COMPETITION COMMISSION v. ATAL BUILDING SERVICES ENGINEERING LTD AND OTHERS

CTEA 2/2022 and CTEA 2/2023

(HEARD TOGETHER)

[2024] HKCT 1

CTEA 2/2022

IN THE COMPETITION TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 2 OF 2022

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IN THE COMPETITION TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 2 OF 2023

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(HEARD TOGETHER)

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REASONS FOR DECISION

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1.  On 25 October 2023 I handed down my decision in respect of applications heard on 29 August 2023 in CTEA 2/2023 (“1^st Action”). The applications were for an order that a Kam Kwong application that had been made in the 1^st Action (although wrongly formulated as an order for a declaration and penalty by consent[1]) by the Commission and the 1^st Respondent (“ATAL”) be heard together with a similar application in CTEA 2/2022 (“2^nd Action”), although no such application had been issued and listed in the 2^nd Action before 29 August 2023. I determined that the applications in the 1^st Action and (necessarily when the requisite application was made) in the 2^nd Action, be heard at or immediately after the trial of the Actions or when all the Respondents had agreed that the Actions be determined by Kam Kwong applications for the reasons explained in my decision. The Commission seeks leave to appeal that decision along with directions to which ATAL and 5^th and 6^th Respondents (employees of ATAL) agree for the Kam Kwong applications in the 2^nd Action to be heard at the same time as the Kam Kwong applications to be made in the 1^st Action.

2.  I wrote to the Parties in both Actions on 18 September 2023 directing that as the Commission and ATAL sought one penalty of HK$150,000,000 be imposed in both the Actions that at the next CMC the following questions be addressed:

“2.1 Issue 1: whether one pecuniary penalty can be imposed in two proceedings;

2.2 Issue 2: if yes, the matters to be taken into account in determining the appropriate penalty;

2.3 Issue 3: when the pecuniary penalty in Action 1 should be determined (this matter was addressed in Action 2); and

2.4 Issue 4: whether the facts of the Actions make it appropriate for a single pecuniary penalty to be imposed.”

3.  It was apparent from ATAL’s skeleton that it understood that my concern was whether the Tribunal could properly give one composite judgment imposing one composite fine in two proceedings. At the hearing it was accepted by both the Commission and ATAL that this would not be appropriate, although the calculation of the penalties would need to be calculated so as to avoid unfairly imposing in each proceeding a penalty, which duplicated the penalty imposed in the other proceeding. This seems to me broadly correct. As a consequence, the 2^nd and 4^th questions did not require consideration.

4.  The 2^nd question is academic, because it is the same issue as that already determined in the 1^st Action and in respect of which leave to appeal is sought, namely, whether the Kam Kwong application in respect of ATAL should be determined at this stage or, as I have directed, at trial or, if all the Respondents reach agreement with the Commission, at that stage. For the same reasons it seems to me that the Kam Kwong Proceedings in the 2^nd Action should be dealt with after trial or if all the Respondents reach agreement with the Commission, at that stage. As I understand it the Commission and ATAL accept, unsurprisingly, that the Kam Kwong Applications should be dealt with together, whenever that may be. I refused to grant leave to appeal. The question of when a Kam Kwong application be determined is, in my view, clearly a matter of discretion and its determination ultimately a case management decision. There is no material point of law involved. The Commission simply wish to reargue the matter before the Court of Appeal.

5.  I also determined, on the 1^st Respondent’s application, that the Commission should disclose correspondence relating to cooperation agreements entered between two of ATAL’s employees and the Commission. Leave is also sought to appeal that decision (“Decision”). I also refused leave in respect of this application. It does not seem to me that it has been demonstrated that the appeal has a reasonable prospect of success or raises an issue on which in my view it would be helpful for the Court of Appeal to opine. However, I ordered an interim stay of my Decision until the determination of ATAL’s application to Court of Appeal.

6.  I will direct on the consent summons dated 18 August 2023 in CTEA 2/2023 and the summons dated 27 September 2023 in CTEA 2/2022 that the two proceedings be heard together with liberty to apply, and costs reserved. I will make no other directions until the Court of Appeal has determined the leave application in CTEA 2/2023 other than in respect of costs. In my view the vast majority of the time at the Case Management Conference involved dealing with the applications for leave to appeal and the questions I refer to in [2], which in the case of issue 1 seems from the lengthy submissions filed by the Commission to have been misunderstood by the Commission. I order that 80% of the costs in both proceedings be paid by the Commission; 20% be paid by the 1^st Respondent to the  3^rd to 7^th Respondents in CTEA 2/2022 and 2^nd to 5^th Respondents in CTEA 2/2023 with a certificate for two counsel.

CTEA 2/2022

CTEA 2/2023