On 21 May 2015, the Court of Justice handed down another important decision paving the way for claimants in antitrust private actions (Case C-352/13). The decision is a preliminary ruling requested by Landgericht Dortmund in the action brought by CDC against the members of the Hydrogen peroxide cartel sanctioned by the European Commission in 2006.
The first question raised by the German Court concerned the consolidation of claims against several members of a cartel pursuant to Article 6.1, Regulation (EC) No 44/2001 (now Article 8.1 in the recast Regulation (EU) No 1215/2012), and in particular whether a defendant domiciled in one Member State may also be sued in another Member States, as one of a number of co-defendants, where any one of them is domiciled. In the case at hand, the matter was further complicated by the fact that the action against the only company domiciled in Germany was withdrawn, but after it had been served on all the other defendants, before the expiry of the period prescribed by the Court for lodging a defence and before the first hearing.
The Court confirmed the applicability of Article 6.1, Regulation (EC) 44/2001, and therefore the possibility to consolidate the claims against several defendants in one action in one Member State.
As to the fact that a settlement agreement was reached with the so called “anchor defendant”, (giving jurisdiction to the German court) the Court of Justice concluded that, in order to exclude the applicability of art. 6.1, Regulation (EC) 44/2001, the other defendants must provide “firm evidence that, at the time that proceedings were instituted, the parties concerned had colluded to artificially fulfil, or prolong the fulfilment of that provision’s applicability”. Indeed, such evidence may be considered the proverbial probatio diabolica, leaving open the possibility to select an undertaking as a tactical device to establish the jurisdiction against several defendants even if there are on-going settlement discussions.
The second question required the Court to give a ruling on the scope of application of Article 5.3, Regulation (EC) No 44/2001 (now Article 8.1), in an action brought against the members of a cartel considered as a single and continuous infringement. Under such provision, in matters relating to tort the defendant may be sued in the courts for the place “where the harmful event occurred or may occur”. This provision is intended to cover both the place where the damage occurred and the place of the events giving rise to it.
The Advocate General argued that the application of Article 5.3, Regulation (EC) No 44/2001 should be excluded in an infringement of such nature, because “if the Court were to hold that a multiplicity of courts had jurisdiction in this case under Article 5(3) of the Brussels I Regulation, the possibilities offered to citizens seeking legal redress on that basis would be very significantly opened up, whereas this is a choice of jurisdiction of a special nature, and must, therefore, in principle be interpreted strictly”.
The Court did not agree and stated that the place of the casual event can be identified and it should be considered the place “of a specific event during which either the cartel was definitively concluded or one agreement in particular was made which was the sole casual event giving rise to the loss allegedly inflicted on the buyer” (par. 50).
The Court went even further saying that the place where the damage occurred (namely, the loss consisting in additional costs incurred because of artificially high prices) is the “victim’s registered office”. This is possibly the first time the Court has identified the registered office as the locus damni giving a wide choice to the claimant to choose the forum which it considers most favourable.
But a wide interpretation can work both ways: on the basis of Folien Fischer and Fofitec (C-133/11), one of the members of the cartel used the same wide interpretation given by the Court to Article 5.3, Regulation (EC) No 44/2001, to bring an action for negative declaration before the Courts of a Member State in which proceedings were known to be particularly drawn out (the so called “Torpedo action”).
The third question from the German court concerned the possibility for a defendant to dispute the jurisdiction established on the basis of Articles 5.3 and/or 6.1, Regulation (EC) No 44/2001 on the basis of the arbitration and/or jurisdiction clauses contained in the agreements entered into with the claimant during the cartel period. This is a typical procedural defence raised by those members of a cartel that are sued together with their fellow co-cartelists in the court of a Member State where they are not domiciled.
The Court found in the negative. A national court should consider “a clause which abstractly refers to all disputes arising from contractual relationships as not extending to a dispute relating to the tortious liability that one party allegedly incurred as a result of the other’s participation in an unlawful cartel” (par. 69). The reason is that a clause conferring jurisdiction cannot satisfy the requirement of clear unvitiated consensus, since the victim of the cartel was unaware of its existence at the time the agreement was concluded. This conclusion is consistent with the decision reached by District Court in The Hague on 1 May 2013 in the action brought by CDC against the members of the paraffin wax cartel.
The decision contains an interesting final warning: national courts must disregard the special rules of jurisdiction set forth in Articles 5/6, Regulation (EC) No 44/2001, where “a clause refers to disputes in connection with liability incurred as a result of an infringement of competition law” (par. 41). It follows that if arbitration clauses containing such inclusion will become common practice, arbitration proceedings over cartels will be no longer isolate exceptions. This scenario could further complicate things particularly in case of multiple litigation in relation to the same infringement, something which is common in cartel cases. In fact, arbitration proceedings fall outside the scope of application of Article 30, Regulation (UE) No 1215/2012, and therefore consolidation of actions “closely connected” may be not possible.
This decision undoubtedly constitutes another step forward for antitrust private enforcement after the recent adoption of the Directive 2014/104/UE (the so called “Directive on Antitrust Damages Actions”). With various legislators currently working on improving the collective redress mechanisms, the life of antitrust infringers is becoming significantly more dangerous.