In two judgments that are of pan-European interest because of their relevance to the interpretation of the EU competition Damages Directive, the Finnish Supreme Court and the Belgian Constitutional Court ruled on limitation periods to bring competition damages claims.
The Finnish Supreme Court held that the limitation period starts when the Finnish Competition Authority submits a detailed proposal for fines to the Market Court and issues a press release about it. However, the Belgian Constitutional Court held that the civil damage claim is not time-barred as long as the decision of the Competition Authority is not final.
These judgments are particularly interesting in the light of the rule set out in Article 10 of the Competition Damages Directive, which provides that:
"Limitation periods shall not begin to run before the infringement of competition law has ceased and the claimant knows, or can reasonably be expected to know:
(a) of the behaviour and the fact that it constitutes an infringement of competition law;
(b) of the fact that the infringement of competition law caused harm to it; and
(c) the identity of the infringer"
"Member States shall ensure that a limitation period is suspended or, depending on national law, interrupted if a Competition Authority takes action (…). The suspension shall end at the earliest one year after the infringement decision has become final (…)."
The consensus at the moment seems to be that in most cases the claimant cannot generally be expected to have the relevant knowledge until the Commission issues a decision finding an infringement, and in fact possibly not even until the decision has been published (the judgment of the English Court of Appeal in Arcadia v. Visa is a notable exception).
The judgments of the Finnish Supreme Court and of the Belgian Constitutional Court provide an insight into how national courts are likely to assess the claimant's knowledge and the applicable statutes of limitation in antitrust damages claims.
Background of the Finnish Supreme Court judgment
In 2009, the Finnish Market Court fined Metsäliitto Osuuskunta and Stora Enso Oyj EUR 51 million for collusion in the purchase of timber between 1997 and 2004. Following the judgment, a large number of forest owners brought damages claims between 2011 and 2015 against Metsäliitto, Stora Enso and UPM-Kymmene (which had escaped fines as the recipient of immunity).
Alternative starting points for the limitation periods
The District Court held that, in the case of one of the claims brought in 2011, both the five-year limitation period under the Competition Restrictions Act and the three-year limitation period under the general Statute of Limitations Act had started to run in May 2004. This was the date when the Finnish Competition Authority (FCCA) published a press release concerning dawn raids at the business premises of Metsäliitto and Stora Enso. It therefore concluded that the claim had been brought out of time.
However, the Court of Appeal held that both limitation periods started in 2010 when the judgment of the Market Court became legally binding.
Ruling of the Finnish Supreme Court
The Supreme Court held that neither of these approaches was correct.
It noted that both the Competition Restrictions Act and the Statute of Limitations Act provided that the limitation period starts when the claimant became aware or should have become aware of the occurrence of the damage. In addition to the information the claimant has actually received, the information the claimant could have obtained is therefore also relevant.
According to the Supreme Court, the limitation period could not have started before the claimant should have become aware of the damage. The Supreme Court held that this was when the claimant became aware of the prohibited collusion between the undertakings, based on which it was able to assess the effects of the prohibited co-operation on the prices for the wood sales that it had agreed with the suspected cartel members. However, the Supreme Court did not consider it necessary for the Market Court to have issued a definitive ruling in order to trigger the start of the limitation periods.
The Supreme Court noted that the May 2004 press release issued by the FCCA when it carried out dawn raids (the "dawn raids press release") referred only to a suspicion of collusion, and did not reveal any concrete details of the suspected prohibited co-operation. At that time, it was not possible for the private forest owners to conclude whether the suspected cartel had caused damage to them. Therefore, the dawn raids press release did not trigger the start of the limitation period.
The Supreme Court held that the FCCA's submission to the Market Court in December 2006 and its related press release gave the private forest owners sufficient information on the existence of the restriction of competition that they could assess whether they had suffered loss as a result of it. The submission and press release contained more specific information on the cartel than the 2004 dawn raids press release. They described the nature of the prohibited conduct, its duration and geographic coverage as well as the participants. The Supreme Court therefore concluded that this was the point at which the limitation period commenced.
The Supreme Court also ruled that the Competition Restrictions Act applied only to damage which had occurred after the Act had come into effect (i.e. 1 October 1998). Limitation periods for damage which had occurred before the Act came into effect were governed by the Statute of Limitations Act. Therefore, the private forest owners' right to compensation had not expired in so far as their claims were based on the Competition Restrictions Act (i.e. for damage suffered before 1 October 1998), where the five-year limitation period applied. The private forest owners' right to compensation had expired in so far as their claims were governed by the Statute of Limitations Act, where the three-year limitation period applied.
The Supreme Court sent the wood cartel case back to the District Court of Helsinki. The District Court will continue the handling of this case and other related matters that were on hold while waiting for the preliminary ruling of the Supreme Court. The total number of the so called wood cartel matters currently pending in the District Court is approximately 1700.
Background of the Belgian Constitutional Court judgment
In its judgment of 23 October 2014, in a case between Herman Verboven BV and Honda Motor Europe Logisitcs BV, Gent's Commercial Tribunal asked a preliminary question to the Belgian Constitutional Court regarding the starting point for the limitation period in competition law damages claims.
Namely, the Commercial Court of Gent asked the Constitutional Court to determine whether the application of Article 2262bis, § 1er, alinéa 2 of the Belgian civil code breached Articles 10 and 11 of the Belgian Constitution. According to the Commercial Court of Gent, Articles 10 and 11 of the Belgian Constitution – which safeguard the principles of equality and non-discrimination – could be breached because there is an important discrepancy between the limitation period in the ambit of a damages claim in application of Articles 101 and 102 TFEU and Belgian equivalents (in accordance with Article 2262bis, § 1er, alinéa 2 of the Belgian civil code), and the limitation period for civil claims in criminal proceedings (in accordance with Article 26, alinéa 1 of the preliminary title of the Belgian code of criminal procedure).
Alternative limitation periods
The application of Article 2262bis, § 1er, alinéa 2 of the Belgian civil code to competition law damages claims meant that the statutory five year limitation period run uninterruptedly as of the moment the party in question became aware of the occurrence of the damage and of the identity of the perpetrator. In practice, this often meant that parties had no choice but to apply for provisional measures before the Courts in order to stop the clock without having any certainty as to the lawfulness of the alleged infringement. By contrast, in criminal proceedings involving an investigation in application of Article 26, alinéa 1 of the preliminary title of the Belgian code of criminal procedure, the limitation period for victims is suspended as long as the criminal investigation is ongoing.
Ruling of the Belgian Constitutional Court
In its judgment handed down on 10 March 2016 (Arrêt n°38/2016), the Belgian Constitutional Court held that, in the ambit of damages claims, Article 2262bis, § 1er, alinéa 2 of the Belgian civil code was contrary to Articles 10 and 11 of the Belgian Constitution – which safeguard the principles of equality and non-discrimination – because the limitation period for a damages claim may expire before the decision of the Competition Authority becomes final.
By reference to relevant ECHR jurisprudence, the Constitutional Court held that in the ambit of competition law infringements, such an early application of the statute of limitations would severely restrict a party's access to justice and violate the principles of legal certainty and good administration. In particular, the Constitutional Court highlighted the difficulty encountered by parties in "stand alone" claims bearing the burden of proof in substantiating evidence to demonstrate competition law infringements and damages.