Cargolux loses bid to throw out compo claim over price fixing

Wednesday 21st November 2012

Cargolux Airlines International, which paid $6 million last year to settle its role in a global cargo cartel case, has lost a bid to throw out a compensation claim by a local flower exporter over its price-fixing on fuel and security surcharges.

In the High Court in Auckland, Associate Judge David Abbott last week dismissed an application to strike out NZ Bloom's compensation claim on the grounds the flower exporter had left its run too late. The Nov. 13 decision was published on the Justice Ministry's website.

The claim relates to $314,265 in costs NZ Bloom faced shipping flowers to Los Angeles between July 2004 and December 2006.

Cargolux sought to strike out the claim on the grounds that it was time-barred, saying it came from an agreement that was entered into more than 10 years ago, and that NZ Bloom should have discovered it more than three years before it filed the proceedings in November last year.

The judge said the onus was on Cargolux to prove the facts leading to the claim were discoverable before Nov. 2, 2008, and was unable to do so.

Cargolux claimed because the air cargo cartel had been reported on by media as early as 2006 and that NZ Bloom should have been aware of these as a small business "looking for opportunities for cost reductions or savings, particularly where there was a prospect that part of its costs might have been imposed unlawfully," the judgment said.

Judge Abbott disagreed, saying "I do not consider it appropriate to draw an inference of knowledge of the content of the reports merely from the fact that they appeared in a publication circulating generally in the area where the party is resident."

In the absence of clear facts as to when NZ Bloom should have become aware of the cartel, a trial was appropriate, he said.

"I am not persuaded that discovery was something that 'could well have happened'," the judge said. "I cannot be satisfied to the degree of certainty required that NZ Bloom's claim is definitely statute-barred."

The judge also didn't agree with Cargolux that the 10-year time-bar was appropriate, saying the carrier first started imposing the surcharge in July 2004, which is when time starts, rather than the signing of the original contract in 2001.

NZ Bloom was awarded costs and Cargolux has until Dec. 12 to file its statement of defence.

The alleged price-fixing has been the subject of antitrust process worldwide, with big settlements from multi-national airlines in Europe and the US Some of the alleged agreements appear to have been in place since 2001.

In 2006, air freight forwarding services in and out of New Zealand generated $450 million in revenue. New Zealand's Commerce Commission has settled with six airlines, which have paid an aggregate $21.4 million to the antitrust regulator.

BusinessDesk.co.nz

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