Asian shippers urged to join price-fixing case

PUBLISHED : Monday, 20 December, 2010, 12:00am
UPDATED : Monday, 20 December, 2010, 12:00am

Asian cargo owners, including firms in Hong Kong and on the mainland, which shipped airfreight to and from Europe up to four years ago are being encouraged to join a legal action that is seeking compensation from 11 airlines that colluded to fix fuel and security charges.

More than 300 shippers have already joined the action, which is being co-ordinated by Ireland's Claims Funding International. But any company that wants to join has just three months to sign up.

The total cost of airfreight charges paid by the 300 cargo owners to the airlines, which include Cathay Pacific Airways, was 4.3 billion (HK$44.5 billion), according to Peter Koutsoukis, the managing director of the Dublin-based company.

Lawyers are working out how much the shippers were overcharged.

The case was launched in September just before the European Commission last month imposed fines totalling Euro799 million against the 11 carriers, which also include Singapore Airlines, Japan Airlines and Qantas Airways, for price fixing between 1999 and 2006.

Koutsoukis said the action had been instituted at Amsterdam district court against three carriers - Air France, KLM and Martinair - that were among the airlines involved in the cartel.

He said while the case was not a class action, the experiences of a few of the shippers which used the services of the three airlines were being used as a precedent for the hundreds of other shippers.

Koutsoukis pointed out that although only three airlines had been selected, all 11 involved in the cartel were 'jointly and severally liable'. This meant if the shippers won compensation, the three airlines would have to pay damages to the other shippers, even though their cargo was carried by the other airlines in the cartel.

He thought this would be an unacceptable burden for the three carriers and the other airlines would pay a proportion of any damages.

Asked how much money was involved, Koutsoukis said a team, overseen by CFI, was still assessing how much the shippers were overcharged as a result of the cartel.

He said the Dutch court was bound by European rules to follow the decision of the commission. Therefore, as the airlines had already been fined for being cartelists, shippers did not have to prove the airlines were guilty of cartel behaviour. But, to be successful, they would have to prove the level of loss they suffered.

'We know our group spent 4.3 billion on airfreight with the airlines between December 1999 and February 2006. 'The question is how much they lost because of the price fixing. It is up to the court to decide.

Koutsoukis declined to name the 300 companies, but said by far the biggest users of airfreight were manufacturers and suppliers involved in the electronics, pharmaceutical, retail, part and fresh produce industries. They are thought to include electronics manufacturers Philips and Ericsson.

He confirmed some Asian companies re among those that ha signed up although most came from Britain, France, Belgium, Sweden, the Netherlands and Switzerland.

Explaining the March deadline, Koutsoukis said that was when the first court hearing in Amsterdam t place. A list of claimants ha to be finalised before that hearing.

'We have been told the court will not allow any amendments, he said

A special purpose company, Equilib, has been registered in France by CFI to represent shippers.

Koutsoukis said companies wanting to join the action ha to sign over their rights to Equilib on a no-win, no-fee basis.

If successful, we will be paid 27.5 per cent commission and the shippers will get72.5 per cent of the damageshe s. We are buying the rights and in the meantime, we carry all the risk as well as the risk of lossHe added that the European Union investigation was one of seven probes launched by jurisdictions around the world into price fixing on airfreight shipments by airlines. Other investigations ha been launched by the United States, Australia, New Zealand, South Korea, Britain and Canada.

SIA was fined US$48 million by the US justice department at the end of last month after pleading guilty to fixing rates for air cargo to and from the US between February 2002 and February 2006. This came less than a month after it was fined 74.4 million as one of the 11 carriers in the EC investigation.