The proceedings were prompted by the bankruptcy of Heiploeg, a North Sea shrimp trader. The trustees held a former director liable for damages resulting from a fine imposed by the European Commission for cartel agreements made with a competitor (violation of Article 101 TFEU). Heiploeg was fined €27 million on that ground. According to the trustees, that fine caused the group to go bankrupt.
In the first instance, the trustees made a plausible case that the former director played the leading role at Heiploeg during the first period of the cartel. He was reportedly known as the ‘godfather’ of the shrimp trade. The District Court of Noord-Nederland (ECLI:NL:RBNNE:2020:3292) therefore found that the former director had improperly performed his duties as a director (Article 2:9 of the Dutch Civil Code) and that he was liable for the resulting loss.
The Arnhem-Leeuwarden Court of Appeal (ECLI:NL:GHARL:2022:10497) largely upheld the District Court's judgment. Among other things, the Court of Appeal rejected the former director’s defence that the competition rules were not intended to protect against the loss claimed by the trustees. The former director had relied in this regard on a ruling by the Landgericht Saarbrücken (LG Saarbrücken 1. Kammer für Handelssachen 15.09.2020, 7HKO 6/16). In that case, the German court had ruled that a fine could not be recovered from the director because that would detract from the purpose and useful effect of Article 101 TFEU.
In the Court of Appeal’s opinion, the recourse action brought by the trustees was not incompatible with the German court's interpretation of European law. The action was a recourse action of the bankrupt company. Given the company’s situation, the fine had no effect on it and it had no interest in the action. The recourse action also did not mitigate its obligation to pay the fine. On the contrary, the action was in line with the principle that everyone is entitled to reimbursement of loss resulting from a breach of competition law. The former director is therefore ordered to pay €13 million in damages.
It has been possible for years in the Netherlands for directors to be fined up to €900,000 by the ACM (Authority for Consumers and Markets) for competition law violations. The fact that a director (or former director) has been convicted under civil law for damages resulting from a violation of competition law is unique. As far as we know, an attempt has been made only once before to hold a director liable for damages after a cartel violation (ECLI:NL:RBROT:2007:BA0926) – and unsuccessfully. Perhaps this judgment will open the door to new proceedings in which the company itself tries to recover the fine from the directors.
This blog has also been published in the Snelrecht section of specialist journal Mr. Online
Information on dawn raids by ACM and the European Commission can be found at invalacm.nl
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