On 27 April 2017, the Court of Justice of the European Union ("CJEU") dismissed an appeal by Akzo Nobel ("Akzo"). In the appeal, Azko was seeking to overturn its liability for cartel fines of its subsidiaries, which fines had been annulled due to the expiry of the statute of limitation. The CJEU ruled that the fact that the fines against Akzo's subsidiaries were time-barred did not prevent the parent company from being fined.
Akzo's appeal relates to the European Commission's heat stabilizers cartel decision of 2009 (amended in 2011) in which 24 companies, including Akzo jointly and severally with its subsidiaries, were fined a total of EUR 173 million. In July 2016, the General Court of the European Union ("GC") annulled the fines imposed on German and Dutch subsidiaries of Akzo based on the finding that the fines were in fact time-barred. However, in this decision the GC only granted Akzo a minimal reduction of the fines. Effectively the GC thus annulled the fine imposed on the subsidiaries but upheld the fine imposed on Akzo.
Akzo appealed the GC's ruling based on the argument that its liability was solely derivative of that of its subsidiaries (based on the principle of parental liability) and thus if the subsidiaries were no longer liable for the fine, Akzo as well should be relieved of any liability. In December 2016, Advocate General Wahl in his opinion advised the CJEU to side with Akzo. According to AG Wahl, the expiry of the limitation period cannot be limited to the entity that has directly carried out that action, but must extend to the entities to which liability for the same action is attributed. The CJEU, however, disagreed with the AG and stated in its ruling that the fact that an action is time-bared for a subsidiary does not preclude an action against a company that has been held “personally responsible and jointly and severally liable” with the subsidiary and for which the action is not time-barred. The EUCJ based its point of view on the fact that Akzo was, at least for part of the infringement period, part of the same economic unit as its subsidiaries and thus the subsidiaries behavior could be directly attributed to Akzo and – rather crucially – the participation of Akzo in the infringements lasted longer than that of its subsidiaries. Accordingly the CJEU dismissed Akzo's appeal.
Source: Judgement of the Court of Justice 27/04/2017