1.Some but Not All of the Defendants to These Actions Contend That This Court Lacks Jurisdiction Against Them

Mr. Justice Teare: 1.Some but not all of the Defendants to these actions contend that this Court lacks jurisdiction against them and, in the event that the Court has jurisdiction, contend that the proceedings commenced in this court should be stayed. Both the jurisdiction and the stay applications depend upon the application of the Judgments Regulation in the context of European competition law and multiple parties. 2.The claims in these actions arise out of and follow on a decision by the Commission of the European Communities dated 29 November 2006 in Case COMP/F/38.638 – Butadiene Rubber and Emulsion Styrene Butadiene Rubber (the "Commission Decision"). The Commission Decision found 13 companies (the "Addressees") guilty of an infringement of Article 81 of the EC Treaty in relation to the market for the supply of Butadiene Rubber ("BR") and Emulsion Styrene Butadiene Rubber ("ESBR"). 3.The Addressees were: Bayer AG ("Bayer"), The Dow Chemical Company, Dow Deutschland Inc, Dow Deutschland Anlagengesellschaft mbH, Dow Europe GmbH, (collectively "Dow") Eni SpA, Polimeri Europa SpA (collectively "Enichem"), Shell Petroleum NV, Shell Nederland BV, Shell Nederland Chemie BV (collectively "Shell"), Kaucuk a.s. and Unipetrol a.s. (collectively "Kaucuk") and Trade-Stomil Ltd ("Stomil"). 4.The Addressees were variously domiciled in Germany, the Netherlands, Italy, the Czech Republic, Switzerland and Poland. None was domiciled in England. 5.The Commission Decision held that the Addressees committed a "complex single and continuous infringement" of Article 81 of the Treaty by agreeing price targets for their products, sharing customers by non- aggression agreements and exchanging sensitive commercial information relating to prices, competitors and customers. In particular it was said that: i) The cartel took effect at least between 20 May 1996 and 28 November 2002. ii) The agreement was operated by a series of meetings, usually taking place "on the fringes" of the committee meetings of the European Synthetic Rubber Association ("ESRA"), in an informal setting before or after the official committee meetings. iii) ESRA meetings took place four times each year at various locations across Europe and the cartel meetings took place at the same locations. These locations included Milan, Vienna, Amsterdam, Brussels, Richmond- on-Thames, Frankfurt, Grosse Leder, and Prague. The cartel was ended at a meeting in London. 6.In considering the liability of particular companies the Commission said: "Concerning the principle of personal liability, Article 81 of the Treaty is addressed to "undertakings" which may comprise several legal entities. In this context the principle of personal liability is not breached so long as different legal entities are held liable on the basis of circumstances which pertain to their own role and their conduct within the same undertaking. In the case of parent companies, liability is established on the basis of their exercise of effective control on the commercial policy of the subsidiaries which are materially implicated by the facts. Under these circumstances, the principle of personal liability is not breached. References to different areas of law where the principle of autonomy of a subsidiary plays a different role (such as under corporate law) is not appropriate." 7.So far as concerns the impact of the cartel on the market the Commission said: "In this proceeding, it is not possible to measure the actual impact on the EEA market of the complex of arrangements of which the infringement consists and therefore the Commission does not rely specifically on a particular impact, in line with the Guidelines according to which the actual impact should be taken into account when it can be measured. The Court of First Instance has held that the Commission is not required precisely to demonstrate the actual impact of the cartel on the market and to quantify it, but may confine itself to estimates of the probability of such an effect. What can be said, in this case, is that with regard to the EEA, the cartel arrangements were implemented by the European producers and that such implementation did have an impact on the market, even if its actual effect is difficult to measure. Therefore, the Commission will not take into account the impact on the market in determining the applicable fines in this case." 8.The Commission Decision imposed fines on the Addressees. The fines were assessed by reference to the effective economic capacity of the offenders to cause damage to competition. For this purpose regard was had to the sales of BR and ESBR by each undertaking in the last full calendar year of the infringement. Enichem and Bayer were placed in the first category, Dow in the second category, Shell in the third, Kaucuk in the fourth and Stomil in the fifth. Regard was then had to the size of each undertaking (to ensure that the fine had a deterrent effect) by applying a multiplier to the basic fine. Shell had the largest multiplier applied. The fines were then adjusted to reflect the period of time each undertaking was party to the cartel. Aggravating factors (such as involvement in previous cartels) and mitigating factors (such as co-operation with the Commission) were considered. In the result Enichem received the largest fine of EUR 272.25 million, followed by Shell with a fine of EUR 160.875 million. Dow's fine was reduced by 40% to reflect the value of the evidence it supplied to the Commission of the cartel. In the result it was fined EUR 64.575 million. Bayer was granted immunity because it was the "whistle-blower". 9.In February 2007, the Addressees, with the exception of Bayer, lodged appeals against the Commission's Decision with the Court of First Instance of the European Communities ("CFI"). It is necessary to note the grounds of appeal submitted by Dow and Enichem. i) The Dow Chemical Company contends that it should not be held liable for the acts of its subsidiaries. The other Dow companies contend that the Commission identified too early a start date for the cartel and that the fine imposed on them was too high. Thus the Dow Defendants do not challenge the cartel's existence on their appeal. Nor do they challenge the participation of subsidiary companies in the Dow Group in that cartel. ii) Eni SpA contends that it should not be held liable for the acts of its subsidiaries. It also contends that the fine is too high. Polimeri Europa SA, a company in the Eni group, contends that the Commission made procedural errors in coming to its Decision, that the Commission's assessment of the market was unfair, that another company, and not it, was managing BR and ESBR, and that the fine imposed was too high. Thus Enichem does not challenge the existence of the cartel. 10.The appeals to the CFI were listed for hearing in October 2009. I was informed that decisions of the CFI can be expected some 6-9 months after the hearing of the appeal. Thereafter there may be a further appeal to the European Court of Justice which I was told might take 18-24 months. 11.On or around 29 July 2007, after receiving letters before action from the Milan office of S.J.Berwin LLP, Enichem commenced proceedings in Milan against 28 defendants, all of whom were companies in the Pirelli, Michelin, Continental, Goodyear, Bridgestone and Cooper groups. The relief claimed was as follows: "(i) to rule and declare the inexistence in the period between 20.5.1996 and 28.11.2002, of any agreement whatsoever and/or any other forbidden anti-competition practices (the so-called "cartel") between the producers of [BR] and [ESBR] addressed by the [Commission Decision]; (ii) in any case, to rule and declare that Eni SpA, Polimeri Europa SpA and Syndial SpA have never adopted forbidden anti-competition behaviour within the sphere of the alleged "cartel" referred to under (i); (iii) in any case, to rule and declare that the alleged "cartel" referred to under (i) had had no effect on the BR and ESBR prices and that, in any case, the subjects hereby summoned cannot complain of any damage consequent to the aforesaid "cartel"." 12.It is necessary to note two matters concerning the Italian proceedings: i) Although Enichem had not sought to appeal to the CFI on the basis that the cartel did not exist, Enichem sought a declaration from the Italian court that the cartel did not exist. ii) Enichem contends that those who bought BR or ESBR not only from it but also from other companies in the cartel suffered no loss. Thus Enichem invited the Italian court to consider whether the cartel as a whole, not just Enichem, had caused any damage to the tyre manufacturers who were made defendants to the Italian proceedings. 13.None of the defendants to the Italian proceedings issued a counterclaim seeking damages from Enichem for its breach of Article 81 though it is common ground that they could have done so. However, on 21 December 2007 26 Claimants drawn from the same groups of tyre manufacturers who were named as defendants to the Italian proceedings issued proceedings in England against 23 Defendants who were alleged to be part of the cartel. However, the disputes between the Claimants and the Shell Defendants (D1-6) have since been settled and so the remaining Defendants are the Bayer and Lanxess Defendants (D7-13), the Dow Defendants (D14-20), Trade-Stomil (D21) and Kaucuk (D22-23). 14.In relation to the Claimants in the English proceedings, it is to be noted that: i) Of the 26 companies included as Claimants in the English proceedings, 14 had been named as defendants in the Italian proceedings.

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