In a recent judgment, the “Court of Appeal (CoA)” upheld the High Court’s decision that England is not the proper jurisdiction for a contribution claim filed by Samsung against LG. The contribution claim was made by Samsung after settling a 2015 complaint against it in England by a number of local authorities in connection with a cartel in the LCD panel market.
The courts concluded that the contribution proceedings could instead be initiated in South Korea or Taiwan, where respectively Samsung and LG were headquartered, and where the cartel meetings took place.
In December 2010, the “European Commission (the Commission)” adopted a “decision (the decision)” against several Korean and Taiwanese companies for having participated in a cartel in the sector of “liquid crystal display (LCD)” used in displays. The cartel members, including the Samsung and LG group companies, held regular cartel meetings, mainly in hotels in Taiwan.
Several sets of follow-up proceedings have been filed in England against Samsung and, in some actions, other cartelists, including the LG companies. The contribution claim in question was only filed against LG after a settlement was reached by Samsung with the plaintiffs in one of these actions. LG challenged jurisdiction, saying Samsung had failed to demonstrate that England was clearly the proper forum for the claim.
Below, we focus on the two grounds of appeal discussed at length by the CoA in its judgment.
The “Cambridgeshire Factor”
Samsung argued that the contribution claim had to proceed in England because the settlement related to claims for damages arising from a cartel that was allegedly implemented or intended to affect England. The English courts had already ruled on a series of actions relating to the agreement, including an action in which LG was a defendant: iiyama v Samsung Electronics Ltd.
The High Court had recognised, and the CoA agreed, that the fact that the underlying claim was pending in England could be a powerful, if not overwhelming, factor in favor of hearing the contribution claim in the jurisdiction. However, where the underlying claim has already been settled, the only question to consider is which forum is most appropriate for the trial of the contribution claim.
The fact that the English courts ruled on the claims relating to the LCD cartel (and a related cathode ray tube cartel) in iiyama vs Samsung Electronics Ltd. did not give much weight. The High Court sided with LG in concluding that there was a distinction between proof of infringement and analysis of liability between the infringing parties, only the latter being at issue in the contribution proceedings .
The CoA considered that the fact that the same group of lawyers in England had acted in similar proceedings concerning the same cartel (including public enforcement proceedings before the Commission) could constitute a strong argument against the opening of proceedings. a contribution procedure elsewhere, where the parties would have to start from scratch with new local lawyers. This would be the “connection factor”, also known as the “Cambridgeshire factor”, so named after the ship at the center of a pioneering case on jurisdictional issues: Spiliada Maritime Corporation v Cansulex Ltd  AC 460. Unfortunately for Samsung, the CoA concluded that insufficient evidence in this regard had been produced before the High Court judge and that the Cambridgeshire factor had not been established.
Binding nature of the Commission’s decision
Samsung argued that England would be an appropriate forum in view of the Commission’s decision which was binding on the English courts and in which the Commission had decided that the tortfeasors were also liable. To the extent that it was necessary to refer further to events in Asia, Samsung argued that the Commission had already produced a great deal of evidence annexed to the Decision.
Regarding the binding nature of the decision, the High Court judge was not asked to read the Commission’s decision in detail, nor were the parties asked to read the “Remedies” section. of the decision in which the Commission examined and rejected LG’s arguments that it should receive a lower fine for its participation in the cartel. It therefore appears that this factor was not taken into account to maintain the claim for contribution in the jurisdiction. The CoA said that, had this argument been properly made out in the High Court, the judge could not have reached the conclusion that “the relative liability of the tortfeasors was not of interest to the Commission”. It could at least be argued that the decision was binding on this issue and, in that case, any evidence contradicting the conclusions of the decision would not be admissible. Furthermore, the question of the extent to which the Commission’s conclusions are binding is a question of English and/or European law, which would be better determined in England than in Asia. However, given the evidence before him, the judge was entitled to reach the conclusion he did.
The CoA was skeptical that, as LG argued, there would be any other meaningful evidence regarding the guilt of the cartel members, given that LG had sought immunity under the the public enforcement proceedings, which came with the condition that it would cooperate fully with the Commission and provide it with all available evidence. However, he admitted that the judge could have rationally come to the opposite conclusion, especially given that Samsung’s attorney admitted that some additional documents might be available.
The outcome of this application for contribution is a helpful reminder that a party wishing to resist a jurisdictional challenge must bring all relevant arguments to the table before the trial judge and submit detailed supporting evidence. It should also be noted that, if sufficiently proven, the existence of similar proceedings in the jurisdiction as well as the existence of any binding regulatory decision may prove to be strong arguments in favor of claims being heard in England.
With regard to contribution claims, the possibility for claimants to sue only one of the parties jointly and severally liable for the damage caused (as in the case of multi-party infringements of competition law) has always been a tool important tactic. Plaintiffs are able to avoid the strategic complications of pursuing their claims against impoverished defendants or companies against whom judgment would be difficult to enforce. Defendants are of course still entitled to bring an action for contribution against the other culprits independently of the underlying action (and they have two years to do so from the payment of the damages). Defendants have tended to bring claims for contribution alongside the underlying proceedings (e.g. in the Truckslitigation) and in such cases the underlying and contributing proceedings have been handled jointly by the courts. It is therefore unlikely that the judgments will lead to a very marked difference in approach in the future.
Samsung Electronics Co. Ltd and others v LG Display Co. Ltd and another  EWCA Civil 423
Samsung Electronics Co. Ltd and others v LG Display Co. Ltd and another  EWHC 1429 (Comm)
Originally published May 16, 2022
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