On 28 February 2017 UK High Court judge Mr Justice Marcus Smith handed down a judgment in Microsoft Mobile’s damages claim against participants in a lithium ion battery cartel.4
Microsoft Mobile (a wholly owned subsidiary of Microsoft Corporation) filed the claim in the High Court in September 2015. It brought the proceedings in its own right and as assignee of the rights of Nokia Corporation, whose mobile devices business the Microsoft group of companies acquired in September 2013. Microsoft Mobile and Nokia manufacture and distribute mobile telephones, which contain lithium ion batteries.
Microsoft Mobile claimed damages for loss allegedly caused by anti-competitive conduct between 1999 and 2011 by four suppliers of lithium ion batteries: Sony Europe Limited, Sony Corporation, LG Chem Limited and Samsung SDI Co Limited.5
Sony Europe sought a stay of the proceedings against it on the basis that an arbitration clause subsisting between it and Nokia is unaffected by the assignment of Nokia’s rights to Microsoft Mobile and that the arbitration clause is sufficiently wide to catch the current proceedings.
Mr Justice Smith agreed with this analysis, ruling that Microsoft Mobile must seek to resolve the dispute through arbitration before proceeding with a damages suit.6 He rejected Microsoft Mobile’s contention that the arbitration clause should be disregarded as incompatible with its rights as a damages claimant under EU competition law.
He further reasoned that it did not matter that Microsoft Mobile’s claim was grounded in competition law torts rather than contractual breach, otherwise “it would be easy for a claimant to circumvent the scope of an arbitration or jurisdiction clause by selectively pleading or not pleading certain causes of action. It would be an extraordinary outcome were a claimant successfully to be able to contend that, because a contractual claim had not been pleaded, a “parallel” claim in tort arising out of exactly the same facts and with a scope defined by that contract fell outside the scope of such a provision”.7
As regards the other defendants,8 the court ruled that it had no jurisdiction to hear the claim against them. Mr Justice Smith found that, taking into account his findings on the effect of the arbitration clause, Microsoft Mobile had not demonstrated sufficient evidence to draw the dispute away from its apparent centre in Asia, where the defendants are based.