OT Computers Ltd V Infineon Technologies AG

• Published date: 25 May 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Trials & Appeals & Compensation
• Law Firm: Moon Beever
• Author: Frances Coulson

The decision of the Court of Appeal in OT Computers Ltd v Infineon Technologies AG [2021] EWCA Civ 501 does not give an insolvency practitioner a free pass as regards limitation, but it does give him or her a sporting chance.

The company had, it was alleged, been a victim of a cartel. This only emerged in 2002, shortly after it went into administration. Foxton J ([2020] EWHC 415 (Comm) held that the existence of the cartel could not with reasonable diligence have been discovered by the company, so that time did not run for limitation purposes until it was discovered or could have been discovered by a reasonably diligent insolvency practitioner. The company's position, he held, differed from that of other claimants who were also victims of the cartel but who were still in business when the facts began to emerge, so their claims were time-barred. The judge gave permission to appeal, which was duly made, the appellants contending that he had been wrong in taking into account the company's insolvency in considering whether it could have discovered enough about the existence of the cartel to enable it to bring proceedings.

Males LJ identified the issue before the court thus:

"This appeal is concerned with the words 'until the plaintiff has discovered the ... concealment ... or could with reasonable diligence have discovered it' in section 32(1) of the Limitation Act 1980. Specifically, how does that section apply when the defendant deliberately conceals a relevant fact so that (1) it cannot reasonably be discovered by the claimant at the time of the concealment, (2) by the time it could be discovered by a person carrying on business of the relevant kind (here, the assembly and sale of computers), the claimant is in administration, and (3) the matters which would have put a person who continued to carry on such a business on notice of the need for further enquiry would not have come to the notice of a reasonably diligent insolvency practitioner?"

The question, he said, raised a new point by reason of the fact that the company had been carrying on business at the time when the wrong was committed but had ceased to do so by the time the fact of it had begun to emerge. That was a situation that had not been covered by the substantial body of case law on limitation, nor was it contemplated when Paragon Finance plc v DB Thakerart & Co was decided or by any of the later cases in which the approach in Paragon had been applied. Thus, Males LJ felt able to say,

"To...