The claims in question follow on from the European Commission’s Settlement Decision dated 19 May 2010 in respect of the DRAM memory chips cartel (the Decision). The claimants are companies within the Granville Technology Group, a British computer retailer and manufacturer, and were all in liquidation at the time of filing. The defendants are Infineon Technologies and Micron Europe, two of the Decision’s addressees.
The High Court judgment
We wrote about the High Court judgment in our blog last year. By way of reminder, the High Court ruled that the claims brought by two of the three claimants were time-barred. Those two claimants were put on notice of certain facts which should have led them to further investigate by 2005, but the claimants waited until May 2016, exactly 6 years after the Decision was issued, to file proceedings. The third claimant, OT Computers Limited (OTC), had ceased trading and was in administration at the time when the same facts began to emerge. It followed, the High Court said, that OTC could not have discovered, with reasonable diligence, the facts of the cartel sufficient for it to plead a viable claim. OTC was therefore in time to make its claim, as limitation only started to run at the date of the Decision.
The Court of Appeal judgment
Section 32(1)(b) Limitation Act 1980 provides that in circumstances where any facts relevant to the right of action have been concealed by the defendant, the limitation period does not begin to run until the claimant has discovered the concealment or “could with reasonable diligence have discovered it”. On appeal, the defendants argued that in order to ascertain whether OTC could have discovered the facts of the cartel (with reference to section 32(1)(b)), the High Court had to assume that OTC was still trading.
Below, we summarise the key points arising from the judgment:
- The CoA emphasised the purpose of section 32(1)(b) which is to ensure that the claimant is not disadvantaged as far as limitation is concerned by reason of not being aware of facts giving rise to the claimant’s cause of auction. In other words, the purpose is to avoid unfairness to the claimant.
- The CoA made clear that the question as to whether the claimant could with reasonable diligence have discovered certain facts depends on the context in which the issue arises and the particular circumstances of the claimant. Whilst the test is an objective one, it refers to the actual claimant in each case, not to a hypothetical claimant. The question relevant to the diligence test is, as the High Court stated, not what the claimant should have discovered, but whether it could have done so with exercise of reasonable diligence.
- The formulation of the two-staged, reasonable diligence test established in case law, and which was adopted by the High Court, is: (i) whether there is something to put the claimant on notice that further investigation is required; and (ii) what a reasonably diligent investigation would then reveal. The CoA clarified that it is more accurate to consider the test as being concerned with reasonable diligence throughout, with the first stage requiring the claimant to be attentive in the way that it can learn what a person exercising reasonable diligence could learn.
- The CoA found that there was no requirement for the court to assume that a company in administration was still trading for the purposes of the reasonable diligence test. It is not relevant that OTC was carrying on business at the time it suffered harm. At the time when the facts which would have alerted it to further investigation started to emerge, OTC was in administration and had sold its business and assets - it had no remaining officers or employees other than the administrators.
Practical implications going forward
The CoA judgment is a welcome restatement and clarification of the case law on the test for reasonable diligence for the purposes of section 32(1)(b) Limitation Act 1980.
Whilst this judgment will bring some comfort to insolvent companies in circumstances similar to OTC’s, it is important to note that the mere fact that the company had gone into administration by the time the facts indicating it should investigate further surfaced does not mean it is automatically entitled to wait until the outcome of a competition investigation is known. The CoA indicated that the conclusion on limitation may well have been different if for example, OTC’s administrators had still been trying to rescue the company at the relevant time.
More broadly, as stated in our blog post last year, the limitation issues faced by the claimants in Granville v Infineon are a useful reminder that claimants should not wait until the publication of the competition authority’s decision to bring a claim in circumstances where a claimant might have sufficient knowledge of the relevant conduct earlier.
 OT Computers Limited (In Liquidation) v Infineon Technologies AG, Micron Europe Limited  EWCA Civ 501