Tech

UK Court of Appeal rules Tiny Computers’ legal remains can sue Micron and Infineon over 2002 DRAM price-fixing cartel

The legal remains of one-time PC maker Tiny Computers can sue RAM manufacturers Micron and Infineon for damages over a 2002 price-fixing cartel, the UK Court of Appeal has ruled.

The case resurrects some ancient brand names from British computing history as well as some decidedly dodgy doings by DRAM dealers during the 2000s.

Earlier this month the Court of Appeal ruled that liquidators from Grant Thornton were entitled to sue Infineon and Micron for damages over a RAM price-fixing cartel that first came to light in 2004 and was smashed for good in 2010.

Back in the mists of time, Tiny assembled PCs in the UK. The company went into receivership in 2002 before being rescued by a rival from the Granville Technology Group. Granville itself went under a few years later.*

All is fair in love, war and business, you might think. But no: in 2010 the European Commission announced that 10 memory chip makers had been running a global price-fixing cartel between 1998 and 2002. The political bloc fined these companies a few hundred million for their sins. Among them were Micron (which grassed up the others and had its fine zeroed as a result) and Infineon.

Grant Thornton, liquidator of a Granville company called OT Computers Ltd, spotted an opportunity. One day before the six-year statute of limitations ran out, it filed a High Court claim against Infineon and Micron, claiming damages for the harm caused by the cartel.

Unwilling to stump up without a fight, both RAM makers said Grant Thornton’s case was brought too late. The statute of limitations, they said, started running in 2002 when the cartel ended – and not in 2010 when the EU made its announcement about fines.

Last year High Court judge Mr Justice Foxton ruled that while OT Computers could sue, two of its sister firms (Granville Technology Group Ltd and VMT Ltd) couldn’t, because both companies knew about the cartel thanks to news reports in 2004 of a US Department of Justice investigation. They were therefore far too late in filing court cases in 2015. OT, however, “ceased trading nearly 6 months before any reports of the DOJ investigation began circulating” – meaning that, legally, its liquidators didn’t know about the investigation until the EU’s 2010 announcement.

Fraud, concealment, or mistake

Infineon and Micron appealed, asking the court to rule on the meaning of section 32(1) of the Limitation Act 1980: the words “until the plaintiff has discovered the… concealment… or could with reasonable diligence have discovered it” were key, they said. OT Computers’ insolvency was irrelevant, the two companies argued, because the liquidators knew about the cartel before they formally took control of the dead company.

Lord Justice Males disagreed, ruling this month: “I conclude that there is nothing in the language of section 32 which requires the claimant to be treated as if it were still carrying on business at the time when facts concerning the wrongdoing begin to emerge and that achieving the purpose of the section does not require any such assumption to be made.”

The judge explained his conclusion by saying that in this case, OTC “could not have discovered that it was suffering loss as a result of purchasing DRAM at artificially inflated prices between 1998 and 2002 when it was still in business.”

Having gone under two years before any public hint of an investigation into the DRAM cartel was made, OTC simply could not have known – and until the EU announcement in 2010 there was no reason for the insolvent company, which obviously wasn’t active or trading, to have known or had anything come to its notice.

In a legal blog post about the case, Frances Coulson, of Moon Beever solicitors, opined: “The message for the cautious IP (insolvency practitioner) is to get on and investigate the affairs of any company in respect of which he or she is appointed as soon as possible so as to uncover what may have been carefully concealed. That is easier said than done: it is hard to investigate when one does not necessarily know what one is looking for.”

The odds of anyone other than OT Computers’ creditors and liquidators securing a payout as a result of the judgment are vanishingly small. Nonetheless, the case shows how the ghosts of British IT companies from the past still linger around us today. ®

Bootnote

* The rescue was short-lived; Granville collapsed in 2005 owing around £50m in total of which £19m was due to HSBC alone, though the later collapse isn’t relevant for this story. Time Computers, another Granville property, shut up shop in July that year.


Source link

Related Articles

Back to top button