Cartel damages claims: Dutch Court refers preliminary questions to the Dutch Supreme Court regarding applicable law and determines the burden of proof for valid claim assignments

Introduction

On 2 August 2017 the Amsterdam District Court rendered two important judgments in one of the air cargo follow-on proceedings brought by SCC.

Pursuant to an EC Decision of 17 March 2017, various air cargo carriers coordinated their pricing behaviour in the provision of airfreight services between 1999 and 2006. SCC is a Dutch claim vehicle stating that a large number of shippers assigned their individual claims for damages as a result of the aforementioned cartel to SCC. The judgments deal with two important questions in relation to the claims: 1) How to determine the applicable law? 2) Have the claims been lawfully assigned to SCC?. Below both judgments are briefly discussed.

Judgment 1: Applicable law

The judgment addresses the preliminary question which law systems govern the shippers' individual claims for damages. It follows from Article 4 (1) WCOD (Unlawful Act act) – which applies to the pre-Rome II Regulation era – that obligations ensuing from an unlawful act because of unlawful competition are governed by the law of the country on whose territory the competitive activity affects the competitive relationships. According to the air cargo carriers, the place of departure of the flight determines the applicable law, as this is usually the place where the price and terms of the air transport are negotiated. SCC, however, argues that "the law of the country on whose territory the competitive activity affects the competitive relationships", is not a suitable rule by which the applicable law can be determined in a feasible way, because almost all law systems of the world would then apply. SCC therefore argues that the locations of the head offices of the defendants (air cargo carriers) should determine the applicable law. The Court confirms its previous decision that Article 4 (1) WCOD indeed in principle applies to the claims dated from 1999 through 2006. However, it subsequently considers that in case of an alleged worldwide cartel with alleged worldwide effects, the place where "competitive activity affects competitive relationships", does not result in a feasible solution. According to the court, the decisions in the paraffin wax (CDC/Shell) and sodium chlorate cases (CDC/Kemira), where the law applicable was determined by the place of the manufacturing sites of the purchasers, cannot easily apply here. Furthermore, in the latter decision the Court accepted a fragmentation of applicable laws. The place where a product is delivered is much easier to determine than the place where the airfreight service took place. Therefore, the Court considers the following 'solutions': • Apply Dutch law to every individual claim, because that serves the EU effectiveness principle, and prevents delays as required under Dutch procedural law; • Apply the laws of the countries in which the head offices of the defendants (air cargo carriers) are established; • Apply the laws of the countries where the 'victims' were based. The Court finds that all possible solutions have drawbacks and that it needs more guidance on which arguments should be decisive, also because other air cargo follow-on cases are pending before the Amsterdam District Court. It proposes that the Dutch Supreme Court will be asked whether one the aforementioned 'solutions' or a different way to determine the applicable law should be applied. The parties have provided their comments to the draft preliminary questions on 13 September 2017.

Judgment 2: Assignments

SCC argued that a large number of shippers (originally 1,170, but decreased during the proceedings to 266 - although not resulting in a decrease of the claimed amount) assigned their alleged cartel damages claims to SCC. The assignments were governed by French Law or Dutch law (moreover, a number of intra-company assignments were subject to German law).

The Court confirms that the burden of proof for a valid assignment is on the claimant. However, it also decides that if the documentation (i) contains the agreement for the assignment (title), (ii) contains the assignment deed and (iii) it is clear that the documentation was signed/provided by the assignor, this in principle sufficiently proves the validity of the assignment, unless the defendant submits specific indications to the contrary.

The Court finds that in this particular case most assignments are valid and are neither in breach of the prohibition on fiduciary transfers nor in breach with the assignment formalities. However, the alleged assignments by group companies of one of the shippers were submitted too late in the proceedings and are therefore not accepted by the Court.