Dutch courts not afraid of high cartel damage claims

The Dutch courts have shown again in 2015 that the Netherlands is an attractive jurisdiction for follow-on cases. Not just because the Dutch courts are quick to accept their own jurisdiction, but also because damages have actually been established for the first time. It is expected that this trend will continue in 2016 as well. In addition, 2016 will be a very important year for (the implementation of the) Directive on Antitrust Damages Actions (the “Directive”).

Jurisdiction matters

In both the follow-on proceedings in relation to the natrium chloride cartel and the follow-on in relation to the prestressing steel cartel, (several) cartel members (the defendants in the proceedings) have contested the jurisdiction of the Dutch courts. According to these defendants, the necessary close connection between the claims submitted against them and those submitted against the 'anchor defendants' established in the Netherlands is lacking. However, the court held in both cartel damage claim proceedings that there was indeed a close connection, as both cartels involved a single continuous infringement. In the sodium chlorate cartel, the Court of Appeal ruled that the circumstance that 'anchor defendant' Akzo as (grand) parent company of cartel member Kemira was not directly involved in the prohibited cartel was not relevant as regards the jurisdiction of the Dutch courts. Moreover, it was foreseeable for the defendants in both cases that they would be summoned before the Dutch courts, as the defendants in both follow-on procedures together with their business established in the Netherlands formed part of the sodium chlorate cartel or the prestressing steel cartel. The Dutch court considered on the basis thereof that it had jurisdiction in both cases to hear the cartel damage claims. These proceedings will undoubtedly continue in 2016.

Passing-on defence

In 2015, the Dutch courts again rendered a judgment on the application of the passing-on defence. The follow-on cases relating to the gas-insulated switchgear cartel resulted in interesting judgments in this context (see also our previous blogs, click here, here and here). State-owned company TenneT started two separate follow-on proceedings against cartel members Alstom and ABB in relation to the gas-insulated switchgear cartel. Alstom and ABB put forward in both cases that TenneT charged the "overcharge" resulting from the cartel on to its purchasers, which means that TenneT sustained no damage or at most very little damage. Whereas the Arnhem-Leeuwarden District Court still accepted this defence in 2014, the passing-on defence put forward by Alstom was rejected by the Gelderland District Court on 10 June 2015 following a weighing of interests. In this connection, the court weighed the interests of TenneT and Alstom against each other and more specifically the risk of (i) potential overcompensation of TenneT on the one hand and (ii) the consequences for Alstom of damages that are too low or too high on the other hand. On the basis thereof, the court did not consider it unreasonable that TenneT, a 100% subsidiary of the Dutch State, was “in a sense” overcompensated. This overcompensation will, after all, benefit the purchasers of TenneT (the end consumers) via the Treasury and the future energy prices. The court considers that the alternative, namely “that Alstom c.s. would be enabled to retain the profits it obtained unlawfully”, would be unreasonable and would even qualify as unjustified enrichment. The court therefore rejected the passing-on defence put forward by Alstom and furthermore ordered Alstom to pay TenneT an amount of EUR 14.1 million in damages.

The question arises as to what the consequences of this cautious application of the passing-on defence will be for other follow-on proceedings in which such defences are conducted. The TenneT/Alstom case was, after all, highly casuistic. What was particularly special about these proceedings was the fact that TenneT is a state-owned company that is, moreover, regulated on the basis of sector-specific energy legislation. It is very likely that in 2016 as well the passing-on defence will once again have a role to play in cartel damage cases. For example, TenneT has submitted an appeal to the Supreme Court against the ruling of the Court of Appeal in the case against ABB.

Air freight cartel

Several interesting developments also occurred in 2015 in the follow-on proceedings that were initiated in relation to the air freight cartel. The most important development is that the General Court in its judgment of 16 December 2015 set aside the decisions of the European Commission. The General Court ruled that an inconsistency existed between the grounds of the decision rendered by the European Commission and the operative part of the decision, which meant that the rights of defence of the addressees of the decision rendered by the European Commission were prejudiced. The General Court therefore set aside the judgment of the European Commission to the extent that it concerns the addressed airline companies that had submitted an appeal against the judgment. The question now arises as to what the consequences of the Court's ruling are for the pending follow-on proceedings. For the time being, these appear to be less serious than originally thought. Firstly, the European Commission can remedy the defects in its decision by rendering a new decision. Secondly, several claimants did not invoke (exclusively) the decision of the European Commission, but rather the facts construed by themselves that allegedly demonstrate the existence of a breach of competition law. If that is the case, this no longer concerns a follow-on cartel damage claim, but rather a stand-alone cartel damage case, but this does not alter the fact that the civil courts theoretically may determine damages on the basis of the facts furnished by the claimant itself (and therefore separately from the judgment of the European Commission).

Directive on Antitrust Damages Actions

In 2015, the Dutch government has worked on the implementation of the Directive that entered into effect on 26 December 2014. This Directive is intended to make it easier for victims of an breach of competition law to recover the damage suffered by them from the cartel participants. The Directive must be implemented by the Member States on 27 December 2016. In 2015, the government presented its implementation act for consultation. The definitive Implementation Act is therefore expected in 2016. In practice, this Directive and the Implementation Act will not be very important for Dutch follow-on cases (see also our previous blog), as Dutch legislation already realises (most) of the aims of the Directive. 

It is likely that 2016 will bring even more interesting follow-on cases as a result of the attractiveness of the Netherlands as a cartel damage claim country. For example, ConsumentenClaim and the Consumers' Association have announced that they will be cooperating to enforce a compensatory scheme for consumers who paid too much in the period between 1996 and 2006 as a result of the picture tube cartel that was fined by the European Commission.

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