Posts Tagged Article 101 TFEU

Office Depot v Holdham et al. Lis alibi pendens in follow-on cartel damages suit. Delay in the Swedish proceedings crucial factor in High Court’s rejection of a stay

in [2019] EWHC 2115 (Ch) Office Depot BV et al v Holdham SA et al, the High Court in August (I had promised posting soon after the Tweet. That did not quite happen) held on issues of lis alibi pendens (and, alternatively, a stay on case management grounds) in a follow-on cartel damages suit arising from the European Commission’s cartel finding in the envelopes market. That’s right: envelopes. Cartel cases do not always involve sexy markets. But I digress (and I also confess to finding stationary quite exciting).

Sir Geoffrey Vos’ judgment deals with the fate of the Office Depot claimants’ follow-on proceedings in England against certain Bong (of Sweden) corporate defendants, after the Bong parties had commenced Swedish proceedings for negative declarations as to their liability. In March 2019 the relevant Swedish court said in effect that Article 8 Brussel I a was not engaged so that the Swedish Bong proceedings for negative declarations could only proceed against the locally domiciled Office Depot company, which was Office Depot Svenska AB, but not the non-Swedish Office Depot entities. Parties at the time of Sir Geoffrey’s decision (Swedish followers may be able to enlighten us on whether there has been a decision in the meantime; at 23 the expected date is mentioned as ‘the autumn’) were awaiting a certiorari decision by the Swedish Supreme Court.

CJEU C–406/92 The Tatry of course is discussed, as is CDC. Sir Geoffrey also discussed C-129/92 Owens Bank, in particular Lenz AG’s Opinion (the CJEU did not get to the part of the Opinion relevant to current case). Discussion between the parties, at Sir Geoffrey’s request, focused on the issue of the judge’s discretion under lis alibi pendens for related actions, rather than on whether or not the actions are related (it was more or less accepted they are; see ia at 43 ff).

At 46 ff the Court then exercises its discretion and finds against a stay, on the basis in particular of the expected length of the Swedish proceedings: at 54: ‘the grant of a stay would be contrary to justice in that it would delay unreasonably the resolution of proceedings that can only be tried in England and already relate to events many years ago‘, and at 48: ‘The stage in the Swedish proceedings is a long way behind these. It will be between one and two and a half years before jurisdiction is resolved there, two courts already having refused jurisdiction. It will be perhaps between three and five years before the substantive litigation in Sweden is resolved, if it ever gets off the ground.

Swedish courts do not tend to get used for torpedo actions. Yet the swiftness of English court proceedings yet again comes in to save the day (or indeed, scupper the stay).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

 

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Disciplining abuse of anchor defendants in follow-up competition law cases exceedingly difficult. Borgarting Court of Appeal (Norway) applies CDC in Posten /Bring v Volvo.

After the French Cour de Cassation in MJI v Apple Sales, the Brussels Court of Appeal in FIFA/UEFA, and the Court at Amsterdam in Kemira, (as well as other courts undoubtedly, too; and I have highlighted more cases on the blog), Ørjan Salvesen Haukaas has now reported an application of CDC in a decision of December 2018 by a Norwegian Court of appeal, LB-2018-136341 Posten /Bring v Volvo. The court evidently applies Lugano (Article 6), not Brussels Ia, yet the provision  is materially identical.

Norwegian and foreign companies in the Posten/Bring group (mail services) had sued companies in the Volvo group for alleged losses incurred when purchasing trucks from Volvo after certain companies in the Volvo group had been fined for participating in a price-fixing cartel. Posten/Bring also sued a Norwegian company in the Volvo group, which had not been fined for participating in the price-fixing cartel.

Borgarting Court of Appeal held that Norwegian courts have jurisdiction pursuant to Article 6(1) Lugano even if the anchor defendant is sued merely to obtain Norwegian jurisdiction. The court solely had to determine whether the claims were so closely connected that there was a risk of irreconcilable judgments, in the absence of any suggested collusion between the anchor defendant and claimants per CDC.

Geert.

(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1.

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Anchor defendants in follow-up competition law cases. The High Court in Vattenfall et al v Prysmian et al.

Thank you Brick Court and Stewarts, among other, for flagging [2018] EWHC 1964 (Ch) Vattenfall et al v Prysmian et al in which the High Court dismissed a call for summary judgment on the grounds of lack of jurisdiction.

A classic case of follow-up damages litigation in competition law, here in the high voltage power cables cartel, fines for which were confirmed by the CJEU early July. Core to the case is the application of Article 8(1)’s anchor defendants mechanism. Only two of the defendants are UK incorporated companies – UK subsidiaries of companies that have been found by the European Commission to have infringed EU competition law.

Authority cited includes of course CDC, Roche Nederland and Painer, and Cooper Tyre (sale of the cartelised products can amount to implementation of the cartel). Vattenfall confirms that for the English courts, ‘knowingly implementing’ the cartel has a low threshold.

At 89 ff the Court refers to the pending case of (what I now know to be) C-724/17 Skanska Industrial Solutions e.a.: Finnish Courts are considering the application for cartel damages against parent companies on acquiring cartelist subsidiaries, had dissolved them. Relevance for Vattenfall lies with the issue of knowledge: the Finnish courts wonder what Article 101 TFEU has to say on the degree of knowledge of the cartelist activities, relevant for the liability of the parent company. An application of fraus, or abuse in other words. Elleray DJ however, did not consider the outcome of that reference to be relevant for the case at hand, in its current stage of procedure.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

 

 

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EU competition law in the UK post Brexit. Applying foreign ‘public’ law.

In one of my many ponderings on research I would like to do but might never get an opportunity do (hence my repeated sharing of potential PhD topics) I came across an excellent post by Daniel Jowell QC on the application of EU competition law in the UK courts post-Brexit.

The usual disclaimer of course applies (let’s wait and see what happens in the future Treaty between the UK and the EU) yet one important consideration has wider appeal: how does one apply the classic conflicts suggestion that courts do not apply foreign public law, or if they do, do so with great caution?: both out of comity with the foreign State; and to protect one’s own ordre public.

Competition law is often seen as being of quasi-public nature. Daniel justifiably suggests that post Rome II (in which competition law is assigned a specific (if complicated) lex causae), the UK will revert to its standard rules which increase the possibility that UK courts might refuse to apply foreign competition law, including the EU’s, on public policy grounds.

One to remember.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 4, Heading 4.6.2.

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Cheers to that! The CJEU on excise duties, alcohol, packaging and regulatory autonomy in Valev Visnapuu.

Postscript 10 December 2015 For a similar exercise, see Sharpston AG in C-472/14 Canadian Oil.

Less is sometimes more so I shall not attempt to summarise all issues in Case C-198/14 Valev Visnapuu. The case makes for sometimes condensed reading however it perfectly illustrates the way to go about dealing with obstacles to trade put in place for environmental, public health or, as in this case, both reasons.

Mr Visnapuu essentially forum shops Estonia’s lower prices on alcohol by offering Finnish clients home delivery of alcoholic beverages purchased there. No declaration of import is made to Finish customs and excise, thereby circumventing (accusation of course is that this is illegal) a variety of excise duties imposed for public health and environmental reasons, as well as a number of requirements relating to retail licenses and container requirements (essentially a deposit-return system) for beverages.

Confronted with a demand to settle various tax debts, as well as with a suspended prison sentence, Mr Visnapuu turns to EU law as his defence in a criminal proceeding. The CJEU then had to settle a variety of classic trade and environment /public health questions: whether the packaging and packaging waste Directive is exhaustive on the issue of deposit-return system (answer: no and hence the system additionally needs to be assessed vis-a-vis EU primary law: Article 34 ff TFEU or Article 110 TFEU); whether in the context of that Directive excise duties on packaging may be imposed (yes) and packaging integrated into a functioning return system exempt (yes; in the absence of indications that imported systems are less likely to enjoy the exemption); whether the relevant excise duties fall under Article 34 ff TFEU or Article 110 TFEU (answer: it is part of an internal system of taxation hence needs to be judged vis-a-vis Article 110 TFEU); and finally whether the retail licence requirement needs to be judged viz Article 34 or Article 37 TFEU (answer: mixed, given the various requirements at stake). Final judgment on proportionality is down to the Finnish courts.

Readers in need of a tipple would be advised to postpone until after reading the judgment. Again though the case shows that if one keeps a clear head, classic structures of applying EU law go a long way in untangling even complex matters of law and fact.

Geert.

 

 

 

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Anchor defendants in follow-up competition law cases. Amsterdam applies CDC in Kemira.

Update 23 October 2015 As Reported by Emmanual Guinchard, the French Cour de Cassation also applied CDC in MJI v Apple Sales.

Towards the end of July, the Court at Amsterdam applied the recent CJEU judgment in CDC, on the application of (now) Article 8’s rule on anchor defendants. The case also involved CDC – busy bees on the competition enforcement front, this time pursuing inter alia Kemira, a Finnish company, using Akzo Nobel NV, domiciled in The Netherlands, as anchor defendants.

The court referred in extenso to the CJEU’s CDC case, noting inter alia that it is not up to CDC to show that the suit was not just introduced to remove Kemira from the Finnish judge: that Kemira suggests that introduction of the suit in The Netherlands is not very logical given the absence of factual links to that Member State, does not suffice. The court also adopted the CJEU’s finding on choice of court and liability in tort. In the absence of specific proviso in a standard contractual choice of court, the application of such choice of court to extracontactual liability [such as here, for infringement of competition law] cannot be assumed.

Finally, at 2.18, the Court also referred to argument made by Kemira that Finish and Swedish law ought to apply to the interpretation (not: the validity) of the choice of court agreement. That would have been an interesting discussion. However in light of the court’s earlier judgment on the irrelevance of the court of choice, the court did not entertain that issue.

Geert.

(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1.

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

Update 29 May 2018 on economic loss: Bobek AG would seem to take a similar view (that the CJEU’s finding on registered office is at odds with its case-law on Article 7(2) in his Opinions in Barclays and  flyLAL.

Update November 2017. For a contrary ruling on the scope of arbitration agreement, see Dortmund 13 September 2017, reviewed here.

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.‘ Update 29 May 2018 Bobek AG would seem to take a similar view (that the CJEU’s finding on registered office is at odds with its case-law on Article 7(2) in his Opinions in Barclays and  flyLAL.

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.

(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1.

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