On 26 November 2019 the Court of Appeal of Arnhem ("Court of Appeal") applied the EU competition law notion of an ‘undertaking’ in a cartel damage claim procedure between TenneT and entities belonging to the Alstom group of companies.

The Court of Appeal ruled that one of these entities formed a single undertaking with its 48% shareholder Alstom. Therefore, this entity could be held liable under Dutch civil law for the competition law infringement of its 48% parent company which was fined in 2007 by the European Commission ("Commission") for participating in the Gas Insulated Switchgear cartel. While this subsidiary was not held liable or even included in the Commission’s investigation leading to this cartel fine.

The Court of Appeal based its decision on a broad application of the reasoning of the European Court of Justice in its Skanska judgment (see: link) of 14 March 2019. The Court of Appeal considered that it follows from the Skanska judgment that the determination of the entity which is held liable for damages resulting from a cartel infringement is governed by EU law. Furthermore, by applying EU law principles, the subsidiary should be considered to be part of the same ‘undertaking’ as its Alstom parent which was held liable by the Commission for the cartel infringement.

The Court of Appeal dismissed the argument that the reasoning in the Skanska judgment should be limited to cases of ‘economic continuity’, and not in a case of holding parent companies liable for their subsidiaries or even less so as in this civil procedure where a subsidiary is held liable for the conduct of its parent company. It remains to be seen whether this interpretation of the Skanska judgment will be upheld in the event of an appeal to the Dutch Supreme Court.

Please find the judgment of the Court of Appeal here (in Dutch only).