May 8, 2023

Competition Appeals Tribunal denies request to strike claims against defendant in car safety equipment case

The UK Competition Appeal Tribunal recently refused a request for summary judgment and to strike claims against Tokai Rika Co, LTD, a Japan-based seatbelt supplier and one of eleven defendants in a follow-on damages suit in connection with the supply of car safety equipment.  The suit for damages was brought by a group of car manufacturers following settlements reached, in 2017 and 2019, between the defendants and the European Commission in which Tokai Rika and other defendants admitted that they colluded on prices and the allocation of the supply of seatbelts to Toyota, in violation of Article 101 of the Treaty on the Functioning of the EU and Article 53 of the Agreement on the European Economic Area.  Tokai Rika was also similarly accused of collusion involving the sale of seatbelts to Suzuki.

Despite its admissions, Tokai Rika argued that the European Commission’s decision, which was submitted as part of the Claimants’ pleadings, failed to reference Tokai Rika in certain statements related to the inference of collusion and alleged that further disclosures would not enable the Claimants make this inference.  Tokai Rika also claimed that there was no evidence to show a causal link between the collusion at issue and any damage or loss suffered by the Claimants.  In its application, Tokai Rika also made reference to certain communications made in the Re-Amended Particulars of Claim (“RAPC”) released following the preliminary disclosure of the Commission’s file on this matter, in which the Tribunal acknowledged that the Claimants might face certain evidentiary challenges in proving causation and damages and also made assertions that “umbrella damages” such as those made by the Claimants needed to be properly particularized to be sustainable at trial.  The court ultimately decided not to strike the claims against Tokai Rika reasoning that the company’s wrongdoing may become more apparent and refined with additional discovery.  The Tribunal also wanted to give Claimants an opportunity to plead its claim for “umbrella damages” with proper particulars.

As a result of the ruling, Tokai Rika may be forced to disclose documents that it produced to competition authorities in US, Brazil and South Africa as well as financial documents related to the volume of commerce, initial contract prices, price amendments, and manufacturing costs.  The trial for this case is currently scheduled for October 1, 2024.

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