Akzo Nobel N.V. v Competition Commission & Ors
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE RICHARDS
- LORD JUSTICE BRIGGS
Areas of Law
- Competition Law
- Corporate Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
The case concerned Akzo Nobel's appeal against a Competition Commission enforcement order prohibiting its share acquisition due to substantial lessening of competition in the UK. The Court of Appeal upheld that Akzo Nobel was carrying on business in the UK through centralized management. Key legal principles established include the scope of 'carrying on business' for jurisdictional purposes.
Judgment
Lord Justice Briggs :
This appeal from the Competition Appeal Tribunal raises questions of interpretation and application to particular facts of Section 86(1) of the Enterprise Act 2002 (“the Act”). Section 86(1) seeks to identify the circumstances in which an enforcement order made under Chapter 4 of the Act may extend to conduct outside the United Kingdom. It provides as follows:
“(1) An enforcement order may extend to a person’s conduct outside the United Kingdom if (and only if) he is –
a United Kingdom national;
a body incorporated under the law of the United Kingdom or of any part of the United Kingdom; or
a person carrying on business in the United Kingdom.”
The enforcement order in issue in these proceedings was one which the Competition Commission proposed to make (in the absence of receiving satisfactory undertakings) to prohibit completion of the indirect acquisition by Akzo Nobel N.V. (“Akzo Nobel”) of 51% of the shares of Metlac Holding S.R.L. (“Metlac Holding”), following an investigation of the proposed transaction by the Commission, on a reference by the Office of Fair Trading, and a report by the Commission dated 21 st December 2012 (“the Report”). In bare outline the Commission concluded that the proposed transaction would, if carried into effect, result in the creation of a relevant merger situation which might be expected to result in a substantial lessening of competition (“SLC”) within the United Kingdom market for the supply of metal packaging coatings for beer and beverages (“B&B”): see Section 36(1) of the Act. Having decided that this would give rise to an anti-competitive outcome within the meaning of Section 36(2), the Commission concluded in its Report that the only remedy likely to be effective was prohibition of the transaction.
Akzo Nobel is incorporated in the Netherlands. Metlac Holding is incorporated in Italy. The proposed share acquisition arose from the exercise of an option to purchase the 51% shareholding held by Akzo Nobel’s wholly-owned subsidiary Akzo Nobel Coatings International BV (“ANCI”), also incorporated in the Netherlands, which had been granted by members of the Italian Bocchio family. ANCI already owned the remaining 49% of the shares of Metlac Holding. Completion of the transaction triggered by the exercise of the option would not involve any conduct within the United Kingdom by any of the parties to that transaction.
The Akzo Nobel Group of companies, of which Akzo Nobel is the ultimat