Private enforcement: ECJ confirms that victims of an unlawful cartel can jointly sue several defendants in one court

 

With its judgment of 21 May 2015 (C-352/13) the European Court of Justice (ECJ) confirmed that victims of an unlawful cartel can jointly sue several defendants for cartel damages in accordance with Regulation (EC) No 44/2001 (“Brussels I Regulation”) in the court of any Member State as long as at least one of the defendants (usually referred to as “anchor defendant”) is domiciled in that jurisdiction. Moreover, the fact that the claim against the anchor defendant is later withdrawn after the court had been seised has no impact on the jurisdiction of that court with regard to the proceedings brought against the remaining defendants.

Background

The ECJ judgment was handed down in a preliminary ruling procedure initiated by the Regional Court (Landgericht) Dortmund in 2013. The Regional Court Dortmund had to decide upon the admissibility of a follow-on damage claim which Brussels-based Cartel Damage Claims (CDC) had brought against six participants in the hydrogen peroxide cartel in March 2009. Evonik Degussa GmbH (Evonik Degussa) was the only defendant domiciled in Germany and therefore functioned as an anchor defendant to establish jurisdiction for the German court. In September 2009, however, CDC and Evonik Degussa reached an out-of-court settlement as a result of which CDC withdrew the action against Evonik Degussa. The remaining defendants that are domiciled outside of Germany challenged the court’s international jurisdiction.  

In light of these developments, the Regional Court Dortmund submitted several questions concerning international jurisdiction according to the Brussels I Regulation to the ECJ. In his opinion of 11 December 2014, Advocate General Jääskinnen argued in favour of the Regional Court’s jurisdiction (for more information, please see here). This view is now widely confirmed by the ECJ.

ECJ judgment

Article 6(1) of the Brussels I Regulation enables a claimant to sue several co-defendants in the courts of any Member State where at least one defendant is domiciled. The ECJ confirms that the provision is also applicable to cartel damage claims.

As a starting point, the ECJ emphasizes that the European Commission’s decision of 3 May 2006 – according to which the defendants participated in a “single, continuous infringement” of EU competition law – did not determine the requirements with respect to civil law liability since these are to be determined by the national law of each Member State. However, the Court states that the fact that the national laws on liability may differ constitutes a risk of irreconcilable judgments if a cartel victim were to bring his claims against the cartel participants before the courts of various Member States. In such a case, Art. 6(1) of the Brussels I Regulation provides the possibility to bundle the cartel damage claims in a single court. Furthermore, participants in an unlawful cartel which has been fined by the European Commission must expect to be sued for damages in the courts of the Member States.

Furthermore, the ECJ points out that the withdrawal of the action against the anchor defendant after the court had been correctly seised does not affect the Regional Court’s jurisdiction over the remaining defendants domiciled outside of Germany. However, the ECJ also holds that Art. 6(1) of the Brussels I Regulation must not be abused.

Moreover, jurisdiction clauses contained in supply contracts between the cartel members and the victim of the cartel would only affect jurisdiction pursuant to Art. 6(1) of the Brussels I Regulation if such clauses specifically referred to disputes arising from an infringement of competition law. This, however, will probably only play a minor role in practice.

Assessment and outlook

The private enforcement of cartel damage claims faces numerous obstacles in practice: secret cartels often operate for long periods with a large number of participants domiciled in several Member States. The ECJ’s acknowledgement of the principle of perpetuation of competence (perpetuatio fori) ensures predictability and legal certainty in proceedings against several defendants domiciled in different jurisdictions. This is likely to facilitate future cartel damage claims.

It should be noted that the ECJ judgment concerns the “old” Brussels I Regulation (Regulation (EC) No 44/2001) which was replaced by Regulation (EU) No 1215/2012 as of 15 January 2015. However, the relevant provisions for the judgment were included in the new Regulation without any major changes. Thus, the ECJ’s interpretation of these provisions will also apply in the future.

Already available: Private Enforcement: Advocate General argues that dropping an anchor defendant should not affect the court’s jurisdiction to hear a cartel damage claim