National Grid Electricity Transmission Plc v ABB Ltd & Ors

Factual and Procedural Background

This case arises from a large-scale follow-on damages action for breach of competition rules under Article 101 of the Treaty on the Functioning of the European Union ("TFEU"). The claim follows a European Commission decision concerning a cartel involving the supply of Gas Insulated Switchgear ("GIS"), heavy electrical equipment used in power substations. The Commission's decision, issued in 2007, found 20 companies engaged in a cartel lasting approximately 16 years, imposing fines exceeding 750 million Euros.

The Plaintiff alleges substantial losses from overcharges caused by the cartel, listing 46 projects with expenditures near 550 million Euros. Damages depend on complex economic analysis of overcharges and pass-through to customers. The claim involves 22 defendants grouped into four corporate groups, referred to by the parent company names: ABB, Siemens, Alstom-Grid, and Areva. Some defendants were directly addressed in the Commission decision; others are subsidiaries.

The proceedings began in November 2008. Some defendants appealed the Commission decision to the General Court, delaying early proceedings, though a complete stay was declined. Appeals to the General Court were dismissed except for minor issues. Further appeals to the European Court of Justice ("ECJ") are pending, with trial fixed for June 2014, anticipating resolution of ECJ appeals. Disclosure has proceeded in stages under court orders.

Legal Issues Presented

1. Whether the court should order disclosure from French defendants despite the French blocking statute (French law No 68-678 of 26 July 1968), which prohibits communication of certain documents to foreign judicial proceedings and carries criminal penalties.
2. Whether the EU Evidence Regulation (Regulation 1206/2001) provides an alternative and appropriate procedure for obtaining evidence from French defendants.
3. The appropriate exercise of the court’s discretion in ordering disclosure when foreign law prohibits such disclosure.
4. The assessment of the risk of prosecution under the French blocking statute if disclosure is ordered.

Arguments of the Parties

Appellant's Arguments (Plaintiff)

• The court should exercise its discretion to order disclosure despite the French blocking statute, as the risk of prosecution under that statute is minimal or theoretical in this case.
• The direct route under the EU Evidence Regulation is not appropriate for ordinary disclosure between parties and has already failed due to refusal by French authorities.
• Delay caused by attempts to use the EU Evidence Regulation should be avoided to allow timely trial preparation.

Appellees' Arguments (French Defendants)

• Compliance with disclosure orders would violate the French blocking statute, exposing them to criminal penalties.
• The court should use the court-to-court route under the EU Evidence Regulation, requesting the French court to order disclosure, thus avoiding risk of prosecution.
• The direct route under the EU Evidence Regulation is preferable and has been used in other litigation to facilitate disclosure.
• Previous English cases involving the blocking statute are distinguishable due to the existence of the EU Evidence Regulation and recent prosecutions.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the complexity of calculating cartel overcharges and the critical importance of disclosure to enable expert economic analysis. The French blocking statute, which prohibits communication of certain documents for foreign judicial proceedings under threat of criminal penalties, posed a significant obstacle to disclosure from the French defendants.

The court reviewed prior English case law concerning the blocking statute, noting that historically the risk of prosecution has been regarded as low or theoretical, with only one known prosecution involving deception and no court order. The court carefully considered expert reports from distinguished French legal experts with sharply divergent views on the statute’s application and the likelihood of prosecution.

Despite the expert disagreement, the court assumed for argument’s sake that disclosure would violate the blocking statute but emphasized that the critical issue was the likelihood of actual prosecution. The court found the opinion predicting prosecution unpersuasive, highlighting factors such as the discretion of the French Public Prosecutor, the public policy context, and the absence of prosecutions over several decades despite frequent compliance by French companies with English disclosure orders.

The court also considered the EU Evidence Regulation, which provides two routes for obtaining evidence from other Member States: a court-to-court route and a direct route. The direct route had been unsuccessfully attempted here, with the French Ministry of Justice refusing requests on the basis that the procedure improperly delegated evidence-taking responsibility to a party rather than judicial personnel.

The court held that the EU Evidence Regulation does not govern ordinary disclosure between parties, which is a procedural matter under the lex fori (English law). The cited ECJ decisions confirmed that national courts retain discretion to use their own procedural rules rather than the Regulation’s mechanisms. The court found that further attempts to use the Regulation would cause delay and uncertainty, especially since the French courts might reject such requests as inappropriate.

Balancing these factors, the court concluded that the French defendants should be subject to the same disclosure obligations as other defendants, as the risk of prosecution under the blocking statute is at most theoretical and outweighed by the interests of justice and EU competition law policy.

Holding and Implications

The court's final decision was as follows:

• The Plaintiff's application for disclosure against the French Defendants is granted.
• The applications by the French Defendants to require the court to make a request to the French court for disclosure under the court-to-court route of the EU Evidence Regulation are refused.

The immediate effect is that the French Defendants must comply with disclosure orders directly under English procedural rules, without recourse to the EU Evidence Regulation’s court-to-court mechanism. This decision removes procedural delay and uncertainty, facilitating the progression of the case to trial. The court explicitly rejected the argument that the French blocking statute should prevent disclosure, finding the risk of prosecution negligible. No new legal precedent was established beyond the application of established principles to the specific facts.