Dublin-based freight and passenger airline ASL is pursuing a claim for more than €263 million against Europe’s competition regulator, claiming its decision to block a merger between logistics firms UPS and TNT was “unlawful”.
The claim, filed in September and gazetted in the Official Journal of the European Union on Monday, says the commission is liable for losses ASL suffered in 2013 when the UPS/TNT tie-up was blocked at EU level, scuppering the airline’s plan to acquire TNT Airways and Spain’s Pan Air Lineas Areas.
The commission held that the €5.2 billion merger would have harmed competition for the express delivery of small packages in 15 European countries. UPS and TNT called off the deal two weeks before the commission officially announced its decision, after learning of opposition to the deal from the commission’s Directorate-General for Competition.
ASL had struck a deal with Dutch parent TNT Express to acquire the latter’s stakes in TNT Airways and Pan Air in late 2012, conditional on the UPS merger. ASL was set to partner with the combined entity on its outsourced air business in Europe.
UPS went on to sue the commission in the EU General Court, which last year quashed the enforcer’s decision, holding that UPS might have been able to better defend itself had it been able to see the final version of the econometric model the commission used to analyse the deal.
The enforcer has since appealed against the General Court’s ruling to the European Court of Justice. However, in an opinion on the appeal delivered in July, Advocate-General Juliane Kokott said the General Court’s ruling was sound. “The rights of defence would be devoid of meaning if the commission left the undertakings concerned in the dark about the key analytical steps and the calculations on which it based its prediction of a significant impediment to effective competition resulting from the proposed merger,” she wrote.
ASL, with counsel from Matheson in Dublin, is arguing that the 2013 decision is “tainted with serious breaches of rules of law” set up to protect individuals and their investments, as well as falling short of proper merger control procedures.
The airline further claims the commission incurred non-contractual liability under the Treaty on the Functioning of the European Union, which requires the bloc to “make good any damage caused by its institutions or by its servants in the performance of their duties.” The €263 million was necessary to put ASL “in the position they would have been in but for the unlawfulness of the Decision,” the airline says.
ASL ultimately succeeded in acquiring TNT Airways and Pan Air in 2016, following the unconditional approval of TNT Express’s merger with FedEx.
Counsel to ASL
Partners Helen Kelly and Kate McKenna and senior associate Ronan Scanlan
Noel Travers SC