Yesterday the Court of Appeal handed down judgment in Ryanair Limited v Esso Italiana Limited [2013] EWCA Civ 1450.
This decision is the first appellate authority to examine whether a claim for breach of competition law is within the scope of a contractual jurisdiction clause.
Ryanair’s claim arose out of a ruling by the Italian competition authority in June 2006, by which it had ruled that Esso Italiana, together with other suppliers of jet fuel at airports in Italy, had operated a cartel. There was evidence that the price of jet fuel at Italian airports had been inflated as a result. All members of the cartel were heavily fined in Italy.
Ryanair had purchased fuel from several of the cartelists throughout the operation of the cartel. It commenced proceedings in London against Esso Italiana, claiming damages for breach of contract, and in tort for breach of EU law/statutory duty. The contract claim was for breach of a price adjustment clause in its contract for the purchase of jet fuel. The tort claim included a claim that Esso Italiana was jointly and severally liable for losses it (Ryanair) had incurred in purchasing overpriced fuel from both Esso Italiana, and the other cartelists. Ryanair served proceedings on Esso Italiana in Italy, in reliance on an English jurisdiction clause in the contract.
Esso Italiana challenged the Court’s jurisdiction in relation to the claim for breach of statutory duty. At first instance it conceded that the Court had jurisdiction over the contract claim. On that basis, Eder J held that both claims were within the scope of the jurisdiction clause, because the parties cannot have intended concurrent proceedings arising out of the same facts (2012 EWHC 200 (Comm).
On appeal however, and on the initiative of the Court of Appeal, Esso Italiana was, unusually, allowed to withdraw its concession in relation to the Court’s jurisdiction over the contract claim and that it was properly arguable for the purposes of jurisdiction. The Court of Appeal (Rix, Patten and Tomlinson LJJ) ruled that, on a proper construction of the price adjustment clause, it was not intended to encompass a claim in relation to the operation of a cartel. It held the contract claim itself was therefore without merit, and as a consequence, the Court did not have jurisdiction over it. They went on to hold that, since there was therefore no risk of concurrent proceedings, the parties cannot have intended the claim for breach of statutory duty to be within the scope of the jurisdiction clause.
Unfortunately therefore, as a result the Court’s ruling as to the merits of the claim for breach of contract, the question addressed by Eder J was left undecided by the Court of Appeal. The Judgment nevertheless considers the case law on construction of jurisdiction clauses, in the context of claims for breach of competition law.
Ryanair were represented before the Commercial Court by Stephen Auld QC, and in the Court of Appeal by Stephen Auld QC and Eleanor Campbell, of One Essex Court.