Anchor defendants in follow-up competition law cases. The ECJ confirms AG’s view on joinders. Sticks to Article 5(3 /7(1). Locus damni for purely economic loss = registered office.

In Case C-352/13 CDC, in which the ECJ held last week, at issue is among others the use of Article 6(1) of the Brussels I-Regulation (8(1) in the recast) when the claim against the anchor defendant has been settled before the trial is well and truly underway.

I reviewed JÄÄSKINEN AG’s opinion here.  The ECJ’s overall approach to Article 6 is not to take into account the subjective intentions of plaintiff, who often identify a suitable anchor defendant even if is not the intended target of their action. Like its AG, the Court does make exception for one particular occasion, namely if it is found that, at the time the proceedings were instituted, the applicant and that defendant had colluded to artificially fulfil, or prolong the fulfilment of, Article 6’s applicability. I had expressed reservation vis-a-vis this suggestion, obviously in vain. In cases such as these, where tort is already clearly established (via the European Commission’s cartel finding), the intention of ECJ and AG seem noble. Collusion to defraud is disciplined by the non-applicability of Article 6. However this arguably serves the interests of the parties guilty of the other type of collusion involved: that of defrauding not procedural predictability, but rather consumers’ interest. 

Next, the referring court enquired about the application of Article 5(3)’s special jurisdictional rule in the event of infringement of competition law, where that infringement concerns a complex horizontal agreement, spread over a long period of time, and with varying impact in various markets. The AG had suggested dropping application of Article 5(3) (now 7(1)) altogether, both with respect to locus delicti commissi and locus damni. Here the Court disagreed. Difficult as it may be, it is not to be excluded that locus delicti commissi can be established. At 50: one cannot rule out ‘the identification, in the jurisdiction of the court seised of the matter, of a specific event during which either that cartel was definitively concluded or one agreement in particular was made which was the sole causal event giving rise to the loss allegedly inflicted on a buyer.’

For locus damni, the Court again has no sympathy for either mozaik effect of Article 5(3), or indeed the often great difficulties in establishing locus damni, flagged by the AG. At 52: ‘As for loss consisting in additional costs incurred because of artificially high prices, such as the price of the hydrogen peroxide supplied by the cartel at issue in the main proceedings, that place is identifiable only for each alleged victim taken individually and is located, in general, at that victim’s registered office.

Registered office as the locus damni for purely economic loss, lest my memory fails me, has not been as such confirmed by the ECJ before. It is also currently pending in Universal. The Court is in my view a bit radical when it comes to justifying registered office as the Erfolgfort: at 53: ‘That place fully guarantees the efficacious conduct of potential proceedings, given that the assessment of a claim for damages for loss allegedly inflicted upon a specific undertaking as a result of an unlawful cartel, as already found by the Commission in a binding decision, essentially depends on factors specifically relating to the situation of that undertaking. In those circumstances, the courts in whose jurisdiction that undertaking has its registered office are manifestly best suited to adjudicate such a claim.

Finally, on the issue of choice of court in the agreements between the victims of the cartel, and those guilty of the cartel, the Court follows the AG’s lead. Such clauses are not generally applicable to liability in tort (the clause would have to refer verbatim to tortious liability). Neither do they in principle bind third parties, lest of course there be subrogration (Refcomp). (The referring national court has given very little detail on the clauses at issue and hence the ECJ notes that it could not reply to all questions referred).

In the end, it is the finding with respect to economic loss for which the judgment may be most remembered.

Geert.

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