Jurisdictional Issues in International Cartel Cases: A Canadian Perspective

AuthorDonald B. Houston and Jeanne L. Pratt
Donald B. Houston and Jeanne L. Pratt*
In most industries, competition is increasingly global in scope, no longer
localized to one region, state, or country. Although borders have become
increasingly irrelevant in business, they raise important jurisdictional
issues in the enforcement of competition laws, both in criminal and civil
proceedings. International cartel activity presents challenging issues for
alleged cartel participants, enforcement authorities, and plaintiffs suing
to recover damages.
With respect to private actions in particular, jurisdictional issues
raised by a claim for damages allegedly suffered as a result of interna-
tional cartel activity can permeate every stage of an action, from service
of the claim to enforcement of any judgment or award of costs. For defen-
dants, jurisdictional challenges may be an important option to consider
in a defence strategy. For plaintiffs, overcoming the difficulties of having
a claim certified, proceeding through trial, and enforcing a judgment
against a defendant with no ties to Canada can present a challenging
1) Civil Actions Brought Pursuant to Section 36 of the
Competition Act
In Canada, private actions brought by persons who have been harmed
by the anti-competitive conduct of others are available as a means of pri-
* Both of Fraser Milner Casgrain LLP, Toronto.
vate enforcement of competition laws. Section 36 of the Competition Act1
grants a right of private action with respect to conduct that is contrary to
the criminal provisions of the statute, allowing a plaintiff to sue to recover
damages. Claims brought pursuant to section 36 must be issued within
two years of the date of the completion of criminal proceedings or the last
date on which the conduct was engaged in, whichever is later.
For conspiracy claims, the most relevant criminal provisions of the
Competition Act are sections 45 and 46. Under section 45 everyone “who
conspires, combines, agrees or arranges with another person” to prevent
or lessen competition “unduly” is guilty of an indictable offence and
subject to criminal penalties. Under section 46 a corporation carrying
on business in Canada that implements a foreign conspiracy in Canada,
regardless of whether it has knowledge of the foreign conspiracy, is guilty
of an indictable offence and subject to criminal penalties. Section 36
allows persons who have suffered harm as a result of such conspiracies
to bring civil damage claims in the courts. Where one or more defendants
in a section 36 action has pleaded guilty to an offence under the statute,
the “record of proceedings” may be used in the subsequent civil action
against that defendant as proof that it engaged in conduct contrary to the
statute’s criminal provisions.2 In addition, any admissions made in the
criminal proceedings are admissible as evidence in the subsequent civil
Unlike in private antitrust claims in the United States, there is no pro-
vision for treble damages in Canada. In a section 36 action, the plaintiff
must suffer quantifiable harm and must prove its actual loss at trial. The
plaintiff may only recover the amount of its actual losses plus the costs of
pursuing the legal action, including the costs of investigating the matter
and the costs of court proceedings.4 In addition to the statutory claim,
a plaintiff may (and generally does) allege common law tortious activ-
ity, such as civil conspiracy or intentional interference with economic
relations. A plaintiff may also claim punitive damages, provided that
common law tortious activity is proven in addition to a section 36 claim.
However, the threshold for an award of punitive damages is high. They
may only be awarded where there is evidence of egregious, high-handed
conduct on the part of the defendants.5
1 R.S.C. 1985, c. C-34.
2 Ibid. at s. 36(2).
3 Ibid.
4 Ibid. at s. 36(1).
5 Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130.

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