This is a link to a short blog post  which looks at the interpretation of arbitral clauses and their applicability to antitrust disputes.

It provides a good overview of the law as it stands in Europe and the UK. Shortly: a typical arbitration clause will usually say that all disputes arising out of a contract should be subject to arbitration. Since “the parties likely intended any dispute (contractual or tortious) arising out of the relationship into which they have entered or purported to have entered to be decided by the same tribunal”, this could be interpreted as subjecting to arbitration any claims about over-pricing paid in the context of an agreement containing such a clause, even if the damage was caused by a cartel. However, the law is that competition law claims will be regarded as coming within an arbitration clause only if they are closely related factually to a viable contractual claim which has already been, or could be, made. This covers many situations, but not cartel damages, because “the undertaking which suffered the loss could not reasonably foresee such litigation at the time that it agreed to the jurisdiction clause” .

However, the reason why I’m linking this here is because it comments on a recent case which is great fun.  In short, Microsoft sued Sony for damages in relation to the pricing of Li-Ion batteries that Sony supplied to Microsoft (and Sony was part to a cartel of Li-Ion batteries). Sony argued that the dispute should be subject to arbitration and not the civil courts because all the allegedly cartelised supplies by Sony had been provided to Microsoft pursuant to an agreement with an arbitration clause requiring that “any disputes related to this Agreement or its enforcement” should be arbitrated (I have no idea what advantage Sony sought to gain from this). To establish that the claim for damages was related to the agreement, Sony advanced an argument against itself that Microsoft had not advanced: Sony argued that, because the contractual prices had been subject to an express obligation that they be negotiated in good faith, and because Sony was subject to a further obligation to disclose events that reasonably may affect its ability “to meet any of its obligations” under the agreement, the operation of a cartel not only gave rise to tortious liability but was also a clear breach of contract. The Court accepted this submission, holding that it was “very difficult” to see how Sony could have engaged in the conduct complained of in the claim for damages without also breaching the contract.  On that basis, the competition law claims fell within the arbitration clause. This, my friends, is quality lawyering. Kudos.

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