and within the EEA. A number of appeals against this decision are pending before the General Court (Air cargo cartel).

Application for Disclosure of Commission Decision

A key part of the claimant’s’ case relied upon the Commission’s 2010 Decision. BA and fellow addresses were in possession of the confidential version of the Commission’s Decision. The claimants and some of the Part 20 Defendants which were not addressees of the Decision were not. Without disclosure of a meaningful copy of the Decision the conduct of the case would stall.

BA and its fellow addresses of the Decision had made various application to the Commission to have parts of the Decision excised on the grounds that they were confidential. The Commission had not been able to decide upon their claims albeit that it was now some 4 years after the Decision had been handed down by the Commission. Given the fact that the non-confidential version of the Decision was not available the claimants sought disclosure of the Decision in April 2014 suitably redacted to address legitimate confidentiality concerns.

Following BA’s refusal, the claimants wrote to the Commission, which indicated that it would publish a provisional non-confidential decision in due course. This has not yet been published. In April 2014, the Commission informed the High Court that it was not yet in a position to publish a version of the Decision due to the number of confidentiality claims made by addressees of the Decision. It noted that it could not over-ride the confidentiality claims and referred to the position taken by the European Court in relation to the publication of a cartel decision in the case of Pilkington (see Case C-278/13 P(R) – European Commission v Pilkington Group Limited, Order of the Vice President of the Court, 10 September 2013).

The High Court ordered BA to circulate the Decision to people potentially affected with appropriate redactions. However the document produced was in the High Court’s view “completely useless because so much has been redacted”. Therefore the claimants applied to the High Court asking it to review the appropriateness/ lawfulness of the redactions made by BA and other airlines to the Decision. They requested that the High Court judge review the Decision and decide which part or parts of it ought to be redacted.

Judgment

The High Court held that it was completely unacceptable for the Commission to have not published a non confidential version of the Decision after some four years after the Decision was taken. To make matters worse the Commission had taken no steps to speed up that process and no indication had been given as to when the whole process would be finalised. In short, the current situation where the claimants and the Part 20 Defendants who are not addressees of the Decision had not seen the Decision while some parties had seen the Decision in its full form was not “sensible or just”.

The Court rejected the suggestion that it should undertake the task of reviewing the appropriateness of the redactions to the Decision. The Court therefore considered whether it was possible for an English judge to order the disclosure of the Decision in un-redacted form and whether there should be any protections and if so what in making such an order.

The Court held that the rights and concerns of all parties were best reconciled through the disclosure of the unredacted version of the Decision in a confidentiality ring with certain further safeguards. Leniency material and material covered by legal professional privilege should be removed. In addition, one concern had been that access to the Decision would disclose possible rights of action against further parties. However this concern could be addressed if the Court barred the claimants from using the Decision to commence any proceedings, whether within this action or any other action within this jurisdiction or elsewhere, against any party. The Court also rejected worries that someone might breach the terms of the confidentiality ring. The Court however would not shy away from making an order which it thought just and appropriate solely on the basis that it might be breached.

The High Court then considered the impact of its ruling upon the relationship with the EU Commission. It was argued that the Court had a duty of sincere co-operation. There might be a risk that the High Court’s decision could conflict with future decisions of the Commission in respect of the airlines’ applications for redaction and this would be a breach of that principle. The High Court noted that there could not be a final trial on this action pending the conclusion of the EU appeals against the Decision. However, it is possible for the High Court to proceed to examine matters and identify issues in advance of a final trial. In relation to the Decision, this will be done within a confidentiality ring. The High Court saw no conflict in this.

Emerald Supplies Ltd and Others v British Airways Plc [2014] EWHC 3513 (Ch) and [2014] EWHC 3514 (Ch).