On September 20 2001 the European Court of Justice issued a judgment (Courage) that addressed the direct applicability of EU Treaty provisions in relation to the recovery of damages.

The Courage Case reaffirms the direct applicability of EU regulations and national courts jurisdiction to enforce these rules, already stated in BRT v Sabam.

This judgment follows the emergence of a new approach to the issue in spanish case law, which reversed the Spanish Supreme Court's pioneering decision in the Campsa Case of December 1993. On that occasion the Supreme Court dismissed a litigant's claim for damages suffered as a result of the unfair behaviour of Campsa (at that time the oil monopolist in Spain), which violated Section 86 of the EU Treaty. The ground for the dismissal was that the Spanish judges were not entitled to decide whether an EU provision had been violated, because that prerogative was reserved for the European Commission.

The Supreme Court's new approach to the issue was expressed in two judgments issued on June 2 2000 and June 7 2000 (two parallel judgments are deemed to be a binding precedent under Spanish law), and is in line with the European Court of Justice ruling. It allows a damaged party to recover damages suffered in cases of unfair competition amounting to a violation of the EU Treaty.

In cases decided by the Supreme Court, the fact that the violated rule is an EU regulation or a national act is key to this matter because different rules apply in each case. In the case of a Spanish rule being violated, the Spanish Unfair Competition Act 1989 states that the redress for damages can only be awarded after a judicial review of the Office of Fair Trading's decision, which takes place before the Court of Appeal, and its subsequent appeal before the Supreme Court. This is a lengthy process often lasting for six or seven years. In case of a violation of the EU regulations the provision of the Spanish Unfair Competition Act do not apply.

For further information on this topic please contact Jorge Hern├índez or Jorge Capell by telephone (+34 9152 47100) or by fax (+34 9152 47153) or by email ([email protected] or [email protected]).