The District Court East Netherlands has ruled that ABB must compensate TenneT, the operator of the Dutch electricity grid, for the damages it suffered as a result of the Gas Insulated Switchgear (GIS) cartel. In 2007, the European Commission fined eleven groups of companies over EUR 750 million for participating in a cartel for GIS projects. ABB received full immunity from fines under the Commission’s leniency programme, but will nevertheless need to cough up now. The exact amount of damages to be paid to TenneT will be determined in separate proceedings. This is the first substantive ruling on cartel damages in the Netherlands.

Following the Commission's decision, TenneT claimed damages for the 1993 purchase of a GIS-installation from ABB following a tender procedure in which ABB offered the best price. The court found that even though the Commission decision does not explicitly mention the Dutch GIS projects, it does establish that ABB participated in a worldwide cartel which had a particular impact on the EEA and thus, according to the court, also on the Netherlands. This, in combination with the fact that ABB failed to substantiate why the cartel would not apply to the Dutch project, made it safe to assume that the price paid by TenneT for the GIS-installation was affected by the cartel.

ABB's argument that TenneT's damages claim had lapsed was rejected by the court. ABB argued that the statutory five-year limitation period for damages claims started on 14 May 2004, one day after the European Commission's press release announcing the launch of an investigation into the GIS sector and ABB's subsequent press release stating that an internal compliance audit had revealed that certain ABB employees were involved in anti-competitive activities. TenneT's damages claim of 24 June 2010 was therefore too late. The court did not agree: the limitations period commences once the victim has knowledge of the damage and the parties liable for it. The press releases provided TenneT with insufficient knowledge to conclude it was a cartel victim.

Furthermore, the court considered it highly likely that TenneT sustained actual damage, as the object and effect of a cartel is, almost by definition, to cause customers to pay more for a product than they would under competitive market conditions. Although the exact amount of damages still needs to be established in follow-up proceedings, the court indicated that a comparison between offers made by ABB during and after the cartel - resulting in a 54% price overcharge according to a report submitted by TenneT - would make a suitable calculation method. ABB's argument that TenneT did not suffer any loss because it passed on the overcharge to its customers was rejected by the court. According to the court, potential "benefits" gained by a cartel victim may in some cases be off-set against the damage sustained, if (i) there is a sufficient causal link between the benefits and the harmful event and (ii) it is reasonable to deduct these benefits from the damages to be paid by the cartel participant. In the court's view, the latter condition had not been fulfilled in the case at hand, provided that TenneT uses ABB's compensation to the benefit of its customers by reducing its energy prices.

The TenneT ruling can still be appealed and the exact amount of damages will have to be determined in separate damages assessment proceedings. Nevertheless, the ruling provides useful pointers for cartel damages claims in the Netherlands.