Enron Coal Services Ltd (in liquidation) v English Welsh & Scottish Railway Ltd

[2009] EWCA Civ 647; [2009] WLR (D) 224

The jurisdiction of the Competition Appeal Tribunal under s 47A of the Competition Act 1998 was limited to the determination of follow-on claims for damages based on a finding by a regulator of infringement of a relevant prohibition. Such a finding was not only a pre-condition to the making of a s 47A(1) claim, it also determined and defined the claim’s limits and the tribunal’s jurisdiction in respect of it. The Court of Appeal had jurisdiction under s 49 of the 1998 Act to hear an appeal against a strike-out decision of the tribunal under r 40 of the Competition Appeal Tribunal Rules 2003, whether that decision was to strike out or not to strike out a claim.

The Court of Appeal so held, granting permission to both parties to appeal, allowing the appeal of the defendant, English Welsh & Scottish Railway Ltd, against the refusal on 12 March 2009 of the Competition Appeal Tribunal [2009] CAT 7 to strike out part of a claim brought against it under s 47A of the 1998 Act for damages for loss resulting from breaches of the prohibition on abuse of a dominant position in s 18 of the 1998 Act and art 82EC of the EC Treaty, and dismissing the cross-appeal of the claimant, Enron Coal Services Ltd (in liquidation) against the decision of the tribunal to strike out part of its claim.

PATTEN LJ said that for the claimant a preliminary point was raised about the jurisdiction of the Court of Appeal to hear an appeal against a decision of the tribunal not to strike out a claim under r 40 of the 2003 Rules. The question was whether the rejection of such a strike-out application was a decision “as to the award of damages or other sum” under s 47A of the 1998 Act. It was accepted that a decision to strike out a claim would be such a decision because it would amount to a rejection of the claim. But a refusal to strike out did no more than to leave the pleaded claim intact and to allow it to proceed to an adjudication at a full hearing and was thus not determinative of the claim. His Lordship considered that to be too literal an approach to the construction of s 49(1) of the 1998 Act. The reference in it to a decision of the tribunal “as to the award of damages or other sum in respect of a claim made in proceedings under s 47A” was simply descriptive of the type of relief available in such claims. It was not intended to limit the disappointed party’s right of appeal to decisions of the tribunal either awarding or refusing an award of damages following a full hearing. The wording of s 49(1) was wide enough to cover a r 40 determination against the viability of the claim and a decision to the opposite effect.

For there to be a claim for damages under s 47A of the 1998 Act based on a finding of infringement of a prohibition (and, with it, the jurisdiction of the tribunal to adjudicate upon it), a regulator, such as the Office of Rail Regulation, had to have made a decision that a relevant prohibition had been infringed as described in s 47A(6). The use of the word “decision” made it clear that s 47A was differentiating between findings of fact as to the conduct of the defendant made as part of the overall decision and a determination by the regulator that particular conduct amounted to an infringement of the prohibition on abuse of a dominant position. It was not open to a claimant to seek to recover damages through the medium of s 47A simply by identifying findings of fact which could arguably have amounted to such an infringement. No right of action existed unless the regulator had actually decided that such conduct constituted an infringement of the relevant prohibition as defined. The corollary to that was that the tribunal (whose jurisdiction depended upon the existence of such a decision) had to have satisfied itself that the regulator had made a relevant and definitive finding of infringement. The purpose of s 47A was to obviate the necessity for a trial of the question of infringement only where the regulator had in fact ruled on that very issue. The tribunal ought to be astute to recognise and reject cases where there was no clearly identifiable finding of infringement and where they were in effect being asked to make their own judgment on that issue.

JACOB LJ agreed. CARNWATH LJ delivered a concurring judgment.

Appearances: Mark Brealey QC and Maya Lester (instructed by Freshfield Bruckhaus Deringer LLP) for the defendant; Daniel Beard (instructed by Orrick, Herrington & Sutcliffe) for the claimant.