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Latham Secures Final Victory for Renesas

December 14, 2022
UK Supreme Court draws line under smart card chips cartel ruling.

Latham & Watkins secured yet another victory for Renesas Electronics Corporation, Renesas Electronics Europe Limited, and Renesas Electronics Europe GmbH (together Renesas), previous manufacturers and suppliers of smart card chips, in its successful defence against a follow-on damages claim for c. £400 million in connection with the European Commission’s Smart Card Chips cartel decision.

In September 2014, the European Commission (EC) found that between September 2003 and September 2005, certain Renesas entities and other addressees, infringed Article 101 of the Treaty on the Functioning of the European Union (and certain equivalent treaty provisions covering the European Economic Area) by coordinating prices and quotations for smart card chips. The EC imposed fines totaling approximately €138 million. In July 2019, 15 companies in the Gemalto group, which are active in the digital identity and security sector, brought damages claims against a number of the addressees, and two of their subsidiaries.

On 28 January 2022, the High Court found that Gemalto’s claims against the defendants were time-barred and should be dismissed. Mrs Justice Bacon held that by the time of the announcement of the Statement of Objections, taking account the other information available to it, Gemalto had sufficient material before it to be able to form a reasonable belief as to the essential elements of a claim for damages arising from the cartel without waiting for the EC’s decision, and that the limitation period had expired prior to the date on which Gemalto’s claim was brought in the present proceedings.

On 10 June 2022, the Court of Appeal ruled that the conclusion of the High Court was right, that the six-year statutory clock had expired, when it dismissed Gemalto’s follow-on claim against Infineon and Renesas in January. The Court also denied Gemalto permission to appeal to the Supreme Court against its ruling.

On 13 December 2022, the Supreme Court refused Gemalto’s application for permission to appeal because the application does not raise an arguable point of law. Gemalto was ordered to pay Renesas’ (and their co-defendant’s) costs. This is a significant decision for Renesas and brings the proceedings to an end subject to resolving the issue of costs.

The Latham team was led by London partner Oliver Browne and Düsseldorf partner Michael Esser, with London associates Hayley Pizzey, Shreya Ramesh, Anna Kullmann, and Amaryllis Bernitsa.