Companies should beware of the civil enforcement risks of anti-competitive clauses when carrying out contract negotiations. The Supreme Court recently confirmed that the cartel prohibition's nullity penalty prevents not only clauses with an anti-competitive object, but also those with an anti-competitive effect, from being converted into valid clauses.
The Civil Code's statutory conversion provision converts invalid clauses into valid clauses that correspond as much as possible to the original clause. In 2009 the Supreme Court ruled that the cartel prohibition's absolute nullity penalty prevents the statutory conversion provision from applying to clauses with an anti-competitive object. The recent ruling makes it clear that the same goes for clauses with an anti-competitive effect.
This case concerned an exclusive purchasing clause between petrol company BP and the defendant, concluded for a duration of 20 years. The Supreme Court first confirmed the Court of Appeal's view that this clause had an anti-competitive effect, given:
- the duration of the exclusivity (20 years);
- BP's market share in the relevant market (11% to 12%); and
- the existence of parallel networks by competitors.
It subsequently considered the Court of Appeal's right to reject BP's argument that the clause could be converted into a valid clause. According to the Supreme Court, the application of the statutory conversion provision to anti-competitive clauses would be contrary to the cartel prohibition's absolute nullity penalty, irrespective of whether these clauses had an anti-competitive object or effect. Any other view would impair the cartel prohibition's effectiveness and deterrent effect, and would be contrary to settled EU case law on the absolute nullity laid down in Article 101 of the Treaty on the Functioning of the European Union (the EU cartel prohibition). However, the remaining provisions of the agreement between BP and the defendant could remain in force because these were not intrinsically linked to the void clause.
Thus, even though the statutory conversion road has definitely been cut off for all anti-competitive clauses, it does not prevent actors from concluding a new (valid) agreement to the same effect should the existing agreement be caught by the cartel prohibition's nullity penalty. Whether including a contractual conversion clause in an agreement would also do the trick is not yet clear, as the Supreme Court left this question unanswered in an earlier case.
For further information on this topic please contact Jolling De Pree, Erik H Pijnacker Hordijk or Jaap de Keijzer at De Brauw Blackstone Westbroek by telephone (+31 70 328 53 28), fax (+31 70 328 53 25) or email (firstname.lastname@example.org, email@example.com firstname.lastname@example.org). The De Brauw Blackstone Westbroek website can be accessed atwww.debrauw.com.