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International Antitrust Litigation: Conflict of Laws and Coordination
 9781849460392

Table of contents :
Cover
Prelims
Series Editors' Preface
Contents
Table of Abbreviations
Table of Cases
Table of Legislation
Table of Treaties, Conventions and Agreements Etc
1. Introduction
Part I. International Antitrust Litigation - Conflict-of-Laws Issues
I.1 Jurisdiction in EU Cross-Border Litigation
2. How to Apply Articles 5(1) and 5(3) Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach
3. International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation
4. Jurisdiction Issues: Brussels I Regulation Articles 6(1), 23, 27 and 28 in Antitrust Litigation
I.2. Applicable Law in the EU - Rome I and Rome II
5. Private Enforcement of Antitrust Provisions and the Rome I Regulation
6. International Antitrust Claims under the Rome II Regulation
7. Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law)
I.3. Alternative Forms of Litigation
8. International Litigation and Competition Law: The Case of Collective Redress
9. Arbitration and EU Competition Law
I.4. Beyond the EU
10. Jurisdiction and Choice of Law in International Antitrust Law - A US Perspective
11. Recognition and Enforcement of Foreign Judgments
Part II. International Antitrust Litigation - Coordination Issues
II.1 Coordination between Competition Authorities and Courts
12. Access to Evidence and Files of Competition Authorities
13. Exchange of Information and Opinions between European Competition Authorities and Courts - From a Swedish Perspective
14. Discovery in a Global Economy
II.2 Coordination Within the European Competition Network
15. The ECN and Coordination of Public Enforcement of EU Law - Can Lessons Be Learned from International Private Law Jurisdiction Rules and Vice Versa?
16. Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-border Antitrust Investigations
17. Recognition of Foreign Decisions within the European Competition Network
Policy Proposals
How to Apply Articles 5(1) and 5(3) Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach
International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation
Jurisdiction Issues: Brussels I Regulation Articles 6(1), 23, 27 and 28 in Antitrust Litigation
Rome I and Antitrust Litigation
Rome II and Antitrust Litigation
Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law)
International Litigation and Competition Law: the Case of Collective Redress
Arbitration and EU Competition Law
Recognition and Enforcement of Foreign Judgments
Access to Evidence and Files of Competition Authorities
Exchange of Information and Opinions between European Competition Authorities and Courts - From a Swedish Perspective
The ECN and Coordination of Public Enforcement of EU Law - Can Lessons Be Learned from International Private Law Jurisdiction Rules and Vice Versa?
Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations
Recognition of Foreign Decisions within the European Competition Network
Index

Citation preview

INTERNATIONAL ANTITRUST LITIGATION The decentralisation of competition law enforcement and the stimulation of private damages actions in the European Union go hand in hand with the increasingly international character of antitrust proceedings. As a consequence, there is an ever-growing need for clear and workable rules to co-ordinate cross-border actions, whether they are of a judicial or administrative nature: rules on jurisdiction, applicable law and recognition as well as rules on sharing of evidence, the protection of business secrets and the interplay between administrative and judicial procedures. This book offers an in-depth analysis of these long neglected yet practically most important topics. It is the fruit of a research project funded by the European Commission, which brought together experts from academia, private practice and policy-making from across Europe and the United States. The 16 chapters cover the relevant provisions of the Brussels I and Rome I and II Regulations, the co-operation mechanisms provided for by Regulation 1/2003 and selected issues of US procedural law (such as discovery) that are highly relevant for transatlantic damages actions. Each contribution critically analyses the existing legislative framework and formulates specific proposals to consolidate and enhance cross-border antitrust litigation in Europe and beyond. Volume 8 in the series Studies in Private International Law

Studies in Private International Law Volume 1: Electronic Consumer Contracts in the Conflict of Laws Sophia Tang Volume 2: Foreign Currency Claims in the Conflict of Laws Vaughan Black Volume 3: Jurisdiction and Judgments in Relation to EU Competition Law Claims Mihail Danov Volume 4: Cases and Materials on EU Private International Law Stefania Bariatti Volume 5: International Commercial Disputes: Commercial Conflict of Laws in English Courts Jonathan Hill and Adeline Chong Volume 6: International Child Abduction: The Inadequacies of the Law Thalia Kruger Volume 7: Mediating International Child Abduction Cases: The Hague Convention Sarah Vigers Volume 8: International Antitrust Litigation: Conflict of Laws and Coordination Edited by Jürgen Basedow, Stéphanie Francq and Laurence Idot

International Antitrust Litigation Conflict of Laws and Coordination

Edited by Jürgen Basedow, Stéphanie Francq and Laurence Idot

OXFORD AND PORTLAND, OREGON 2012

Published in the United Kingdom by Hart Publishing Ltd 16C Worcester Place, Oxford, OX1 2JW Telephone: +44 (0)1865 517530 Fax: +44 (0)1865 510710 E-mail: [email protected] Website: http://www.hartpub.co.uk Published in North America (US and Canada) by Hart Publishing c/o International Specialized Book Services 920 NE 58th Avenue, Suite 300 Portland, OR 97213-3786 USA Tel: +1 503 287 3093 or toll-free: (1) 800 944 6190 Fax: +1 503 280 8832 E-mail: [email protected] Website: http://www.isbs.com © The editors and contributors severally 2011 The editors and contributors have asserted their right under the Copyright, Designs and Patents Act 1988, to be identified as the authors of this work. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission of Hart Publishing, or as expressly permitted by law or under the terms agreed with the appropriate reprographic rights organisation. Enquiries concerning reproduction which may not be covered by the above should be addressed to Hart Publishing Ltd at the address above. British Library Cataloguing in Publication Data Data Available ISBN: 978-1-84946-039-2 Typeset by Hope Services, Abingdon Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY

SERIES EDITORS’ PREFACE ‘Studies in Private International Law’ by Hart was always intended to be much broader than a traditional series of academic monographs. In the first series editors’ preface we emphasised that the focus in the series was on ‘quality’ and not form. Therefore we welcomed not only ‘scholarly monographs’ but also ‘collections of essays, or other specialised works on private international law.’ The ‘Studies’ got off to a traditional start with the first three volumes being scholarly monographs on substantive aspects of commercial private international law based on traditional library-based legal research. Since then the diversity has come to fruition. Volume 4 is a comprehensive cases and materials book on EU Private International Law. Volume 5 is a first rate treatise length textbook on commercial disputes in private international law. Volume 6 is a short work that essentially reports some significant empirical research on international child abduction. Volume 7 is another short work in the field of international child abduction that comes up with novel ideas about adjectival private international law – mediation. Volume 8 finally fulfils our hope to have a collection of essays in the Series and it also showcases the value of having a large team of experts brought together to do funded legal research. Private international law of competition raises some of the big questions of private international law: the public/private law divide and how private remedies can be used to reinforce public regulation; the complexities of devising fair jurisdiction and applicable law rules given the mosaic effect in different legal systems of the same breaches of competition law; the limits on recognition and enforcement of judgments and arbitral awards that are needed to protect public policy (either to restrain excessive damages granted under a foreign competition law or to avoid the evasion of the enforcing court’s competition policy); and the difficulties of creating fair rules of procedure for obtaining cross border evidence that do not allow those who breach competition law to cover their tracks. Readers will not be disappointed as serious attempts are made to answer these and other key questions. This volume is edited by some of the leading private international lawyers in Europe and has several ‘household’ names in the field making contributions eg, Hannah Buxbaum, Marc Fallon, Catherine Kessedjian, Ralf Michaels, Barry Rodger and Michael Wilderspin. The last of these manages to combine earning a living working for the European Commission Legal Service with a highly refreshing independent spirit that is typified by his characterisation of the case law of the Court of Justice of the European Union on Article 6(1) of the Brussels I Regulation as ‘perverse . . . it strains at a gnat but swallows a camel.’ (p 46). Hopefully readers will feel the urge to find out which aspect of the Court’s case law constitutes the camel and which the gnat! The star studded cast have not been allowed to behave like prima donnas and pick and choose the bits of private international law of competition they want to write about. The editors have ensured that the writers, including themselves, create a fairly complete picture of the subject for the reader. In this regard the coverage is broader than that of Danov’s Volume 3 in this Series, in that it covers much more on international co-ordination of antitrust litigation issues and on applicable law, but the serious researcher will find much value

vi  Series Editors’ Preface in comparing Danov’s treatment of jurisdiction, applicable law, recognition and enforcement of judgments and arbitration with that of the various authors in this book. Readers of this collection will find that there is some excellent material in specialist chapters which has a strong relevance for other areas of private international law eg, Komninos’ thorough and insightful chapter on ‘Arbitration and EU Competition Law’ has an excellent section on public policy control of arbitral awards that is of great interest and value for those concerned with public policy control of foreign judgments. Finally, the book is a clear invitation to law reformers, particularly in the European Union but also at the national level, to consider some carefully thought through law reform suggestions by the contributors that are pulled together by the editors at the end of the book. Sadly the impact of the proposals for reform of Brussels I will be limited by the extent to which these issues are still open in the current Recast discussions in the Council and European Parliament. It would be good if, even now, Wilderspin’s plea for reform of Article 6(1) were to be taken up by the Commission so that the condition ‘to avoid the risk of irreconcilable judgments resulting from separate proceedings’ is either deleted or given a very broad interpretation by a recital and a new requirement is added that the claim against the anchor defendant should not be manifestly inadmissible or unfounded. Paul R Beaumont (University of Aberdeen) Jonathan Harris (King’s College, London)

CONTENTS Series Editors’ Preface v Table of Abbreviations xxi Table of Cases xxv Table of Legislation xlv Table of Treaties, Conventions and Agreements etc lix 1. Introduction

1

Jürgen Basedow, Stéphanie Francq and Laurence Idot

I. Context II. Why Analyse Antitrust Disputes in the Light of Private International Law? A. The International Aspect of Antitrust Litigation B. The Characteristics of Antitrust Litigation C. Examples and Issues i. Example A ii. Example B iii. Example C iv. Example D D. The Normative Context III. Aims of the Research Project IV. Content and Structure of the Book V. Working Method A. Who is Who? B. Working Method C. Methodological Premises

1 1 1 2 3 3 4 4 4 7 8 9 10 10 11 12

PART I.  INTERNATIONAL ANTITRUST LITIGATION – CONFLICT-OF-LAWS ISSUES 15 I.1.  JURISDICTION IN EU CROSS-BORDER LITIGATION 15

2. How to apply Articles 5(1) and 5(3) of the Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach

17

Blanca Vilà Costa

I. Introduction II. Introductory Proposal: There Is No Need to Amend the Brussels I Regulation with a View to Facilitating Private Enforcement of Competition Law III. Interpretative Proposals Concerning Article 5(1) IV. Interpretative Proposals Concerning Article 5(3)

17

19 23 26

viii  Contents 3. International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation

31

Jürgen Basedow

I. Introduction II. Article 5(3) Regulation 44/2001 III. Multistate Effects and Limited Jurisdictional Competence IV. Perspectives on the Place of Acting and Jurisdictional Competence A. Place of Agreement or Concerted Action B. Place of Implementation C. Seat of the Defendant as Place of Acting V. Variety of Cartel Forms A. (Quasi-)Incorporated Cartels B. Cartel Agreements Made outside of (Quasi-)Corporate Structures C. Single-Instance Cartel Agreements D. Complex Cartel Agreements E. Stable Place of Implementation VI. Summary: A Multiplicity of Places of Acting

31 32 32 33 33 34 35 35 35 36 37 37 38 39

4. Jurisdiction Issues: Brussels I Regulation Articles 6(1), 23, 27 and 28 in Antitrust Litigation

41

Michael Wilderspin

I. Introduction 41 A. Purpose of this Paper 41 B. The Relevant Provisions of the Brussels I Regulation 42 i. Article 6(1) Brussels I Regulation 42 ii. Article 23 Brussels I Regulation 43 iii. The Provisions on Lis Pendens and Related Actions 43 II. The Provimi Litigation 43 A. Factual Background 43 B. Applications to Strike Out the Actions 44 C. Other Issues Which Are Either Implicit in the Judgment or Were Common Ground between the Parties 45 III. Analysis of the Judgment of the High Court in Provimi in the Light of the European Court’s Case-Law 46 A. Article 6(1) 46 B. Article 23 50 IV. Recommendations to Be Made with Regard to Article 6(1) and Articles 23, 27 and 28 Brussels I Regulation 51 A. Article 6(1) 51 B. Article 23 53 C. Article 27 56 D. Article 28 58

Contents  ix I.2.  APPLICABLE LAW IN THE EU – ROME I AND ROME II 61

5. Private Enforcement of Antitrust Provisions and the Rome I Regulation

63

Marc Fallon and Stéphanie Francq

I. Introduction 63 II. How Do Antitrust Rules Apply in Contractual Litigation? 64 A. Basic Principles Governing the Designation of the Lex Contractus 64 i. The Rules Governing the Identification of the Applicable Law 64 ii. Exceptions 66 B. Basic Principles Governing the Applicability of Competition Law 67 i. Influence of Competition Law on the Substance and Validity of Contracts 68 a. General Remarks: the Influence of Competition Law is Incidental in regard to the Contractual Regime 68 b. Influence of EU Competition Law on Contractual Litigation 69 c. Influence of Article 101(3) TFEU and Block Exemption Regulations 70 ii. The Nature of Competition Law from the Point of View of Private International Law 73 C. The Intervention of Competition Law Rules in International Contractual Litigation 74 i. EU Competition Law 74 a. Primary Law 74 b. Secondary Law 76 ii. National Competition Law 77 a. The Interplay of Article 4 and Article 9 Rome I 77 b. Conflict of Competition Laws of Different Legal Systems 79 D. Conclusion 81 III. Specific Issue: The Nullity of the Contract or Part Thereof and its Consequences 82 A. Nullity of the Contract or Part Thereof 83 i. Material Scope of the Provision on Nullity 83 ii. The Law Applicable to Issues Related to the Nullity of the Contractual Agreement but Falling Outside the Scope of Article 101(2) TFEU 86 B. Assessment of Damages and Nemo Auditur 88 i. Taking into Account Substantive Overriding EU Requirements 88 ii. Ascertaining the Applicable Law 89 C. Conclusion 90

x  Contents 6. International Antitrust Claims under the Rome II Regulation

91

Stéphanie Francq and Wolfgang Wurmnest

I. Introduction II. Legislative History III. Foundations of Article 6 Rome II A. Determining the Scope of the Rome II Regulation i. General Remarks ii. Non-Contractual Obligations iii. Civil and Commercial Matters B. Article 6 Rome II in the General System of the Regulation i. Overview ii. Is Article 6(3) Rome II a Universal Provision? C. The Interplay between Articles 6(1) and 6(3) Rome II i. Background ii. No Need to Distinguish Articles 6(1) and (3) Rome II? iii. The Dividing Line between Unfair Competition and Restriction of Competition D. Necessary Legislative Amendments IV. Nature of the Rules Designated by Article 6(3) Rome II A. Problem Stated i. Various Aspects of Competition Law ii. Market Rules Determine their Own Scope of Application B. Solution for Articles 101, 102 TFEU C. Possible Solutions for Market Rules of National Origin i. Article 6(3) Rome II as an ‘Open Gate’ ii. Market Rules as Overriding Mandatory Rules (Article 16 Rome II) iii. Market Rules as Rules of Safety and Conduct (Article 17 Rome II) D. Necessary Legislative Amendments V. The Law of the Affected Market, Article 6(3)(a) Rome II A. Defining the Relevant Market B. Nature of the Link Required C. Necessary Legislative Amendments VI. The Right to Choose the Law of the Forum, Article 6(3)(b) Rome II A. General Remarks B. Unwritten Limitations of the Concentration Rule? i. Problem Stated ii. Limitations with Regard to the Application of National Competition Law iii. Limitations with Regard to the Kind of Damage Sustained by the Plaintiff C. Necessary Legislative Amendments VII. Conclusion

91 93 96 96 96 96 97 98 98 100 103 103 104 105 107 107 107 107 109 110 111 111 114 117 119 119 120 122 124 124 124 125 125 126 127 128 128

Contents  xi 7. Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law)

131

Sylvaine Poillot-Peruzzetto and Dominika Lawnicka

I. Introduction 131 II. Preliminary Question: Is the Debate Related to the Distinction between Contractual and Non-Contractual Spheres an Odd Issue in the Context of Actions for Damages Based on a Breach of EU Competition Law? 135 III. Assessment of the Distinction between Contractual and Non-Contractual Claims Arising out of a Restriction of Competition 138 A. Distinction of the Texts 139 B. Distinctions as Far as the Reasoning and the Solutions are Concerned 139 i. The Distinctions and the Issue of Determining Jurisdiction 139 a. Tort 140 b. Contract 140 ii. The Distinction and the Issue of Applicable Law 140 a. Differences Based on the Assessment of a Specific Policy 141 b. Differences Based on the Specification of the Policy 141 c. Differences between Solutions on the Basis of Examples 141 d. Results of the Comparison 144 IV. How the Distinction Conflicts with European Principles 145 A. The European Principles Involved 145 i. Specificity of the European Legal Order and Its Directions 145 ii. Competition Policy as a Pillar of the Internal Market 146 a. The Importance of the Basis 146 b. The Effects of the Basis in Competition Law: the Specificity of Private Actions Based on Competition in the Member States 147 iii. The Area of Freedom, Security and Justice 147 a. Predictability, Legal Certainty and Justice 147 b. Fundamental Place of the European Citizen 148 c. Simplification of Litigation 148 d. No Distortion of Competition between Litigants 148 e. Consistency among the European Texts 148 B. The Elements of the Conflict 149 i. The Difficult Implementation of the Distinction between Contractual and Non-Contractual Obligations Conflicts with Certainty, Predictability, Necessity of Simplification and Effectiveness of Competition Policy 149 a. Conflicts Resulting from the Existence of the Primary Distinction between Contractual and Non-Contractual Obligations 149 b. Conflicts Resulting from the Difficulties of Implementation of the Distinction within the Categories 151

xii  Contents

ii. The Variety of the Solutions Induced by the Existence of the Distinction Conflicts with Principles of the Area of Freedom, Security and Justice as well as with the Objective of Effectiveness of EU Competition Law a. Different Choice of Jurisdiction for the Plaintiff Conflicts with the Principle of Non-Distortion of Competition between the Litigants when they Sue for Damages on the Basis of a Breach of Competition Rules b. Possible Party Autonomy in Case of Contractual Obligations Conflicts with Competition Policy and with the Principles of the Area of Freedom, Security and Justice c. Different Connecting Factors and Different Reasonings whether the Obligation Is Contractual or Non-Contractual for the Same Prohibited Behaviour Conflicts with the Principle of Consistency and with the Necessity not to Distort Competition between the Litigants d. Possible Use of Article 4(4) Rome I Regulation for a Contractual Obligation Conflicts with the Necessary Predictability of the Solutions for the Plaintiff e. The Impossibility of Adoption of a Single Applicable Law to an Action Brought against Several Defendants (Namely Distributors) on the Basis of Several and Similar Contractual Obligations May Be Considered in Conflict with at Least Three European Principles iii. The Lack of Specific Rules for Contract Conflicts with the Objective of Effectiveness of European Competition Policy and the Principle of Consistency V. Proposals of Means of Convergence A. Formal Solution i. The Solution of Formal Unity of Competition Matters Through a Single Text ii. The Solution of Formal Diversity through Three Texts Containing Equivalent Provisions B. Substantive Common Solutions VI. Conclusion

153

153

153

154

154

154

154 155 155 155 156 156 157

I.3.  ALTERNATIVE FORMS OF LITIGATION 159

8. International Litigation and Competition Law: the Case of Collective Redress

161

Dimitrios-Panagiotis L Tzakas

I. Introduction II. The Requirements Emanating from EU Competition Law III. Current State of Collective Redress in the EU A. Collective Redress in the Legal Systems of the Member States

161 162 165 165

Contents  xiii i. Representative Actions ii. Collective Actions B. The Propositions of the European Commission IV. Specific Issues Raised by Collective Redress Instruments A. Representative Actions i. Recognition of the Representative Entity ii. Admissibility of the Type of Action iii. Defining the Eligible Representative Entities a. Conflict-of-Laws Issues b. Questions of Interchangeability or Substitution c. The Commission’s Proposals iv. Represented Individuals v. Distribution of Damages B. Collective Actions V. Jurisdictional Aspects VI. Applicable Law VII. Recognition and Enforcement of Collective Redress Rulings VIII. Conclusion

165 167 168 170 170 170 172 172 172 175 176 178 180 182 183 184 185 189

9. Arbitration and EU Competition Law

191

Assimakis P Komninos

I. Introduction 191 II. Modernised EU Competition Law and Arbitration 192 A. From Distrust to Embrace 192 B. How Competition Law Issues Arise in Arbitration 194 C. Arbitrability of EU Competition Law 194 D. Competences of Arbitrators in the Decentralised System of Enforcement 196 III. The Application of EU Competition Law by International Arbitration Tribunals 198 A. EU Competition Law as Applicable Law in Trans-border Disputes in General 198 B. The Specific Case of Arbitration 200 IV. The Institutional Position of Arbitration in its Relationship with the European Commission 202 A. Arbitration Is Not Covered by the Cooperation Duties of Regulation 1/2003 202 B. General Exclusion of Arbitration from the Courts Cooperation Notice 204 C. A Notice on Cooperation with Arbitrators? 206 V. Conflicts of Resolution between Arbitration and Competition Authorities 207 A. Arbitration and Article 16 Regulation 1/2003 207 B. Arbitration and National Laws Conferring a Binding Effect on NCAs’ Decisions 210

xiv  Contents

C. Direct Intervention by the Commission as an Exceptional Corrective Mechanism 211 VI. The Ultimate Safeguard: the Public Policy Control of Arbitral Awards 213 A. Eco Swiss 213 B. The Extent of the Public Policy Control 214 C. A Proposed Balanced Approach for Review of Arbitral Awards 218 D. Conclusion 221 I.4.  Beyond the EU

223

10. Jurisdiction and Choice of Law in International Antitrust Law – A US Perspective 225 Hannah L Buxbaum and Ralf Michaels

I. Introduction A. The Value of a US Perspective B. Doctrinal Matters II. Personal Jurisdiction A. Personal Jurisdiction i. Targeting ii. Conspiracy B. Forum non Conveniens III. Applicable Law A. Actions for Monetary Damages i. Damages Claims as Part of Applicable Antitrust Law ii. Effects Doctrine iii. Concentration of Applicable Law iv. Application of Foreign Law B. Contract Validity i. Party Autonomy ii. Federal Antitrust Law and State Contract Law iii. US Antitrust Law and Foreign Contract Law iv. Foreign Antitrust Law and State Contract Law IV. Conflict-of-Laws Issues in Class Action Certification A. Jurisdiction Over Non-Resident Class Members B. Applicable Law C. Recognition of Foreign Judgments: The Question of Preclusion V. Conclusion

225 225 227 228 228 228 229 230 231 231 231 232 233 235 237 238 238 239 239 240 240 241 243 244

11. Recognition and Enforcement of Foreign Judgments

245

Catherine Kessedjian

I. Introduction II. Which Model to Choose? A. The United States B. The European Union

245 246 246 249

Contents  xv III. Specific Issues in Competition Law A. Punitive Damages B. Administrative Penalties in Addition to Civil Damages C. Judgment Handed Down After a Collective Action IV. Conclusion

251 252 254 255 256

PART II.  INTERNATIONAL ANTITRUST LITIGATION – COORDINATION ISSUES 257 II.1.  COORDINATION BETWEEN COMPETITION AUTHORITIES AND COURTS 257

12. Access to Evidence and Files of Competition Authorities

259

Laurence Idot

I. Introduction 259 II. Access to Evidence in the Context of the European Union 263 A. Acknowledgement of a Right of Access 263 i. Disclosure Inter Partes 263 a. Situation in Positive Law (De Lege Lata) 263 b. The Proposed Solutions (De Lege Ferenda) 268 ii. Access to the Competition Authorities’ Files 270 a. Situation in Positive Law (De Lege Lata) 270 b. Proposed Solutions (De Lege Ferenda) 272 B. The Limits to the Right of Access 273 i. Identification of the Limits Accepted in Competition Laws 273 a. The Rights and Privileges Granted to Undertakings Involved in Administrative Proceedings 273 b. The Restrictions on the Authorities’ Right to Disclose 275 ii. The Introduction of the International Dimension 276 a. The Pre-Draft Solutions 277 b. The Suggested Improvements 278 III. Access to Evidence in a Truly International Context 279 A. The Current Situation 280 i. Access for a Claimant in a Private Action to Evidence Located Abroad 280 a. The Limits of International Cooperation 281 b. The Development of Unilateral Application 282 ii. The Use in Foreign Proceedings of Documents Located in the United States 283 B. The Possible Means 284 i. Experience Gained from International Cooperation in Competition Matters 284 ii. The Lessons to Be Learned from International Cooperation in Matters of Mutual Legal Assistance 286

xvi  Contents 13. Exchange of Information and Opinions between European Competition Authorities and Courts – From a Swedish Perspective

289

Robert Moldén

I. Introduction 289 A. Introduction to the EU – Framework of Regulation 1/2003 289 B. Introduction to Swedish Competition Law Procedure – The New Swedish Competition Act of 2008 291 II. The Right of National Courts to Request a Preliminary Ruling from the Court of Justice in Competition Law Cases 293 A. General Observations on Preliminary Rulings by the Court of Justice 293 B. Swedish Courts’ Requests for a Preliminary Ruling from the European Court of Justice in Competition Law Cases 294 i. The STIM Case 294 ii. The TeliaSonera ADSL Case 295 III. The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts in Competition Law Cases 296 A. General Points on Amicus Curiae Observations in Competition Law Cases 296 i. The Garage Gremeau Case 297 ii. The Case on Tax Deductibility of Commission Fines in the Netherlands 298 iii. The Pierre Fabre Dermo-Cosmétique Case 299 B. Amicus Curiae Observations Issued by the SCA to Swedish Courts in Competition Law Cases 300 i. The Soda-Club Case 300 IV. The Right of National Courts to Request Opinions from the Commission in Competition Law Cases 301 A. General Points on Requests of Opinions from the Commission by National Courts in Competition Law Cases 301 B. Requests for Opinions from the Commission by Swedish Courts in Competition Law Cases 302 i. The Ystad Harbour Case 302 ii. The Ekfors Case 303 C. The Right of Swedish Courts to Request Opinions from the Swedish Competition Authority in Competition Law Cases 304 i. The SAS v Luftfartsverket Case 305 V. The Right of National Courts to Request Information from the Commission in Competition Law Cases 306 VI. The Obligation of Member States to Forward National Judgments on EU Competition Law to the European Commission 307 A. General Points 307 B. The Swedish Example: Non-Transparent Provisions 308

Contents  xvii C. The German Example: Transparent Provisions VII. Why National Courts Are Not Entitled by Regulation 1/2003 to Request Information and Opinions from NCAs – Proposal to Consider Amending Regulation 1/2003 in this Respect A. A Puzzling Asymmetry between Articles 15(1) and 15(3) B. An Overview of the Legislative History of the Coordination Measures Embodied in Article 15 Regulation 1/2003 i. The Obligation to Forward Copies of National Judgments on EU Competition Law to the Commission – Article 15(2) ii. The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts – Article 15(3) iii. The Right of National Courts to Request Information and Opinions from the Commission – Article 15(1) C. Analysis of the Legislative Process

309

14. Discovery in a Global Economy

315

310 310 311 311 312 312 313

Maurice E Stucke

I. Introduction II. Litigants Abroad Who Seek Discovery in the US A. When Does the US Court Have Statutory Authority to Order Discovery Under Section 1782(a)? i. Who Can Seek Discovery Under Section 1782? ii. What Foreign Proceedings Qualify Under Section 1782(a)? iii. When Can an Interested Person Seek Discovery under Section 1782? iv. What Kind of Discovery Is Available under Section 1782(a)? B. When Will the US Courts Exercise Their Discretion and Permit Discovery under Section 1782? i. Is the Person from Whom Discovery Is Sought a Participant in the Foreign Proceeding? ii. Comity Considerations iii. Is the Applicant’s Discovery Request under Section 1782(a) an Attempt to Circumvent Foreign Proof-Gathering Restrictions or Other Policies of a Foreign Country or the United States? iv. Is the Discovery Request Unduly Intrusive or Burdensome? III. When Can Private Litigants in the US Seek Discovery Abroad? A. Does the US Court Have the Statutory Authority to Order the Requested Discovery? i. Federal Rules of Civil Procedure Versus the Hague Convention ii. Personal Jurisdiction iii. US Court’s Subpoena Power iv. Seeking Discovery from Multi-National Corporations Operating Through Subsidiaries in Various Countries

315 315 316 317 318 319 320 321 322 323

324 325 326 326 327 328 329 329

xviii  Contents

B. Should the US Court Exercise Its Discretionary Authority to Compel Production? 331 i. EC’s Leniency Program 331 ii. Blocking Statutes 333 IV. Friction from US Discovery 336 A. Criticisms about the United States’ Liberal Discovery Mechanisms for Foreign Litigants 338 B. Policy Proposals 341 V. Conclusion 342 II.2.  COORDINATION WITHIN THE EUROPEAN COMPETITION NETWORK 343

15. The ECN and Coordination of Public Enforcement of EU Law – Can Lessons Be Learned from International Private Law Jurisdiction Rules and Vice Versa?

345

Barry J Rodger

I. Introduction 345 II. Regulation 1/2003 and the Functioning of the ECN 346 A. The nature of the ECN 346 B. ECN Functioning 346 III. ECN ‘Case Allocation’ 348 A. The Network Notice 348 B. 2009 Commission Report on Regulation 1/2003 350 C. Procedures, Sanctions and Inconsistent Outcomes: Divergence and Convergence 351 IV. Leniency and Concurrency 354 V. International Private Law and Conflicts of Jurisdiction 356 A. Introduction 356 B. Lis Alibi Pendens – First Come First Served 357 C. Forum Non Conveniens 358 VI. Concluding Remarks 360 A. Lessons from the US? 360 B. The Private and Public Enforcement Context Compared 360 C. Case Allocation Methods Compared 361 D. Mutual Lessons? 362 E. Future Issues in Case Allocation 363 16. Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations

365

Damien MB Gerard

I. Introduction II. Issues and Approaches A. Coordination Issues: Dealing with Diversity and Uncertainty i. Diversity ii. Uncertainty

365 366 367 368 370

Contents  xix B. Approaches: Managing Diversity to Ensure Legal Certainty 373 i. Conflictualist Approach 373 ii. Cumulative Approach 376 a. The Position of Individuals in Cross-Border Investigations 376 b. The Kerosene Case 379 c. The European Courts and Evidence Obtained from Third Countries 380 iii. Recognition Approach 381 a. Recital 16 in the Broader Context of Enforcement Cooperation 382 b. Recital 16 in the Broader Context of the European Integration Process 386 III. Solution and Recommendations 387 A. Solution: Successive Application of the Lex Fori Mitigated by the Convergence between National Procedural Enforcement Frameworks 387 i. Control of Legality 388 ii. Control of Admissibility 389 B. Recommendations: Enhance Legal Certainty to Ensure a Proper Balance between Effective Enforcement and Due Process 390 IV. Concluding Remarks 391 17. Recognition of Foreign Decisions within the European Competition Network

393

Jürgen Basedow



I. Introduction: Integration Policy and Recognition II. The Recognition of an NCA Decision by the NCA of another Member State III. The Recognition of an NCA Decision in Civil Proceedings of another Member State IV. The Recognition of Civil Judgments by a Civil Court of a Foreign Member State V. The Recognition of Civil Judgments by an NCA of a Foreign Member State VI. The Effect of Recognition VII. Conclusion

393 395

Policy Proposals

403

How to apply Articles 5(1) and 5(3) of the Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach

405

396 398 399 400 402

Blanca Vilà Costa

International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation

407

Jürgen Basedow

Jurisdiction Issues: Brussels I Regulation Articles 6(1), 23, 27 and 28 in Antitrust Litigation Michael Wilderspin

409

xx  Contents Rome I and Antitrust Litigation

413

Marc Fallon & Stéphanie Francq

Rome II and Antitrust Litigation

415

Stéphanie Francq & Wolfgang Wurmnest

Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law) 419 Sylvaine Poillot-Peruzzetto & Dominika Lawnicka

International Litigation and Competition Law: the Case of Collective Redress

421

Dimitrios-Panagiotis L Tzakas

Arbitration and EU Competition Law

425

Assimakis P Komninos

Recognition and Enforcement of Foreign Judgments

427

Catherine Kessedjian

Access to Evidence and Files of Competition Authorities

429

Laurence Idot

Exchange of Information and Opinions between European Competition Authorities and Courts – From a Swedish Perspective

433

Robert Moldén

The ECN and Coordination of Public Enforcement of EU Law – Can Lessons Be Learned from International Private Law Jurisdiction Rules and Vice-Versa?

435

Barry J Rodger

Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations

437

Damien MB Gerard

Recognition of Foreign Decisions within the European Competition Network

439

Jürgen Basedow

Index 441

TABLE OF ABBREVIATIONS ABA American Bar Association ALI American Law Institute Arb Arbitration: the Journal of the Chartered Institute of Arbitrators Arb Int’l Arbitration International ARC  Act against Restraints of Competition BGH  Bundesgerichtshof BVerfG  Bundesverfassungsgericht Bull ASA Swiss Arbitration Association Bulletin CA  Competition Authorities CA Paris Paris Court of Appeal CAT Competition Appeal Tribunal CMLRev Common Market Law Review CPI Competition Policy International Antitrust Journal CUP Cambridge University Press DG Directorate General DOJ  Department of Justice DUP Dundee University Press EAW  European Arrest Warrant EBLR European Business Law Review ECJ  European Court of Justice ECLR European Competition Law Review ECN European Competition Network EJN European Judicial Network EU PIL  European private international law Eur Law Rev European Law Review EuZW Europäische Zeitschrift für Wirtschaftsrecht Fordham L Rev Fordham Law Review FTAIA Foreign Trade Antitrust Improvements Act GAR Global Antitrust Review GCLR Global Competition Litigation Review GEDIP/EGPIL Groupe Européen de Droit International Privé/European Group for Private International Law Giust Civ Giustizia Civile GP Gazette du Palais GRURInt Gewerblicher Rechtsschutz und Urheberrecht: Internationaler Teil GWB Gesetz gegen Wettbewerbsbeschränkungen Harvard ILJ Harvard International Law Journal HLJ The Hastings Law Journal ICC International Chamber of Commerce ICLQ International & Comparative Law Quarterly

xxii  Table of Abbreviations ICN  International Competition Network ILA  International Law Association ILPr International Litigation Procedure Int ALR International Arbitration Law Review IPRax Praxis des Internationalen Privat- und Verfahrensrechts JCP Juris-classeur périodique JCP/E La Semaine Juridique – Entreprise et Affaires JDI Clunet Journal du droit international – Clunet JT Journal des Tribunaux JIA  Journal of International Arbitration JLS  Justice-Liberty-Security JPIL Journal of Private International Law JZ JuristenZeitung LGDJ Librairie générale de droit et de jurisprudence Lloyd’s Rep Lloyd’s Law Reports LMCLQ Lloyd’s Maritime and Commercial Law Quarterly NCA National Competition Authority NCCUSL National Conference of Commissioners on Uniform State laws NJW Neue Juristische Wochenschrift NOU Nämnden för offentlig upphandling OECD  Organisation for Economic Co-operation and Development OFT Office of Fair Trading OPEC  Organization of the Petroleum Exporting Countries OUP Oxford University Press PIL private international law PUF  Presses Universitaires de France RabelsZ Rabels Zeitschrift für ausländisches und internationales Privatrecht RCADI Recueil des Cours de l’Académie de Droit International RCDIP Revue Critique de droit international privé RDAI/IBLJ Revue de Droit des Affaires Internationales/ International Business Law Journal RDIDC Revue de Droit International et de Droit Comparé Rev Arb Revue de l’Arbitrage Riv Arbitrato Rivista dell’arbitrato RIW Recht der Internationalen Wirtschaft RLC Revue Lamy de la Concurrence RLDA Revue Lamy droit des affaires SCA Swedish Competition Authority SchiedsVZ Zeitschrift für Schiedsverfahren SIAR Stockholm International Arbitration Review TFEU Treaty on the Functioning of the European Union UNTS United Nations Treaty Series USC  United States Code USCCAN United States Code Congressional and Administrative News USGPO US Government Printing Office VuR Verbraucher und Recht WLR Weekly Law Reports

Table of Abbreviations  xxiii WM Wertpapier-Mitteilungen YJIL Yale Journal of International Law YCA Yearbook Commercial Arbitration YPIL Yearbook of Private International Law ZWeR Zeitschrift für Wettbewerbsrecht ZZPInt Zeitschrift für Zivilprozeß International

TABLE OF CASES Belgium Tribunal de première instance Bruxelles (Civ Bruxelles), 15 October 1975, Preflex SA v Lipski (1976) 91 Journal des Tribunaux 493....................................................................212 Tribunal de première instance Bruxelles (Civ Bruxelles), 8 March 2007, SNF SAS v Cytec Industrie BV (2007) 127 GP No 112-114, 53.........................................................217 Cyprus Supreme Court, judgment of 7 November 2005 (294/2005)...............................................385 European Union EU cases in alphabetical order A Ahlström Osakeyhtiö and others v Commission of the European Communities (Wood Pulp), Joined Cases C–89/85, C–104/85, C–114/85, C–116/85, C–117/85, C–125/85, C–126/85, C–127/85, C–128/85 and C–129/85, [1994] ECR I–99 (ECJ)..............................................................................................................74, 77 A Ahlström Osakeyhtiö and others v Commission (Woodpulp I), Joined Cases C–89/85, 104/85, 114/85, 116/85-117/85 and 125/85 to 129/85, [1988] ECR 5193 (ECJ)...................................................................................34, 109, 122, 199–200 Aalborg Portland A/S Irish Cement Ltd, Ciments français SA, Italcementi – Fabbriche Riunite Cemento SpA, Buzzi Unicem SpA and Cementir – Cementerie del Tirreno SpA v Commission of the European Communities, Joined Cases C–204/00 P, C–205/00 P, C–211/00 P, C–213/00 P, C–217/00 P and C–219/00P, [2004] ECR I–123............................................................................................................................68 AC–Treuhand AG v Commission, Case T–99/04, [2008] ECR II–1501..............................211 Aéroports de Paris v Commission, Case T–128/98, [2000] ECR II–3929...........................195 Agrofert, Case T–11/07, [2010] (CFI)...................................................................................271 Akzo, Case C–7/04P (R), [2004] ECR I–8739......................................................................274 Akzo, Joined Cases T–125/03R and T–253/03R, [2004] ECR II–4771................................274 Akzo Chemie BV and Akzo Chemie UK Ltd v Commission, Case 53/85, [1986] ECR 1965............................................................................................................................274 Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v Commission of the European Communities, Joined Cases T–125/03 and T–253/03, [2007] ECR II–3523..................274 Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission, Case C–550/07P, [2010].....................................................................................................274 AM & S Europe Limited v Commission of the European Communities, Case 155/79, [1982] ECR 1575 (ECJ).....................................................................................................274 Arcado v Haviland, Case 9/87, [1988] ECR 1539...............................................133–4, 149–50 Archer Daniels Midland Co v Commission, Case C–511/06P, [2009] ECR I–5843............................................................................................................376, 380–1

xxvi  Table of Cases Archer Daniels Midland Co v Commission, Case T–59/02, [2006] ECR II–3627...........................................................................................................376, 380–1 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others, Case 189/87, [1988] ECR 5565 (ECJ)............................... 22, 26–7, 42, 48, 133–4, 151, 411 Automec Srl v Commission, Case T–24/90, [1992] ECR II–2223............... 84–5, 87, 350, 360 Béguelin Import Co v SAGL Import Export, Case 22/71, [1971] ECR 949..............74, 79, 83 Bernard Denilauler v SNC Couchet Frères, Case 125/79, [1980] ECR 1553......................269 Bernardus Hendrikman and Maria Feyen v Magenta Druck & Verlag GmbH, Case C–78/95, [1996] ECR I–4943...................................................................................219 Besix SA v WABAG and Plafog, Case C–256/00, [2002] ECR I–1737............. 26, 39, 363, 407 Binon v AMP, Case 243/83, [1985] ECR 2015 (ECJ)..............................................................84 Brasserie de Haecht II, Case 48/72, [1973] ECR 77................................................................84 C, Case C–435/06, [2007] ECR I–10141.................................................................................96 Car Trim v KeySafety, Case C–381/08, [2010] ECR I–1255 (ECJ)................................21, 405 Cartesio Oktató és Szolgáltató bt, Case C–210/06................................................................171 CEPSA v LV Tobar, Case C–279/06, [2008] ECR I–6681.......................................................24 Color Drack v Lexx International, Case C–386/05, [2007] ECR I–3699 (ECJ)......21, 24, 405 Colozza and Rubinat v Italy, Series A no 89 (1985) (ECHR)......................................... 187–8 Commission of the European Communities v Italian Republic, Case C–372/99, [2002] ECR I–819..............................................................................................................163 Commission of the European Communities v Lisrestal, Case C–32/95P, [1996] ECR I–5373........................................................................................................................187 Commission of the European Communities v Technische Glaswerke Illmenau, Case C–139/07P, [2010].....................................................................................................271 Commission v Italy [1973], Case 39/72, ECR 101..................................................................90 Courage Ltd v Bernard Crehan, Case C–453/99, [2001] ECR I–6297 (ECJ)............................................................... 17, 24, 56, 69, 74, 83–4, 86–8, 90, 93, 99, 111, 137–8, 145–6, 148, 162–4, 172, 174, 263, 406, 413, 421 Dalmine v Commission, Case C–407/04P, [2007] ECR I–829 (ECJ)..................................381 Delimitis v Henninger Brau AG, Case C–234/89, [1991] ECR I–935 (ECJ).................73, 312 Dieter Krombach v André Bamberski, Case C–7/98, [2000] ECR I–1935..........188, 219, 397 Dirección General de Defensa de la Competencia v Asociación Española de Banca Privada and others, Case C–67/91, [1992] ECR I–4785 (Spanish banks case)...............275 Dumez v Hessische Landesbank, Case C–220/88, [1990] ECR I–49 (ECJ)..........................28 Eco Swiss China Time Ltd v Benetton International NV, Case C–126/97, [1999] ECR I–3055...................................54–5, 67, 74–5, 86, 195, 197, 201, 205, 209, 213–19, 222 Effer SpA v Hans-Joachim Kantner, Case 38/81, [1982] ECR 825 (ECJ)..............................23 Eirini Lechouritou and others v Dimosio tis Omospondiakis Dimokratias tis Germanias, Case C–292/05, [2007] ECR I–1519.......................................................... 96–7 Electrosteel Europe v Edil Centro, Case C–87/10 (ECJ)........................................................21 Elisa María Mostaza Claro v Centro Móvil Milenium SL, Case C–168/05, [2006] ECR I–10421..................................................................................................................74, 86 Erhard Eschig v UNIQA Sachversicherung AG, Case C–199/08, [2009] ECR I–8295.......163 Erich Gasser GmbH v MISAT Srl, Case C–116/02, [2003] ECR I–14693...................................................................................... 53, 56–7, 187, 387, 411 Etablissements Consten and Grundig-Verkaufs v Commission of the European Economic Community, Joined Cases 56/64 and 58/64, [1966] ECR 299...................68, 73

Table of Cases  xxvii Eurofood, Case C–341/04, [2006] ECR I–3813....................................................................383 Europemballage Corporation and Continental Can Company Inc v Commission of the European Communities, Case 6/72, [1975] ECR 495 (ECJ).....................................120 Falco Privatstiftung v Weller-Lindhorst, Case C–533/07, [2009] ECR I–3327 (ECJ)...............................................................................................................20–1, 25–6, 405 Fiatagri and New Holland Ford v Commission, Case T–34/92, [1994] ECR II–905.........195 Fiona Shevill and others v Presse Alliance SA, Case C–68/93, [1995] ECR I–415 (ECJ)..........................................................................28, 33, 35, 118, 139, 184, 233, 406, 422 Fonderie Officinie Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS), Case C–334/00, [2002] ECR I–7357.............................................22–4, 363 France Telecom SA v Commission, Cases T–339/04 and T–340/04, [2007] ECR II–521.........................................................................................................................354 Freeport v Olle Arnoldsson, Case C–98/06, [2007] ECR I–8319...................................... 47–8 Gemeente Almelo and others v Energiebedrijf Ijsselmij NV, Case C–393/92, [1994] ECR I–1477........................................................................................................................197 Gemeente Steenbergen v Luc Baten, Case C–271/00, [2002] ECR I–10489.........................97 Gencor Ltd v Commission, Case T–102/96, [1999] ECR II–753..................... 77, 79, 122, 199 Giuseppe Francesco Gasparini and Others, Criminal proceedings against, Case C–467/04, [2006] ECR I–9199..........................................................................................387 Gorraiz Lizarraga and others v Spain, (App No 62543/00), ECHR 2004.III......................163 Götz Leffler v Berlin Chemie AG, Case C–443/03, [2005] ECR I–9611..............................104 Gregory Paul Turner v Felix Fareed Ismail Grovit, Harada Ltd and Changepoint SA, Case C–159/02, [2004] ECR I–3565.........................................................................187, 387 Gubisch Maschinenfabrik KG v Palumbo, Case C–144/86, [1987] ECR 4861 (ECJ)...................................................................................................................57, 80, 357–8 Guy Denuit and Betty Cordenier v Transorient – Mosaïque Voyages and Culture SA, Case C–125/04, [2005] ECR I–923...........................................................................197, 205 H J Banks & Co Ltd v British Coal Corporation, Case C–128/92, [1994] ECR I–1209........................................................................................................................162 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA, Case 21/76, [1976] ECR 1735 (ECJ)................................................................................. 28, 32, 139, 184 Hoffmann-La Roche Co AG v Commission of the European Communities, Case 85/76, [1979] ECR 461 (ECJ)...................................................................................120 Horst Ludwig Martin Hoffmann v Adelheid Krieg, Case 145/86, [1988] ECR 645........................................................................................................ 48, 219, 400, 411 IB v Conseil des Ministres, Case C–306/09...........................................................................385 Industrie Tessili Italiana v Dunlop AG, Case 12/76, [1976] ECR 1473.......................139, 151 Ingmar GB Ltd v Eaton Leonard Technologies Inc, Case C–381/98, [2000] ECR I–9305........................................................................................................................199 Inspecteur van de Belastingdienst v X BV, Case C–429/07, [2009] ECR I–4833 (ECJ)...........................................................................................................................202, 299 Ireks-Arkady v Council and Commission, Case 238/78, [1979] ECR 2955..........................90 Irish Beef Industry, Case C–209/07 (ECJ)............................................................................300 Italian Republic v Council of the European Economic Community and Commission of the European Economic Community, Case 32/65, [1966] ECR 389............................72 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA, Case C–26/91, [1992] ECR I–3967 (ECJ)....................................... 24, 26, 97, 132–4, 148–9

xxviii  Table of Cases JCJ Wouters and others v Algemene Raad van de Nederlandse Orde van Advocaten, Case C–309/99, [2002] ECR I–1577.................................................................................212 Jean-Claude Arblade and others, Criminal proceedings against, Joined Cases C–369/96 and C–376/96, [1999] ECR I–8453 (ECJ).................................................81, 200 Just, Case 68/79, [1980] ECR 501............................................................................................90 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd, Case C–167/01, [2003] ECR I–10155........................................................................................171 Kanal 5 Ltd and TV 4 AB v Föreningen Svenska Tonsättares Internationella Musikbyrå (STIM) upa, Case C–52/07, judgment of 11 December 2008.................................... 294–5 Leclerc v Commission, Case T–88/92, [1996] ECR II–1961..................................................85 LTU Lufttransportunternehmen GmbH & Co KG v Eurocontrol, Case 29/76, [1976] ECR 1541..........................................................................................................97, 132 Manfredi, see Vincenzo Manfredi and others Manuele Arduino, Criminal Proceedings against, Case C–35/99, [2002] ECR I–1529......212 Marco Gambazzi v DaimlerChrysler Canada Inc and CIBC Mellon Trust Company, Case C–394/07, [2009] ECR I–2563.................................................................................219 Martin Peters Bauunternehmung GmbH v Zuid Nederlandse Aanemers Vereniging, Case 34/82, [1983] ECR 987......................................................................................133, 357 Masterfoods Ltd v HB Ice Cream Ltd, Case C–344/98, [2000] ECR I–11369 (ECJ).....207, 393 Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, Case C–420/07, [2009] ECR I–3571..................................................................................383, 387 Metro SB-Grossmärkte GmbH & Co KG v Commission of the European Communities, Case 26/76, [1977] ECR 1875..............................................................................................68 Michaïlidis, Joined Cases C–441/98 and C–442/98, [2000] ECR I–7145..............................90 Microsoft Corp v Commission, Case T–201/04, [2007] ECR II–3601................................193 Netherlands State v Reinhold Rüffer, Case 814/79, [1980] ECR 3807..................................97 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG, Case 102/81, [1982] ECR 1095..................................................197, 205, 213 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, Case 26/62, [1963] ECR 1...........................................145 NV L’Oréal and SA L’Oréal v PVBA “De Nieuwe AMCK”, Case 31/80, [1980] ECR 3775 (ECJ).................................................................................................................120 Océano Grupo Editorial SA v Rocío Murciano Quintero, Joined Cases C–240/98 to C–244/98, [2000] ECR I–4941..........................................................................................163 Odile Jacob, Case T–237/05, [2010] (CFI)............................................................................271 Osterreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst v Republik Osterreich, Case C–195/98, [2000] ECR I–10497............................................................163 Overseas Union Insurance, Case C–351/89, [1991] ECR I–3317 (ECJ)................................80 Owners of the cargo lately laden on board the ship “Tatry” v the owners of the ship “Maciej Rataj”, Case C–406/92, [1994] ECR I–5439.............. 48, 50, 57, 80, 357–8, 411–12 Owusu (Andrew) v NB Jackson, Case C–281/02, trading as `Villa Holidays Bal-Inn Villas’ and others, [2005] ECR I–1383.......................................... 32, 55, 187, 219, 359, 363 Pellegrini v Italy, no 30882/96 ECHR, 20 July 2001 (ECtHR).............................................397 Petra Engler v Janus Versand GmbH, Case C–27/02, [2005] ECR I–481 (ECJ).........23–4, 97 Pfleiderer AG v Bundeskartellamt, Case C–360/09, lodged 9 September 2009..................276 Pierre Fabre Dermo-Cosmétique, Case C–439/09...............................................................299

Table of Cases  xxix Portelange, Case 10/69, [1969] ECR 309................................................................................83 Postbank NV v Commission of the European Communities, Case T–353/94, [1996] ECR II–921..................................................................................... 270, 275, 278, 430 Powell Duffryn v Petereit, Case C–214/89, [1992] ECR I–1745............................................45 Productores de Música de España (Promusicae) v Telefónica de España SAU, Case C–275/06, [2008] ECR I–271...................................................................................277 Régie Nationale des Usines Renault SA v Maxicar SpA, Case C–38/98, [2000] ECR I–2973..............................................................................................55, 74, 188, 219–20 Rehder v Air Baltic, Case C–204/08, [2009] ECR I–6073 (ECJ)....................................21, 405 Reisch Montage AG v Kiesel Baumaschinen Handels GmbH, Case C–103/05, [2006] ECR I–6827............................................................................................46–7, 53, 410 Réunion européenne SA and Others v Spliethoff ’s Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002, Case C–51/97, (ECJ 27 October 1998) [1998] ECR I–6511................................................................................................32, 47, 134 Riviera Auto Service Etablissements Dalmasso SA, Garage des quatre vallées SA, Pierre Joseph Tosi, Palma SA (CIA - Groupe Palma), Christophe and Gérard Palma v Commission of the European Communities, Joined Cases T–185/96, T–189/96 and T–190/96, [1999] ECR II–93...........................................................70, 85, 87 Roche Nederland BV and Others v Frederick Primus and Milton Goldenberg, Case C–539/03, [2006] ECR I–6535............................................... 46, 48–50, 52–3, 57, 411 Rosmarie Kapferer v Schlank & Schick GmbH, Case C–234/04, [2006] ECR I–2585........................................................................................................................218 Rudolf Gabriel, Case C–96/00, [2002] ECR I–6367...............................................................22 Saint Paul Dairy Industries NV v Unibel Exser BVBA, Case C–104/03, [2005] ECR I–3481 (ECJ)......................................................................................................265, 269 Salonia v Poidomani and Baglieri, Case 126/80, [1981] ECR 1563 (ECJ)............................84 SEP v Commission, Case C–36/92P, [1994] ECR I–1911....................................................274 SGL Carbon AG v Commission of the European Communities, Case C–308/04P, [2006] ECR I–5977........................................................................................................68, 86 Shearson Lehmann Hutton Inc v TVB, Case C–89/91, [1993] ECR I–139.........................184 Société de distribution de mécaniques et d’automobiles (Sodima) v Commission of the European Communities, Case T–62/99, [2001] ECR II–2579....................................70 Société de Vente de Ciments et Bétons de l’Est SA v Kerpen & Kerpen GmbH und Co KG, Case 319/82, [1983] ECR 4173.......................................................................... 85–6 Société Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU), Case 56/65, [1966] ECR 235....................................................................................................................84 Stanley George Adams v Commission of the European Communities, Case 53/84, [1985] ECR 3539........................................................................................................... 274–5 Stefan Grunkin and Dorothee Regina Paul, Case C–353/06, 14 October 2008 (ECJ)........394 Sumitomo Chemical Co Ltd and Sumika Fine Chemicals Co Ltd v Commission of the European Communities, Joined Cases T–22/02 and T–23/02, [2005] ECR II–4065.........................................................................................................................85 T v Italy, judgment of 12 October 1992, Application No 14104/88............................... 187–8 T-Mobile Netherlands BV and others v Raad van Bestuur van de Nederlandse Mededingingsautoriteit, Case C–8/08, [2009] ECR I–4529......................................67, 105 Tatry, The see Owners of the cargo lately laden on board the ship `Tatry’ v the owners of the ship `Maciej Rataj’ [1994] ECR I–5439

xxx  Table of Cases Tokai Carbon Co Ltd and Others v Commission of the European Communities, Joined Cases T–236/01, T–239/01, T–244/01 to T–246/01, T–251/01 and T–252/01, [2004] ECR II–1181.......................................................................................................68, 81 Tremblay and Others v Commission......................................................................................85 Uberseering BV v Nordic Construction Company Baumanagement GmbH, Case C–208/00, [2002] ECR I–9919..........................................................................................171 Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern, Case C–432/05, [2007] ECR I–2271 (ECJ)..................................................................................................164 VAG France SA v Etablissements Magne SA, Case 10/86, [1986] ECR 4071..................70, 87 Verein für Konsumenteninformation v Commission of the European Communities, Case T–2/03, [2005] ECR II–1121 (CFI)..........................................................................271 Verein für Konsumenteninformation v Karl Heinz Henkel, Case C–167/00, [2002] ECR I–8111..............................................................................................................97, 183–4 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others, Joined Cases C–295/04 to C–298/04, [2006] ECR I–6619 (ECJ).............................................................................17, 28, 67, 69, 74, 88, 90, 111, 137–8, 145–6, 148, 162–4, 172, 174, 195, 263, 406, 413, 421 Volker Sonntag v Hans Waidmann and others, Case C–172/91, [1993] ECR I–1963..........................................................................................................................97 Volkswagen AG v Commission of the European Communities, Case T–62/98, [2000] ECR II–2707.............................................................................................................72 Walt Wilhelm and others v Bundeskartellamt, Case 14/68, [1969] ECR 1...........................79 Wood Floor Solutions Andreas Domberger v Silva Trade, Case C–19/09, [2010] ECR I–2121 (ECJ)..................................................................................................21, 25, 405 Yavuz v Austria, judgment of 27 May 2004, Application No 46549/99...............................188 EU cases in chronological order Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration [1963] ECR 1...........................................145 Joined Cases 56/64 and 58/64, Etablissements Consten and Grundig-Verkaufs v Commission of the European Economic Community [1966] ECR 299....................68, 73 Case 32/65, Italian Republic v Council of the European Economic Community and Commission of the European Economic Community [1966] ECR 389..........................72 Case 56/65, Société Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU) [1966] ECR 235....................................................................................................................84 Case 14/68, Walt Wilhelm and others v Bundeskartellamt [1969] ECR 1............................79 Case 10/69, Portelange [1969] ECR 309.................................................................................83 Case 22/71, Béguelin Import Co v SAGL Import Export [1971] ECR 949...............74, 79, 83 Case 6/72, Europemballage Corporation and Continental Can Company Inc v Commission of the European Communities [1975] ECR 495 (ECJ).............................120 Case 39/72, Commission v Italy [1973] ECR 101...................................................................90 Case 48/72, Brasserie de Haecht II [1973] ECR 77.................................................................84 Case 12/76, Industrie Tessili Italiana v Dunlop AG [1976] ECR 1473........................139, 151 Case 21/76, Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735 (ECJ)............................................................................................. 28, 32, 139, 184 Case 26/76, Metro SB-Grossmärkte GmbH & Co KG v Commission of the European Communities [1977] ECR 1875..........................................................................................68

Table of Cases  xxxi Case 29/76, LTU Lufttransportunternehmen GmbH & Co KG v Eurocontrol [1976] ECR 1541..........................................................................................................97, 132 Case 85/76, Hoffmann-La Roche Co AG v Commission of the European Communities [1979] ECR 461 (ECJ).......................................................................................................120 Case 238/78, Ireks-Arkady v Council and Commission [1979] ECR 2955...........................90 Case 68/79, Just [1980] ECR 501.............................................................................................90 Case 125/79, Bernard Denilauler v SNC Couchet Frères [1980] ECR 1553.......................269 Case 155/79, AM & S Europe Limited v Commission of the European Communities [1982] ECR 1575 (ECJ).....................................................................................................274 Case 814/79, Netherlands State v Reinhold Rüffer [1980] ECR 3807...................................97 Case 31/80, NV L’Oréal and SA L’Oréal v PVBA “De Nieuwe AMCK” [1980] ECR 3775 (ECJ).................................................................................................................120 Case 126/80, Salonia v Poidomani and Baglieri [1981] ECR 1563 (ECJ).............................84 Case 38/81, Effer SpA v Hans-Joachim Kantner [1982] ECR 825 (ECJ)..............................23 Case 102/81, Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095..........................197, 205, 213 Case 34/82, Martin Peters Bauunternehmung GmbH v Zuid Nederlandse Aanemers Vereniging [1983] ECR 987.......................................................................................133, 357 Case 319/82, Société de Vente de Ciments et Bétons de l’Est SA v Kerpen & Kerpen GmbH und Co KG [1983] ECR 4173............................................................................ 85–6 Case 243/83, Binon v AMP [1985] ECR 2015 (ECJ)..............................................................84 Case 53/84, Stanley George Adams v Commission of the European Communities [1985] ECR 3539........................................................................................................... 274–5 Case 53/85, Akzo Chemie BV and Akzo Chemie UK Ltd v Commission [1986] ECR 1965............................................................................................................................274 Joined Cases C–89/85; C–104/85; C–114/85; C–116/85; C–117/85; C–125/85; C–126/85; C–127/85; C–128/85 and C–129/85, A Ahlström Osakeyhtiö and others v Commission of the European Communities (Wood Pulp) [1994] ECR I–99 (ECJ).......................74, 77 Joined Cases C–89/85; 104/85; 114/85; 116/85-117/85 and 125/85 to 129/85, A Ahlström Osakeyhtiö and others v Commission (Woodpulp I) [1988] ECR 5193 (ECJ)...................................................................................34, 109, 122, 199–200 Case 10/86, VAG France SA v Etablissements Magne SA [1986] ECR 4071...................70, 87 Case C–144/86, Gubisch Maschinenfabrik KG v Palumbo [1987] ECR 4861 (ECJ)...................................................................................................................57, 80, 357–8 Case 145/86, Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645........................................................................................................ 48, 219, 400, 411 Case 9/87, Arcado v Haviland [1988] ECR 1539................................................133–4, 149–50 Case 189/87, Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others [1988] ECR 5565 (ECJ)............................. 22, 26–7, 42, 48, 133–4, 151, 411 Case C–220/88, Dumez v Hessische Landesbank [1990] ECR I–49 (ECJ)...........................28 Case C–214/89, Powell Duffryn v Petereit [1992] ECR I–1745.............................................45 Case C–234/89, Delimitis v Henninger Brau AG [1991] ECR I–935 (ECJ)..................73, 312 Case C–351/89, Overseas Union Insurance [1991] ECR I–3317 (ECJ)................................80 Case T–24/90, Automec Srl v Commission [1992] ECR II–2223................ 84–5, 87, 350, 360 Case C–26/91, Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I–3967 (ECJ)........................................... 24, 26, 97, 132–4, 148–9

xxxii  Table of Cases Case C–67/91, Dirección General de Defensa de la Competencia v Asociación Española de Banca Privada and others [1992] ECR I–4785 (Spanish banks case)........................275 Case C–89/91, Shearson Lehmann Hutton Inc v TVB [1993] ECR I–139.........................184 Case C–172/91, Volker Sonntag v Hans Waidmann and others [1993] ECR I–1963...........97 Case T–34/92, Fiatagri and New Holland Ford v Commission [1994] ECR II–905..........195 Case C–36/92P, SEP v Commission [1994] ECR I–1911.....................................................274 Case T–88/92, Leclerc v Commission [1996] ECR II–1961...................................................85 Case C–128/92, H J Banks & Co Ltd v British Coal Corporation [1994] ECR I–1209......162 Case C–393/92, Gemeente Almelo and others v Energiebedrijf Ijsselmij NV [1994] ECR I–1477........................................................................................................................197 Case C–406/92, The owners of the cargo lately laden on board the ship “Tatry” v the owners of the ship “Maciej Rataj” [1994] ECR I–5439.......... 48, 50, 57, 80, 357–8, 411–12 Case C–68/93, Fiona Shevill and others v Presse Alliance SA [1995] ECR I–415 (ECJ)..........................................................................28, 33, 35, 118, 139, 184, 233, 406, 422 Case T–353/94, Postbank NV v Commission of the European Communities [1996] ECR II–921................................................................................................. 270, 275, 278, 430 Case C–32/95P, Commission of the European Communities v Lisrestal [1996] ECR I–5373................................................................................................................... 187–8 Case C–78/95, Bernardus Hendrikman and Maria Feyen v Magenta Druck & Verlag GmbH [1996] ECR I–4943................................................................................................219 Case T–102/96, Gencor Ltd v Commission [1999] ECR II–753..................... 77, 79, 122, 199 Joined Cases T–185/96; T–189/96 and T–190/96, Riviera Auto Service Etablissements Dalmasso SA, Garage des quatre vallées SA, Pierre Joseph Tosi, Palma SA (CIA - Groupe Palma), Christophe and Gérard Palma v Commission of the European Communities [1999] ECR II–93 (ECJ).................................................70, 85, 87 Joined Cases C–369/96 and C–376/96, Criminal Proceedings against Jean-Claude Arblade and others [1999] ECR I–8453 (ECJ)...........................................................81, 200 Case C–51/97, Réunion européenne SA and Others v Spliethoff ’s Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002, (ECJ 27 October 1998) [1998] ECR I–6511............................................................................................................32, 47, 134 Case C–126/97, Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I–3055...................................54–5, 67, 74–5, 86, 195, 197, 201, 205, 209, 213–19, 222 Case C–7/98, Dieter Krombach v André Bamberski [2000] ECR I–1935...........188, 219, 397 Case C–38/98, Régie Nationale des Usines Renault SA v Maxicar SpA [2000] ECR I–2973..............................................................................................55, 74, 188, 219–20 Case T–62/98, Volkswagen AG v Commission of the European Communities [2000] ECR II–2707.............................................................................................................72 Case T–128/98, Aéroports de Paris v Commission [2000] ECR II–3929............................195 Case C–195/98, Osterreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst v Republik Osterreich [2000] ECR I–10497.........................................................163 Joined Cases C–240/98 to C–244/98, Océano Grupo Editorial SA v Rocío Murciano Quintero [2000] ECR I–4941............................................................................................163 Case C–344/98, Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I–11369 (ECJ)...........................................................................................................................207, 393 Case C–381/98, Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I–9305........................................................................................................................199 Joined Cases C–441/98 and C–442/98, Michaïlidis [2000] ECR I–7145..............................90

Table of Cases  xxxiii Case C–35/99, Criminal Proceedings against Manuele Arduino [2002] ECR I–1529.......212 Case T–62/99, Société de distribution de mécaniques et d’automobiles (Sodima) v Commission of the European Communities [2001] ECR II-2579...................................70 Case C–309/99, JCJ Wouters and others v Algemene Raad van de Nederlandse Orde van Advocaten [2002] ECR I–1577...................................................................................212 Case C–372/99, Commission of the European Communities v Italian Republic [2002] ECR I–819..............................................................................................................163 Case C–453/99, Courage Ltd v Bernard Crehan [2001] ECR I–6297 (ECJ)............................................................... 17, 24, 56, 69, 74, 83–4, 86–8, 90, 93, 99, 111, 137–8, 145–6, 148, 162–4, 172, 174, 263, 406, 413, 421 Case C–96/00, Rudolf Gabriel [2002] ECR I–6367................................................................22 Case C–167/00, Verein für Konsumenteninformation v Karl Heinz Henkel [2002] ECR I–8111..............................................................................................................97, 183–4 Joined Cases C–204/00 P; C–205/00 P; C–211/00 P; C–213/00 P; C–217/00 P and C–219/00 P Aalborg Portland A/S Irish Cement Ltd, Ciments français SA, Italcementi – Fabbriche Riunite Cemento SpA, Buzzi Unicem SpA and Cementir – Cementerie del Tirreno SpA v Commission of the European Communities [2004] ECR I–123........68 Case C–208/00, Uberseering BV v Nordic Construction Company Baumanagement GmbH [2002] ECR I–9919................................................................................................171 Case C–256/00, Besix SA v WABAG and Plafog [2002] ECR I–1737.............. 26, 39, 363, 407 Case C–271/00, Gemeente Steenbergen v Luc Baten [2002] ECR I–10489..........................97 Case C–334/00, Fonderie Officinie Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS) [2002] ECR I–7357...........................................22–4, 363 Case C–167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd [2003] ECR I–10155....................................................................................................171 Joined Cases T–236/01; T–239/01; T–244/01 to T–246/01; T–251/01 and T–252/01, Tokai Carbon Co Ltd and Others v Commission of the European Communities [2004] ECR II-1181.......................................................................................................68, 81 Joined Cases T–22/02 and T–23/02, Sumitomo Chemical Co Ltd and Sumika Fine Chemicals Co Ltd v Commission of the European Communities [2005] ECR II-4065.........................................................................................................................85 Case C–27/02, Petra Engler v Janus Versand GmbH [2005] ECR I–481 (ECJ)..........23–4, 97 Case T–59/02, Archer Daniels Midland Co v Commission [2006] ECR II–3627...........................................................................................................376, 380–1 Case C–116/02, Erich Gasser GmbH v MISAT Srl [2003] ECR I–14693...................................................................................... 53, 56–7, 187, 387, 411 Case C–159/02, Gregory Paul Turner v Felix Fareed Ismail Grovit, Harada Ltd and Changepoint SA [2004] ECR I–3565........................................................................187, 387 Case C–281/02, Owusu (Andrew) v NB Jackson, trading as `Villa Holidays Bal-Inn Villas’ and others [2005] ECR I–1383........................................... 32, 55, 187, 219, 359, 363 Case T–2/03, Verein für Konsumenteninformation v Commission of the European Communities [2005] ECR II–1121 (CFI).........................................................................271 Case C–104/03, Saint Paul Dairy Industries NV v Unibel Exser BVBA [2005] ECR I–3481 (ECJ)......................................................................................................265, 269 Joined Cases T–125/03 and T–253/03, Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v Commission of the European Communities [2007] ECR II–3523.......................274 Joined Cases T–125/03R and T–253/03R, Akzo [2004] ECR II–4771................................274

xxxiv  Table of Cases Case C–443/03, Götz Leffler v Berlin Chemie AG [2005] ECR I–9611...............................104 Case C–539/03, Roche Nederland BV and Others v Frederick Primus and Milton Goldenberg [2006] ECR I–6535...................................................... 46, 48–50, 52–3, 57, 411 Case C–7/04P (R), Akzo [2004] ECR I–8739.......................................................................274 Case T–99/04, AC–Treuhand AG v Commission [2008] ECR II-1501...............................211 Case C–125/04, Guy Denuit and Betty Cordenier v Transorient – Mosaïque Voyages and Culture SA [2005] ECR I–923............................................................................197, 205 Case T–201/04, Microsoft Corp v Commission [2007] ECR II-3601.................................193 Case C–234/04, Rosmarie Kapferer v Schlank & Schick GmbH [2006] ECR I–2585........218 Joined Cases C–295/04 to C–298/04, Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I–6619 (ECJ)......................... 17, 28, 67, 69, 74, 88, 90, 111, 137–8, 145–6, 148, 162–4, 172, 174, 195, 263, 406, 413, 421 Case C–308/04P, SGL Carbon AG v Commission of the European Communities [2006] ECR I–5977........................................................................................................68, 86 Cases T–339/04 and T–340/04, France Telecom SA v Commission [2007] ECR II–521.........................................................................................................................354 Case C–341/04, Eurofood [2006] ECR I–3813.....................................................................383 Case C–407/04P, Dalmine v Commission [2007] ECR I–829 (ECJ)...................................381 Case C–467/04, Criminal proceedings against Giuseppe Francesco Gasparini and Others [2006] ECR I–9199................................................................................................387 Case C–103/05, Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2006] ECR I–6827............................................................................................46–7, 53, 410 Case C–168/05, Elisa María Mostaza Claro v Centro Móvil Milenium SL [2006] ECR I–10421..................................................................................................................74, 86 Case T–237/05, Odile Jacob [2010] (CFI)............................................................................271 Case C–292/05, Eirini Lechouritou and others v Dimosio tis Omospondiakis Dimokratias tis Germanias [2007] ECR I–1519........................................................... 96–7 Case C–386/05, Color Drack v Lexx International [2007] ECR I–3699 (ECJ).......21, 24, 405 Case C–432/05, Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern [2007] ECR I–2271 (ECJ)..................................................................................................164 Case C–98/06, Freeport v Olle Arnoldsson [2007] ECR I–8319...................................... 47–8 Case C–210/06, Cartesio Oktató és Szolgáltató bt................................................................171 Case C–275/06, Productores de Música de España (Promusicae) v Telefónica de España SAU [2008] ECR I–271......................................................................................................277 Case C–279/06, CEPSA v LV Tobar [2008] ECR I–6681........................................................24 Case C–353/06, Stefan Grunkin and Dorothee Regina Paul, 14 October 2008 (ECJ)...................................................................................................................................394 Case C–435/06, C [2007] ECR I–10141..................................................................................96 Case C–511/06P, Archer Daniels Midland Co v Commission [2009] ECR I–5843............................................................................................................376, 380–1 Case T–11/07, Agrofert [2010] (CFI)....................................................................................271 Case C–52/07, Kanal 5 Ltd and TV 4 AB v Föreningen Svenska Tonsättares Internationella Musikbyrå (STIM) upa, judgment of 11 December 2008................ 294–5 Case C–139/07P, Commission of the European Communities v Technische Glaswerke Illmenau [2010]...............................................................................................271 Case C–209/07, Irish Beef Industry (ECJ)............................................................................300

Table of Cases  xxxv Case C–394/07, Marco Gambazzi v DaimlerChrysler Canada Inc and CIBC Mellon Trust Company [2009] ECR I–2563.................................................................................219 Case C–420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams [2009] ECR I–3571........................................................................................383, 387 Case C–429/07, Inspecteur van de Belastingdienst v X BV [2009] ECR I–4833 (ECJ)...........................................................................................................................202, 299 Case C–533/07, Falco Privatstiftung v Weller-Lindhorst [2009] ECR I–3327 (ECJ)...............................................................................................................20–1, 25–6, 405 Case C–550/07P, Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission [2010]...........................................................................................................274 Case C–8/08, T-Mobile Netherlands BV and others v Raad van Bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I–4529........................................67, 105 Case C–199/08, Erhard Eschig v UNIQA Sachversicherung AG [2009] ECR I–8295........................................................................................................................163 Case C–204/08, Rehder v Air Baltic [2009] ECR I–6073 (ECJ).....................................21, 405 Case C–381/08, Car Trim v KeySafety [2010] ECR I–1255 (ECJ).................................21, 405 Case C–19/09, Wood Floor Solutions Andreas Domberger v Silva Trade [2010] ECR I–2121 (ECJ)..................................................................................................21, 25, 405 Case C–306/09, IB v Conseil des Ministres...........................................................................385 Case C–360/09, Pfleiderer AG v Bundeskartellamt, lodged 9 September 2009..................276 Case C–439/09, Pierre Fabre Dermo-Cosmétique...............................................................299 Case C–87/10, Electrosteel Europe v Edil Centro (ECJ)........................................................21 France CA Paris, Garage Gremeau v DaimlerChrysler France........................................................297 CA Paris, Jacquetin v Intercaves, Case No RG No 06/06860, 20 March 2008.....................195 CA Paris, Labinal SA v Mors and Westland Aerospace Ltd (1993) Rev Arb 645, 19 May 1993.......................................................................................................................195 CA Paris, Pierre Fabre Dermo-Cosmétique, Case No RG 2008/23812...............................299 CA Paris, SNF SAS v Cytec Industrie BV (2007) XXXII YCA 282, 23 March 2006............215 CA Paris, Sté Aplix v Sté Velcro (1994) Rev Arb 164, 14 October 1993..............................195 CA Paris, Tamkar v RC Group (2007) 127 GP No 194-198, 15 March 2007......................215 CA Paris, Thalès v Euromissile (2005) Rev Arb 750, 18 November 2004.............214–15, 217 Cass Civ, 16 March 1999, Pordea v Sté Times Newspapers Ltd (1999) 126 JDI Clunet 773..........................................................................................................................220 Cass Civ, 4 June 2008, SNF SAS v Cytec Industries BV (2008) 135 JDI Clunet 1107.........215 Cass Com, 21 January 1997 (1997) IV Bulletin civil No 19.................................................369 Cour de Cassation (1st Civil Law Chamber), 7 January 1964, Munzer (1964) RCDIP 344.........................................................................................................................251 Cour de Cassation (1st Civil Law Chamber), 6 February 1985, Simitch (1985) RCDIP 369.........................................................................................................................251 Cour de Cassation (1st Civil Law Chamber), 4 December 1990 (1991) 80 RCDIP 558.........................................................................................................................173 Cour de Cassation (1st Civil Law Chamber), 15 May 2001, Optelec v Soc Midtronics BV (2001) I-134 Bulletin (2002) RCDIP 86.....................................................................151 Cour de Cassation (1st Civil Law Chamber), 23 January 2007, Waeco France v Waeco International (2007) I-30 Bulletin....................................................................................152

xxxvi  Table of Cases Cour de Cassation (1st Civil Law Chamber), 20 February 2007, Cornelissen (2007) RCDIP 420.........................................................................................................................252 Cour de Cassation (1st Civil Law Chamber), 5 March 2008, Cecil v Wolman (2008) I-61 Bulletin.......................................................................................................................152 Cour de Cassation (1st Civil Law Chamber), 22 October 2008, Monster Cable v AMS (2008) I-233 Bulletin.........................................................................................................150 Cour de Cassation (1st Civil Law Chamber), 13 January 2009, Delor Vincent v Renault Agriculture (2009) IV-3 Bulletin.......................................................................................150 Cour de Cassation (1st Civil Law Chamber), 7 July 2009, Mécanic v La Redoute et Les 3 Suisses (2009) IV-96 Bulletin.........................................................................................150 Cour de Cassation (Ch comm), 24 November 2009, No 08-13052.....................................167 Cour de Cassation (Criminal Law Chamber), 12 December 2007, Appeal No 07-83228.......................................................................................................................280 Conseil de la concurrence, Décision n° 03-D-41 du 4 août 2003 relative à une demande de mesures conservatoires présentée par la SA DYNEFF à l’encontre de la société TOTAL FRANCE et certaines de ses filiales sur les marchés afférents à la commercialisation de produits pétroliers raffinés dans le sud de la France (Dyneff case)......................................................................................................................272 Conseil de la concurrence, Décision n° 08-D-30 du 4 décembre 2008 relative à des pratiques mises en œuvre par les sociétés des Pétroles Shell, Esso SAF, Chevron Global Aviation, Total Outre Mer et Total Réunion (Kerosene case)..............................379 Germany Federal Constitutional Court (Bundesverfassungsgericht), 2 BvR 2236/04 of 18 July 2005, judgment of 18 July 2005 (2236/04), Arrest Warrant Act case..................385 paras 63–116........................................................................................................................375 Federal Constitutional Court (Bundesverfassungsgericht), BvE 2/08, judgment of 30 June 2009, ‘Lisbon Opinion’.........................................................................................386 OLG Thüringer (Germany) 8 August 2007, 4 Sch 3/06 - Schott (2008) 58 Wirtschaft und Wettbewerb 353..........................................................................................................215 Italy CA Florence, 21 March 2006, Soc Nuovo Pignone v Schlumberger SA..............................215 CA Milan, 5 July 2006, Terra Armata Srl v Tensacciai SpA (2007) 25 Bull ASA 618..........216 Corte d’Appello Bologna, 11 October 1990, COVEME SpA v CFI - Compagnie Française des Isolants SA (1993) 3 Rivista dell’arbitrato (Riv Arbitrato) 77..................195 Corte di Cassazione, 21 August 1996, No 7733, Telecolor SpA v Technocolor SpA (1997) 47 Giustizia Civile (Giust Civ) I-1373..................................................................195 Netherlands Hague CA, 24 March 2005, Cases 04/694 and 04/695, Marketing Displays International Inc v VR Van Raalte Reclame BV (2006) 2 SIAR 207.......................................................403 Pres Rechtbank The Hague, 27 May 2004, Marketing Displays International Inc v VR Van Raalte Reclame BV, KG/RK 2002-979 and 2002-1617 (2006) 2 SIAR 201........217 Poland Constitutional Court, judgment of 27 April 2005 (P 1/05).................................................385

Table of Cases  xxxvii Sweden CA Göta, Case T 33-00, Staten genom Luftfartsverket v Scandinavian Airlines System.................................................................................................................................305 CA (Svea), Case Ö 1561-10, Soda Club........................................................................300, 433 CA (Svea), Case T 6730-03, 4 May 2005, Republic of Latvia v Latvijas Gaze.....................216 District Court, Solna, Case T 1532/93, Nya färghuset i Ystad AB v D-Fastigheter AB......304 District Court, Stockholm, Case T 31862-04, TeliaSonera ADSL,.......................................295 Market Court, 9 February 2005, Case A 3/04, MD 2005:5 VVS-Installatörerna v Konkurrensverket of 9 February 2005..............................................................................308 Market Court, 1 November 2005, Case A 7/04, MD 2005:29, B2 Bredband Holding AB (publ) v Telia Sonera Aktiebolag (publ) and TeliaSonera Sverige Aktiebolag................308 Market Court, 15 November 2007, Övertorneå kommun and others v Ekfors Kraft AB and others, Case A 4/06 MD 2007:26................................................................292, 303, 306 Supreme Court, 23 December 2004, Case T 2280-02, BMA v FV.......................................308 Supreme Court, 19 February 2008, Case T 2808-05, Danska staten genom BornholmsTrafikken v Ystad Hamn Logistik Aktiebolag (Ystad Harbour)........................................................................................................292, 302–3, 306 Supreme Court, Case T 2137-01, SAS v Luftfartsverket................................................. 304–5 Switzerland G SA v V SpA 118 II ATF 193; [1996] ECC 1 (Federal Tribunal)........................................201 Tensacciai v Terra Armata (2006) Rev Arb 763, 8 March 2006 (Tribunal Fédéral)............216 United Kingdom Abidin Diver, The [1977] 373 AC 423...................................................................................359 Airbus Industrie GIE v Patel and others [1999] 1 AC 119 (HL).........................................358 Argyllshire Weavers Ltd v A Macaulay (Tweeds) Ltd, 1962 SC 388 (IH, 1st Div)......... 358–9 Berezovsky v Forbes Inc (No 1) [2000] 1 WLR 1004...........................................................359 Cooper Tire & Rubber Company and Others v Shell Chemicals UK Ltd and others [2009] EWHC 2609 (Comm)........................................................................... 38, 42, 44, 47 Courage v Inntrepreneur Pub Company [2003] EWHC 1510 (Ch); [2004] EWCA Civ 637; [2006] UKHL 38..............................................................................................56, 87 Cover Europe Ltd, Re, [2002] EWHC 861 (Ch)...................................................................358 Dresser UK Ltd and others v Falcongate Freight Management Ltd and others [1992] 1 QB 502 (CA)...................................................................................................................358 ET Plus SA and others v Welter and others [2006] Lloyd’s Rep (Comm) 251; [2005] EWHC 2115.......................................................................................................................195 FKI Engineering and FKI plc v Dewind [2007] EWHC 72 (Comm)....................................47 Garden Cottage Foods v Milk Marketing Board [1983] 1 AC 130........................................45 Lubbe v Cape plc [2000] 1 WLR 1545 (HL).................................................................359, 363 Mackshannon v Rockware Glass Ltd [1978] AC 795 (HL)..................................................359 Morrison v Panic Link Ltd, 1993 SC 631 (IH, 1st Div)........................................................358 Roche Products Ltd and others v Provimi Ltd [2003] EWHC 961................42–5, 47, 49–50, 52, 54–5, 87, 155, 230 Roche Products Ltd and others v Provimi Ltd [2003] EWHC 2609 (Comm).....264, 410–11 Sarrio SA v Kuwait Investment Authority [1999] AC 32; [1997] 3 WLR 1143; [1998] 1 Lloyd’s Rep 129 (HL)..........................................................................................358

xxxviii  Table of Cases Sim v Robinow [1892] 9 R 665..............................................................................................358 Sony Computer Entertainment Ltd v RH Freight Services Ltd [2007] 2 Lloyd’s Law Reports (Lloyd’s Rep) 463 (QBD).....................................................................................357 Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460.................................. 358–9 W Maronier v B Larmer (CA) (2002) International Litigation Procedure (ILPr) 39........220 United States of America Adams v Unione Mediterranea Di Sicurta, 364 F 3d 646 (5th Cir 2004)............................328 Advanced Micro Devices Inc v Intel Corp, Civ Act No C–01-7033 MISC WAI, 2002 WL 1339088 (ND Cal 7 January 2002)....................................................................317 Advanced Micro Devices Inc v Intel Corp, No C 01-7033, 2004 WL 2282320, 2 (ND Cal 4 October 2004)...............................................................................................323 Air Cargo Shipping Services Antitrust Litigation, Re, 2008 WL 5958061, 24–30 (ED NY 2008).............................................................................................231, 236–7 Air Cargo Shipping Services Antitrust Litigation, Re, 1:06-md-01775 (ED NY 29 March 2010)..................................................................................................................282 Air Cargo Shipping Services Antitrust Litigation, Re, WL 1189341, 4 (ED NY 29 March 2010)............................................................................................................. 334–6 Alfadda v Fenn, 149 FRD 28 (SD NY 1993).........................................................................334 Allegheny General Hospital v Philip Morris Inc, 228 F 3d 429 (3d Cir 2000)....................335 Alstom SA Securities Litigation, Re, 253 FRD 266 (SD NY 2008)......................182, 186, 244 Alyeska Pipeline Service Co v Wilderness Society, 421 US 240 (1975)...............................336 Animal Sci. Prods. v Chira Minmetals Corp, 2011 US App LEXIS 17046 (3d Cir)............227 Apotex Inc, Re, Misc No M12-160, 2009 WL 618243, 4 (SD NY 9 March 2009)...........................................................................................................................320, 325 Arbitration between Norfolk Southern Corp, Norfolk Southern Ry Co and General Sec Ins Co and Ace Bermuda Ltd, Re, 626 F Supp 2d 882 (ND Ill 2009)........................319 Automotive Refinishing Paint Antitrust Litigation, Re, 358 F 3d 288 (3d Cir 2004).........329 Automotive Refinishing Paint, Re, 229 FRD 482 (ED Pa 2005)..........................................329 Avery Dennison Corp v UCB Films PLC, No 95 C 6351, 1998 WL 293002, 2 (ND Ill 28 May 1998)......................................................................................................330 Babcock Borsig AG, Re, 583 F Supp 2d 233 (D Mass 2008)........................................318, 321 Baker and others v General Motors Corp, 522 US 222 (1998)............................................386 Bankers Trust Co, Re, 61 F 3d 465 (6th Cir 1995)................................................................330 Baxter International Inc v Abbott Laboratories 315 F 3d 829 (7th Cir 2003); (2003) XXVIII Yearbook Commercial Arbitration (YCA) 1154.................................................195 Baycol Products Litigation, Re, 218 FRD 197 (D Minn 2003).............................................182 Beecher v Able, 575 F 2d 1010 (2d Cir 1978).......................................................................181 Blue Oil Trading Ltd, Re, No 3:09 MC152-RJC, 2009 WL 3247854, 2–3 (WDNC 5 October 2009).................................................................................................................325 Bodner v Paribas, 202 FRD 370 (ED NY 2000)....................................................................334 Bridgestone/Firestone Inc, Re, 288 F 3d 1012 (7th Cir 2002)..............................................182 Bulk [Extruded] Graphite Prods Antitrust Litigation, Re, No 02-6030 (WHW), 2007 WL 2212713, 9 (D NJ 2007).....................................................................................229 Burger King Corp v Rudzewicz, 471 US 462 (1985)............................................................328 Calder v Jones, 465 US 773 (1984)........................................................................................228 Canadian International Paper Co, Re, 72 F Supp 1013 (SD NY 1947)...............................330

Table of Cases  xxxix Capital Currency Exchange NV v National Westminster Bank PLC, 155 F 3d 603 (2d Cir 1998)......................................................................................................................231 Carsten Rehder Schiffsmakler und Reederei Gmbh & Co, Re, No 6:08-mc-108-Orl35DAB, 2008 WL 4642378 (MD Fla 17 October 2008) 2........................................... 323–5 Castano v American Tobacco Co, 84 F 3d 734 (5th Cir 1996).............................................182 Cawley v Bloch 544 F Supp, 133 (D Md 1982).....................................................................229 Chaveriat v Williams Pipe Line Co, 11 F 3d 1420 (7th Cir 1993)........................................330 Chicken Antitrust Litigation American Poultry, Re, 669 F 2d 228 (5th Cir 1982).............181 Chocolate Confectionary Antitrust Litigation, Re, 602 F Supp 2d 538 (MD Pa 2009)......243 Citric Acid Litigation, Re, 191 F 3d 1090 (9th Cir 1999).....................................................330 CL-Alexanders Laing & Cruickshank v B Goldfeld, 127 FRD 454 (SD NY 1989).............186 Cochran Consulting Inc v Uwatec USA Inc, 102 F 3d 1224 (Fed Cir 1996).......................330 Cole v Tobacco Inst, 47 F Supp 2d 812 (ED Tex 1999)........................................................229 Comcast of Los Angeles Inc v Top End International Inc, No CV 032213 JFWRCX, 2003 WL 22251149, 4 (CD Cal 2 July 2003).....................................................................330 Comisión Ejecutiva, Hidroeléctrica Del Rio Lempa v Nejapa Power Co LLC, No 08-135-GMS, 2008 WL 4809035 (D Del 14 October 2008) 1...................................318 Comisión Ejecutiva, Hidroeléctrica Del Río Lempa v Nejapa Power Co LLC, No 08-3518, 2009 WL 2358694 (3d Cir 3 August 2009)..................................................322 Conopco Inc v Arhema Inc (In re Hydrogen Peroxide Antitrust Litig), 702 F Supp 2d 548 (ED Pa 2010)..........................................................................................................234 Cotton Yarn Antitrust Litigation, Re, 505 F 3d 274 (4th Cir 2007).....................................238 Credit Suisse Electronics (USA) LLC v Billing, 551 US (2007)...........................................360 Cromer Finance Ltd v M Berger, 205 FRD 113, 134–35 (SD NY 2001)..............................186 Cryolife Inc v Tenaxis Medical Inc, No C08-05124 HRL, 2009 WL 88348, 4 (ND Cal 13 January 2009)..........................................................................321, 323–5, 339 Czech Republic, Re, No 3:08-mc-001-J-33TEM, 2008 WL 179263 (MD Fla 17 January 2008)................................................................................................................324 DaimlerChrysler AG Securities Litigation, Re, 216 FRD 291 (D Del 2003).......................242 Daniel v American Board of Emergency Medicine, 428 F 3d 408 (2d Cir 2005)...............329 Degitechnic, Re, No C07-414-JCC, 2007 WL 1367697, 5 (WD Wash 8 May 2007)...........325 Dexia Credit Local v Rogan, 231 FRD 538 (ND Ill 2004)....................................328, 330, 334 Diamond Shamrock Chemicals Co, Re, 725 F 2d 858 (2d Cir 1984) cert denied 465 US 1067 (1984)...........................................................................................................182 Dornberger v Metropolitan Life Ins Co, 961 F Supp 506 (SD NY 1997)............................239 Dynamic Random Access Memory (DRAM) Antitrust Litigation, Re, 546 F 3d 981 (9th Cir 2008)....................................................................................................................234 E Bement & Sons v National Harrow Co, 186 US 70 (1902)...............................................238 Eisen v Carlisle & Jacquelin, 417 US 156 (1974)..................................................................241 El Cid Ltd v New Jersey Zinc Co, 444 F Supp 845 (SD NY 1977).......................................231 El Paso Corp v La Comisión Ejecutiva Hidroeléctrica Del Río Lempa, No 08-20771, 2009 WL 2407189, 3 (5th Cir 6 August 2009)..........................................................319, 322 Electric & Musical Industries Ltd, Re, 155 F Supp 892 (SD NY 1957)................................282 Emerson Electric Co v Le Carbone Lorraine SA, 500 F Supp 2d 437 (D NJ 2007)............234 Empagran SA v F Hoffmann-La Roche Ltd, 417 F 3d 1267 (DC Cir 2005).......................234 Empagran SA v F Hoffmann-La Roche Ltd, 453 F Supp 2d 1 (D DC 2006)..............235, 337 Erie Railroad Co v Tompkins, 304 US 64 (1938)............................................................ 246–7

xl  Table of Cases Esses, Re, 101 F 3d 873 (2d Cir 1996)...................................................................................316 Euromepa SA, Re, 51 F 3d 1095 (2d Cir 1995).....................................................................323 F Hoffmann-LaRoche Ltd v Empagran SA, 542 US 155 (2004).............. 231–4, 242, 331, 337 Federal Maritime Commission v DeSmedt, 366 F 2d (2d Cir 1966) 464............................330 First American Corp v Price Waterhouse LLP, 154 F 3d 16 (2d Cir 1998)..........................327 Fischer Advanced Composite Components AG, Re, No C08-1512RSM, 2008 WL 5210839, 4 (WD Wash 11 December 2008)..............................................................325 Flat Glass Antitrust Litigation, Re, No 08-180 (29 July 2009).............................................332 Folding Carton Antitrust Litigation, Re, 76 FRD 420 (ND Ill 1977)..................................330 Folding Carton Antitrust Litigation, Re, 744 F 2d 1252 (7th Cir 1984)..............................181 Gap Inc v Stone International Trading Inc, No 93 Civ 0638 (SWK), 1994 WL 38651 (SD NY 4 February 1994) 1...............................................................................................327 Gemeinschaftspraxis Dr Med Bernard Schottdorf, Re, No Civ M19-88 (BSJ), 2006 WL 3844464 (SD NY 29 December 2006) 6..........................................323–5, 339–41 Gerling International Insurance Co v Commissioner, 839 F 2d 131 (3d Cir 1988)...................................................................................................................................330 Glen Holly Entertainment Inc v Tektronix Inc, 343 F 3d 1000 (9th Cir 2003)...................335 Godfrey, Re, 526 F Supp 2d 417 (SD NY 2007)............................................................316, 340 Grand Jury Subpoenas Duces Tecum Addressed to Canadian International Paper Co, Re, 72 F Supp 1013 (SD NY 1947)....................................................................................282 Graphite Electrodes Antitrust Litigation, Re, 2007 WL 137684 (ED Pa 2007)...................241 Grupo Qumma SA, Re, No M 8-85, 2005 WL 937486, 2 (SD NY 22 April 2005).......................................................................................................................321, 323–5 Guillory v American Tobacco Co, [2001] WL 290603 (ND Ill 2001)..................................180 H Bersch v Drexel Firestone, 519 F 2d 974 (2nd Cir 1975) cert denied 423 US 1018 (1975).................................................................................................................................186 Hallmark Capital Corp, Re, 534 F Supp 2d 951 (D Minn 2007).........................................319 Hartford Fire Ins v California, 509 US 764 (1993)...............................................................233 Hay Group Inc v EBS Acquisition Corp, 360 F 3d 404 (3d Cir 2004).................................329 Heraeus Kulzer GmbH, Re, No 09-MC–00017, 2009 WL 2981921, 4 (ED Pa 11 September 2009)...................................................................................................325, 339 High Strength Steel Inc v Svenskt Stal Aktiebolag, 1985 WL 2546 (ND Ill 1985)..............238 Hilton v Guyot, 159 US 113 (1895).................................................................................. 245–6 Hydrogen Peroxide Antitrust Litigation, Re, 552 F 3d 305 (3d Cir 2008)...........................243 Imanagment Services Ltd, Re, No Civ A 05-2311(JAG), 2006 WL 547949, 3 (D NJ 3 March 2006)..........................................................................................321, 323–4 Industrial Investment Development Corp v Mitsui & Co, 671 F 2d 876 (5th Cir 1982) reversed on other grounds 460 US 1007 (1983).................................................................231 Information Resources Inc v Dun & Bradstreet Corp, 127 F Supp 2d 411 (SD NY 2000).....................................................................................................................236 Intel Corp v Advanced Micro Devices Inc, 542 US 241 (2004)...............283, 317–25, 339–42 Intel Corp v Advanced Micro Devices Inc, 2003 WL 23112943, 2 (US 31 December 2003)...................................................................................................................................338 Intel Corp v Advanced Micro Devices Inc, 2003 WL 23112944, 3 (US 31 December 2003)...................................................................................................................................338 Intel Corp v Advanced Micro Devices Inc, 2003 WL 23138389, 1 (US 23 December 2003)...................................................................................................................................338

Table of Cases  xli Intel Corp Microprocessor Antitrust Litigation, Re, MDL Docket No 05-1717-JJF, 2008 WL 4861544, 10 (D Del 7 November 2008)..................................................... 318–19 Intergraph Corp v Intel Corp, CV-97-N-3023 NE...............................................................317 International Nutrition Company v Horphag Research Ltd and others, 257 F 3d 1324, US Fed App Court 16 July 2001...............................................................246 International Shoe Co v State of Washington, Office of Unemployment Compensation and Placement, 326 US 310 (1945).........................................................328 Investigation of World Arrangements, Re, 13 FRD 280 (D DC 1952)................................331 JLM Industries Inc and others v Stolt-Nielsen SA and others, 2004 US App LEXIS 22253 (2d Cir 2004), (2005) XXX YCA 963..........................................................195 Johnston v Compagnie générale translatantique, 242 NY 381, 152 NE 121 (1926)...........246 Kang v Noro-Moseley Partners, 246 Fed Appx 662 (11th Cir 2007)...........................320, 322 Kang v Nova Vision Inc, No 06-21575-CIV, 2007 WL 1879158 (SD Fla 26 June 2007) 2............................................................................................................320, 324–6, 339 Kashfi v Phibro-Salomon Inc, 628 F Supp 2d 727 (SD NY 1986).......................................239 Keeton v Hustler Magazine, 465 US 770 (1984)...........................................................228, 240 Kelly v Kosuga, 1358 US 516 (1959).....................................................................................239 Kochert v Greater Lafayette Health Services Inc, 463 F 3d 710 (7th Cir 2006)..................335 Kolomoisky, Re, No M19-116, 2006 WL 2404332 (SD NY 18 August 2006) 3...........316, 326 Kotam Electronics Inc v JBL Consumer Products Inc, 93 F 3d 724 (11th Cir 1996)...........................................................................................................................195, 238 Lady Liberty Trans Co v Philadelphia Parking Authority, No 05-1322, 2007 WL 707372, 9 (ED Pa 1 March 2007)......................................................................325 Laker Airways Ltd v Pan American World Airway, 568 F Supp 811; 817–18 (D DC 1983)......................................................................................................................231 Lehman Bros Commercial Corp v Minmetals International Non-Ferrous Metals Trading Co, 179 F Supp 2d 118, 138–39 (SD NY 2001)...................................................239 Letter of Request from Costa Rica, Re, No 07-20037-CIV-SEITZ/MCALILEY, 2007 WL 141155 (SD Fla 16 January 2007)......................................................................324 Letter of Request from Crown Prosecution Service of United Kingdom, Re, 870 F 2d 686 (DC Cir 1989)..............................................................................................319 M Ansari v New York University, 179 FRD 112 (SD NY 1998)...........................................186 McGlinchy v Shell Chemical Co, 845 F 2d 802 (9th Cir 1988)............................................229 McManus v Tato, 184 F Supp 958 (SD NY 1959).................................................................329 Marano, Re, No CV-09-80020-MISC–DLJ, 2009 WL 482649, 3 (ND Cal 25 February 2009)..............................................................................................................325 Marc Rich & Co 707, Re, F 2d 663 (2d Cir 1983).........................................................328, 330 Marubeni America Corp v LBA YK, 335 Fed Appx 95, 2009 WL 1738509 (2nd Cir 2009)............................................................................................................320, 322 Metallgesellschaft AG, Re, 121 F 3d 77 (2d Cir 1997)..........................................................321 Methionine Antitrust Litigation, Re, MDL No 00-1311 CRB (ND Cal 17 June 2002)......332 Methionine, In Re, Case No C–99-3491 CRB (ND Cal July 29 2002).................................284 Michael Wilson Partners Ltd, Re, No 06-cv-02575-MSK-KLM (MEH), 2007 WL 3268475 (D Colo 30 October 2007)...................................................................325, 339 Michael Wilson Partners Ltd, Re, No 06-cv-02575-MSK-PAC (MEH), 2007 WL 2221438, 4 (D Colo 27 July 2007)..............................................................................323 Microsoft Corp, Re, 428 F Supp 2d 188 (SD NY 2006)........................... 316, 322–3, 325, 338

xlii  Table of Cases Microsoft Corp, Re, 2006 WL 1344091 (D Mass 19 April 2006).............................322–5, 338 Microsoft, Re, 2006 WL 825250 (ND Cal 29 March 2006)..............................322–3, 325, 338 Minatec Finance Sàrl, Re, Civ Act No 1:08-CV-269 (LEK/RFT), 2008 WL 3884374 (ND NY 18 August 2008).............................................................. 318, 320, 323, 325–6, 340 Miner v Gillette Co, 428 NE 2d 478 (Ill 1981)......................................................................182 Minpeco SA v Conticommodity Services Inc, 116 FRD 517 (SD NY 1987).......................327 Mirana v Battery Tai-Shing Corp, No C 08-80142 MISC JF (RS), 2009 WL 290459, 3–4 (ND Cal 5 February 2009); S Rep No 88-1580..........................................................326 Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc (Mitsubishi), 473 US (1985) 614..........................................................................................................195, 219, 238 Monosodium Glutamate Antitrust Litigation, Re, 477 F 3d 535 (8th Cir 2007)................234 Motorola Inc v AU Optronics Corp (In re TFT-LCD (Flat Panel) Antitrust Litig), 2011 US Dist LEXIS 42692 (ND Cal)...............................................................................234 Multi-Juice SA v Snapple Beverage Corp, 2003 WL 1961636 (SD NY 2003).....................237 National Hockey League Players’ Association v Plymouth Whalers Hockey Club, 166 F Supp 2d 1155 (ED Mich 2001)................................................................................231 Nokia Corp, Re, 2007, WL 1729664, 5 fn 4 (WD Mich 13 June 2007)................................340 Norex Petroleum Ltd v Chubb Insurance Co of Canada, 384 F Supp 2d 45 (D DC 2005).................................................................................................................. 340–1 Northwest Aluminum Co v Hydro Aluminum Deutschland GmbH, No 02-398-JE, 2003 WL 23571744, 4–5 (D Or 2003)...............................................................................229 Novell Inc v Microsoft Corp, 505 F 3d 302 (4th Cir 2007)..................................................335 Operadora DB Mexico SA, Re, DE CV No 6:09-cv-383-Orl-22GJK, 2009 WL 2423138 (MD Fla 4 August 2009)....................................................................................................319 Order for Labor Court of Brazil, Re, 466 F Supp 2d 1020 (ND Ill 2006).......316, 320, 322–3 Oxus Gold PLC, Re, No Misc 06-82, 2006 WL 2927615 (D NJ 11 October 2006) 5................................................................................................................316, 319, 329 Patricio Clerici, Re, 481 F 3d 1324 (11th Cir 2007)..............................................317, 322, 324 Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Re, No 05-1720 WL 3420517 (ED NY 27 August 2010)........................................................332 Pfizer Inc v Government of India, 434 US 308 (1978).........................................................234 Phillips Petroleum Co v Shutts, 472 US 797 (1985).........................................182, 240–1, 255 Piper Aircraft Co v Reyno, 454 US 235 (1981).............................................................230, 236 Potash Antitrust Litigation, Re, 667 F Supp 2d 907 (ND Ill 2009)......................................243 Procter & Gamble, Re, 334 F Supp 2d 1112 (ED Wisc 2004)..................................320–1, 339 Reinsurance Company of America Inc v Administratia Asigurarilor, 902 F 2d 1282 (7th Cir 1990)............................................................................................................334, 336 Renfield Corp v E Remy Martin & Co and others, 98 FRD 442 (D Del 1982)...................376 Richards v Lloyd’s of London, 135 F 3d 1289 (9th Cir) (en banc), cert denied, 119 S Ct 365, 142 L Ed 2d 301 (1998)...............................................................................219 Richmark Corp v Timber Falling Consultants, 959 F 2d 1468 (9th Cir 1992)...................333 Royal Dutch/Shell Transport Securities Litigation, Re, 380 F Supp 2d 509 (D NJ 2005)........................................................................................................................186 Roz Trading Ltd, Re, 469 F Supp 2d 1221 (ND Ga 2006)..................................319–20, 324–5 Rubber Chemicals Antitrust Litigation, Re, 486 F Supp 2d 1078 (ND Cal 2007).......................................................................................................................283, 331–3 Rubber Chemicals Antitrust Litigation, Re, 504 F Supp 2d 777 (ND Cal 2007)................241

Table of Cases  xliii Schmitz, Re, 259 F Supp 2d 294 (SD NY 2003)....................................................................323 Schmitz v Bernstein, Liebhard & Lifshitz LLP, 376 F 3d 79 (2d Cir 2004)..................316, 321 Seacoast Motors of Salisbury Inc v Daimler-Chrysler Motors Corp, 271 F 3d 6 (1st Cir 2001).....................................................................................................................195 Searock v Stripling, 736 F 2d 650 (11th Cir 1984)...............................................................330 Servicio Pan Americano de Proteccion, Re, 354 F Supp 2d 269 (SD NY 2004)......320, 324–5 Sharp Electronics Corp v Metropolitan Life Insurance Co, 578 F 3d 505 (7th Cir 2009)....................................................................................................................337 Simon II Litigation, Re, 211 FRD 86, 166 (ED NY 2002)....................................................182 Simula Inc v Autoliv Inc, 175 F 3d 716 (9th Cir 1999)................................................219, 238 Smith v Dominion Bridge Corp, 1998 WL 98998 (ED Pa 1998).........................................242 Société internationale pour participations industrielles et commerciales SA v Rogers, 357 US 197 (1958)........................................................................282, 330–1, 334–5 Société Nationale Industrielle Aérospatiale v US District Court for the Southern District of Iowa, 482 US 522 (1987)......................................... 281, 315, 327, 334, 338, 342 Sola Electric Co v Jefferson Electric Co, 317 US 173 (1942)................................................239 State of California v Levi Strauss & Co, 715 P 2d 564 (Cal 1986).......................................181 State of West Virginia v Chas Pfizer & Co, 314 F Supp 710 (SD NY 1970) affirmed 440 F 2d 1079 (2d Cir 1971)..............................................................................................181 Static Random Access Memory Antitrust Litig, In Re, 2010 US Dist 1411968 (ND Cal).............................................................................................................................227 Stirman v Exxon Corp, 280 F 3d 554 (5th Cir 2002)...........................................................182 Strauss v Credit Lyonnais SA, 249 FRD 429 (ED NY 2008)................................................334 Sveaas, Re, 249 FRD 96 (SD NY 2008)..................................................................................323 TFT-LCD Antitrust Litig, Re, 267 FRD 291, 2010 US Dist LEXIS 38122 (ND Cal)...........242 Timberlane Lumber Co v Bank of America NT and SA, 549 F 2d 597 (9th Cir 1976)......233 Ukrnafta v Carpatsky Petroleum Corp No 3:09 MC 265(JBA), 2009 WL 2877156, 4 (D Conn 27 August 2009)..............................................................................................319 Union Carbide Corporation Gas Plant Disaster at Bhopal, India in December 1984, 634 F supp 842 (1986).......................................................................................................359 United Kingdom, Re, No 3:07-mc-46-J-32MCR, 2007 WL 3286689 (MD Fla 5 November 2007).............................................................................................................324 United Kingdom v United States, 238 F 3d 1312 (11th Cir 2001).......................................322 United Phosphorus Ltd v Angus Chemical Co, 43 F Supp 2d 904 (ND Ill 1999)..............229 United Phosphorus Ltd v Angus Chemical Co, 322 F 3d 942 (7th Cir 2003).....................227 United States v Bank of Nova Scotia, 691 F 2d 1384 (11th Cir 1982).................................336 United States v Field, 532 F 2d 404 (5th Cir 1976)...............................................................328 United States v First National Bank of Chicago, 699 F 2d 341 (7th Cir 1983)...................334 United States v First National City Bank, 396 F 2d 897 (2d Cir 1968)........................330, 335 United States v Germann, 370 F 2d 1019 (2d Cir), vacated on other grounds 389 US 329 (1967)....................................................................................................................328 United States v International Union of Petroleum & Industrial Workers, 870 F 2d 1450 (9th Cir 1989)............................................................................................................330 United States v Socony-Vacuum Oil Co, 310 US 150 (1940)...............................................337 United States v Topco Associates Inc, 405 US 596 (1972)....................................................335 Uranium Antitrust Litigation, Re, 480 F Supp 1138, CCH 1980-1 TC 63124 (ND Ill 1979)..................................................................................281–2, 327–8, 330, 334–5

xliv  Table of Cases Uranium Cartel case see Uranium Antitrust Litigation, Re, Urethane Antitrust Litigation, Re, 2010 WL 398094, 7 (D Kan 2010)....................231, 236–7 US v Aluminum Co of America, 148 F 2d 416 (2d Cir 1945)..............................................232 US v National City Lines Inc, 334 US 573 (1948) (National City Lines I)..........................230 US v National City Lines Inc, 337 US 78, (1949) (National City Lines II).........................230 Vedatech KK and others v Crystal decisions Inc, US Dist (ND Cal, 28 April 2009)...........246 Verizon Communications v Trinko, 540 US (2004).............................................................360 Vitamins Antitrust Litigation, Re, US Dist LEXIS 25073 (D DC 2001)....................... 229–30 Vitamins Antitrust Legislation, In Re, Misc No 99-197 (TFH) MDL No 1285 (DDC Dec 18 2002), 2002 US Dist LEXIS 25815.............................................................284 Vitamins Antitrust Litigation, Re, 2002 US Dist LEXIS 25815 (18 December 2002).........332 Vitamins Antitrust Litigation, Re, MDL No 1285, 2002 US Dist LEXIS 26490 (D DC 23 January 2002)....................................................................................................332 Vivendi Universal SA Securities Litigation, 242 FRD 76, 95–105 (SD NY 2007)...............244 Vivendi Universal SA Securities Litigation, Re, 241 FRD 213 (SD NY 2007).............182, 186 Weber v Finker, 554 F 3d 1379 (11th Cir 2009); S Rep No 88-1580 (1964), reprinted in (1964) United States Code Congressional and Administrative News (USCCAN) 3789......................................................................................................317 Westinghouse Electric Corp Uranium Contracts Litigation, Re, 563 F 2d 992 (10th Cir 1977)............................................................................................................. 335–6 Wilhelm, Re, 470 F Supp 2d 409 (SD NY 2007)...................................................................319 World-Wide Volkswagen Corp v Woodson, 444 US 286 (1980).........................................328 Wyatt Energy Inc v Motiva Enterprises LLC, 936 A 2d 280, 287 (Conn App 2007)...........237 Yukos Hydrocarbons Investments Ltd, Re, Civ Act No 5:09-MC–0078, 2009 WL 5216951 (ND NY 30 December 2009).......................................................................316 Zinser v Accufix Research Institute Inc, 253 F 3d 1180 (9th Cir 2001)...............................182

TABLE OF LEGISLATION Belgium Civil Code, Art 1382...............................................................................................................113 Private International Law Act 2004, Art 99(2).......................................................................91 Bulgaria Private International Law Act 2005, Art 107...........................................................................91 Denmark Administration of Justice Act................................................................................................168 European Union EC Treaty......................................................................................................75–7, 219, 317, 347    Art 3(1)(g)............................................................................................................81, 213, 276    Art 10..................................................................................................................................163    Art 10(2).............................................................................................................................276    Art 61 (now 67 TFEU).......................................................................................................399    Art 65 (now 81 TFEU)...............................................................................................102, 399    Art 69....................................................................................................................................63    Art 81 (now 101 TFEU)................... 34, 37, 44–5, 51, 70, 136–8, 145–7, 193, 195, 202, 204, 211, 260, 271, 274, 276, 296, 347–8, 350, 352, 354, 393–4, 396, 410    Art 81(1)........................................................................................................... 46, 58, 72, 398    Art 81(2).......................................................................................................................58, 151    Art 81(3)............................................................................................... 36, 71–2, 79, 193, 297    Art 82..........................................................................51, 70, 121, 136, 146–7, 202, 204, 260, 271, 274, 296, 347–8, 350, 352, 393–4, 396, 410    Art 85.......................................................................................... 137, 162, 196, 270, 366, 393    Art 85(1).....................................................................................................................137, 162    Art 85(3).......................................................................................................................72, 217    Art 86.......................................................................................................... 196, 270, 366, 393    Art 287 (now 339 TFEU)...................................................................................................275    Art 293................................................................................................................................220    Art 293(d)...........................................................................................................................219 EEC Treaty    Art 85....................................................................................................................55, 193, 312    Art 86..................................................................................................................................312    Art 251..................................................................................................................................95 EU Treaty....................................................................................................................80, 84, 413 Treaty of Amsterdam.............................................................................................................250 Treaty on European Union    Title VI (now Arts 82ff TFEU)..................................................................................286, 386

xlvi  Table of Legislation    Art 4(2)...............................................................................................................................386    Art 4(3) (ex 10 EC).............................................163, 202–3, 207–8, 213, 218, 392, 425, 430 Treaty on the Functioning of the European Union (TFEU).................. 17, 84–6, 89, 194, 249    Art 26..................................................................................................................................177    Art 26(2) (ex 14(2) EC).............................................................................................178, 423    Art 49..................................................................................................................................171    Art 54 (ex 48 EC)...............................................................................................................171    Art 67(4) (ex Art 61 EC)....................................................................................................399    Art 81 (ex Art 65 EC).................................................................................................102, 399    Art 101 (ex 81 EC; formerly 85 EEC)......................... 2, 17, 26, 34, 36, 42, 56, 58, 65, 67–9, 71–5, 80, 82–6, 88–90, 100–1, 103–4, 106, 108–11, 120–1, 126, 131–3, 136, 138, 147, 152, 154–6, 161, 163–4, 169, 174, 176, 192, 194–9, 201, 203, 206–8, 210, 213, 215–16, 218, 222, 263, 265, 268, 272, 274–6, 289–91, 294, 296, 298–9, 301–3, 306–12, 345–6, 354, 364–7, 370–1, 373, 377–81, 383, 388, 393–4, 396–7, 399, 401, 406, 413, 415, 422, 425–6, 439    Art 101(1).....................70–3, 76, 79, 84, 86, 90, 108, 162, 197, 215, 217, 290, 299–300, 401    Art 101(2).................................. 69–70, 72–3, 76, 79, 83–7, 90, 108, 197, 213, 238, 306, 413    Art 101(3) (ex 81(3) EC, 85(3) EEC)......................................... 69–73, 79–80, 83, 120, 162, 193, 196–8, 206, 216, 290, 299–300, 393    Art 102 (ex 82 EC; formerly 86 EEC).................... 2, 17, 42, 67–70, 73–5, 80, 82–3, 100–1, 103–4, 106–7, 109–11, 120–1, 126, 131–3, 136, 138, 147, 152, 154–6, 161, 164, 169, 174, 176, 195–9, 201, 203, 207–8, 210, 216, 218–19, 263, 265, 268, 274–5, 289–91, 294–6, 298–9, 301–3, 306–12, 345–6, 364–7, 370–1, 373, 377–8, 381, 383, 388, 393–4, 396–7, 399, 413, 415, 422, 439    Art 106(1)...........................................................................................................................302    Art 267............................................................................................ 205, 213, 291, 294, 298–9    Art 299 (ex 256 EC)...........................................................................................................393 Treaty of Lisbon (2009)...........................................................................................17, 136, 397 Treaty of Rome (1957)...........................................................................................................250    Art 220................................................................................................................................249 EC Directives pre-draft Directive on damage actions..........................9, 93, 164, 269, 273, 277, 423, 429–31   Recital 3..............................................................................................................................177   Chapter V...........................................................................................................................273    Art 3(3)...............................................................................................................................176    Art 4............................................................................................................................169, 182    Art 5....................................................................................................................................188    Art 5(1)...............................................................................................................................169    Art 5(2)...............................................................................................................................180    Art 5(3)...............................................................................................................................188    Art 5(6)...............................................................................................................................181    Art 6(1)...................................................................................................................169, 178–9    Art 6(2).......................................................................................................................169, 178    Art 6(5)...............................................................................................................................177

Table of Legislation  xlvii    Art 7............................................................................................................................... 267–8    Art 7(2)...............................................................................................................................262    Art 7(3)(d)..........................................................................................................................277    Art 7(6)...............................................................................................................................268    Art 8........................................................................................................................267–8, 277    Art 8(2)...............................................................................................................................277    Art 8(3)...............................................................................................................................278    Art 9............................................................................................................................... 267–8    Art 12..................................................................................................................................273   Explanatory Memorandum...............................................................................262, 267, 269     paras 7–9........................................................................................................................258     paras 66-69.....................................................................................................................260     paras 76–83....................................................................................................................263     paras 84–86....................................................................................................................267     paras 100–103................................................................................................................272     para 104..............................................................................................................268, 272–3     paras 105–109................................................................................................................272     para 117..........................................................................................................................277     para 118..........................................................................................................................275     para 119..........................................................................................................................277 Directive 80/1263...................................................................................................................394 Directive 84/450/EEC......................................................................................................68, 105 Directive 86/653.............................................................................................................150, 199 Directive 89/48.......................................................................................................................394 Directive 93/13.........................................................................................................................74 Directive 97/7/EC.............................................................................................................68, 105 Directive 98/27/EC...............................................................................................68, 105, 176–8    Art 4....................................................................................................................................177 Directive 2002/65/EC.......................................................................................................68, 105 Directive 2004/48...........................................................................................................267, 429   Recital 18............................................................................................................................174    Art 4....................................................................................................................................174 Directive 2005/29.............................................................................................................68, 105    Art 3(2).................................................................................................................................68 EC Regulations Brussels I Regulation see Regulation 44/2001 Rome I Regulation see Regulation 593/2008 Rome II Regulation see Regulation 864/2007 Regulation 17/1962..........................................................................................................72, 393    Art 9(1).......................................................................................................................196, 393 Regulation 26/62....................................................................................................................302 Regulation 1017/68................................................................................................................202 Regulation 2988/74..........................................................................................................85, 202 Regulation 123/85....................................................................................................................71    Art 5(2).................................................................................................................................87 Regulation 4056/86................................................................................................................202

xlviii  Table of Legislation Regulation 3975/87................................................................................................................202 Regulation 556/89..................................................................................................................222 Regulation 4064/89..................................................................................................................77 Regulation 1534/91..................................................................................................................72   Recital 7................................................................................................................................72 Regulation 240/96..................................................................................................................217 Regulation 1215/99..................................................................................................................70 Regulation 2790/99..........................................................................................................77, 299   Recital 17..............................................................................................................................79 Regulation 823/2000................................................................................................................36 Regulation 1346/2000, Art 26................................................................................................383 Regulation 44/2001 (Brussels I)..................... 7–9, 13, 18–21, 23–6, 32, 41–2, 50–1, 53, 55–6, 58, 80, 96–7, 133–6, 139–40, 142–4, 148–53, 155–6, 183–4, 187–8, 228–30, 232, 245, 250–2, 256, 263–6, 269, 272, 280, 355–7, 360, 362–3, 365, 387, 394, 397–400, 402, 405–7, 409–12, 421, 427–8, 439   Preamble...............................................................................................................................49   Recital 8..............................................................................................................................360   Recital 11............................................................................................................................360   Recital 19..............................................................................................................................20   Chapter III..........................................................................................................................357    Art 1............................................................................................................................229, 398    Art 1(1)...............................................................................................................................183    Art 2................................................................... 19, 27, 29, 32, 35, 37, 44, 139, 183, 356, 421    Art 4......................................................................................................................................98    Art 5................................................................................................................19, 25–7, 29, 33    Art 5(1)........................................................................8, 17–29, 39, 97, 133, 139, 150–1, 405    Art 5(1)(a)........................................................................................20–1, 25–6, 139–40, 151    Art 5(1)(b)...................................................................................... 21, 24–6, 139, 151–2, 405    Art 5(1)(c)......................................................................................................................21, 26    Art 5(3)........................ 8, 17–29, 31–9, 97, 133, 139, 151, 183–4, 228, 244, 357, 405–7, 421    Art 6....................................................................................................................................143    Art 6(1)..................................37, 41–59, 139, 143, 184, 229–30, 244, 363, 407, 409–11, 421    Art 6(3)(a)..........................................................................................................................232    Arts 15–17..................................................................................................................184, 356    Art 23................................................................................................41–59, 363, 409, 411–12    Art 27.............................................................................................. 41–59, 139, 357, 409, 412    Art 27(1)–(2)......................................................................................................................357    Art 28................................................................................ 41–59, 139, 357, 363, 409, 411–12    Arts 29–30..........................................................................................................................357    Art 31....................................................................................................................58, 265, 269    Art 32..........................................................................................................................269, 398    Art 33..........................................................................................................................399, 439    Art 33(2).............................................................................................................................399    Art 33(3).....................................................................................................................399, 439    Art 34..........................................................................................................................397, 439    Art 34(1).......................................................................................................219–20, 383, 400    Art 34(2).............................................................................................................................387

Table of Legislation  xlix    Art 34(3).......................................................................................................................48, 411    Art 53..................................................................................................................................399    Art 73....................................................................................................................................18 Regulation 1049/2001................................................................................................271–3, 430 Regulation 1206/2001........................................................ 7, 265–9, 272, 280, 382–3, 429, 431   Recital 12............................................................................................................................382    Art 1....................................................................................................................................382    Arts 4–7..............................................................................................................................266    Art 10..................................................................................................................................266    Art 10(3).............................................................................................................................382    Arts 11–12..........................................................................................................................266    Arts 13–14..................................................................................................................266, 382    Arts 15–16..........................................................................................................................266    Art 17..................................................................................................................................266    Art 17(5).............................................................................................................................382 Regulation 1400/2002....................................................................................................... 297–8    Art 1(1)(f)–(h)...................................................................................................................297 Regulation 1/2003.................................... 2, 8–9, 17, 70–1, 73, 80, 83, 103, 126, 197, 202, 204, 260, 274–5, 279, 289–91, 296, 299, 304–6, 308, 310–14, 345–8, 350, 352–4, 359–60, 363, 365–74, 378–9, 383, 387, 390–1, 393, 398, 425, 433–4, 437   Recital 4................................................................................................................................70   Recital 8................................................................................................................................79   Recital 9......................................................................................................................... 103–4   Recital 16.................................................366, 369, 371–2, 376, 378, 381–2, 384–7, 390, 437   Recital 18............................................................................................................................354   Recital 21............................................................................................................................313    Art 1..............................................................................................................................17, 197    Art 1(2).................................................................................................................................83    Art 3......................................................................................................................79, 290, 367    Art 3(1)...............................................................................................................................346    Art 3(2).............................................................................................................70–1, 103, 106    Art 3(3)...............................................................................................................................356    Art 5............................................................................................................................... 352–3    Art 5(1)...............................................................................................................................346    Art 5(2)...............................................................................................................................396    Art 6......................................................................................................................................17    Art 9....................................................................................................................................193    Art 11............................................................................................................ 80, 276, 347, 349    Art 11(1).............................................................................................................................347    Art 11(6).....................................................................................................................347, 350    Art 12................................. 80, 260, 276, 347, 354, 366–7, 370, 377, 379, 388, 390–2, 437–8    Art 12(1).............................................................................................................................347    Art 12(2)..................................................................................... 347, 367, 371, 381, 390, 437    Art 12(3)..................................................................................... 347, 367, 376–8, 390–1, 438    Art 13........................................................................................................................80, 348–9    Art 13(1)–(2)......................................................................................................................348

l  Table of Legislation    Art 15.............................................................202, 270, 291, 293, 300, 306, 308, 310–11, 434    Art 15(1)................................................................... 203, 271, 291, 301–7, 310, 312–14, 434    Art 15(2)................................................................................. 203, 271, 291, 303, 307–8, 311    Art 15(3)............................................................... 203, 271, 290, 296–300, 305, 309–10, 312    Art 15(4).............................................................................................................................305    Art 16............................................................................................ 207–10, 273, 390, 393, 425    Art 16(1).............................................................................................................................209    Art 16(2).............................................................................................................................352    Art 20..................................................................................................................................384    Art 20(5)–(6)......................................................................................................................274    Art 22.................................................................274, 366–7, 371, 374, 376, 379, 388–91, 437    Art 22(1).....................................................................................................................370, 372    Art 23(5).............................................................................................................................383    Arts 25–26............................................................................................................................85    Art 27..................................................................................................................................358    Art 27(2).............................................................................................................................274    Art 28..........................................................................................................................275, 358    Art 28(2).....................................................................................................................275, 278    Art 29....................................................................................................................................71    Art 35..................................................................................................................................367 Regulation 358/2003................................................................................................................71   Recital 3................................................................................................................................71   Recital 12..............................................................................................................................71   Recital 26..............................................................................................................................71    Art 1(c).................................................................................................................................71    Art 6......................................................................................................................................71 Regulation 2201/2003, Art 22................................................................................................383 Regulation 139/2004..............................................................................................................122 Regulation 773/2004    Art 15(2).............................................................................................................................274    Art 16..................................................................................................................................274 Regulation 805/2004..............................................................................................................383 Regulation 1397/2004............................................................................................................308 Regulation 2006/2004......................................................................................................68, 105    Art 11(1).............................................................................................................................178 Regulation 861/2007..............................................................................................................383 Regulation 864/2007 (Rome II)............................ 7, 9, 28, 64, 76, 87, 89, 91–4, 96, 98, 100–2, 104–5, 108, 111–12, 114–19, 123, 125, 128–9, 132, 135–6, 139–45, 147–9, 151–2, 155–6, 170, 174–5, 179, 184, 227, 232, 362, 415–17, 419, 422   Recital 1..............................................................................................................................147   Recital 2..............................................................................................................................136   Recital 6..........................................................................................................133, 147–8, 173   Recital 7.......................................................................................................... 28, 96, 116, 184   Recital 11........................................................................................................ 89, 96, 104, 151   Recitals 13–14.....................................................................................................................148   Recital 21...................................................................................91, 95, 98, 105, 123, 141, 147

Table of Legislation  li   Recital 22......................................................................................................................95, 417   Recital 23........................................................ 95, 100–2, 106–7, 113, 128, 141, 416–17, 419   Recital 29..............................................................................................................................99   Recital 32...................................................................................................... 98, 141, 149, 156   Recital 34............................................................................................................................141   Recital 35............................................................................................................................148   Chapters II–VI.....................................................................................................................99    Art 1(d)...............................................................................................................................179    Art 1(1).................................................................................................................................96    Art 1(2)(b)..........................................................................................................................104    Art 1(4).................................................................................................................................96    Art 2......................................................................................................................................96    Art 3....................................................................................................................................100    Art 3(4).................................................................................................................................67    Art 4.................................................................................89, 92, 94, 99, 102–3, 123, 141, 152    Art 4(1)...........................................................................................................................91, 98    Art 4(2)...............................................................................................................................110    Art 4(3)...................................................................................................................89, 92, 152    Art 5....................................................................................................................................123    Art 5(2).................................................................................................................................92    Art 6............................. 54, 80, 89, 92, 95–6, 98–9, 103–4, 123, 135, 141, 152, 178, 419, 422    Art 6(1)....................................................................................... 93, 95, 103–7, 116, 128, 416    Art 6(2)............................................................................................. 89, 93, 95, 103, 105, 107    Art 6(3).......................................................... 7–9, 28, 91–3, 95, 98–119, 123, 125–6, 128–9, 135–6, 141–3, 153, 181, 199, 406, 415–16    Art 6(3)(a)......................................................... 95, 101–3, 107, 114, 119–22, 124–6, 128–9, 141–2, 174–5, 179, 181–2, 184–5, 416–17, 423    Art 6(3)(b)................................ 51, 93, 95, 100–2, 105, 110, 114, 122, 124–8, 142–3, 148–9, 174–5, 179, 182, 185, 230, 235, 242, 244, 416–17, 422    Art 6(4)...................................................................................................................95, 99, 153    Art 9....................................................................................................................................153    Art 9(2)...............................................................................................................................153    Art 10..............................................................................................................................89, 99    Art 10(1).........................................................................................................................89, 99    Art 10(4)...............................................................................................................................92    Art 14....................................................................................................................................99    Art 15......................................................................................................................99, 112–13    Art 15(a)...............................................................................................................112–13, 174    Art 15(b)–(c)......................................................................................................................112    Art 15(f).....................................................................................................................174, 179    Art 16.................................................................... 99, 114–17, 119, 128–9, 140, 200, 416–17    Art 17......................................................................................................99, 117–19, 128, 416    Art 23..................................................................................................................................124    Art 24....................................................................................................................................99    Art 26....................................................................................................................99, 140, 200    Art 27....................................................................................................................................99 Regulation 1/2008, Art 28......................................................................................................430

lii  Table of Legislation Regulation 593/2008 (Rome I)............................7, 9, 25, 45, 63–7, 69, 75, 77–9, 81–2, 89–90, 96–7, 108, 115–16, 129, 132, 134, 136, 139–42, 147–9, 151–2, 155–6, 232, 413–14, 417, 419   Recital 1..............................................................................................................................147   Recital 2..............................................................................................................................136   Recital 6..................................................................................................................133, 147–8   Recital 7..........................................................................................................................25, 28   Recital 10............................................................................................................................151   Recital 17...................................................................................................... 25, 134, 152, 406   Recital 37............................................................................................................................149   Recital 40............................................................................................................................148    Art 1(1).................................................................................................................................64    Art 1(2)(e)............................................................................................................................45    Art 3...................................................................................................... 65–6, 81, 87, 141, 414    Art 3(1).................................................................................................................................67    Art 3(3)...............................................................................................................................145    Art 3(4).........................................................................................................................75, 145    Art 4............................................................................................ 65–6, 77–8, 81, 87, 141, 414    Art 4(1).................................................................................................................65, 152, 154    Art 4(1)(a)......................................................................................................................25, 65    Art 4(1)(b)............................................................................................................................25    Art 4(1)(e)............................................................................................................................25    Art 4(1)(f)....................................................................................................................25, 142    Art 4(2).........................................................................................................................65, 142    Art 4(3).........................................................................................................................65, 152    Art 4(4)...............................................................................................................142, 144, 154    Arts 5–8................................................................................................................................66    Art 9......................................................... 66–7, 75, 77–8, 81, 83, 97, 116, 129, 140, 200, 414    Art 9(1)...........................................................................................................................66, 73    Art 9(2)...........................................................................................................................66, 78    Art 9(3)......................................................................................... 66, 78–9, 82, 116, 201, 414    Arts 10–11............................................................................................................................66    Art 12..............................................................................................................................63, 65    Art 12(1)(e)..........................................................................................................................89    Art 19(1)–(3)........................................................................................................................65    Art 21...................................................................................... 67, 75, 79, 82–3, 140, 200, 414    Art 23....................................................................................................................................67 Regulation 4/2009, Art 24......................................................................................................383 Regulation 906/2009................................................................................................................36 Regulation 267/2010................................................................................................................71 Regulation 330/2010........................................................................................................... 70–1    Art 4(a).................................................................................................................................71 Finland Act on Class Actions No 444/2007........................................................................................167

Table of Legislation  liii France Civil Code, Art 1382...............................................................................................................113 Civil Procedure Code    Art 11..................................................................................................................264, 272, 430    Art 145................................................................................................................................264 Commercial Code    Art L121-35........................................................................................................................107    Art L420-2..........................................................................................................................103    Art L420-6..........................................................................................................................166    Art L442-6, I–5...................................................................................................................150    Art L450-1(2).....................................................................................................................374    Art L450-3..................................................................................................................369, 388    Art L450-4(5).....................................................................................................................369    Art L462-3..........................................................................................................................271    Art L462-9-I.......................................................................................................................275    Art L463-6..............................................................................................................270–1, 275    Art L464-3..........................................................................................................................274    Art L470-7..........................................................................................................................167    Arts R-463-13 to R-463-15-1.............................................................................................274 Consumer Code    Art L421-1 to L421-2.........................................................................................................166    Art L422-1..................................................................................................................166, 176    Arts R411-1 to R411-6.......................................................................................................176 Decree (10 February 2009)....................................................................................................274 Law No 78-753 (17 July 1978)...............................................................................................272 Law No 80-536 (16 July 1980)...............................................................................................280 Order 4 November 2004........................................................................................................274 Order 2008-1161 (13 November 2008).........................................................................274, 369 Germany Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen (GWB)).......................................................................................... 98, 107, 122, 309–10, 434   s 20(2)-(3)..........................................................................................................................103   s 20(4).........................................................................................................................103, 107   s 21......................................................................................................................................126   s 32......................................................................................................................................108   s 33..............................................................................................................................108, 113   s 33(2).........................................................................................................................165, 174   s 33(4).................................................................................................................................396   s 34a......................................................................................................................98, 165, 183   s 81......................................................................................................................................108   s 90a......................................................................................................................309–10, 434   s 90a(1).................................................................................................................309–10, 434   s 90a(2)........................................................................................................................ 309–10   s 90a(3)–(4)........................................................................................................................310   s 130(2).................................................................................................................................91 Competition Act, s 33(4).......................................................................................................211

liv  Table of Legislation Criminal Code, (Strafgesetzbuch), s 298..............................................................................108 Federal Data Protection Act, s 4b(5)–(6)..............................................................................309 Strafprozessordnung, s 135....................................................................................................369 Greece Civil Code...............................................................................................................................237 Consumer Protection Act 2251/1994....................................................................................179 Netherlands Civil Procedure Code, Art 186...............................................................................................265 Code of Civil Procedure    Art 7:907.............................................................................................................................168    Art 1075..............................................................................................................................217 Norway Dispute Act 2005....................................................................................................................168 Portugal Act 83/95.................................................................................................................................168 Sweden Act on Administrative Procedure, Art 24..............................................................................304 Act amending the Swedish Code of Judicial Procedure 2005 (Lag 2005:683 om ändring i rättegångsbalken)........................................................................................304 Code of Judicial Procedure (Rättegångsbalken)...................................................................309    Chapter 35, Art 6................................................................................................................304    Chapter 40, Art 1................................................................................................................304 Competition Act 1993 (Konkurrenslagen, 1993:20)............................................................291 Competition Act 2008 (Konkurrenslagen, 2008:579)............................291, 304, 308–10, 434   Chapter 3     Art 1................................................................................................................................292     Art 2................................................................................................................................293     Arts 3–4..........................................................................................................................292     Art 17..............................................................................................................................292     Art 26..............................................................................................................................293    Chapter 6, Art 1..................................................................................................................292    Chapter 7, Art 1..................................................................................................................292   Chapter 8............................................................................................................................308     Art 2................................................................................................................................304     Art 3................................................................................................................................308     Art 7................................................................................................................................293     Art 13..............................................................................................................................308 Competition Regulation 2008 (Konkurrensförordning 2008:604).....................................309    Art 6....................................................................................................................................309 Group Proceedings Act 2002.................................................................................................167

Table of Legislation  lv Switzerland Federal Act on Private International Law 1987    Art 19..................................................................................................................................201    Art 137..................................................................................................................91, 199, 201    Art 137(1)...........................................................................................................................122 United Kingdom Competition Act 1998............................................................................................126–7, 355–6   s 47A...................................................................................................................................211   s 47B...................................................................................................................166, 175, 178   s 47B(9)..............................................................................................................................166   s 58A............................................................................................................................ 210–11 Enterprise Act 2002................................................................................................................211   s 19......................................................................................................................................166 Gas Act 1986, s 28(5).............................................................................................................356 Magna Carta...........................................................................................................................335 Protection of Trading Interests Act 1980..............................................................................280 secondary legislation Civil Procedure Rules    Pt 19II, r 19.6......................................................................................................................168    Pt 19III, rr 19.10-19.15......................................................................................................168 Competition Act 1998 (Concurrency) Regulations 2004 (SI 2004/1077)...................... 355–6 Rules of the Supreme Court, Ord 11.....................................................................................358 Specified Body (Consumer Claims) Order 2005 (SI 2005/2365)........................................166 United States of America Class Action Fairness Act 2005..............................................................................................227 Clayton Act.....................................................................................................................230, 336   s 4................................................................................................................................237, 336   s 12......................................................................................................................................329 Code of Federal Regulations, 11 CFR, section 92.54............................................................327 Constitution...............................................................................................................227–8, 328    Art IV..................................................................................................................................246    Full Faith and Credit Clause......................................................................................249, 386   5th Amendment.................................................................................................................320 Federal Rules of Civil Procedure............................................. 8, 315–17, 320, 327–9, 339, 341   r 4(k)(2)(B)........................................................................................................................328   r 12(b)(1)............................................................................................................................241   r 12(b)(6)............................................................................................................................241   r 23.................................................................................................................. 8, 186, 241, 336   r 23(b)(3)........................................................................................................182, 186, 241–2   r 23(b)(3)(C)......................................................................................................................243   r 26..............................................................................................................................326, 336   r 26(b)(1)............................................................................................................................326   r 26(c).................................................................................................................................326   r 26(c)(7)............................................................................................................................326

lvi  Table of Legislation   r 27..............................................................................................................................326, 336   r 28..............................................................................................................................326, 336   r 28(b).................................................................................................................................329   rr 29–33......................................................................................................................326, 336   r 34......................................................................................................................................336   r 34(a)(1)....................................................................................................................330, 341   rr 35–36......................................................................................................................326, 336   r 37..............................................................................................................................331, 336   r 45......................................................................................................................................329   r 45(a)(1)(A)..............................................................................................................330, 341   r 45(a)(2)............................................................................................................................329   r 45(b)(2)............................................................................................................................329   r 45(c)(1)............................................................................................................................328   r 45(c)(3)(C)......................................................................................................................339   r 45(e).................................................................................................................................331   r 54(d).................................................................................................................................336   r 69(a).................................................................................................................................317 Federal Rules of Evidence, r 501............................................................................................320 Foreign Trade Antitrust Improvements Act 1982................................ 122, 232, 242, 331, 337 Restatement (Second), section 40.........................................................................................282 Restatement (Second) Conflict of Laws, section 202...........................................................239 Restatement (Third) of the Foreign Relations Law   section 437..........................................................................................................................338   section 437(1)(c)................................................................................................................327   section 442..................................................................................................282–3, 327, 331–6   section 442(1)(a)................................................................................................................332   section 442(1)(c)................................................................................................................332   section 442(2)(a)................................................................................................................336   sections 473–474................................................................................................................327 Sherman Act............................................102, 109, 115, 122, 231, 235, 238–9, 279, 334–5, 337   s 1367(a).............................................................................................................................236   s 1367(c).............................................................................................................................236 Uniform Foreign Money Judgments Recognition Act 1962................................................247 Uniform Foreign-Country Money Judgments Recognition Act 2005........................... 247–8   s 3(b)...................................................................................................................................248 United States Code    Title 15 USC...........................................................................................................................8     section 1.........................................................................................................................238     section 6a................................................................................................................122, 232     section 6a(1)..................................................................................................................232     section 15.......................................................................................................................336     section 16(a)..................................................................................................................337     section 22...............................................................................................................228, 329     section 26.......................................................................................................................337     section 4304(a)(2).........................................................................................................337    Title 28 USC...........................................................................................................................8     section 1331...................................................................................................................227

Table of Legislation  lvii     section 1332(d)(2).........................................................................................................227     section 1367...................................................................................................................227     section 1367(a)..............................................................................................................235     section 1404(a)..............................................................................................................230     section 1407...................................................................................................................321     section 1782................................................... 8, 283–4, 315–19, 321–3, 325, 329, 338–42     section 1782(a)..........................................................................................315–26, 338–42     section 1782(b)..............................................................................................................316     section 1783.......................................................................................................282–3, 329     section 1920...................................................................................................................336 Walsh Act........................................................................................................................282, 329

TABLE OF TREATIES, CONVENTIONS AND AGREEMENTS ETC Agreement between the European Community and the Government of the Republic of Korea concerning cooperation on anti-competitive activities    Art 4(4)...............................................................................................................................392    Art 7....................................................................................................................................392 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968)............................20–1, 24, 41, 46, 96, 132–4, 136, 219–20, 245, 249–50, 265, 359–60, 362, 394, 398, 400, 411–12    Art 2..............................................................................................................................39, 407    Art 5(3).........................................................................................................................28, 151    Art 6(1).....................................................................................................................47–50, 52    Art 17....................................................................................................................................43    Art 22....................................................................................................................42–3, 48, 50    Art 24..................................................................................................................................265    Art 27(1).............................................................................................................................219    Art 27(3)...............................................................................................................................48    Art 28....................................................................................................................................50   Protocol..............................................................................................................................249 EU/USA Agreement on extradition......................................................................................286 EU/USA Agreement on mutual legal assistance...................................................................286    Arts 8–9..............................................................................................................................286 European Convention on Human Rights.....................................................................367, 375    Art 6............................................................................................................ 187, 367, 388, 397    7th Protocol, Art 4.............................................................................................................255 European Economic Area Agreement.....................................................................................51    Art 53....................................................................................................................44, 193, 211    Art 53(1).............................................................................................................................193 Geneva Convention (1961)...................................................................................................249 Hague Convention on Choice of Court Agreements (2005)......................... 55, 245, 247, 254    Art 2(2)(h)............................................................................................................................55    Art 11(1)-(2)......................................................................................................................254 Hague Convention on Product Liability, Art 9.....................................................................117 Hague Convention on Road Traffic Accidents, Art 7...........................................................117 Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters (1970).............................................................8, 245, 281–2, 315, 324, 327, 331, 431    Arts 2–23............................................................................................................................281 Hague Service Convention (1965)........................................................................................183    Art 13..................................................................................................................................185 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters 1988........................................................ 41–2, 51, 54–6, 245, 252, 412

lx  Table of Treaties, Conventions and Agreements etc    Art 6(1).................................................................................................................................44    Art 17..............................................................................................................43–5, 50, 54, 56    Art 21....................................................................................................................................54    Art 23..............................................................................................................................17, 21 Lugano II Convention..............................................................................................................41 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)..........................................................................................8, 209, 217–18, 249    Art V(2)(b).................................................................................................................. 217–18 Rome Convention (1980)............................................................................ 32, 78, 87, 117, 152    Art 4(2)...............................................................................................................................152    Art 5....................................................................................................................................117    Art 7............................................................................................................................. 116–17    Art 7(1).........................................................................................................................66, 116

1 Introduction JÜRGEN BASEDOW, STÉPHANIE FRANCQ AND LAURENCE IDOT

I. Context This book is the result of a research project funded by the European Commission in the frame of the ‘Civil Justice Programme 2007–2013’. The funding was solicited by three partner institutions: (i) the Max Planck Institute for Comparative and International Private Law (Hamburg, Germany); (ii) the Université Catholique de Louvain, Chair of European Law (Louvain-la-Neuve, Belgium); (iii) the University Paris II-Panthéon Assas, Collège européen de Paris (Paris, France). The project was coordinated by the Université Catholique de Louvain. The book focuses on a specific type of litigation: international antitrust litigation, ie litigation, mainly of civil nature, which follows violations of antitrust law and involves factual patterns spread across various countries. As such, State Aid and mergers are not dealt with. The object of the book is to inquire into the functioning and potential development of private international law techniques and instruments applicable for this specific kind of litigation. The introduction explains the reasons underlying the need for this analysis (II), the goals of the research project (III), the structure and content of the book (IV), as well as the working method (V).

II.  Why Analyse Antitrust Disputes in the Light of Private International Law? A.  The International Aspect of Antitrust Litigation The context of competition law enforcement in the European Union has changed radically in the last few years. The decentralisation of antitrust law enforcement and the development of private damages actions have the effect of increasing the number of involved authorities, be they of an administrative or judicial nature. In addition, disputes raising competition law issues are becoming increasingly international. Public and private actions

2  Jürgen Basedow, Stéphanie Francq and Laurence Idot pursued against anti-competitive practices often involve companies located in different countries, business practices of global reach, procedures in more than one State and evid­ entiary material spread across multiple jurisdictions. As a result, judicial and administrative authorities of various countries may have to deal with antitrust infringements demonstrating similar patterns and will inevitably encounter specific difficulties linked to the international character of the proceedings. As a result, there is a growing concern about not only rules on jurisdiction, the applicable law and recognition of decisions, but also about the sharing of evidence, protection of business secrets and the interplay between administrative and judicial procedures. The growing international nature of antitrust litigation therefore deserves an analysis from the point of view of private international law rules and techniques, which are especially devoted to solving difficulties typically resulting from the international nature of private relationships. Before turning to these specific questions, some clarification on the relationship between public and private aspects of antitrust litigation and on the exact reach of private international law in antitrust litigation needs to be made.

B.  The Characteristics of Antitrust Litigation The implementation of competition law can take two, a priori separate, paths: enforcement of competition law can be the domain of either public authorities or private parties. The distinction between public and private enforcement is fundamental, at least on the European continent where the role of competition authorities is central to the conception of competition law enforcement. Public enforcement corresponds to the implementation of Articles 101 and 102 TFEU or analogous national provisions by specialised authorities which are often of an administrative nature and which act on behalf of the public/general interest. Competition law being understood as prompting the common good, violations of competition law are therefore prosecuted and subject to sanctions of an administrative nature and in some national legal systems, incidentally, of a criminal nature. The European Commission and National Competition Authorities (NCAs) are in charge of public enforcement in the EU. Public enforcement is thus regulated by rules of public law so that private international law reasoning and specific provisions of private international law have a priori no impact. In the EU, public enforcement (and the international aspects thereof) is mainly organised by Regulation 1/2003 and by the Commission Notice on cooperation within the Network of Competition Authorities (ECN Notice). Private enforcement, by contrast, is initiated by private parties who are either victims of a violation of competition law or who were party to an agreement violating competition law of which they want to be freed. Parties are thus defending their own private interest, but by doing so they take part in the identification and redress of antitrust violations. Civil judges apply competition law rules in private actions based on contractual or non-­ contractual claims. A violation of competition law can either form the ground of the claim or be called upon incidentally in a claim concerning primarily the enforcement of a contract for instance. Since, as mentioned above, most private enforcement proceedings involve parties, facts and evidence spread throughout various countries, private inter­ national law rules and techniques are necessarily relied on. Private enforcement therefore constitutes the core of this book.

Introduction  3 Public and private enforcement cannot however be considered as entirely hermetic spheres. Indeed, most non-contractual claims for damage based on a violation of competition law follow the decision of a competition authority condemning the practice. Claims for damages are thus, in the vast majority of cases, so-called ‘follow-on actions’. Parties to this kind of private litigation will need to have access to the files and evidence possessed by the public authority and will need to ensure that the administrative decision will be recognised by the civil judge. Even in the case of so-called ‘stand-alone’ litigation, where the dispute concerns the enforcement of a contract which is, according to one party, contrary to competition law, the judge might need either to have access to the files or to ask for the intervention of a public authority. The difficulty is exacerbated by the fact that the private litigation will not necessarily be pending in the same State where public enforcement has taken place. The coordination between public and private enforcement is thus becoming not only an import­ ant issue, but also an issue which presents international aspects. Private international law instruments and reasoning could help in solving these practical concerns.1 In a more general way, it could be questioned whether in some respects the logic sus­ taining private international law could not (or does not) inspire the cooperation between competition authorities, especially within the European Competition Network (ECN), be it in regard of case allocation, in regard of the transmission of evidence and documents, or concerning the reach and recognition of a competition authority decision by other members of the ECN.2 This is the reason why the object of this research is not strictly limited to private enforcement but instead also covers coordination issues between private and public litigations as well as some coordination issues within the ECN. A few examples help clarify the object of the book.

C.  Examples and Issues As mentioned in the previous section, private enforcement litigations can have their source in- or outside of a contractual setting. They can follow an administrative decision, but they may not. They can derive from cartel practices or the abuse of a dominant position.

i.  Example A A group of wood pulp producers agree, during a secret meeting in a hotel in Singapore, on a minimum price for their products. The wood pulp producers are established in several EU countries and the US. Wood pulp producers sell directly to paper producers, ie their final clients, all over the world. Papers producers buy the wood pulp at an artificial price for years and subsequently claim for the price difference. Many of the contracts signed between wood pulp producers and paper producers contain a choice-of-jurisdiction clause. Competitors, mainly a group of competitors eager to be active on the EU market who have been supplanted on this market by members of the cartel, consider claiming for damages.

  See the contributions of L Idot, R Moldén and J Basedow (‘Recognition of Foreign Decisions’).   See the contributions of D Gerard, B Rodger and J Basedow (‘Recognition of Foreign Decisions’).

1 2

4  Jürgen Basedow, Stéphanie Francq and Laurence Idot

ii.  Example B A US manufacturer enjoys a worldwide dominant position on the market for central processing units. The central processing unit manufacturer offers rebates to major computer manufacturers – located in various countries such as Japan, the US and a number of EU countries – if the latter agrees to equip their computers exclusively or almost exclusively with the processing unit it produces. The dominant US manufacturer also offers money to major computer sellers if they agree to exclusively sell computers equipped with its processing units. As a result, competitors (located in the US and the EU) producing central processing unit for computers can hardly have access to the market and consider claiming for damages.

iii.  Example C A major beer brewer established in the UK has organised a closed distribution network. According to the exclusivity clause found in the supply contract, the distributors can only sell the beer of the UK brewer. Beer sales are also subject to a minimum price clause. One distributor located in France decides to establish commercial relationships with a Belgian beer brewer and, in order to keep both beers attractive, lowers the price of the English beer. The English beer producer sues the distributor for breach of contract. The distributor alleges the exclusivity clause and the minimum price clause are void because they infringe competition law.

iv.  Example D A nylon producer established in the US enters into a joint venture with an English fuel and petrochemical producer in order to establish a plant producing nylon in the Netherlands. Parties to the joint venture agree to share the US and the EU markets: the EU market should be reserved for the plant located in the Netherlands while the US market is reserved for the US nylon producer, who is obliged to sell only in the US and not to penetrate the European market. The joint venture contract contains an arbitration clause. Two years after the implementation of the joint venture, the English party observes that the US nylon producer is selling his products directly in Hungary and Slovenia. The parties disagree on the territorial reach of the non-competition clause. In the preceding examples, different types of private claims could be brought: – Example A: (i) claim raised by the paper producers against the wood pulp producers for the price difference; (ii) damage claim brought by competitor(s) against members of the cartel; – Example B: damage claims of competitors against the US producer of central processing units; – Example C: the claim is actually brought by the principal (the beer brewer) against its distributor for breach of contract; competition law is used as a defence in this litigation; – Example D: a claim by the UK petrochemical producer against the US nylon producer for breach of contract. In each case, the international aspect of these litigations will raise specific questions. Initially, victims of the anti-competitive practice, whether or not contractual partners, will have to identify jurisdictional grounds allowing them to seise a civil court. In Example A,

Introduction  5 some of the sale contracts concluded between paper producers and members of the cartels designate the competent court. It is, however, unclear whether this agreement could or should be regarded as also covering disputes related to a competition law infringement.3 Indeed, depending on the formulation of the jurisdiction clause, respecting the clause may force related claims to be brought in different fora. If no court was chosen (in Examples A and B for instance, there is no jurisdiction agreement between the members of the cartels and their potential competitors, nor is there one between the processing unit producer in dominant position and its competitors), the identification of the court will rest on factors other than party autonomy, such as the domicile of the defendant, the place of implementation of the contract (for contractual claims), the place of acting and the place of injury (for noncontractual claims) or, in the US, pursuant to the factor known as ‘targeting’.4 It appears clear that some of these factors are difficult to implement in antitrust litigations. The place of acting, for instance, in a case like the wood pulp cartel (Example A) or the abuse of dominant position by the central processing unit producer (Example B) explained above, is difficult to localise: should it be localised in the Singapore hotel in Example A? Where could the place of acting be localised in Example B, when the act of causation comprises a multitude of behaviours which can be localised all over the world and have an impact in just as many countries? Other procedural difficulties may appear as well. For instance, in Example B two claims could be raised against the central processing unit producer by different competitors for the same breach of competition law – but in different countries. This raises the danger of parallel proceedings and the need for lis pendens or similar mechanisms. Also, one civil victim (for instance, a paper producer having purchased wood pulp from different members of the cartel in Example A) could choose to bring an individual claim for damages (contractual or non-contractual) against several members of the cartel: this case would raise the issue of the consolidation of related claims against different defendants.5 In the first two examples (A and B), one of the core difficulties for claimants will be to prove the existence of an anti-competitive practice. Access to evidence is, for the claimants, the deciding element on the question whether the action has any chance of success. In these examples, it is almost certain that the civil proceeding will follow a condemnation by a public authority (follow-on action) and raise the coordination issues mentioned above: 1. Recognition of the decision of a competition authority by a civil judge: for instance, in Example A, is the decision of a German competition authority binding on a French judge? And if yes, is the impact of the administrative decision to be limited according to the territorial reach of the competition authority’s power? 2. Access to files, documents and evidence held by the competition authorities:6 for instance, in order to assess the exact amount of the damages, the claimant might need to have access to precise information possessed by the competition authority. The administrative decision as such might prove insufficient in this respect. At a second stage, the law applicable to the merits will need to be identified. This question is a classical question of private international law, but in antitrust litigation it is double-sided: identification of the applicable law demands not only the identification of   See the contribution of M Wilderspin.  See the contributions of B Vilà Costa, J Basedow (‘International Cartels and the Place of Acting’) and HL Buxbaum & R Michaels. 5   See the contributions of M Wilderspin and HL Buxbaum & R Michaels. 6   See the contributions of L Idot, R Moldén, J Basedow (‘Recognition of Foreign Decisions’) and M Stucke. 3 4

6  Jürgen Basedow, Stéphanie Francq and Laurence Idot the law applicable to the damage claims but also a determination of the law applicable to the assessment of the legality of an anti-competitive business practice affecting various jurisdictions. For instance, in Example A (wood pulp cartel), can EU competition law be applied to assess the legality of a behaviour which also has an anti-competitive impact on the US market? If yes, to what extent? Can French law be applied to the damage action brought by competitors of the wood pulp cartel members (Example A), including to the damages which are related to a restriction of competition on the US market? We shall see that in both the US and the EU specific solutions have been crafted in order to answer these questions.7 Despite all normative efforts for clear solutions, just like for the formulation of jurisdiction grounds, the criteria used for identifying the applicable law rests on factors calling for interpretation. For instance, in Examples A and B, if one refers to the ‘affected market’ for designating the applicable law, it is clear in the illustrative cases at hand that the ‘affected market’ can cover two continents . . . Depending on the factual patterns, the proceeding may be more or less complicated. For instance: 1. In Example D, the parties to the joint venture have included an arbitration clause in the contract. This raises specific questions: is the clause covering this litigation also controlling for competition law issues? Should the arbitrators be allowed to apply competition law? How are they to determine the applicable law for this specific kind of litigation?8 2. Several claimants (multiple competitors of the wood pulp cartel members in Example A, a group of competitors of the processing unit producer in Example B, or – more likely – consumer groups believing that they have purchased computers at an artificial price in Example B) could wish to gather their claims against one or more member of the cartel and thus bring a so-called ‘class action’ suit.9 Favouring the role of consumers as private enforcement actors is dependent on the existence of either class actions or representative actions, but the functioning of these collective redresses in international proceedings raises extremely thorny questions. It is clear from the facts that proceedings in all four examples could be initiated in various locations and be submitted to different laws, on the merits as well as on the procedural aspects. The international setting of the potential proceedings will inevitably trigger issues familiar to internationalists such as: 1. A race to the court in international settings and the pursuit of strategies for under­ mining the chance of success of proceedings in other locations more favourable to the other party.10 2. Forum shopping: forum shopping is the practice according to which parties tend to bring their claim before the jurisdiction that is most favourable to them, in terms of procedure or substance. It is not necessarily a condemnable practice. To a certain extent, claimants need to plan the strategic development of the proceedings. For instance, in Examples A and B proposed above, proceedings could probably be brought both in the EU and in the US. It might be more advantageous (especially in Example B where the   See the contributions of M Fallon & S Francq, S Francq & W Wurmnest and HL Buxbaum & R Michaels.   See the contribution of AP Komninos. 9   See the contributions of DP Tzakas and HL Buxbaum & R Michaels. 10   See the contributions of B Vilà Costa and M Wilderspin. See also the contribution of HL Buxbaum & R Michaels (on the point of forum non conveniens). 7 8

Introduction  7 headquarters of the processing unit manufacturer are located in the US) for the European victims to bring their claim in the US in order to benefit from the discovery procedure in a case where the victims’ access to evidence entails significant complexity.11 Alternatively, during a proceeding pending in Europe, the delivery of evidence and documents located in the US may be requested.12 3. Recognition and enforcement of foreign decisions originating from private enforcement actions. For instance, in Example B, prejudiced competitors may decide to sue the processing unit manufacturer in the US and will subsequently need to seise assets or bank accounts located in Europe. Enforcement of the US civil judgment would therefore be necessary. Whereas recognition and enforcement of foreign decisions has become an almost automatic procedure among Member States, the recognition and enforcement procedure (concerning, for instance, the possible enforcement of a US decision which stems from a private enforcement and which condemns members of the cartel, settled in Europe, to significant damages and perhaps even to punitive damages), still faces uncertainties in cases encompassing transatlantic relations.13 The nature of all these issues is identical in the US and in the EU, but the solutions and the corresponding legal provisions differ.

D.  The Normative Context It cannot be said that the specific questions linked to the international setting of most private enforcement procedures face a legislative lacuna. Quite to the contrary, both in the US and the EU, litigants can rely either on existing general provisions in the field of private international law or on specific provisions concerning private enforcement. In the European Union, a claimant willing to initiate civil claims linked to breach of competition law will rely on the Brussels I Regulation concerning the identification of the court (Regulation 44/2001); for determination of the applicable law, recourse will be taken to the Rome I Regulation (Regulation 593/2008) if the claim is of contractual nature, and to the Rome II Regulation (Regulation 864/2007) if the claim is non-contractual. Except for Article 6(3) Rome II, the provisions of these Regulations have not been formulated in regard of international antitrust litigations. As shown by the list of relevant instruments, depending on the characterisation of the claim, different provisions will come into play. For instance, in Example A, members of the wood pulp cartel and paper producers are bound by sale contracts: because different provisions apply, it is necessary to decide whether the claim of the paper producers is contractual or non-contractual. Characterisation will thus prove to be a central issue of interpretation in the European context. The need for this distinction and for different regimes for contractual and non-contractual claims is thus questioned.14 Once the question of characterisation is solved, the use of the relevant provisions of these Regulations (and mainly of the Brussels I Regulation) requires reference to case-law of the European Court of Justice. Other instruments of EU private international law may also be relied on for more specific problems: such is the case regarding Regulation 1206/2001 on the taking of evidence abroad.   See the contribution of M Stucke.  ibid. 13   See the contributions of C Kessedjian and J Basedow (‘Recognition of Foreign Decisions’). 14   See in this book the contribution and proposals of S Poillot-Peruzzetto & D Lawnicka. cp for the US, the contribution of HL Buxbaum & R Michaels. 11 12

8  Jürgen Basedow, Stéphanie Francq and Laurence Idot In the US, issues of jurisdiction and applicable law are intermingled: the application of US competition law, which depends upon the effects doctrine (the reach of which is defined by case-law), determines the substantive jurisdiction of US federal courts. Parties will have regard to Titles 15 and 28 of the United States Code (USC) and to the general due process limitations. Forum non conveniens will also be taken into consideration. Discovery is governed by Title 28 USC Section 1782 and by the Federal Rules of Civil Procedures, such as interpreted by case-law, and by the 1970 Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters. Class actions, up to now, have not been organised as such in a European act, in contrast to US law where class actions are governed primarily by Rule 23 of the Federal Rules of Civil Procedure. Arbitration as such is not regulated by EU law instruments; instead, it is governed directly by national provisions and case-law and by the New York Convention. As far as public enforcement is concerned, the directly relevant provisions are to be found in Regulation 1/2003. Coordination issues mentioned above, concerning the interplay between the public and the private spheres, are partially addressed by Regulation 1/2003 and by some Notices of the European Commission. At first sight, it appears that the difficulties raised by the international nature of antitrust litigation are broadly covered by legal provisions. A closer look, however, shows that some issues remain unaddressed and that the existing provisions themselves raise new issues, ie numerous questions of interpretation. Here, one can readily identify a number of examples where the lawmaker has failed to consider the international aspects of antitrust litigation. The White Paper on damages actions for breach of antitrust rules (COM (2008) 165 final) does not even address the international aspect of damages actions. Also, for private parties, access to evidence gathered by a competition authority is currently not covered by any legal provisions. Another problem is that the legal framework governing the protection of business secrets in the case of an exchange of information among the NCAs is unclear. Collective redress is, up to now, not covered by any provision at the EU level. Besides normative lacuna, some of the existing provisions dedicated to solving the problems of international antitrust litigation raise severe difficulties of interpretation. This is, among others, the case for Article 6(3) Rome II Regulation – the core conflict-of-law provision for private enforcement in the EU – and for the relevant provisions of the Brussels I Regulation, such as Articles 5(1) and 5(3). The need for interpretation is also clear in the US where case-law, while essential to the proper application of the provisions mentioned above, sometimes leads to further uncertainty. Therefore, at least in the EU, the normative context is as it currently stands neither sufficient nor self-supporting.

III.  Aims of the Research Project Since the project was financed by the European Commission, the research mainly focused on the current and coming EU instruments in the dedicated field. However, it proved impossible to analyse the international aspects of antitrust enforcement without an in-depth analysis of transatlantic situations. Moreover, the solutions developed in the US

Introduction  9 are on some points more advanced than the European ones. For these reasons, the research also covers some aspects of antitrust litigations in the US as well as in transatlantic relationships. Against this background, the aims of the research project are threefold. 1. The identification and highlighting of the problems linked to the international dimension of antitrust litigations. The reason that specific issues related to the international character of antitrust litigation are frequently overlooked is that these issues have, for the most part, not been clearly identified. Identifying which present the real difficulties (in contrast to issues that can easily be solved with existing instruments) constituted therefore the first goal of the project, thus ensuring that individuals confronted with these problems in practice benefit from a thorough assessment of problematic instances. 2. Testing the adequacy of existing EU instruments. The second aim of the research project is to inquire whether the existing pieces of legislation adequately answer the needs of international antitrust litigation. On the one hand, international litigation is already largely dealt with in a set of EU Regulations, which – with the exception of Article 6(3) Rome II – have not been drafted with regard to litigations based on competition law infringements (Brussels I, Rome I, Rome II, etc). On the other hand, Regulation 1/2003, subsequent Commission Notices, block exemption regulations and future projects of the Commission (ie the pre-draft Directive on damage actions) have been (or will be) formulated with a view to improving the efficiency of implementation of competition law, but they do not address the specific difficulties raised by international litigation. It is therefore necessary to inquire whether the instruments adopted in the ‘Justice-LibertySecurity’ (JLS) area and the instrument adopted (or to be adopted) in the area of competition law provide for a satisfactory legal framework, create specific difficulties or leave some issues open. This exercise is especially useful in view of the forthcoming revision of several JLS instruments and the current developments in the field of private enforcement. 3. Proposing practical solutions. The final aim of the research project is to suggest practical solutions and tools for practitioners, courts, authorities and lawmakers. Practitioners should find clear directions on the interpretation of the existing instruments and ideas on how to use them in the evolving context of international antitrust litigations. Where needed, the members of the research group identified the points on which legislative intervention is necessary and have formulated first proposals or guidelines. In this respect, the recommended interpretations and proposed amendments have been formulated so far as possible in a broad perspective, meaning in a way that renders these solutions adequate for litigation not involving competition law as well. As such, the proposals should be able to sustain legislative efforts in a general way.

IV.  Content and Structure of the Book The book directly reflects the goals of the research project. The book is concluded by the proposals of the members of the research group. As mentioned above, the proposals aim at (i) providing some interpretative guidelines for both the

10  Jürgen Basedow, Stéphanie Francq and Laurence Idot existing instruments in the EU and on some points which are not covered by legal provisions, and, above all (ii) suggesting necessary legislative amendments or clarifications. They have been formulated with regard to international antitrust litigations but could, in some respects, be used in other fields. The proposals cannot, however, be read independently from the rest of the book. The identification of the specific difficulties raised by international antitrust litigation, the explanations as to the current state of affairs and the reasoning behind the proposals is found in the contributions rather than in the proposals. The proposals thus do not reflect all the issues discussed in the contributions, but only the few points on which the authors felt that it was necessary and feasible to formulate interpretative and/or normative guidelines at this stage. The proposals do not include recommendations to the US lawmaker as the contributors and organisers considered this research project not the proper forum for such an effort. Readers will find, in the collection of contributions constituting the bulk of the book, answers concerning seven major issues concerning antitrust litigations: (i) allocation of jurisdiction (in civil and administrative litigation); (ii) applicable law; (iii) obtaining evidence; (iv) recognition and enforcement of foreign decisions (civil and administrative decisions); (v) collective redress; (vi) coordination of proceedings and cooperation between authorities; (vii) arbitration. Some contributions cover several of these issues, which are interdependent, while other issues needed to be considered independently. For instance, contributions on the taking of evidence necessarily deal with cooperation between authorities, while contributions on the applicable law do not necessarily do so. The issues are analysed with regard to both the EU and the US experience. Readers will thus find helpful insights for intra-EU, transatlantic and intra-US litigation. The table of contents found at the beginning of the book will help readers to identify the contribution(s) corresponding to their particular needs; references to contributions made in the preceding footnotes (see points B, C and D of the introduction) will provide similar assistance.

V.  Working Method A.  Who is Who? The project was initiated and conceived by its three organisers, Professor Jürgen Basedow, Professor Stéphanie Francq and Professor Laurence Idot, who obtained the generous financial support of the Commission and who defined the project goals and limits. The organisers form the scientific committee together with three members of the partner institutions, Professor Marc Fallon, Professor Catherine Kessedjian and Professor Wolfgang Wurmnest, who were closely involved in the development of the project. They were consulted on the major issues concerning the evolution of the research project. The contributors were chosen on the basis of their expertise in the field of competition law and/or private international law. One of the core methodological choices of the project was to gather experts from both disciplines and combine the views of practitioners and academics from various EU countries.

Introduction  11 The members of the research group are: Professor Jürgen Basedow, Director of the Max Planck Institute for Comparative and International Private Law, Hamburg Professor Hannah Buxbaum, Indiana University Maurer School of Law Professor Stéphanie Francq, Université Catholique de Louvain, Holder of the Chair of European Law Professor Marc Fallon, Université Catholique de Louvain, President of the Institut pour la recherche interdisciplinaire en sciences juridiques Damien Gerard, Research Fellow, Université Catholique de Louvain, Chair of European Law Professor Laurence Idot, University Paris II-Panthéon Assas, Collège européen de Paris Professor Catherine Kessedjian, University Paris II-Panthéon Assas, Collège européen de Paris Dr Assimakis Komninos, Local Partner, White & Case LLP, Brussels; Visiting Research Fellow, University College London; Visiting Professor, IREA Université Paul Cezanne Aix-Marseille III; former Commissioner and Member of the Board, Hellenic Competition Commission. Dominika Lawnicka, Université Toulouse 1 Capitole, Institut de recherche en droit européen, international et comparé Professor Ralf Michaels, Duke University School of Law Robert Moldén, Head of the Competition Law Practice Group, Gärde Wesslau; Doctoral Candidate in competition law, University of Lund; former Senior Case Officer, Swedish Competition Authority. Professor Sylvaine Poillot-Peruzzetto, Université Toulouse 1 Capitole, Institut de recherche en droit européen, international et comparé Professor Barry Rodger, University of Strathclyde, Glasgow Professor Maurice Stucke, University of Tennessee College of Law Dr Dimitrios Tzakas, Advocate (Athens Bar), LL.M., former Research Fellow, Université Catholique de Louvain, Chair of European Law. Professor Blanca Vilá Costa, Universitat Autònoma de Barcelona Michael Wilderspin, European Commission, Legal Service Professor Wolfgang Wurmnest, Leibniz Universität Hannover In addition, the research group benefited from the input of observers from the EU Commission (E De Smijter, R Becker, DG COMP) and from a Japanese university (Professor M Nagata, Osaka University, Graduate School of Law and Politics). Of final note, 28 PhD students from several EU and non-EU countries were invited to the conference ultimately organised to present the results of the research project. Along with the comments of highly qualified members of the audience, their expertise enriched the conference debate.

B.  Working Method At a first stage, the contributors worked individually on the topics proposed by the organisers. A first draft of each contribution was circulated among members of the group before they met for a two-day research seminar in December 2009. During the seminar, each contribution was presented and discussed. At a second stage, on the basis of this exchange of ideas, each contributor adapted his or her paper and drafted preliminary conclusions.

12  Jürgen Basedow, Stéphanie Francq and Laurence Idot The preliminary conclusions were circulated among the members of the group and each member was free to comment on them. At a third stage, the members of the scientific committee met to discuss the preliminary conclusions and offered their comments to each contributor. These were mainly concerned with ensuring the methodological consistency of the conclusions and also contained a handful of substantive suggestions or questions. The contributors were invited to adapt their conclusion on this basis. The academic freedom of each contributor has, naturally, been respected so as to make allowance for the specificities and the heterogeneity of the topics brought together in this project. At a fourth stage, all the contributions and conclusions were reworked and finalised on the basis of the discussions during the conference.

C.  Methodological Premises The organisers of the projects aimed at setting the foundations of a dialogue – rendered necessary by current practice – between the disciplines of competition law and private international law. Some methodological guidelines therefore presided at the constitution of the group, mainly: (i) mixing experts of both disciplines and, as far as possible, finding members with mastery in both disciplines; (ii) mixing practitioners (having various backgrounds in competition law, eg lawyers and members of competition authorities) and academics from various countries; (iii) mixing legal backgrounds, achieved through the international composition of the group; (iv) mixing established experts with their younger colleagues. Some methodological guidelines also guided the work of each contributor. Contributors were asked to work from a comparative perspective: legal developments in the EU were to be analysed and elaborated in regard of the experience of the Member States, especially in the field of private international law where the EU efforts are more recent. Contributors working on the EU legislative instruments could take advantage of the inputs provided by their American colleagues. The US members of the group drafted their contributions under a comparative perspective as far as it was relevant and with regard to international, especially transatlantic litigation. Contributors were also invited to work intensively with case-law: considering case-law from various jurisdictions is a requirement of comparative analysis, but also a way of remaining in tune with practice. Finally, respect for the goals of the research project was requested. This implied presenting the questions concerning individual topics in a clear and understandable way; showing how far the existing EU instruments and case-law solve the identified difficulties; and, for difficulties not easily solved, first favouring legislative interpretation over the formulation of proposed amendments and then, as necessary, presenting proposed amendments concisely. Concerning the proposals of each contributor, some methodological choices were set from the start. As far as possible, the contributors favoured interpretative solutions that would avoid long legislative procedures and could provide direct answers for practitioners. Secondarily, necessary clarifications or legislative amendments were also to be highlighted. The proposals reflect the personal opinion of each contributor. No general group solution is presented since members of the group considered it premature to do so in view of the stage of development of norms and practice in the dedicated area.

*   *   *

Introduction  13 The contributions were last updated in September 2010. Subsequent legal and jurisprudential developments have not been incorporated. Only one major legislative event has occurred in the meantime. The EU Commission issued a proposal for the revision of the Brussels I Regulation in December 2010 (COM (2010) 748 final). The conclusions reached by the authors are still relevant in regard of the proposal of the Commission, which leaves some of the major provisions discussed in the book unchanged. To a certain extent, the document of the Commission reflects the proposals of some contributors to this research project. As to other related matters, DG Competition did not proceed on the path toward a Directive on damages actions and launched a public consultation in the field of collective redress (SEC (2011) 173 final). The latter document only contains a series of questions addressed to the public. All issues addressed and the comments made in the book are therefore unaffected by the most recent activities of the Commission.

Part I International Antitrust Litigation – Conflict-of-Laws Issues I.1 Jurisdiction in EU Cross-Border Litigation

2 How to Apply Articles 5(1) and 5(3) Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach BLANCA VILÀ COSTA*

I. Introduction Private enforcement of competition law is a field in which cross-border cases are becoming more and more frequent. Especially in the Member States of the European Union (EU), the last decade has witnessed a significant increase in the number of actions brought before national courts based on the infringement of Articles 101 and/or 102 TFEU1 (as well as the corresponding provisions of domestic law, where applicable). Such a development can be attributed to a number of causes, ranging from an overall greater awareness of competition law-based rights on the part of the victims to the decentralisation process and the pro-­private enforcement approach which have characterised the field of EU competition law in recent years. Indeed, the adoption of Regulation 1/20032 and the subsequent full applicability of Article 101 TFEU3 (formerly Article 81 EC), the case-law of the Court of Justice of the European Union (ECJ) in the well-known Courage 4 and Manfredi 5 cases, or the quasi-restating effect of the consultation processes launched by the Commission with the publication of the Green Paper6 and the White Paper on damages actions,7 are all *  Professor of Private International Law, Jean Monnet Centre of Excellence; Director, University Institute of European Studies, Universitat Autònoma de Barcelona. The author thanks Dr Crístian Oró, Universitat Autònoma de Barcelona, for reviewing the final English text of this paper and his permanent support and discussion throughout the duration of this research project. 1   Treaty on the Functioning of the European Union, in its current version after the entry into force of the Treaty of Lisbon on 1 December 2009. For the consolidated text, see [2008] OJ C115. 2   Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [currently Arts 101 and 102 TFEU] [2003] OJ L1. 3   Arts 1 and 6 Regulation 1/2003. 4   Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297. 5   Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619. 6   Commission, ‘Damages actions for breach of the EC antitrust rules’ (Green Paper) COM (2005) 672 final, 19 December 2005. See also Commission, ‘Staff Working Paper, Annex to the Green Paper, Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2005) 1732, 19 December 2005. 7   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008. See also Commission, ‘Staff Working Paper accompanying the White Paper on Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2008) 404, 2 April 2008.

18  Blanca Vilà Costa factors which have raised the awareness of stakeholders as to the possibility of enforcing their rights derived from competition law infringements before national courts. Consequently, the number of cases involving cross-border situations has also experienced a considerable increase. To be sure, a greater impact of private actions in the aggregate of competition enforcement cases results in a higher number of instances involving transnational litigation, usually because the concerned parties – undertakings, consumers or more generally private parties – come from different States. This stems from the very configuration of the market at the global level, but even more noticeably at the EU level: indeed, the internal market understood as an area of free movement of goods and services, coupled with the freedom of establishment and the free movement of persons, has undeniably proved to be an excellent breeding ground for cross-border litigation in which parties from different States (not only Member States) are involved. When such litigation gives rise to issues of possible competition law infringements, the conditions are set for cross-border private enforcement cases to arise, due to the fact that effects of restrictive practices are easily felt on markets extending beyond the national borders of the State where they are carried out. Moreover, contracts containing potentially restrictive clauses are often concluded between undertakings from different States. Consequently, it is possible to hold that private enforcement of competition law is nowadays, in a relevant part, embedded in a transnational environment, which calls for a thorough analysis of its implications from a private international law perspective. As in any other cross-border situation, plaintiffs – and to a certain extent defendants – faced with transnational private enforcement litigation have to deal with some private international law issues. This particular assessment must be carried out so as to determine, on the one hand, the State or States whose courts have jurisdiction to hear the action; and on the other hand, the law that must be applied to the adjudication of the case. In the following pages we will analyse some specific issues arising in the context of the first question, ie jurisdictional issues triggered by the interface between private international law and competition law, in order to determine how the principles and rules of private inter­national law must be used as a solution for the particular problems posed by private enforcement of competition law. It is also important to highlight that our analysis will be conducted not only in the framework of the existing legislative instruments and the relevant case-law of the ECJ, but also paying attention to possible developments in the context of the review of the so-called Brussels I Regulation.8 As it is well known, this is the instrument of EU law which establishes inter alia the heads of jurisdiction that national courts of the Member States must apply, as a general rule, regarding defendants domiciled in a Member State.9 The Brussels I Regulation is currently the object of a process of review, which may bring about a considerable number of amendments, adaptations or the addition of new provisions to the Regulation. Indeed, in accordance with its obligation under Article 73 Brussels I Regulation, the Commission presented a Report on the application of the Regulation,10 which was 8   Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1 (see also the corrigendum in [2001] OJ L307). 9   For a thorough and extensive analysis of the Brussels I Regulation, see U Magnus and P Mankowski (eds), Brussels I Regulation (Munich, Sellier, 2007). 10   Commission, ‘Report on the application of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters’ (Commission Report) COM (2009) 174 final, 21 April 2009.

Brussels I: Art 5(1) and 5(3)  19 accompanied by a Green Paper on the review of the Regulation.11 In the latter, the Commission launched a consultation aimed at determining, among a number of issues, whether new heads of jurisdiction should be added to the existing ones.12 This review process would undoubtedly be a good opportunity to amend Articles 5(1) or 5(3) Brussels I Regulation, or to add an ad hoc jurisdiction rule for cases of private enforcement of competition law. We will first deal with this topic in section II, and will subsequently, in sections III and IV, turn to the question of the interpretation and application of the above-mentioned provisions of the Regulation in their current form. As a conclusion, the overall purpose of our analysis will aim at establishing what we consider to be the requirements of a coherent approach to the jurisdictional issues raised by the enforcement of competition law before national courts. To be sure, in our view the underlying idea is that, from a jurisdictional perspective, a coherent construction and application of the existing provisions suffices to satisfy the needs of cross-border competition law litigation.13 The key to this coherent approach lies in carrying out an accurate delimitation between contractual issues and non-contractual issues – a delimitation which, as we will see, has to be made according to a method of exclusion, giving precedence to the contractual characterisation.

II.  Introductory Proposal: There Is No Need to Amend the Brussels I Regulation with a View to Facilitating Private Enforcement of Competition Law As we have just highlighted, it could be envisaged to take advantage of the review of the Brussels I Regulation either to create specific heads of jurisdiction for competition-related cases or to amend the existing ones with the aim of facilitating or enhancing the deter­ mination of special jurisdiction in private enforcement cases. This approach would require adding a new section to Article 5 Brussels I Regulation, or modifying the current wording of section (1), which applies to matters relating to a contract, and/or section (3), which deals with non-contractual matters.14 However, it is submitted that this approach would turn out to be problematic and is therefore unnecessary. Indeed, drafting an ad hoc yet broad and all-encompassing provision would bring about difficulties, since private enforcement cases can arise in a variety of factual backgrounds which hinder the creation of an across-the-board head of jurisdiction: not only as regards the contractual or tortious configuration, but also considering that private enforcement litigation very often involves multiple parties as plaintiffs and/or defendants, who in turn will not always reside in one Member State.15 11  Commission, ‘Review of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters’ (Green Paper) COM (2009) 175 final, 21 April 2009. 12   See especially Section 8.2 Green Paper on the review of the Brussels I Regulation, together with Section 3.8.2 Commission Report on its application. 13   See in contrast in this book the contribution of S Poillot-Peruzzetto and D Lawnicka. 14   It must be remembered that irrespective of the specific subject matter of a competition law enforcement case, plaintiffs will always be able to avail themselves of the general head of jurisdiction of Art 2 Brussels I Regulation, which grants jurisdiction to the courts of the Member State where the defendant is domiciled. 15   On this subject, it should be noted that the possibility of adopting EU measures on collective redress (see Commission, ‘Consumer Collective Redress’ (Green Paper) COM (2008) 794 final, 17 November 2008, which is referred to by Section 2.1 White Paper on damages actions, as well as ch 2.C Staff Working Paper Accompanying

20  Blanca Vilà Costa In this sense, it is important to point out that the Commission seems to be considering whether it would be possible to adopt an ad hoc jurisdiction rule for related actions ratione materiae, when it holds in the Green Paper on the review of the Brussels I Regulation that ‘it should be reflected to what extent it may be appropriate to permit a grouping of actions by and/or against several parties on the basis of uniform rules’.16 If this is read in conjunction with the Report on the application of the Regulation,17 it seems like the Commission envisages adopting a specific head of jurisdiction for matters involving uniform rules such as, among others, EU competition law, in cases where one or more plaintiffs wish to sue one or more defendants, on the basis of a single infringement, before the courts of a Member State. However, the viability of such a rule raises several doubts, especially because it is not easy to devise a uniform criterion to identify the competent court in the framework of a rule which may involve a plurality of plaintiffs, of defendants, or both, and which will not be linked to an affected market of a single Member State, since the affected market is the internal market. All in all, the prospective example we have just referred to shows us, more generally, that the drafting of specific heads of jurisdiction for competition law private enforcement cases may prove to be highly problematic. But what is more: such a rule is as a matter of fact unnecessary, since the existing provisions of Articles 5(1) and 5(3) Brussels I Regulation are perfectly apt to regulate cross-border private enforcement situations, as long as they are coherently construed and applied. This in turn also implies that the rules of Articles 5(1) and 5(3) need not be modified in the context of the review of the Regulation. As we will see with further details in parts III and IV of this paper, it is enough to interpret them consistently with the case-law of the ECJ, considering that these rules benefit from a now long-standing tradition of interpretation by that court and application by the national courts of the Member States. To be sure, the provisions of Article 5(1)(a), and Article 5(3) have each been the object of a long line of judgments by the ECJ, which started with the case-law concerning the interpretation of the Brussels Convention.18 It is important to note that the interpretation of the Convention given by the ECJ is binding on national courts when it comes to interpreting the provisions of the Brussels I Regulation which remained unchanged when the Convention was transformed into this instrument of EU law, as is the case with Article 5(1)(a) and Article 5(3). This ensues from the wording of Recital 19 of the Regulation,19 and has been corroborated by the ECJ in Falco, where the Court held that ‘the continuity of interpretation is, moreover, consistent with the requirements of legal certainty which dictate that the long-standing

the White Paper) could have an impact on the subject matter we are dealing with, since it may end in the adoption of an ad hoc jurisdiction rule which would partially function as a private enforcement provision. In fact, the Commission envisages adopting specific jurisdiction rules on collective actions (see Section 8.2 Green Paper on the review of the Brussels I Regulation, together with Section 3.8.2 Commission Report on its application), which could be used in competition-related cases. 16   Section 5 Green Paper on the review of the Brussels I Regulation. 17   See Section 3.5 Commission Report on the application of the Brussels I Regulation. 18   Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (for the codified version of the Convention, see [1998] OJ C27). 19   Which in relevant part holds that ‘Continuity between the Brussels Convention and this Regulation should be ensured . . . The same need for continuity applies as regards the interpretation of the Brussels Convention by the Court of Justice of the European Communities’.

Brussels I: Art 5(1) and 5(3)  21 case-law of the Court, which the Community legislature did not intend to alter, should not be called into question’.20 In contrast, the provisions of Articles 5(1)(b) and (c) lack this tradition of inter­pretation, as they were first added to the jurisdiction rule on contractual matters with the adoption of the Brussels I Regulation. They constitute a lex specialis which applies to contracts of sale of goods and provision of services, and as we will see in section III below, they can be particularly significant in private enforcement litigation, due to the considerable incidence of competition law in distribution contracts. Notwithstanding the lack of long-standing case-law regarding paragraphs (b) and (c), these recently-added provisions have in recent months been the object of a number of judgments of the ECJ: Color Drack 21 (on the interpretation of the special rule for contracts of sale of goods of paragraph (b), first indent, where there are several places of delivery within a single Member State), Falco (on the concept of ‘services’ in paragraph (b), second indent, and the role of paragraph (c)), Peter Rehder  22 (on the interpretation of the rule for contracts of provision of services of paragraph (b), second indent, where there are several places at which services are provided in different Member States), Car Trim23 (on the distinction between ‘sale of goods’ and ‘provision of services’, and on the inter­ pretation of the place of delivery of the goods used by the first indent of paragraph (b)) and, especially, Wood Floor24 (on the applicability of the second indent of paragraph (b) where services are provided in several Member States and on the interpretation of the place of the main provision of services by the agent in case of a commercial agency contract). This line of cases is undoubtedly an incipient one, therefore only partial and fragmentary. Nevertheless, these first judgments already facilitate the construction of paragraphs (b) – and to a lesser extent (c) – and therefore their application to cases pending before national courts. It seems all the more logical to expect that other judgments will ensue25 and further facilitate the application of the rules of this provision. The fact that these provisions have a particular scope of application, as opposed to the general character of Article 5(1)(a), may also play in favour of a more nuanced approach by the ECJ, and even of obtaining judgments adapted to the particularities of specific types of contracts relevant for competition law purposes.26 20   Case C-533/07 Falco Privatstiftung v Weller-Lindhorst [2009] ECR I-3327 para 53; see more generally paras 49–53, where the Court states inter alia that ‘the provisions of the Brussels Convention which were taken up without amendment by Regulation No 44/2001 should receive the same interpretation under the regulation, and this is all the more necessary given that the regulation replaced the Brussels Convention in relations between the Member Status’. 21   Case C-386/05 Color Drack v Lexx International [2007] ECR I-3699. 22   Case C-204/08 Rehder v Air Baltic [2009] ECR I-6073. 23   Case C-381/08 Car Trim v KeySafety [2010] ECR I-1255. 24   Case C-19/09 Wood Floor Solutions Andreas Domberger v Silva Trade [2010] ECR I-2121. 25   See, eg, the reference for a preliminary ruling from the Tribunale Ordinario di Vicenza (Italy) lodged on 15 February 2010, Case C-87/10 Electrosteel Europe v Edil Centro, where the ECJ is questioned about whether Art 5(1)(b), is to be interpreted as meaning that the place of delivery, relevant for the purposes of determining the court having jurisdiction, is the place of final destination of the goods covered by the contract or the place in which the seller is discharged of his obligation to deliver, in accordance with the substantive rules applicable to the individual case, or whether that rule is open to a different interpretation. 26   As in the Wood Floor case (n 24), where, as we have already pointed out, the Court delivered a judgment interpreting the meaning of the concept of place of performance of the main provision of services in the case of a commercial agency contract. The answer of the Court was so tailor-made that it specifically said that ‘for a commercial agency contract, [the place of the main provision of services] is the place of the main provision of services by the agent, as it appears from the provisions of the contract or, in the absence of such provisions, the actual performance of that contract or, where it cannot be determined on that basis, the place where the agent is domiciled’. It is submitted that this reasoning may apply mutatis mutandis to distribution contracts.

22  Blanca Vilà Costa In any event, as we have already stated, we consider that the rules of Articles 5(1) and 5(3) Brussels I Regulation need not to be modified for the sake of private enforcement, as long as they are interpreted consistently with the case-law of the ECJ, ie as long as a coherent approach is guaranteed. In our view, the key issue to this coherent application and proper treatment of competition law enforcement cases lies in carrying out an accurate delimitation between contractual issues and non-contractual issues.27 To that end, it is important to bear in mind the principles stemming from the case-law of the ECJ, according to which the distinction between these two areas is a relevant and delicate question. To be sure, this delimitation has to be carried out according to a method of exclusion, which requires giving precedence to the contractual characterisation: non-contractual or tortious matters are those actions which seek to establish the liability of a defendant and which cannot be characterised as contractual.28 Bearing in mind that the contractual analysis takes priority over the noncontractual, a matter should only be considered tortious insofar as it cannot be characterised as contractual. Therefore, in case of uncertainty, the priority will be to assess whether the contractual characterisation prevails; and only in the event of a negative answer to that question will it be possible to resort to the head of jurisdiction on non-contractual matters.29 There is however a trend toward considering actions for private enforcement of com­ petition law as falling exclusively within Article 5(3), which can be traced not only in a substantial part of academic writing,30 but also in documents such as the Commission’s   See in this book the contribution of S Poillot-Peruzzetto and D Lawnicka.   This well-established case-law starts with Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others [1988] ECR 5565 para 17, where the Court held that ‘the concept of “matters relating to tort, delict and quasi-delict” covers all actions which seek to establish the liability of a defendant and which are not related to a “contract” within the meaning of Article 5(1)’. 29   See Case C-96/00 Rudolf Gabriel [2002] ECR I-6367 para 34, according to which ‘It is thus necessary in the first instance to examine whether an action such as that in point in the main proceedings is contractual in nature’. For a concrete application of this principle, see, eg, Case C-334/00 Fonderie Officinie Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS) [2002] ECR I-7357 paras 21–27, where the Court rejected the applicability of Art 5(1) to an action for pre-contractual liability, and therefore declared that Art 5(3) applied. 30   See, eg, M Brkan, ‘Procedural Aspects of Private Enforcement of EC Antitrust Law: Heading Toward New Reforms?’ (2005) 28(4) World Competition 479–506, 486–87; J Fitchen, ‘Allocating Jurisdiction in Private Competition Law Claims within the EU’ (2006) 13(4) Maastricht Journal of European and Comparative Law 381– 401 (although admitting that the contractual characterisation is ‘the most orthodox’, but not the only possible one: ‘As anti-cartel provisions may be litigated by those internal or external to the infringement, it could be argued that an “internal” dispute might also be construed as contractual’, p 389); T Ballarino, ‘L’art 6 del Regolamento Roma II e il diritto antitrust comunitario: conflitto di leggi e principio territorialistico’ (2008) XCI (1) Rivista di diritto internazionale 65–78; C Kessedjian, ‘Chapter 10: Competition’ in C McLachlan and P Nygh (eds), Transnational Tort Litigation: Jurisdictional Principles (Oxford, Clarendon Press, 1996) 171–87, especially 173–74; C Withers, ‘Jurisdiction and Applicable Law in Antitrust Tort Claims’ (May 2002) Journal of Business Law 250–71, especially 253; M Hellner, ‘Unfair Competition and Acts Restricting Free Competition: A Commentary on Article 6 of the Rome II Regulation’ (2007) 9 Yearbook of Private International Law (YPIL) 49–69; R Gil Nievas, ‘Litigación civil internacional por daños derivados de infracciones del Derecho de la competencia’ (2009) 4 Revista de Derecho de la Competencia y la Distribución 137–65, especially 139–40 fn 8, and 155. However, the contractual and noncontractual fields are dealt with by L Idot in ‘Quelques pistes pour la résolution des conflits de droits de la concurrence en matière de distribution’ (1993) 19 (2) Droit et pratique du commerce international (DPCI) 214–43, 230–43; in ‘Les conflits de lois en droit de la concurrence’ (1995) 122 (1) Journal du droit international – Clunet 321–41; in ‘Le droit de la concurrence’ in A Fuchs, H Muir Watt and E Pataut (eds), Les conflits de lois et le système juridique communautaire (Paris, Dalloz, 2004) 255–81; in ‘Private Enforcement of Competition Law: Recommendations Flowing from the French Experience’ in J Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, Kluwer, 2007) 85–106, 86–87. See also, more briefly, K Lenaerts and D Gerard, ‘Decentralisation of EC Competition Law Enforcement: Judges in the Frontline’ (2004) 27 (3) World Competition 313–49, 326–27; CS Kerse and N Khan, EC Antitrust Procedure, 5th edn (London, Sweet & Maxwell, 2005) 58–59 para 1-064; L Ortiz Blanco, EC Competition Procedure, 2nd edn (Oxford, Oxford University Press (OUP), 2006) 64–65 para 2.02; P Roth and V Rose (eds), Bellamy & Child: European Community Law of Competition, 6th edn (Oxford, OUP, 2008) 1398–403 paras 14.046–14.051. 27 28

Brussels I: Art 5(1) and 5(3)  23 Green Paper on damages actions.31 In our view, this trend should be avoided in the light of the above-mentioned case-law of the ECJ, and the precedence of the contractual characterisation should be preserved. This is the first stage of our proposal for a coherent approach: rather than creating new rules for competition law private enforcement, it is necessary to approach the existing rules without prejudices. Cross-border private enforcement cases present some difficulties due to the fact that they are placed at the crossroads between two sectors characterised by different legal traditions, namely competition law and private international law. It is thus necessary to deal correctly with this interplay so as to reconcile these two different and sometimes diverging traditions. Consequently, one has to look at competition law wearing the glasses of private international law, which includes bearing in mind the principles we have just referred to so as to solve the problems posed by this interface between legal traditions correctly. Only this will allow for a coherent approach, respectful of the requirements of both competition law and private international law. We will further deal with these issues in the following sections, which are devoted to putting forth interpretative proposals concerning Article 5(1) (section III below) and Article 5(3) (section IV below).

III.  Interpretative Proposals Concerning Article 5(1) As we have already put forward in section II above, the contractual characterisation takes precedence over the tortious or non-contractual one, and must therefore be analysed in the first place both from a methodological and an exegetic perspective. The first principle that must be laid down is that, according to the case-law of the ECJ, the concept of ‘contractual matters’ – or ‘matters relating to a contract’, in the Brussels I Regulation’s wording – notwithstanding its casuistic construction,32 has to be interpreted broadly.33 Indeed, it is not necessary to verify that a contract has effectively been concluded, since it is sufficient to identify the existence of a contractual obligation.34 Moreover, Article 5(1) is applicable even when the object of the proceeding deals with the existence of the contract itself.35 From a private enforcement perspective, this supposes that nullity actions which challenge the very existence of the contract on account of a violation of competition law must be considered to be included within the meaning of contractual matters under Article 5(1). More generally, it can be held that the existence of a ‘contractual matter’ simply depends on the existence of an obligation freely assumed by the parties or by one party towards

31   See Section 2.8 Green Paper on damages actions as well as paras 237–40 Staff Working Paper (Annex to the Green Paper). 32   See, eg, H Gaudemet-Tallon, Compétence et exécution des jugements en Europe. Règlement No 44/2001 et Conventions de Bruxelles et de Lugano, 3rd edn (Paris, Librairie générale de droit et de jurisprudence, 2002) 133. 33   See Case C-27/02 Petra Engler v Janus Versand GmbH [2005] ECR I-481 para 48, where the Court acknow­ ledges that ‘the concept of “matters relating to contract” referred to in Article 5(1) of the Brussels Convention is not interpreted narrowly by the Court’. This broad interpretation has also been highlighted in academic writings: see, eg, M Virgós Soriano and FJ Garcimartín Alférez, Derecho procesal civil internacional. Litigación internacional, 2nd edn (Madrid, Thomson Civitas, 2007) 145. 34   Tacconi v Wagner (n 29) para 22. 35   See Case 38/81 Effer SpA v Hans-Joachim Kantner [1982] ECR 825 para 7, as well as more recently Engler (n 33) para 46.

24  Blanca Vilà Costa another.36 From a competition law standpoint – as a pre-qualification issue – this means that the concept of contractual matters covers all actions in which the concerned parties are the parties to the restrictive agreement. Hence, it is submitted that as long as they affect the parties to the contract, Article 5(1) applies not only to nullity actions37 – whether or not claiming restitution,38 actions for the declaration of validity, or actions for performance or non-performance of a contractual obligation in which the antitrust infringement is raised as a defence,39 but also to actions for damages claimed by one of the parties to the contract against their co-contractor in the event that the latter bears significant responsibility for the distortion of competition.40 This configuration is particularly likely to come up in relation to those distribution contracts in which the liability for the infringement can be exclusively or mainly attributed to the supplier. As regards the special provisions of Article 5(1)(b), we have already pointed out that these are the most recent rules among those we are examining, since they were introduced with the adoption of the Brussels I Regulation, as opposed to the remaining rules, which were already present in the Brussels Convention. This paragraph establishes two rebuttable presumptions according to which a person domiciled in a Member State may, in another Member State, be sued, on the one hand, at the place where, under a contract of sale of goods, the goods were or should have been delivered; and on the other hand, at the place where, under a contract of provision of services, the services were or should have been provided. As the ECJ made clear in Color Drack, these rules apply irrespective of whether the contractual obligation on which the claim is founded is the obligation of delivery of goods (or, for that matter, the obligation of providing the services) or another of the obligations of the contract.41 With regard to private enforcement actions, it is submitted that the special provisions of Article 5(1)(b) should as a general rule apply in cases of distribution contracts, notwithstanding their admittedly hybrid nature.42 We have previously pointed out that these contracts are particularly relevant in the field of competition law, since the litigation arising 36   See R Arenas García, ‘La distinción entre obligaciones contractuales y obligaciones extracontractuales en los instrumentos comunitarios de Derecho internacional privado’ (2006) VI Anuario Español de Derecho Internacional Privado 393–415, 399, interpreting a contrario sensu the holding of the ECJ in Case C-26/91 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I-3967 para 15; see also Tacconi v Wagner (n 29) para 23; Engler (n 33) para 50. 37   See, eg, Case C-279/06 CEPSA v LV Tobar [2008] ECR I-6681. 38   Actions for restitution are generally deemed to be included within the scope of Art 5(1) Brussels I Regulation: see, eg, P Franzina, La giurisdizione in materia contrattuale. L’art 5 n 1 del regolamento n 44/2001/CE nella prospettiva della armonia delle decisioni (Padova, Cedam, 2006) 278–83; M Virgós Soriano and FJ Garcimartín Alférez, Derecho procesal civil internacional (n 33) 146; H Gaudemet-Tallon, Compétence et exécution des jugements en Europe (n 32) 135–36. 39   A very common setting in litigation regarding the exclusive supply of beer or fuel and other petroleum products. 40  See Courage (n 4) para 33, where the ECJ confirms that it is possible to raise such a claim: ‘it is for the national court to ascertain whether the party who claims to have suffered loss through concluding a contract that is liable to restrict or distort competition found himself in a markedly weaker position than the other party, such as seriously to compromise or even eliminate his freedom to negotiate the terms of the contract and his capacity to avoid the loss or reduce its extent, in particular by availing himself in good time of all the legal remedies available to him’. 41  See Color Drack (n 21) para 26: the ‘rule of special jurisdiction in matters relating to a contract establishes the place of delivery as the autonomous linking factor to apply to all claims founded on one and the same contract for the sale of goods rather than merely to the claims founded on the obligation of delivery itself ’. 42   To be sure, in distribution contracts there is a coexistence of aspects more related to contracts for the sale of goods with other aspects which are more linked to contracts for the provision of services.

Brussels I: Art 5(1) and 5(3)  25 out of distribution contracts has often to do with purported competition law infringements. Thus the possibility of applying the special rules of paragraph (b) to distribution contracts will ease the determination of jurisdiction in cross-border litigation because, as we will see, the application of the provision of Article 5(1)(a), can give rise to certain difficulties. In our view, distribution contracts can in general terms be characterised as contracts for the provision of services under the second indent of Article 5(1)(b), and the relevant obligation in order to establish the place of performance is the obligation of the distributor. This conclusion can be derived from the requirement of coherence between Article 5(1)(b) Brussels I Regulation and the provisions of Articles 4(1)(a) and (b), as well as (e) and (f) Rome I Regulation.43 The close coordination between the provisions of both instruments is mandated by Recital 17 Rome I Regulation, which states that the concept of ‘provision of services’ and ‘sale of goods’ should be interpreted in the same way as when applying Article 5 Regulation 44/2001 in so far as sale of goods and provision of services are covered by that Regulation. Although franchise and distribution contracts are contracts for services, they are the subject of specific rules.

Accordingly, distribution contracts are characterised by this Recital as contracts for the provision of services, and the need for consistency between both Regulations required by Recital 7 Rome I Regulation argues in favour of the interpretation submitted here.44 Moreover, the interpretation of distribution contracts as contracts for the provision of services, and of the distributor’s obligation as the obligation which characterises the contract, is coherent with the existing case-law of the ECJ concerning the interpretation of Article 5(1)(b) Brussels I Regulation. Indeed, in Falco the Court held that ‘the concept of service implies, at the least, that the party who provides the service carries out a particular activity in return for remuneration’,45 which can be applied to distribution contracts, considering that the distributor does carry out an activity. As regards, on the one hand, the characterisation of distribution contracts as contracts for the provision of services, and on the other hand, the relevance of the obligation of the distributor when it comes to establishing the place where the plaintiff can be sued, reference can be made mutatis mutandis to the Wood Floor case, where the ECJ stated that ‘in a commercial agency contract, it is the commercial agent who performs the obligation which characterises that contract and who, for the purpose of applying the second indent of Article 5(1)(b) of the regulation, provides the services’.46 All in all, the sum of all the above-mentioned criteria calls for the interpretation that the second indent of Article 5(1)(b) applies to distribution contracts. Therefore, this provision should become of great importance for competition law private enforcement actions.

43   European Parliament and Council Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) [2008] OJ L177/6 (see the corrigendum published in [2009] OJ L309). 44   Recital 7 states that ‘The substantive scope and the provisions of this Regulation should be consistent with Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I)’. 45   Falco (n 20) para 29. 46   Wood Floor (n 24) para 34; it should also be recalled that, as previously indicated in para 43 of this judgment, the ECJ established criteria as to the location of the place where it must be considered that these services are provided: ‘that place is the place of the main provision of services by the agent, as it appears from the provisions of the contract or, in the absence of such provisions, the actual performance of that contract or, where it cannot be determined on that basis, the place where the agent is domiciled’. See more extensively paras 38–42.

26  Blanca Vilà Costa Finally, by means of Article 5(1)(c), for contracts other than sales of goods and provisions of services,47 as well as for those contracts of sales or services which do not meet the criteria of paragraph (b), the general rule on contractual matters of Article 5(1)(a) will also apply to private enforcement actions. This rule allows for defendants domiciled in one Member State to be sued, in another Member State, ‘in the courts for the place of perform­ ance of the obligation in question’, ie the obligation on which the claim is founded. In such cases, difficulties may admittedly arise in the context of actions based not on a total or partial breach of performance of the contract by one of the parties, but on the general violation of antitrust rules: for example, when the plaintiff claims that the contract itself is in violation of Article 101 TFEU regardless of the behaviour of the defendant. A possible solution for these situations characterised by the lack of a contractual obligation on which the plaintiff ’s action is based would be to resort to the obligation from whose performance the plaintiff wishes to be exonerated by means of the claim: indeed, the exoneration from such obligation can be considered the main objective of the plaintiff ’s action.48 However, this solution can raise further problems due to its subjective character, therefore resulting in fraudulent behaviour on the part of the plaintiff:49 to be sure, it allows for a substantial degree of forum shopping and lacks the predictability required in the interpretation and application of the Brussels I Regulation. The most adequate solution in such situations may therefore be to set aside Article 5 and resort to the general rule of Article 2. The provisions of Article 5 grant an alternative to the jurisdiction of the courts of the country of the plaintiff ’s domicile, but the availability of such an alternative is by no means compulsory. Consequently, when it is not possible to apply one of the rules of Article 5, the plaintiff will be simply left with the rule of general jurisdiction of Article 2.50

IV.  Interpretative Proposals Concerning Article 5(3) Non-contractual or tortious matters will be the more frequent area of private enforcement of competition law, with actions for damages between parties not previously bound by privity being the non-contractual remedy par excellence. As previously indicated, Article 5(3) will apply according to a method of exclusion, which requires giving priority to the contractual characterisation: non-contractual or tortious matters are actions seeking to establish the liability of a defendant and which cannot be characterised as contractual, ie in those cases where there exists no obligation freely assumed by the parties or by one party towards another.51 It is worth noting that competition law private enforcement has been defined as one of the typical cases for which Article 5(3) was conceived, as long as there is no prior contractual relationship between the parties of the litigation.52 As we have just pointed out, actions for damages are the most usual type of Article 5(3) cases. Nevertheless, the possibilities of applying this provision are not limited to such actions: to be sure, the   See the corroboration by the ECJ in Falco (n 20) para 40.   See U Magnus and P Mankowski (eds), Brussels I Regulation (Munich, Sellier, 2007) 156; M Virgós Soriano and FJ Garcimartín Alférez (n 33) 151. 49   See Magnus and Mankowski, Brussels I Regulation (n 48) 156. 50   See, eg, Case C-256/00 Besix SA v WABAG and Plafog [2002] ECR I-1699 paras 48–54. 51   See the above-mentioned ECJ judgments in Kalfelis (n 28) para 17, in relation with Handte (n 36) para 15. 52   Virgós Soriano and Garcimartín Alférez (n 33) 188. 47 48

Brussels I: Art 5(1) and 5(3)  27 importance of injunctions, including ex ante injunctive relief,53 should not be under­ estimated. Additionally, it will also be possible to use this provision for actions for a declaration of non-liability,54 as opposed to mere declarations of nullity not linked to a corresponding claim for damages.55 As regards the interpretation of Article 5(3) in relation to competition law infringements, it is important to bear in mind that the localisation of the place where the harmful event took place can be facilitated by having recourse to the antitrust rules themselves. Indeed, the content and the scope of the competition rules must be interpreted as a way of pre-localising the place of the harmful event. Competition law rules are per se linked to a particular market, since the criterion of the affected market is precisely the key factor which sets in motion the applicability of the antitrust rules. And the affected market can be analysed, inter alia, from a territorial or geographical point of view. Therefore, it is submitted that this geographical localisation in terms of the competition infringement should be seen as a first step also as regards the localisation of the harm, for the interpretation of the jurisdiction rules. In this regard, it is possible to devise a two-tier method of facilitating the localisation of the place of production of the harmful event. This method entails a double distinction as to the harm. On the one hand, it is possible to identify a ‘generic harm’, which consists in the harm to the market itself, or rather in the infliction of the anti-competitive behaviour to the victim of the infringement from a broad and generic market perspective. From this point of view, the harmful event should be analysed from a quasi-public perspective, ie as a harm not so much to the victim(s) tout court, but rather as a harm to the victim(s) on account of the market or by reason of the market, be it a refusal to sell, a barrier to entry or similar instances of market foreclosure in violation of competition law. This generic harm to the market could consequently be granted a specific jurisdictional function, which would work as a first head of jurisdiction as regards private enforcement cases. As we have previously indicated, the localisation of the competent court under this first rule would have to be carried out according to the geographical aspects of the affected market criterion. On the other hand, it is also possible to identify a second potential head of jurisdiction based on the localisation of the ‘specific harm’ suffered by the victim of the infringement. This second rule is based on the specific behaviour of the infringer as regards the affected customer, competitor or consumer, and would therefore be dependent upon the latter’s localisation. Moreover, this rule would operate separately from the first one, but it would nevertheless be related to it, since the production of a generic harm to the market is a precondition for the assessment of the specific harm inflicted to the victim of the violation. Indeed, the specific-harm rule pinpoints the generic-harm rule, thus establishing a relationship similar to the one existing between the rules of general jurisdiction (Article 2) and the rules of special jurisdiction (Article 5). This means that plaintiffs should be able to choose to sue according to the generic-harm criterion or to the specific-harm one when it comes to using Article 5(3) and determining the meaning of ‘harmful event’. 53   As indicated by the wording of Art 5(3) itself: ‘in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur’ (emphasis added). In case of ex ante actions, the only condition is that the place of production of the possible future harmful event or the place of manifestation of the potential harmful effects need to be able to be determined at the moment at which the plaintiff claims, ie before they actually occur: see Gaudemet-Tallon (n 32) 168. 54   See Magnus and Mankowski (n 48) 182–83. 55   Indeed, mere declarations of nullity do not meet the criteria required by the Kalfelis case-law, in that they are not actions seeking to establish the liability of a defendant.

28  Blanca Vilà Costa Concerning cases of dissociation – ie cases in which the country where the damage occurs and the country where the event giving rise to the damage occurs do not coincide – the ubiquity rule established by the ECJ in Mines de potasse56 will favour the use of the place of manifestation of the harmful effects – interpreted broadly, according to the generic versus specific criterion previously noted. Nevertheless, it should not be overlooked that in some cases the place of production of the harmful event – understood as the place where the decisions stemming from an anti-competitive agreement are taken on a regular basis,57 or where the abusive conduct of a dominant undertaking is carried out – may also play a relevant role, especially as far as violations by object – rather than violations by effect – are concerned: indeed, these violations by object do not require the implementation of the agreement, and therefore, the place of production of the harmful event may be the only criterion available to the plaintiff in order to determine the competent court. More generally, in cases of dissociation the place where the damage occurs must be understood as pointing to the market affected by the competition law violation and on which its direct effects were felt by the victim. In turn, the place of the defendant’s wrongful conduct is to be interpreted as referring to the place where the anti-competitive agreement is concluded or implemented, and in the case of an abuse of dominant position, as the place where the abusive conduct is carried out. As regards the place of manifestation of the harmful effects, particular attention must be paid to indirect purchasers. These purchasers, in their capacity as indirect victims, have a right to claim for damages in order to obtain redress from the harm they suffer, as the ECJ made clear particularly in Manfredi.58 To that end, indirect purchasers may also avail themselves of the above-mentioned dissociation rule, but only as long as they sue in the place where the direct harmful effects were felt – ie the market where the direct victim was harmed – due to the restrictions that the ECJ established in Dumez, where it held that the expression ‘place where the harmful event occurred’ . . . can be understood only as indicating the place where the event giving rise to the damage, and entailing tortious, delictual or quasidelictual liability, directly produced its harmful effects upon the person who is the immediate victim of that event (emphasis added).59

Moreover, in cases where the damage occurs on the market of more than one State, the Shevill doctrine60 will also apply, notwithstanding some necessary adjustments required by the special nature of competition law torts and by the necessary coordination between Article 5(3) Brussels I Regulation and the complex provision of Article 6(3) Rome II Regulation,61 for the sake of coherence, as required by Recital 7 of the latter Regulation.62 In 56   Case 21/76 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735 para 24, according to which ‘where the place of the happening of the event which may give rise to liability in tort, delict or quasi-delict and the place where that event results in damage are not identical, the expression “place where the harmful event occurred”, in Article 5(3) of the Convention, must be understood as being intended to cover both the place where the damage occurred and the place of the event giving rise to it’. 57   The relevant criterion would in all likelihood point to the centre where the anti-competitive decisions are regularly produced – eg, the Secretariat of a shipping conference – which should be interpreted halfway between the strict notion of corporate seat and the merely accidental place of conclusion of an anti-competitive agreement. 58   Manfredi (n 5) para 60, where the right to damages was recognised in favour of consumers, ie third parties. 59   Case C-220/88 Dumez v Hessische Landesbank [1990] ECR I-49 para 20. 60   See Case C-68/93 Fiona Shevill and others v Presse Alliance SA [1995] ECR I-415 paras 29–30. 61  European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-­ contractual obligations (Rome II) [2007] OJ L199/40. 62   Which, similarly to Recital 7 Rome I Regulation, provides that ‘The substantive scope and the provisions of this Regulation should be consistent with Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I)’.

Brussels I: Art 5(1) and 5(3)  29 the light of these adjustments, the plaintiff will be able to sue in each of the States whose markets are affected, although the jurisdiction of the courts will be limited to the harm caused in the forum State. Should the plaintiff wish to sue for the harm suffered in all the States whose markets have been affected, the competent court will be either the court of the domicile of the defendant or the court of the place of the event giving rise to the damage. It is submitted that in the context of private enforcement against anti-competitive agreements, the latter does not correspond to the infringers’ establishments, but rather to the place of conclusion of the agreement, as the place of origin of the harmful event: indeed, the origin of the harm is not linked to the place where the infringers have their seat, but rather to the place where the agreement which triggers the actual or potential anticompetitive effects is entered into. Nevertheless, should any of the above-mentioned criteria prove to be impossible to assess, it is important to bear in mind the optional nature of the special heads of jurisdiction of Article 5. Therefore, as we have previously highlighted, if the special rules cannot be applied, the plaintiff has always the option to resort to the general rule of Article 2.

3 International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation

JÜRGEN BASEDOW*

I. Introduction With increasing frequency, restraints of competition extend across national borders, whether as the result of undertakings from different countries acting concertedly or whether as the result of effects impacting the markets in various States or a transnational market. This in turn raises the question as to which courts may serve as the forum for damage claims brought by parties injured by such restraints of competition. The current debate in Europe is primarily occupied by an attempt to ascertain the appropriate parameters of court competence at the place where the damage occurred according to Article 5(3) Regulation 44/2001. This head of jurisdiction, focusing on the effects of the competition law infringement on a given market, is certainly very important in international competition law cases. Yet it is not the only possibility for plaintiffs to establish jurisdiction before a national court in the European Union. Article 5(3) Regulation 44/2001 also allows plaintiffs to pursue their claims at the place where the undertaking acted in infringing competition law prohibitions. This head of jurisdiction poses highly complex issues in competition law cases, as shall be demonstrated in this contribution. As will be explained in more detail later, some of these complexities became apparent in pending actions before German Courts brought by the Cartel Damage Claims SA (CDC). This company organised under Belgian law specialises in acquiring and bundling the damage claims of parties injured by cartel infringements such that it then may pursue a court claim in its own name against the cartel members.1 In recent years, CDC has brought actions for considerable amounts of damages against members of the German cement cartel2 as well as members of the Europewide bleach cartel.3 It is assumed that such actions will be brought more frequently in the * Professor Dr Dr hc Jürgen Basedow, LLM (Harvard University); Director, Max Planck Institute for Comparative and International Private Law and Professor of Law, University of Hamburg. 1   See the CDC website, www.carteldamageclaims.com. 2   F Seidlitz, ‘Gericht lässt 114-Millionen-Euro-Klage gegen Zementfirmen zu’ (15 May 2008) Welt online. 3   H Schumacher, ‘Doppelt und dreifach – Opfer von Kartellen haben immer bessere Chancen auf Schadensersatz – Kläger fordern von Chemieriesen wie Evonik Degussa jetzt über 600 Millionen Euro’ (27 April 2009) 18 Wirtschaftswoche 52.

32  Jürgen Basedow future as the German Bundesgerichtshof has ruled that CDC has standing under German law to sue cartel members under its ‘business model’.4

II.  Article 5(3) Regulation 44/2001 Under Article 5(3) Regulation 44/2001 a claim arising from a tort, delict or quasi-delict may be lodged in the court ‘for the place where the harmful event occurred or may occur’. According to the jurisprudence of the Court of Justice, this provision is applicable irrespective of whether the claimant is domiciled inside or outside the Union.5 Whereas Article 2 uses the plural in its reference (‘in the courts of that Member State’), Article 5(3) in most authentic languages adopts the singular,6 a distinction which results in Article 5(3) covering not only the international jurisdiction of a Member State but also the local jurisdiction of the individual court. The ‘place where the harmful event occurred or may occur’ has been interpreted by the Court of Justice in a dual sense: meant is both the place ‘where the damage occurred’ as well as the ‘place of the event giving rise to the damage’.7 Thus, one can speak, respectively, of the place of damages (in German: Erfolgsort) and the place of acting (Handlungsort), with the claimant allowed to choose between the two; this dual head of specific jurisdiction for actions sounding in tort, delict or quasi-delict has been justified with reference to the sound administration of justice and the efficacious conduct of proceedings. The Court has emphasised that tortious liability is always the product of a causal connection between the damages and the originating event such that both connecting factors are significant for determining any resulting liability. Depending on the circumstances of the case, both the place of damages and the place of acting have the potential to be particularly helpful with regard to the procurement of evidence.8

III.  Multistate Effects and Limited Jurisdictional Competence When a damaging event produces scattered effects, ie losses sustained in multiple States, the Court of Justice has afforded individual courts with only a limited jurisdictional com  Bundesgerichtshof (BGH) 7 April 2009, KZR 42/08, WRP 2009, 745.   In this manner with regard to Art 2 ECJ, 1 March 2005, Case C-281/02 Andrew Owusu v NB Jackson [2005] ECR I-1383 paras 23–35; as with Art 2, Art 5 similarly links to the domicile of the defendant in the European Union. 6   The French, German, Italian and Dutch versions of the predecessor Rome Convention are all consistent in their use of the singular as concerns the specific head of jurisdiction and the plural as concerns the general head of jurisdiction – thus allowing for the resulting interpretative differentiation. While this singular/plural distinction was faithfully carried over into the French, German, Italian and Dutch versions of the Brussels I Regulation, the later-created English version of Regulation 44/2001 inadvertently formulated Art 5(3) with the plural usage ‘courts’. This oversight on the drafters’ part does not, however, alter the resulting analysis. 7   Case 21/76 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA (ECJ 30 November 1976) [1976] ECR 1735 paras 15–19; see also Case C-51/97 Réunion européenne SA and Others v Spliethoff ’s Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002 (ECJ 27 October 1998) [1998] ECR I-6511 para 28. 8   Bier v Mines de Potasse d’Alsace (n 7). 4 5

Brussels I: The Place of Acting under Art 5(3)  33 petence at the place of damages: as decided in Shevill, a case of media libel, a claimant may seek compensation only for those damages suffered in that particular State. Should he wish to claim the total of damages suffered in multiple States, the plaintiff has the option of bringing his claim before the court of general jurisdiction at the defendant’s domicile according to Article 2 or before the court at the place of acting, being the place where the defamatory publication is published, in accordance with Article 5(3).9 Whereas the abuse of a market dominant position is often directed against individual competitors, customers or suppliers, scattered, multistate damages will frequently result in the case of cartels and firms acting concertedly: by virtue of price-fixing agreements or as a consequence of market sharing or other concerted practices, prices have been set above the competitive level. The result is a reduction in general welfare which – expressed in civil law terminology – is reflected in economic loss on downstream markets. In the cases mentioned above in the introduction, these damages are suffered, for example, by general contractors in the case of the German cement cartel and the manufacturers, purchasers and end-users of paper products as concerns the Europe-wide bleach cartel. As regards the latter, paper mills in numerous European countries have allegedly suffered losses of exactly this sort. The analogous contextual structures and the similar interests which are manifested in these cases argue in favour of adopting the Court of Justice’s Shevill approach, such that unlimited subject-matter jurisdiction can exist only at the domicile of the defendant and the place of acting. However, the competence of the court at the place of acting is also limited, extending solely to conduct which was perpetrated within the boundaries of the forum court’s normal territorial reach and which resulted in losses for which the claimant now demands compensation. To the extent that damage suffered by the claimant can be traced to multiple actions which have been undertaken in both different locations and different countries, a precise identification of the causal relation between individual actions and the components of damage resulting therefrom is necessary. Depending on the cartel’s form and mode of operation, outcomes can vary considerably. To date, the opinions voiced in academic literature have failed to sufficiently consider the wide variety of cartel structures which may be encountered. Opinions favour either recognising the place of the anti-competitive agreement or concerted action as the place of acting under Article 5(3) or, conversely, they substantially or even fully dismiss the jurisdictional significance of this location.

IV.  Perspectives on the Place of Acting and Jurisdictional Competence A.  Place of Agreement or Concerted Action In a first approximation, the present author has argued for establishing the place of agreement as a connecting factor in respect of jurisdiction: ‘For the purposes of Art 5 no 3 Reg 44/2001, the place of acting might therefore include the place where a cartel was agreed and 9   Case C-68/93 Fiona Shevill, Ixora Trading Inc, Chequepoint SARL and Chequepoint International Ltd v Presse Alliance SA (ECJ 7 March 1995) [1995] ECR I-415 paras 32, 24.

34  Jürgen Basedow the individual places where it was implemented’.10 This view is supported by the observation that pursuant to Article 101 TFEU an agreement reached with the intent of restricting competition itself amounts to an infringement of competition law and is void as such regardless of whether it produces damaging effects. Thus, although the actual implementation of the agreement and an ensuing result of restrained competition and sustained damages may be relevant for the establishment of a claim of damages, these facts are of no significance for the assessment of the agreement itself. Where the place of agreement can be readily identified, the place of acting pursuant to Article 5(3) is accordingly determined. In the event the claimant solely wishes to obtain preventative injunctive relief in advance of a cartel meeting, the planned location of the meeting in fact constitutes the only possible connecting factor within the framework of Article 5(3).

B.  Place of Implementation Additionally or as an alternative, the place of the agreement’s implementation is to some extent the place of acting since it is ultimately at this location (or these locations) where the cartel members determine the necessary conditions for the actual restriction of competition: they sell cartel-related goods at artificially high prices, refuse to enter into contractual agreements, deliver only limited quantities, or discriminate against certain groups of purchasers or suppliers.11 Acknowledgment of the place of implementation is, furthermore, supported by the European Court of Justice’s Ahlström decision on the international scope of application of Article 81 EC (now Article 101 TFEU), wherein the implementation of the cartel agreement or concerted practice was expressly named as a relevant element in a competition law assessment.12 As concerns cartels which bear upon a multitude of national markets, especially Europewide cartels, this approach can, however, yield numerous places of acting.13 This in turn raises the fear of forum shopping among the numerously available jurisdictions and, correspondingly, legal uncertainty. These misgivings have, meanwhile, only limited validity: the implementation of a cartel is usually incumbent upon the discrete participation of individual cartel members; accordingly, any single place of implementation will only hold jurisdiction for damage claims which can be traced to individual acts of implementation occurring at that particular place of implementation. Thereby, in many cases a narrowly circumscribed jurisdictional competence would result such that only a small number of claimants could sue in each respective court. It should nonetheless be conceded that ‘place of implementation’ is itself a particularly indefinite term which could lead to wholly random outcomes depending on the location where the individual implementing transactions are concluded. 10   J Basedow, ‘Jurisdiction and choice of law in the private enforcement of EC competition law’ in J Basedow (ed), Private Enforcement of EC competition law (Alphen aan den Rijn, Kluwer, 2007) 229, 250; similarly D Ashton and C Vollarth, ‘Choice of Court and applicable law in tortious actions for breach of Community competition law’ (2006) Zeitschrift für Wettbewerbsrecht 1, 8 f; P Mankowski, ‘Article 5’ in U Magnus and P Mankowski (eds), Brussels I Regulation (Munich, Sellier, 2007) paras 219, 228; P Mankowski, ‘Das neue Internationale Kartellrecht des Art 6 Abs 3 der Rom II-Verordnung’ (2008) Recht der Internationalen Wirtschaft 177, 181. 11   Basedow, ‘Jurisdiction and choice of law’ (n 10); similarly C Withers, ‘Jurisdiction and applicable law in antitrust tort claims’ (2002) Journal of Business Law 250, 261. 12   Joined Cases C-89/85 A Ahlström Osakeyhtiö and Others v Commission (ECJ 27 September 1988) [1988] ECR 5193 para 16. 13   FW Bulst, ‘Internationale Zuständigkeit, anwendbares Recht und Schadensberechnung im Kartelldeliktsrecht: Die Entscheidung des LG Dortmund vom 1.4.2004’ (2004) Europäisches Wirtschafts- und Steuerrecht 403, 405–06.

Brussels I: The Place of Acting under Art 5(3)  35

C.  Seat of the Defendant as Place of Acting An especially noteworthy current in academic literature contends – often without a more detailed explication – that neither the place of the cartel members’ agreement nor the place of implementation is appropriate or meaningful. Instead, these authors argue for a radical solution, namely they contend that cartel members act at their respective seat or, alternatively, their respective place of establishment and thus must be sued at this location.14 This solution may indeed establish clarity, yet it fails to take account of the self-contained significance held by the place of acting alongside the general head of jurisdiction already existing under Article 2. Given that the defendant is amenable to a claim at his seat under Article 2 in any event, the advocated interpretation would effectively eliminate the benefit intended to be bestowed on the claimant in the form of an alternatively available specific head of jurisdiction at the place of acting. Moreover, to the extent the holding from Shevill is adopted for international competition law and the subject-matter jurisdiction of the court is accordingly limited at the place of damages,15 very little remains of the specific head of jurisdiction for tort, delict and quasi-delict as envisioned by Article 5(3) Regulation 44/2001. While a narrow construction of Article 5(3) might work against an over­abundance of competent courts, it should be asked whether such a step would not, conversely, lead to an inappropriate favouring of the defendant contrary to the intent of Article 5(3). Protecting the defendant from broad jurisdictional obligations appears particularly misplaced in those instances where an infringement of competition law has already been found by a competent competition authority.

V.  Variety of Cartel Forms If one keeps in mind the wide range of forms in which cartels are configured, it becomes apparent that each of the views outlined above can claim justification in respect of a particular form. Consequently, in applying Article 5(3) a differentiated approach is demanded.

A.  (Quasi-)Incorporated Cartels In the early days there were many cartels with a corporate structure. For example, their number was estimated at about 2,500 in Germany at the start of World War II.16 They 14   Bulst, ‘Internationale Zuständigkeit’ (n 13) 403, 405; G Mäsch, ‘Vitamine für Kartellopfer: Forum Shopping im europäischen Kartelldeliktsrecht’ (2005) Praxis des Internationalen Privat- und Verfahrensrechts 509, 512 f; S Leible, ‘Art 5 Brüssel I-VO’ in T Rauscher (ed), Europäisches Zivilprozessrecht – Kommentar, 2nd edn (Munich, Sellier, 2006) para 88 a; R Geimer, ‘Anh. I, Art. 5 EuGVVO’ in R Zöller, Zivilprozessordnung, 27th edn (Cologne, Otto Schmidt, 2009) para 27; M Gebauer and A Staudinger, ‘Zivilrechtliche und zivilprozessuale Prinzipien des Internationalen Kartell- und Fusionskontrollverfahrensrechts’ in JP Terhechte (ed), Internationales Kartell- und Fusionskontrollverfahrensrecht – Handbuch (Bielefeld, Gieseking, 2008) Rn 7.44; apparently in the same sense J Fitchen, ‘Allocating jurisdiction in private competition law claims within the EU’ (2006) 13 Maastricht Journal of European and Comparative Law 381, 395. 15   See text above corresponding to n 9. 16  This estimate appears in an article authored by the first president of the Bundeskartellamt (German Competition Authority) E Günther, ‘Die geistigen Grundlagen des sogenannten Josten-Entwurfs’ in H Sauermann

36  Jürgen Basedow maintained regular offices or were even formed as commercial companies with a corporate seat. Their committees partitioned markets, established quotas or set prices and discounts; as ‘syndicates’ (Syndikate) they even to a certain extent carried out the marketing of the affiliated firms’ goods, whose prices were consequently not the result of an independent price-setting process. It is beyond reasonable dispute that the place of acting of such incorporated cartels was their seat – and not the seat of the individual firms participating in the cartel. Giving due heed to the Court of Justice’s admonishment that the forum court should stand in reasonable proximity to the relevant evidence and allow for efficacious proceedings, it remains apparent that Article 5(3) speaks in favour of recognising a head of jurisdiction for torts, delict and quasi-delict at the place of acting, namely the place where such a cartel is seated and established. With the prohibition of cartels subsequent to World War II, the organisations in question were not generally disbanded. Rather, they have continued to exist as trade associations which limit their activities to legal endeavours promoting the interests of their members. Included among such efforts are the organisation of member gatherings in the form of plenary assemblies and working groups as well as the monitoring of markets relevant for their members, both of these types of activities being essential, although not in themselves sufficient conditions of a cartelisation. When price fixing is entertained by the members of such an association at its seat – discussions building upon the market data gathered by the association – the place of acting is by no means incidental or random. Not only are evidential documents to be found at this location, but, generally speaking, witnesses to the anti-competitive agreements are located there as well. So long as cartels such as OPEC are practised in their current fashion, their activities can be readily localised at their respective seats – in the case of OPEC, Vienna. Operating in a similar manner are associations, business consortiums and business networks. Thus, for example, liner shipping consortia, whose members collectively operate container pools or ports, are exempted from the prohibition of cartels in Article 101 TFEU.17 The closer the cooperative efforts of the affiliated shipping companies, the less they can do without a central structure. When cargo rates or other prices and fees are determined in the framework of such an overarching structure, the place of acting is by no means incidental or random. Illegal price-fixing agreements rather follow on from the – legal – arrangements which are agreed upon at the office of the consortium.

B.  Cartel Agreements Made Outside of (Quasi-)Corporate Structures The analysis becomes more complicated when the location of the anti-competitive agreement does not coincide with the location of an institutional office or when a (quasi-)corporate structure does not exist at all. In such cases a differentiation is required and one and E-J Mestmäcker (eds), Wirtschaftsordnung und Staatsverfassung – Festschrift für Franz Böhm zum 80. Geburtstag (Tübingen, Mohr Siebeck, 1975) 183 f with reference to HH Barnikel. See also J Basedow, ‘Kartellrecht im Land der Kartelle: Zur Entstehung und Entwicklung des Gesetzes gegen Wettbewerbsbeschränkungen’ (2008) Wirtschaf tund Wettbewerb 270 f. 17   See Commission Regulation 906/2009 of 28 September 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (con­ sortia) [2009] OJ L256/31; on the above-mentioned exemption from Regulation 823/2000 see J Basedow in U Immenga and E‑J Mestmäcker, Wettbewerbsrecht. EG/Teil 2 – Kommentar zum europäischen Kartellrecht, 4th edn (Munich, CH Beck, 2007) 1572 ff.

Brussels I: The Place of Acting under Art 5(3)  37 must ask whether the cartel (eg, an agreement to partition a market) is the product of a one-time agreement that was not subject to later renewal (point C below) or, alternatively, is the product of regular participant meetings – perhaps at varying locations – which renew and adapt the content of the agreement consistent with the circumstances present at the time of renewal (point D below). A clear localisation can also result from an established place of implementation (point E below).

C.  Single-Instance Cartel Agreements In the first somewhat untypical scenario of a single-instance cartelisation, the choice of the place of agreement may indeed be arbitrarily and incidentally determined; think, for example, of an agreement on the partitioning of EU markets made in the conference centre of a major airport. Nonetheless, this is the sole location at which all of the participants have collaborated and, thus, can be collectively sued. In each of the affected markets, by contrast, only one cartel member has been active; the infringement of competition law precisely consists in each participant being allotted a segment of the total market and in the other members’ promise to accordingly refrain from economic activity in that particular market segment. A damages claim in the court of the place of damages against the cartel members absent in that Member State will hardly strike a claimant as particularly promising, since in light of the limited subject-matter jurisdiction of that court, he must demonstrate that the level of damages he suffered owes exactly to the defendants’ forbearance of competitive activity on this market. Alternatively, he may file a claim at the court having general jurisdiction over the defendant pursuant to Article 2 Regulation 44/2001. Yet when the cartel members have their respective seats in different Member States, a court of competence is lacking before which a claim can be brought against all the cartel members; the requirements for special jurisdiction over related actions pursuant to Article 6(1) will, in the outlined scenario, by no means always be present. Hence, a need for jurisdictional competence at the place of acting may indeed exist. The intent of the European legislator to afford claimants an optional head of jurisdiction for tort, delict or quasi-delict alongside the general head of domiciliary jurisdiction militates against excluding competence at the place of acting since the significance of this specific head of jurisdiction for matters sounding in tort would as a practical consequence be reduced to the barest of minimums.

D.  Complex Cartel Agreements The radical solution which – in the end – identifies the place of acting of individual defendants consistently with the place of general jurisdiction is advanced particularly as concerns cartels of a complex nature. Characteristic in this regard is a recent decision of the English High Court in which the claimant accused the defendants of perpetrating ‘a “complex single and continuous infringement” of Art 81 of the Treaty by agreeing [sic] price targets, sharing customers by non-aggression agreements and exchanging sensitive commercial information relating to prices, competitors and customers’. As the authoring justice goes on to write: The meetings which gave rise to it took place in a number of locations including Milan, Vienna, Amsterdam, Brussels, Richmond-on-Thames, Frankfurt, Grosse Leder and Prague . . . I consider

38  Jürgen Basedow that this is a case where it is, at the very least, difficult to say where the event which gave rise to the damage occurred.18

In each of these named courts of jurisdiction, compensation might be claimed only for that part of the damage which was occasioned specifically by conduct carried out within the court’s jurisdictional borders. Where, for example, price cartels are the subject of renewals at regular meetings attended by cartel members and prices, bonuses, discounts, etc are conformed to the prevailing market conditions, in a case such as above a claimant who has filed suit in Vienna would thus have to demonstrate that the damages he has suffered can be specifically traced to the agreement of the cartel members reached in Vienna. In such a scenario, a precise determination of the causal relationships at hand will obviously pose an exceptional challenge. One can imagine that the Vienna cartel agreement will typically build upon earlier agreements concluded by the same firms, in perhaps Milan or Frankfurt, and will merely prescribe certain changes in regards to price. Here it will be impossible to segregate the damages independently affected by the Vienna agreement from the continuing base effect of earlier agreements. In such cases featuring multiple places of agreement, the sound administration of justice would concededly not be promoted by designating a given court competent at the place of acting only to determine after time-consuming evidential proceedings that the claimant’s damage cannot in fact be unambiguously traced to the conduct of the defendants within the State in question (Austria). In these instances the place of agreement loses its signific­ ance for the localisation of the tortious act. Hence, the claimant will need to take recourse to the remaining heads of jurisdiction at the place of damages (with accordingly limited jurisdiction) and the general courts of competence of the respective defendants.

E.  Stable Place of Implementation The place of implementation has thus far not been discussed, but – as the place of acting – it can also take on a practical significance for connecting an infringement of competition law to a particular jurisdiction. One can envision an ongoing price cartel that is renewed over the years at various locations which are unrelated to the markets in question and thus are of no particular legal significance from a jurisdictional perspective. Suppose, however, that the unique aspect of this cartel is the members’ commitment to a regular exchange of information concerning quantities, prices, discounts and other relevant conditions. This information is transmitted to a central location where an average weighted price is calculated from the various data. This in turn is conveyed to the cartel members who, for their part, have committed themselves to basing their offers on the average weighted price over the course of a subsequent calendar period. While the places of agreement hosting the yearly meeting of the trade association in question routinely shift and cannot justify jurisdiction as a place of acting given their lacking proximity to the necessary proof, the central location of the information exchange system stands in a markedly different posture. It is the nerve centre of the entire cartel and commands access to the majority of evidentially significant facts. It is the cartel’s place of implementation which as the place of acting also attains a competence-justifying effect when it does not coincide with the seat of one of the cartel members.   Cooper Tire & Rubber Co and others v Shell Chemicals UK Ltd and others [2009] EWHC 2609 (Comm) para 65.

18

Brussels I: The Place of Acting under Art 5(3)  39

VI.  Summary: A Multiplicity of Places of Acting The aforementioned considerations show that, in respect of the infringement of com­ petition law and its relation to Article 5(3), the European Court of Justice’s two-pronged conception of place of acting and place of damages demands a highly differentiated treatment with regards to the individual types of restraints on competition. In terms of comprehensively addressing the damages engendered by a cartel, the place of agreement and concerted action carries the advantage that all cartel members have acted illegally at this location and can thus be collectively proceeded against. This is not always possible at other heads of jurisdiction. On the other hand, the place of agreement has the potential to be somewhat random as well as removed from the evidential basis; moreover, long-standing cartels are not infrequently renewed at different locations. This results in extremely complicated questions of causality which are practically insurmountable. Within the case-law of the Court of Justice, one can find a margin of support for rejecting the place of acting as a legitimate connecting factor. Thus, with regards to an, albeit, contractually based and geographically unbounded obligation to desist, the Court decided that such an obligation is not capable of being identified with a specific place or linked to a court which would be particularly suited to hear and determine the dispute relating to that obligation. By definition, such an undertaking to refrain from doing something in any place whatsoever is not linked to any particular court rather than to any other. In those circumstances jurisdiction can, in such a case, be determined [not according to Article 5(1) but] solely in accordance with Article 2 of the Brussels Convention.19

A similar appraisal under Article 5(3) would appear possible and appropriate in the case of multiple places of agreement. However, before fully abandoning recourse to the place of acting, one need ask whether the place of implementation – in light of its stability and favourable evidential posture – allows for a fitting localisation of the harmful conduct as conceptualised in Article 5(3). Only where this is not the case is entirely dispensing with the place of acting an option such that court jurisdiction exists solely – apart from the general jurisdiction at the domicile of the defendant – at the place of damages (ie the affected market), here however with the court’s limited cognisance in respect of subject matter.

19   Case C-256/00 Besix SA v Wasserreinigungsbau Alfred Kretzschmar GmbH & Co KG (WABAG) and Planungsund Forschungsgesellschaft Dipl Ing W Kretzschmar GmbH & KG (Plafog) (ECJ 19 February 2002) [2002] ECR I-1699 paras 49 f.

4 Jurisdiction Issues: Brussels I Regulation Articles 6(1), 23, 27 and 28 in Antitrust Litigation MICHAEL WILDERSPIN*

I. Introduction A.  Purpose of this Chapter The purpose of this chapter is twofold. In the first place, it aims to explore the practical implications of Article 6(1) and Article 23 and, to a lesser extent, Articles 27 and 28 Brussels I Regulation1 (and their counterparts in the Lugano Convention)2 on the determination of the court or courts having jurisdiction in actions for damages arising from infringements of the competition law of the European Union or that of its Member States.3 In the second place, it will draw attention to certain shortcomings of those provisions and, where appropriate, propose certain recommendations which could be taken on board in the context of the current review of the Brussels I Regulation.4 *  Member of the Legal Service of the European Commission. The views expressed in this chapter are those of the author alone and do not necessarily concur with those of the European Commission. 1   Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1. The counterparts to those articles in the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters were Art 6(1), Art 17, Art 21 and Art 22. On the Brussels I Regulation see generally Dicey, Morris and Collins, The Conflict of Laws, 14th edn (London, Sweet & Maxwell, 2006); A Layton and H Mercer, European Civil Practice, 2nd revised edn (London, Sweet & Maxwell, 2004); U Magnus and P Mankowski, The Brussels I Regulation (Munich, Sellier, 2007); H Gaudemet-Tallon, Compétence et exécution des jugements en Europe, 4th edn (Paris, Librairie générale de droit et de jurisprudence, 2010); R Geimer and R Schütze, Europäisches Zivilverfahrensrecht, (Munich, CH Beck, 2004); J Kropholler, Europäisches Zivilprozessrecht (Frankfurt am Main, Verlag Recht und Wirtschaft, 2005). 2   Convention on jurisdiction and the enforcement of judgments in civil and commercial matters [1988] OJ L319/9. The relevant articles in that convention have the same numbering as in the Brussels Convention. The original Lugano Convention has recently been replaced, in relations between the Member States of the European Union, Iceland and Norway (but not yet Switzerland) by an updated convention (the Lugano II Convention) the content and wording of which is closely modelled on the Brussels I Regulation. References in this chapter to the Lugano Convention concern the original convention. 3  See generally M Holm-Hadulla, Private Kartellrechtsdurchsetzung unter der VO Nr 1/2003: Einheitliche Anwendung des europäischen Wettbewerbsrechts durch nationale Zivilgerichte (Baden-Baden, Nomos, 2009) 134 ff. 4   This review was launched by the European Commission in 2009 with its ‘Review of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters’ (Green Paper) COM (2009) 175 final, 21 April 2009.

42  Michael Wilderspin The chapter will concentrate on civil actions arising out of infringements of Article 101 TFEU (formerly Article 81 EC, formerly Article 85 EEC) since this appears to be the provision which is most likely to spawn litigation and to give rise to the most complex problems. Nevertheless, many of the questions which arise in connection with that provision are also capable of arising in connection with Article 102 TFEU (formerly Article 82 EC, formerly Article 86 EEC).5 These issues will be examined against the background of the case-law of the European Court of Justice and also with special reference to the Provimi 6 and Cooper Tire  7 judgments of the English High Court.

B.  The Relevant Provisions of the Brussels I Regulation i.  Article 6(1) Brussels I Regulation Civil litigation arising from international cartels may quite naturally involve suits against defendants from a number of different countries. For example, a buyer of products which have been the subject of the cartel may sue the companies from which it has directly purchased those products. In addition, it may also wish to join other companies within the same undertaking as the seller. It may even wish to bring suit against companies from other undertakings which participated in the cartel but which were not involved in sales to the claimant. The matter may be made even more complex if the claimant has purchased products not directly from a cartel member but indirectly, from another person who himself purchased the products from a member of the cartel.8 One provision of the Brussels I Regulation which may permit such related actions to be concentrated in a single forum is Article 6(1), which provides as follows: A person domiciled in a Member State may also9 be sued: 1.  Where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided that the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

Article 6(1) Brussels I Regulation is derived from Article 6(1) Brussels Convention. That provision, like its counterpart in the Lugano Convention, simply provided that a defendant domiciled in a Contracting State might be sued ‘where he is one of a number of defendants, in the courts for the place where any one of them is domiciled’. However, in Kalfelis,10 the European Court considered the ratio legis of Article 6(1) Brussels Convention and concluded that that provision, like Article 2211 on related actions, was inserted to counter the risk of incompatible judgments. The Court therefore inferred into Article 6(1) the condition relating to the need to avoid the risk of irreconcilable judgments which featured 5   This chapter does not deal specifically with jurisdictional issues relating to civil litigation arising out of infringements of European Union rules on State Aid or of national laws on unfair competition. 6   Roche Products Ltd and others v Provimi Ltd [2003] EWHC 961. 7   Cooper Tire & Rubber Company and Others v Shell Chemicals UK Ltd and others [2009] EWHC 2609. 8   On indirect purchaser litigation see generally F Cengiz, ‘Antitrust damages actions: Lessons from American indirect purchasers’ litigation’ (2010) 59 ICLQ 39. 9   This provision is of course without prejudice to the possibility of suing each defendant in the Member State in which that defendant is domiciled, pursuant to Art 2 of the Regulation. 10   Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others [1988] ECR 5565. 11   Art 28 Brussels I Regulation, see below.

Brussels I: Art 6(1), 23, 27 & 28  43 expressly in Article 22. That case-law was formally integrated by the Community legislature into the text of Article 6(1) Brussels I Regulation.

ii.  Article 23 Brussels I Regulation Article 23 Brussels I Regulation12 allows the parties to select the court or courts which they wish to have jurisdiction to adjudicate their disputes and, concomitantly, to oust the jurisdiction of otherwise competent courts.13 Article 23 provides, insofar as relevant, as follows: 1.  If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.

iii.  The Provisions on Lis Pendens and Related Actions Article 27 Brussels I Regulation provides as follows: 1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

Article 28 provides that: 1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings. 2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof. 3. For the purposes of this Article, actions are deemed to be related when they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments arising from separate proceedings.

II. The Provimi Litigation A.  Factual Background Although judgment was delivered more than six years ago, the case of Roche Products Ltd and others v Provimi Ltd14 still represents one of the best illustrations of the issues which   Art 17 Brussels and Lugano Conventions.   Heads of jurisdiction conferred by Art 22 Brussels I Regulation cannot be ousted at all. Certain other heads can be ousted only in limited circumstances. None of these is likely to assume importance in competition law litigation. 14   Provimi (n 6). For comments on the judgment see inter alia FW Bulst, ‘The Provimi Decision of the High Court: Beginnings of Private Antitrust Litigation in Europe’ (2003) European Business Organization Law Review 623; G Mäsch, ‘Vitamine für Kartellopfer: Forum shopping im europäischen Kartelldeliktsrecht’ (2005) Praxis des Internationalen Privat- und Verfahrensrechts 509. 12 13

44  Michael Wilderspin may arise in connection with the application of Article 6(1) and Article 23 Brussels I Regulation to competition law litigation15 and the judgment thus repays detailed study. The Provimi case involved two sets of civil actions for damages brought in the wake of the European Commission’s vitamins cartel decision.16 Both sets of actions were brought in the English High Court against companies in the Roche group and the Aventis group respectively. In each set of actions, three claimants were involved, namely Provimi UK, Trouw UK (both English companies) and Trouw Deutschland (a German company), all of which claimed to have suffered financial loss by virtue of having purchased vitamins from members of the undertakings which were parties to the cartel. In the first set of actions, Provimi UK sued both Roche UK (the English subsidiary of Roche Switzerland) and Roche Vitamine Europa (Switzerland) (a Swiss company) from both of which it had purchased vitamins. It also sued F Hoffmann La Roche (Switzerland) (the Swiss parent company and the addressee in the Roche group of the above-mentioned Commission decision). Both Trouw UK and Trouw Deutschland sued the same defendants as Provimi UK. In addition, they also sued Hoffmann La Roche AG, a German company. In the second set of actions directed against companies in the Aventis group, the basic scenario was the same. Each set of actions thus raised analogous issues. However, for the sake of simplicity, we shall concentrate on the Roche actions. In the case of all three claimants, jurisdiction against Roche UK was based on Article 2 Brussels I Regulation (domicile of the defendant). The claimants asserted jurisdiction against the foreign defendants on the basis of Article 6(1) Lugano Convention.

B.  Applications to Strike Out the Actions Applications were made to strike out the action brought by Trouw Deutschland against Roche UK (from which Trouw Deutschland had not purchased vitamins), on the basis that the claim had no prospect of success since Roche UK was not an addressee of the abovementioned Commission Decision and there was no allegation that it had knowingly implemented the cartel. In addition, a challenge to the jurisdiction of the English courts over the foreign defendants in the action brought by Trouw Deutschland was made on the basis that the conditions of Article 6(1) were not satisfied. It was accepted by that claimant that if its claim against Roche UK was struck out, there was no basis for asserting jurisdiction under Article 6(1) against the foreign defendants. Finally, certain of the foreign defendants which were in direct contractual relations with the claimants relied on Article 23 Brussels I Regulation or, as the case may be, Article 17 Lugano Convention to give effect to jurisdiction agreements which conferred jurisdiction on respectively German and Swiss courts. All these challenges to the jurisdiction of the High Court were dismissed on the following grounds: 1.  as regards Trouw Deutschland’s claim against Roche UK, the English defendant, there was an arguable case that, by being part of the infringing undertaking and thus partici  See now also the more recent judgment (29 October 2009) Cooper Tire (n 7).   Commission Decision (EC) 2003/2 of 21 November 2001 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Vitamins) [2003] OJ L 6/1. 15 16

Brussels I: Art 6(1), 23, 27 & 28  45 pating in the implementation of the cartel, the English defendant had breached its statutory duty not to infringe Article 81 EC and that the operation of the cartel had caused Trouw Deutschland to pay a higher price for vitamins to its sellers than would have been the case had the cartel not existed. This conclusion was reached despite the fact that, as stated above, the English defendant was not an addressee of the Commission decision17 establishing liability for the infringement of Article 81 EC and that there was no allegation by Trouw Deutschland that it had knowingly implemented the cartel; 2. on that basis, the conditions of Article 6(1) were satisfied as regards the foreign defendants (thus Trouw Deutschland was able to sue Roche Germany, the company from which it had actually bought vitamins, before the court of a country that was not the natural forum for the dispute); 3. as regards the jurisdiction clauses invoked by the defendants, while Article 23 Brussels I Regulation and Article 17 Lugano Convention governed issues of material and formal validity, the question of interpretation and scope was governed by the applicable law.18 The Swiss jurisdiction clause referred to ‘any controversies’. It was, however, held that Swiss law interpreted jurisdiction agreements narrowly. Since the buyer could not reasonably have contemplated when it concluded the agreements that secret cartels were in existence, the scope of the jurisdiction clause was insufficiently wide to cover actions for damages arising out of price fixing to which the seller was party. The German jurisdiction clauses applied to ‘all disputes arising out of the legal relationship’ between the parties. Here too, applying German principles of construction, it was held that the clause did not apply to the dispute in question19 partly because German courts were thought to adopt a restrictive approach to applying such clauses to intentional torts and partly because the court selected did not in fact have jurisdiction, under German procedural law, to hear cases arising out of cartel infringements.

C.  Other Issues Which Are Either Implicit in the Judgment or Were Common Ground between the Parties 1. It was common ground that all the actions, even those brought against parties that had directly sold vitamins to the claimants, were to be treated as actions for breach of a statutory duty not to infringe Article 81 EC20 and were thus to be characterised as tortious in nature.

 ibid.   In Case C-214/89 Powell Duffryn v Petereit [1992] ECR I-1745, the European Court held that questions of interpretation of the jurisdiction clause were for the national court to determine. The Court, quite correctly, did not specify what national law was to govern this question but left this question to the forum. Although agreements on the choice of court are excluded, by virtue of its Art 1(2)(e), from the scope of the Rome I Regulation (European Parliament and Council Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations [2008] OJ L177/6) it was nevertheless common ground before the High Court that questions of interpretation were for the proper law of the agreement, in casu German and Swiss respectively. Although the High Court was not obliged, as a matter of Community law, to apply the law selected by the parties, it made sense to do so since referring questions of the interpretation to that law, rather than the lex fori or even the law of the chosen court gives maximum effect to party autonomy. 19   The High Court implied that, had English law been applicable, the result would have been different. 20   See para 25 of the judgment in Provimi (n 6). Authority for this proposition is the statement of Lord Diplock in Garden Cottage Foods v Milk Marketing Board [1983] 1 AC 130, 141. 17 18

46  Michael Wilderspin 2. There was no application to strike out in respect of the actions against the English defendant where the claimants were direct purchasers of the vitamins. Thus, it must be concluded, the defendants appear to have accepted at least implicitly that their argument to the effect that liability for an infringement of Article 81(1) EC can be imputed to a subsidiary of a parent company only if the subsidiary was aware of the unlawful conduct does not apply where the defendant has been in direct contractual relations with the claimant. 3. Nor (with the exception of the challenges based on the existence of jurisdiction agreements, analysed below) was any challenge to the jurisdiction made in respect of the foreign defendants in respect of the actions brought against them by the English claimants. Thus those defendants appear to have accepted that this was a proper case for the jurisdiction of the English court to be based on Article 6(1).

III.  Analysis of the Judgment of the High Court in Provimi in the Light of the European Court’s Case-Law A.  Article 6(1) The question then arises as to what extent Article 6(1) Brussels I Regulation, as interpreted by the European Court, in fact allows proceedings in competition law litigation to be concentrated in the natural forum (or in the forum most beneficial to the claimant) and whether the High Court applied that provision correctly. It has to be stated at the outset that in some respects the case-law of the European Court on the interpretation of this provision (and the cognate provision of the Brussels Convention) is perverse:21 as will become apparent, it strains at a gnat but swallows a camel. The salient points of that case-law can be summarised as follows. First, although Article 6(1) should not be interpreted in such a way as to encourage forum shopping,22 that provision may nevertheless be invoked against the co-defendant(s) even when the action against the ‘anchor’ defendant (ie, the defendant who is sued in the State of his domicile) is inadmissible. This rather counter-intuitive principle is derived from the judgment of the European Court in Reisch Montage.23 In that case, a claimant brought an action in Austria against an Austrian domiciled defendant for the repayment of a sum of money. The claimant wished to join a German domiciled bank that had stood security for that sum. The European Court held that the fact that the anchor defendant was bankrupt and that, by virtue of the Austrian regulations on insolvency, judicial proceedings could not be brought against him did not constitute a bar to joining the German defendant to the proceedings before the Austrian court on the basis of Article 6(1).24 The judgment has been heavily criticised on the ground that the result is contrary to the purpose and   See below.   See the judgment in Case C-539/03 Roche Nederland BV and Others v Frederick Primus and Milton Goldenberg [2006] ECR I-6535 para 38. The European Court does not define what it means by ‘forum shopping’ but clearly regards it as a Bad Thing. 23   See the judgment in Case C-103/05 Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2006] ECR I-6827. 24   See para 31 of the judgment. 21 22

Brussels I: Art 6(1), 23, 27 & 28  47 wording of Article 6(1) which is to allow concentration of claims against more than one defendant only when it is ‘expedient to hear and determine [the claims] together’: since the Austrian court was barred in limine from adjudicating on the claim against the anchor defendant, that condition could not possibly be satisfied.25 And, as can be seen, the judgment positively promotes forum shopping in that it allows a claimant to bring a claim against a defendant domiciled in State X in order to found jurisdiction, in that State, against co-defendants even where the claim against the anchor defendant is inadmissible or has no reasonable prospect of success.26 Provimi was decided before the judgment of the European Court in Reisch Montage was delivered but, in any event, later decisions of English courts appear to have paid scant attention to that judgment and they continue to require that, for the purposes of founding jurisdiction on the basis of Article 6(1), there must be a real issue between the claimant and the anchor defendant.27 At the same time, the European Court held in Reisch Montage that Article 6(1) may not be used for the sole purpose of removing a defendant from jurisdiction of the courts of the Member State in which he is domiciled.28 But according to its later judgment in Freeport v Olle Arnoldsson29 the claimant overcomes this hurdle simply by demonstrating the risk of irreconcilable judgments. Secondly, the Court held in Freeport v Olle Arnoldsson30 that Article 6(1) may be invoked where the claims are based on different causes of action. Thus, for example, an action against A for breach of contract and against B for procuring that breach of contract could, if the ‘irreconcilability’ condition is fulfilled (below) fall within the scope of Article 6(1). The point seems almost axiomatic but, nevertheless, the ruling in Freeport purportedly distinguishes, but in reality overrules, a dictum in Réunion européenne31 which implied the contrary.32 The possibility of invoking Article 6(1) where one action is based on tort and the other on contract could at first sight be useful in competition litigation in the case where a purchaser of goods which are the subject of a cartel wishes to sue the subsidiary from which it bought the goods and to join the parent company which was responsible for forming the cartel and instructing it to be implemented. But in Provimi, even the action by the purchaser against the English subsidiary from which it had directly purchased vitamins was in any event characterised by all the parties as tortious. This approach is probably correct in principle since, despite the contractual nexus, the claimant was not claiming for 25   See the comment of E Pataut on the judgment in (2007) Revue critique de droit international privé (RCDIP) 175: ‘certaines décisions semblent si étonnantes que seule une seconde lecture permet de se convaincre de leur contenu’. In his Opinion (see especially paras 41–45), the Advocate General reached the opposite conclusion from the Court, holding that if the claim against the anchor defendant is inadmissible from the outset, it is both artificial and contrary to the ratio legis of Art 6(1) to base jurisdiction against the other defendant on existence of the suit against the first. 26  Holm-Hadulla, Private Kartellrechtsdurchsetzung unter der VO Nr 1/2003 (n 3) 142. 27   See, eg, FKI Engineering and FKI plc v Dewind [2007] EWHC 72 (Comm) para 32 and Cooper Tire (n 7). 28   Reisch Montage (n 23). See para 32 of the judgment. 29   Case C-98/06 Freeport v Olle Arnoldsson [2007] ECR I-8319 paras 51–53. 30   ibid paras 41–47. 31   Case C-51/97 Réunion européenne v Spliethoff ’s Bevrachtingskantoor BV [1998] ECR I-6511. 32   In para 50 of the judgment, in the context of discussing whether Art 6(1) Brussels Convention constituted a sufficient basis for joining actions in ‘indivisible’ disputes where one defendant was domiciled in a third country, the Court opined that ‘two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and on the other in tort or delict cannot be regarded as connected’. This dictum (a non sequitur to boot) was interpreted by the Bundesgerichtshof in a judgment of 23 October 2001 (XI ZR 83/01) as precluding the application of Art 6(1) where one action is based on tort and the other on contract.

48  Michael Wilderspin breach of contract as such33 but was complaining that the price that he had paid was too high because of the existence of the cartel. However, it is not beyond the bounds of possibility that the European Court might characterise the action against the direct seller as contractual,34 in which case the option opened by Freeport would acquire some value. Thirdly, and perhaps most significantly for the purposes of the application of Article 6(1) in competition law litigation, the precise meaning of the expression ‘irreconcilable judgments’ has been left open. In Roche Nederland 35 the European Court was seised of a case relating to patent litigation in the Netherlands. Holders of European patents had brought proceedings in that Member State against a Dutch company and various other companies that were not domiciled in the Netherlands but which belonged to the same group as the Dutch company. The claimants alleged that the defendants, in the execution of a common purpose, had infringed the patents in various Member States. The jurisdictional question falling for determination was whether the companies not domiciled in the Netherlands could be sued there on the foundation of Article 6(1) Brussels Convention. The Court was confronted with two radically opposed contentions. According to the first, broad, approach, the expression ‘irreconcilable’ was to be given the meaning that it bears in Article 22 Brussels Convention (Article 28 Brussels I Regulation).36 In relation to that provision, the Court held in The Tatry37 (rejecting inter alia the Commission’s arguments to the contrary) that judgments were irreconcilable if they were ‘conflicting and contradictory’ even if separate enforcement of them was not precluded. According to the other, narrower, approach, the expression ‘irreconcilable judgments’ was to be given the same meaning as in Article 27(3) Brussels Convention (Article 34(3) Brussels I Regulation) in which it means judgments ‘that entail consequences that are mutually exclusive’.38 In Roche Nederland, the European Court left this particular point open, but disposed of the case on the assumption that the broad approach was the correct one. Since (as the Court pointed out in Roche Nederland at paragraph 22) the condition added by the Court in Kalfelis and subsequently integrated by the legislature39 was taken directly from Article 28,40 logically one might conclude that the expression in Article 6(1) should indeed bear the same meaning as in Article 28. What is more, the expression ‘irreconcilable’ in Article 34(3) must be seen in its specific context, which is as a ground for the refusal of the recognition or enforcement of a judgment from another Member State where that judgment is ‘irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought’ (emphasis added). This is a different constellation from the situations contemplated in Articles 6(1) and 28, the application of 33   R Plender and M Wilderspin, The European Private International Law of Obligations (London, Sweet & Maxwell, 2009) ch 20-040. 34   ibid ch 2-022-034. 35   Roche Nederland (n 22). 36   See I.B.iii above for the text of Art 28. 37   Case C-406/92 The owners of the cargo lately laden on board the ship ‘Tatry’ v the owners of the ship ‘Maciej Rataj’ [1994] ECR I-5439. The point at issue was whether proceedings in one Contracting State brought by one group of cargo owners against a shipowner entailed the risk of irreconcilable judgments where proceedings were pending in another Contracting State by another group of cargo owners against the same shipowners pursuant to identically worded contracts. 38   Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645, in which it was held that a judgment ordering a husband to pay maintenance to his wife, and thus posited on the continued existence of the marriage, was irreconcilable with a foreign judgment of divorce involving the same parties. 39   I.B.i above. 40  See Kalfelis (n 10) paras 11 and 12, in which the Court also refers to the preoccupation expressed in the Jenard Report to avoid the risk of judgments that are ‘incompatible with each other’.

Brussels I: Art 6(1), 23, 27 & 28  49 which requires that the parties be different. Clearly, it is far easier to establish irreconcilability of judgments even in the narrow sense in cases in which the parties are the same than it is in cases where only the claimant is the same but the defendants are different. To adopt the narrow approach would thus be to unduly restrict the scope of Article 6(1). For this reason, it can be concluded that the European Court was correct in its assumption. To that extent, in order to ensure that Article 6(1) can continue to fulfil its function, it would be useful to add a recital to the preamble to the Brussels I Regulation to the effect that, in Article 6(1), the expression ‘irreconcilable’ bears the same meaning as in Article 28. Nevertheless, the remainder of the reasoning of the Court in Roche Nederland repays careful study. The Court went on to hold that judgments are not necessarily irreconcilable, even in the broad sense outlined above, simply because they are divergent; rather, the divergence ‘must also arise in the context of the same situation of law and fact’ (emphasis added). This, the Court held, was not the case in Roche Nederland. In that case one critical factor was that, although the patents infringed were European patents, such a patent took effect as a bundle of national patents:41 thus, so the Court held, any divergences which might arise from judgments delivered by courts in the various countries for which the patents had been granted would not have arisen in the context of the same legal or factual situation. The judgment clearly restricts radically the potential utility of Article 6(1) in cases of intellectual property infringements. It is possible to take a narrow reading of the judgment by focusing on the territoriality of patents (and intellectual property rights generally). Such an interpretation would restrict the significance of the judgment to cases in that field. However, it would also be possible to interpret the judgment in a much broader way which would not be auspicious for the future application and usefulness of Article 6(1) to competition law litigation. Despite the fact that identical claimants were claiming in respect of alleged infringements of patents, all of which had the same content, by defendants that were different but members of the same group and which acted in the implementation of a joint strategy, the Court opined, at paragraph 27 of the judgment, that the existence of the same situation of fact could not be inferred ‘since the defendants are different and the infringements they are accused of [sic] . . . are not the same’. Clearly, the reference to the mere difference in the identity of the defendants and the suggestion that this factor militated against the application of Article 6(1) cannot be taken too seriously since that provision can apply only if the defendants are different. However, the second point, namely that the infringements must be identical, might also have serious consequences when applied to competition law litigation. For example, suppose that an action is brought by a buyer (A) of goods which are tainted by the existence of a cartel against the seller (X) of those goods before the courts of the Member State in which X is domiciled. A seeks to join X’s parent company, Y, which is domiciled in another Member State, on the basis of Article 6(1). It can be easily argued that in this case the liability of both X and Y arises out of the same set of facts, namely the sale of the specific goods that A bought from X in execution of the cartel agreement to which Y was party, and that this is thus a proper case to found jurisdiction against Y on the basis of that provision. However, if A also seeks to join another company, Z, which is from the same group and from which the purchaser has bought the same type of goods,42 the extremely literal interpretation of the notion of the ‘same situation of fact’ that the Court adopted in Roche Nederland would   See paras 29 and 30.   cf the facts of Provimi (above).

41 42

50  Michael Wilderspin cast doubt on whether the liability of the seller Z would have arisen in the context of the same situation of fact. If it had not so arisen, jurisdiction against Z could not be based on Article 6(1)43 and the fact that all three parties were acting in the execution of a common purpose, namely the implementation of the same cartel would not, in the Court’s eyes, assume any relevance.44 Nor would the fact that a more purposive approach to the inter­ pretation of Article 6(1) would promote procedural economy.45 It is clear that too narrow a focus on the condition relating to ‘irreconcilable judgments’ risks diverting attention from what should be the real purpose of Article 6(1), namely to allow joinder of defendants, largely for reasons of procedural economy, where the claims are connected. It is suggested that a somewhat more radical approach is necessary to overcome the European Court’s reluctance to treat the alternative heads of jurisdiction that the Brussels I Regulation offers as being anything other than derogations to be interpreted narrowly, suspiciously and literally, with little consideration of their underlying purpose. A modest step on this road might be, while retaining the condition that it be expedient to hear and determine the claims together, to delete the words ‘to avoid the risk of irreconcilable judgments arising from separate proceedings’ in Article 6(1).46

B.  Article 23 As the Provimi litigation (above) shows, there is a risk, even if Article 6(1) a priori allows litigation to be concentrated, that this goal may be defeated by a pre-existing agreement conferring jurisdiction on the courts of another Member State (or Contracting Party to the Lugano Convention), although in that case the High Court went on to hold, as a matter of interpretation, that the jurisdiction agreement was not intended to cover disputes arising out of antitrust infringements. The question then arises whether the effectiveness of such a jurisdiction agreement is simply a question of careful drafting or whether it can seriously be contemplated that courts will ever construe jurisdiction agreements as being apt to cover disputes arising from infringements of European or national competition rules. If that is a realistic possibility, should it be prevented by an appropriate amendment to Article 23 of the Brussels I Regulation and Article 17 of the Lugano Convention? As the Provimi judgment shows, this possibility cannot be entirely excluded. Indeed, in the judgment, it is implied that, had English law been applicable, the jurisdiction clauses in question would have been interpreted as applying to the dispute in question. This point 43  Given that the Court in Roche Nederland (n 22) was purporting to follow the broad interpretation of ‘irreconcilable judgments’ as meaning simply ‘conflicting’ promulgated in The Tatry (n 37), the result of that case suggests that the Court might not go this far in its literal interpretation of ‘the same situation of fact’. In The Tatry (n 37), the Court held that, where one group of cargo owners had, in Contracting State A, brought actions for damages in respect of harm caused to cargo carried under separate but identically worded contracts and another group of cargo owners in contracting State B sought damages in respect of harm caused to another part of the cargo carried under different but identically worded contracts, the relationship between the actions necessary to trigger off the application of Art 22 (now 28) was established by showing that separate trial and judgment would involve the risk of conflicting decisions. The clear implication of the judgment, although the Court does not say so directly, is that a judgment delivered in an action for breach of contract between A and C in Member State X is irreconcilable with a judgment delivered in an action between B and C involving a separate but identically worded contract. 44   Roche Nederland (n 22) para 34. 45   ibid para 36. 46   See IV below.

Brussels I: Art 6(1), 23, 27 & 28  51 notwithstanding, the worst that can happen, if the parties have conferred jurisdiction on a court in another Member State of the EU, is that the litigation, which Article 6(1) Brussels I Regulation may permit to be concentrated in one jurisdiction, may then be fragmented by the application of Article 23. More serious consequences may arise if the jurisdiction agreement confers jurisdiction on a court in a third country which is party to the Lugano Convention but which is not a party to the European Economic Area Agreement. This point is discussed below.

IV.  Recommendations to Be Made with Regard to Article 6(1) and Articles 23, 27 and 28 Brussels I Regulation As a preliminary point, it is important not to exaggerate the importance of encouraging actions for damages in competition cases as a means of private enforcement.47 In particular, it should not, in this author’s view, be pretended that such actions represent a special case that would warrant derogations from the normal rules of jurisdiction or the establishment of special rules of jurisdiction. Thus, any changes proposed to the jurisdictional regime of the Brussels I Regulation to facilitate such actions should be coherent with the basic policy of the Regulation and should be dealt with as merely one aspect of the ongoing general review of the Brussels I Regulation.

A.  Article 6(1) Looked at from the competition policy angle, the European Commission does not appear to attach any particular importance to Article 6(1) Brussels I Regulation as a vehicle in concentrating cross-border actions for damages.48 Neither the White Paper on Damages actions for breach of the EC antitrust rules,49 the Commission Staff Working Paper accompanying the White Paper50 nor the abortive draft proposal for a Directive on rules governing actions for damages for infringements of Articles 81 and 82 EC Treaty pay any attention to that provision. 47  See, eg, W Wils, ‘Should Private Antitrust Enforcement Be Encouraged in Europe?’ (2003) 26 World Competition 473 and, by the same author, ‘The Relationship between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32 World Competition 3. The author is extremely sceptical as regards not merely the effectiveness of private enforcement but also as regards the desirability of encouraging it, considering the public enforcement model to be inherently superior; against: CA Jones, ‘Private Antitrust Enforcement in Europe: A Policy Analysis and Reality Check’ (2004) 27 World Competition 13. In any event, empirical evidence suggests that the majority of competition disputes will be settled before ever reaching court: see B Rodger, ‘Private enforcement of competition law, the hidden story: competition litigation settlements in the United Kingdom, 2000-2005’ (2008) 29 European Competition Law Review 96. 48   This omission is perhaps a little surprising given the insistence by the legislature on including a special conflict rule (Art 6(3)(b)) in the Rome II Regulation (European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations [2007] OJ L199/40), the avowed purpose of which is to permit ‘law shopping’ by the claimant in competition cases. 49   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008. 50   Commission, ‘Staff Working Paper accompanying the White Paper on Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2008) 404, 2 April 2008.

52  Michael Wilderspin Nor, with the specific exception of intellectual property cases, does Article 6(1) receive significant attention in the context of the ongoing review of the Brussels I Regulation. The Heidelberg Report51 mentions Article 6(1) only cursorily and, beyond the realm of intellectual property, the only recommendation that the authors of the Report make is that further consideration should be given to whether joinder could be permitted where jurisdiction against the anchor defendant is based on a connecting factor other than domicile.52 As regards the specific issue of intellectual property, the Heidelberg Report (in common with virtually all academic comments on the decision)53 is critical of the judgment in Roche Nederland v Primus & Goldberg,54 and recommends an amendment of Article 6(1), specific­ ally targeting intellectual property infringement cases, to legitimise the ‘spider in the web’ approach of Dutch courts.55 And in its Green Paper on the review of the Brussels I Regulation (the ‘Green Paper’) the Commission floats some ideas on a possible amendment of Article 6(1)56 but restricts them to the specific context of intellectual property infringements. However, there can be little doubt that, for a claimant who envisages bringing actions against several defendants in a single forum, which will often be the case in actions arising from competition law infringements, in particular cartels, Article 6(1) is among the most important provisions of the Regulation.57 It is therefore important to ensure that this provision permits the concentration of damages in proper cases while, at the same time, protecting defendants from improper forum shopping. Within the context of the present wording of Article 6(1) and the case-law on its interpretation, is it possible for the European Court to develop a coherent approach which will permit procedural economy while at the same time deterring excessive forum shopping or does this issue need to be addressed specifically in the context of the revision of the Brussels I Regulation? In Provimi, judged by any reasonable yardstick, England was the natural forum for the actions by the English claimants but was not the natural forum for the actions by the German claimants. As regards the question whether the decision of the High Court was in conformity with the European Court’s case-law on the interpretation of Article 6(1) Brussels Convention and Brussels I Regulation, it is necessary to analyse both whether the action was properly brought against the anchor defendant and second whether the further defendants could properly be joined. On the first point, as regards the English claimants, the claim was clearly properly brought against the anchor defendant. This, as we have already seen, is less clear in the case of the German defendant, which had neither sold vitamins to the German claimant nor knowingly participated in the formation and implementation of the cartel. However, paradoxically, even if the High Court was wrong, as a matter of EU competition law, to hold that the German claimant had an arguable claim against the 51   Report on the application of Regulation Brussels I in the Member States by Professors Doctors B Hess, T Pfeiffer and P Schlosser. 52   Para 227. 53   See, eg, E Bodson, ‘Le brevet européen est-il différent?’ (2007) 84 Revue de droit international et de droit comparé, which contains a list of some of the disapproving academic comment on the judgment at fn 95. 54   Roche Nederland (n 22). 55   See also the paper by the Max Planck Group for Conflict of Laws in Intellectual Property, published on 20 December 2006, considered below. 56   Green Paper on the review of Regulation 44/2001, 6. 57   In competition law cases the significance of Art 5(3) should of course not be overlooked. Consideration of that provision is beyond the scope of this chapter.

Brussels I: Art 6(1), 23, 27 & 28  53 English defendant, this, according to Reisch Montage,58 would not be fatal to joining the German subsidiary and the parent company on the basis of Article 6(1). Had the Brussels I Regulation permitted a certain amount of judicial discretion in this regard,59 the High Court might have declined jurisdiction in favour of the courts of Germany, which was the natural forum for the German claimant’s action. On the second point, it can be debated whether the decision of the High Court is reconcilable with the much-criticised judgment of the European Court in Roche Nederland BV v Primus Goldberg (above). In order to ensure that the Court adopts a more balanced approach, it may simply suffice to insert a recital in the Brussels I Regulation to the effect that the expression ‘irreconcilable’ in Article 6(1) is to be given the same meaning as in Article 28. However, it may be necessary to go further by deleting the words ‘to avoid the risk of irreconcilable judgments resulting from separate proceedings’. The other side of the coin, namely that Article 6(1) should not be used as a vehicle for improper forum shopping, could be taken care of by: – first, adding a requirement that the claim against the anchor defendant should not be manifestly inadmissible or unfounded; and – second, by allowing a limited amount of judicial discretion in order to prevent actions being brought outside the natural forum.60

B.  Article 23 The idea of reforming Article 23 Brussels I Regulation61 in such a way as to allow agreements on jurisdiction to be given their fullest effect is floated in the Commission’s Green Paper.62 Such reform could, in particular, reverse the rule in Gasser v MISAT.63 In that case the European Court held that, where one party seised a court in Member State A in defiance of a jurisdiction clause conferring jurisdiction on the courts of Member State B, the proceedings in Member State A, if first in time, triggered off the lis pendens rule in Article 27 and thus barred subsequent proceedings between the same parties in respect of the same cause of action even before the courts of the Member State designated by the parties.64 In that case, the European Court took the notion of mutual trust to inordinate lengths65 in its unconvincing ruling to the effect that the court which has been explicitly designated by the parties to adjudicate on their dispute was no better placed than any court in any Member State to determine whether the jurisdiction agreement was valid.66 What is more, the Court   Reisch Montage (n 23).   Art 28 Brussels I Regulation, which does permit a certain amount of discretion in this regard, was not applicable since no related proceedings were pending in Germany. On Art 28 generally, see below. 60   A precedent for a limited application of the doctrine of forum non conveniens, which otherwise is anathema to the European Court, is to be found in Art 28(2). 61   Some of the issues arising in connection with jurisdiction agreements are also relevant to arbitration agreements. Clearly, any recommendations on jurisdiction agreements need to be consistent with those on arbitration agreements. 62   Green Paper on the review of Regulation 44/2001. 63   Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-14693. 64   See also below on Art 27, lis pendens. 65   For criticism of the judgment see, eg, R Fentiman, ‘Access to Justice and Parallel Proceedings in Europe’ (2004) Cambridge Law Journal 312, in which the author criticises the European Court for expressing a narrow, inflexible and formulaic theory of procedural justice. 66   Para 48 of the judgment. 58 59

54  Michael Wilderspin appeared entirely unmoved by the argument that its ruling could encourage delaying tactics by litigants seising courts that they know to lack jurisdiction.67 In this author’s view, as a matter of general policy the ruling in that case should indeed be reversed by according priority to the chosen court, albeit this is not an issue which has specific relevance to private enforcement of competition law. Indeed, as the Provimi litigation (above) shows, in certain competition cases, in particular where there is a pre-existing contractual nexus between the claimant and the defendant, the problems with the application of Article 23, and its counterpart in the Lugano Convention, may present differently. In Provimi, the German and Swiss defendant from which the claimants had purchased vitamins sought to challenge the jurisdiction of the English court in reliance on a jurisdiction agreement in favour of the German and Swiss courts respectively. The High Court dismissed this challenge on the ground that, as a matter of interpretation, the agreement did not cover tortious actions. However, the High Court did not call into question the possibility in principle of such an agreement, if sufficiently widely drafted, operating so as to confer jurisdiction, even in tortious claims, on the chosen court. Holding such an agreement to be effective could have two negative consequences. First, in the case of multiple defendants, it could fragment the litigation by allowing the different defendants (or at least some of them) to require actions to be brought in a multiplicity of different courts, thereby defeating the purpose of Article 6(1). Second, and perhaps more seriously, where the chosen court is in a third State, there would be a danger of that court not attaching civil liability to a breach of EU competition law.68 If a court in a Member State would, in the absence of the jurisdiction agreement, have jurisdiction over the dispute in question, to require that court to cede jurisdiction over the dispute to the court in a third State chosen by the parties (or indeed to require or even to allow the Member States generally to recognise and/or enforce a judgment delivered by a court in a third country in which Community competition law was not applied when it should have been or was otherwise misapplied), would sit uneasily with the general principle that Community competition law has an ordre public character and that its application cannot therefore be ousted.69 As the law now stands, such a risk would exist if the court designated by agreement of the parties was situated in a third State which is party to the Lugano Convention.70 Article 17 of that Convention (corresponding to Article 23 Brussels I Regulation) would confer jurisdiction on the designated court and its Article 21 (corresponding to Article 27 Regulation) would require courts in a Member State seised in defiance of the jurisdiction agreement to decline jurisdiction. Furthermore, the judgment of the court in the Lugano would in prin  Para 53 of the judgment.   Clearly, if the chosen court is within the European Union, this danger would not exist, albeit the risk of fragmentation would still be present. 69   See Case C-126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I-3055. As regards the related issue of party autonomy in the area of selection of the law applicable in private enforcement of com­ petition law disputes, when the forum seised is a court of an EU Member State and the dispute relates to noncontractual obligations arising out of an act of unfair competition or an act restricting free competition falling within the scope of Art 6 Rome II Regulation, the parties are – exceptionally – not allowed to displace the applicable law designated by that article, even if the law that they wish to select is that of another Member State. 70   Namely Switzerland, Iceland and Norway. Swiss courts have in fact shown a willingness to take account of Community antitrust law where the dispute before them has a connection with the EU. However, it is unlikely that they would impose liability on a Swiss defendant for breach of such law if Swiss law does not also impose liability. 67 68

Brussels I: Art 6(1), 23, 27 & 28  55 ciple be entitled to recognition and enforcement in the EU Member States, subject to the uncertain scope of the ordre public exception.71 On the other hand, if such a jurisdiction agreement conferred jurisdiction over a dispute which involved an EU domiciliary and related to a breach of EU competition law on the courts of a third State that was not party to the Lugano Convention, the risk of the EU courts being required to cede jurisdiction to such a court would be far less or even nonexistent. Article 23 Brussels Regulation applies only where the selected court is in a Member State. Where the parties have conferred jurisdiction on the courts of a third State by agreement but an action is nevertheless brought before a court of a Member State, it can be taken as settled law that the court in the Member State would not be required to decline jurisdiction. On the other hand, it is unclear whether the court of the Member State seised would, as the law now stands, be permitted to exercise a discretion to decline jurisdiction in favour of the selected court. This point was left open in Owusu.72 No doubt, even if the European Court did recognise the existence of such a discretion, the exercise of the discretion would be subject to certain safeguards. Nevertheless, in the Green Paper on the review of the Brussels I Regulation, the Commission floats the idea of enacting uniform rules regulating whether and when courts in Member States should decline jurisdiction in favour of courts of third States. In this author’s view, while it may be appropriate as a matter of comity and general policy to grant courts in Member States a discretion in this respect, it would be unwise, in the absence of a specific international law obligation, ever to enact such a requirement. Finally, for the sake of completeness, it should be added that if and when the Hague Convention on Choice of Court Agreements of 30 June 2005 comes into force that convention will not increase the danger of removing antitrust disputes from the jurisdiction of the courts in the European Union since by virtue of Article 2(2)(h) of that Convention, ‘antitrust [competition] matters are excluded from the scope of the Convention’. There is thus a certain theoretical risk of courts in the EU effectively losing control of a relatively small number of cases in which one of the parties is domiciled in an EU Member State and the dispute relates to the infringement of EU competition law. However, as the Provimi litigation shows, where the dispute relates to an alleged particularly flagrant hard core violation it is unlikely as a matter of interpretation that courts would be prepared to infer from an ambiguously worded jurisdiction agreement an intention by the parties to confer jurisdiction on the courts of a third State. It is perhaps equally unlikely that sellers of goods would insert a jurisdiction clause which states baldly that all disputes arising in connection with the sale of those goods, including actions for damages flowing from the implementation of a cartel or the abuse of a dominant position in violation of national or EU antitrust law, are to be submitted to the chosen court. On the other hand, it is easy to imagine less flagrant cases in which a jurisdiction agreement could more legitimately be relied on. Let us suppose a simple contractual dispute 71   cp the judgment in Eco Swiss (n 69) with the judgment in Case C-38/98 Régie Nationale des Usines Renault SA v Maxicar SpA [2000] ECR I-2973. In the former case, the European Court held that where a court in a Member State had jurisdiction to set aside an arbitral award for reasons of ordre public, it had to set aside such an award when the arbitrator had failed to apply Art 85 EEC. However, in the latter case, the Court held that a court in a Member State could not invoke public policy in order to refuse to enforce a judgment delivered in another Member State simply because the court in the originating State had failed to apply or had misapplied the Community rules on free movement of goods. 72   Case C-281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ and others [2005] ECR I-1383.

56  Michael Wilderspin between the tenant of a pub domiciled in England and his landlord, domiciled in, for example, Switzerland.73 Suppose further that the tenant seeks before an English court a declaration that he is not liable for non-payment of rent due under the agreement since the contract was void as being in breach of Article 101 TFEU. In such a case, if the landlord relies on a jurisdiction agreement conferring jurisdiction on the courts of Switzerland which purports to apply to all disputes between the parties arising out of the tenancy agreement between the parties, such a generally worded agreement would in all probability be interpreted as applying to the claimant’s action for a negative declaration and would thus embrace the issue of the contention based on the breach of EUantitrust law. Thus the English court would be required to decline jurisdiction by virtue of Article 17 Lugano Convention. In summary, the risk of a jurisdiction clause being relied on in private enforcement litigation to remove jurisdiction from the court seised does not in any event seem great. Where the chosen court is in an EU Member State, the consequence might be to fragment litigation that could otherwise be concentrated in a single forum but it would not entail the risk of the chosen court failing to apply EUcompetition law. When the chosen court is in a third, non-Lugano, State, Article 23 Brussels I Regulation does not apply. Only in the case of a jurisdiction agreement conferring jurisdiction on the courts of a Lugano State is that risk a real one. In any event, any solution of that particular problem could be found only in a future revision of the Lugano Convention. Thus, on balance, and taking into account the importance of upholding and reinforcing jurisdiction agreements as a matter of general legal policy, this author does not advocate any radical change to Article 23 Brussels I Regulation. In conclusion, though it would be possible to amend Article 23 Brussels I Regulation74 in order to prevent its application to disputes arising from breaches of antitrust law, there is insufficient evidence of its abuse to warrant at this stage such a step, which might have the undesirable knock-on effect of weakening jurisdiction agreements in general. As a matter of general policy, the rule in Gasser v MISAT should be reversed by requiring any court other than the designated court to stay proceedings unless and until the designated court has determined that it does not have jurisdiction. While it is desirable to confer some discretion on courts in Member States to decline jurisdiction if the parties have conferred jurisdiction on the courts of a third State, the Union legislature should not enact unilateral rules which would ever have the effect of requiring them to do so.

C.  Article 27 Article 27 Brussels I Regulation, which applies only where the proceedings in different Member States involve the same cause of action and the same parties, has been broadly interpreted by the European Court. In particular that provision and its predecessor have been held to apply even when the parties’ procedural position in the competing jurisdic73   This imaginary fact situation is based on an internationalisation of the facts in Courage v Inntrepreneur Pub Company [2003] EWHC 1510 (Ch), [2004] EWCA Civ 637, [2006] UKHL 38 which gave rise to the ECJ preliminary ruling: Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297. 74  Amendment of the Brussels I Regulation would not of course solve the potential problem identified as regards agreements conferring jurisdiction on non-EU Lugano States. However, it might conceivably strengthen the Union’s hand in any later renegotiation of the Lugano Convention.

Brussels I: Art 6(1), 23, 27 & 28  57 tions is different, provided that the issue to be determined is substantially the same.75 Furthermore, Article 27 can apply where the first proceedings involve an application for a negative declaration76 and even if the court first seised has been seised in defiance of a jurisdiction agreement.77 In adopting this interpretation, the European Court has given litigants the green light to seise courts in a Member State that they know does not have jurisdiction but which may take considerable time to determine this preliminary point, thereby delaying the possibility for the adversary to bring proceedings in the proper forum. It is particularly ironic that, despite the disapproval that the Court has expressed towards forum shopping in general, its approach to the interpretation of Article 27 positively promotes the worst manifestations of this practice. This problem, as is well known, is particularly prevalent in the field of intellectual property, where a party that is infringing – or proposing to infringe – the rights of for example a patentee can pre-empt the introduction of judicial proceedings by that person through bringing a so-called torpedo action, ie an action for a negative declaration before a court which it knows not to have jurisdiction. Given the limited duration of intellectual property rights, such torpedo actions can paralyse an effective defence of the patentee’s rights during a large proportion of the validity of the patent.78 Many of the interested parties who replied to the Commission’s Green Paper had a position on the issue of lis pendens and torpedoes. They were almost unanimously in agreement that a solution had to be found to remedy the situation that had been created by the Court’s case-law. The majority were however opposed to the abolition of the rule in The Tatry in which the Court held that proceedings in a Member State for a negative declaration triggered off the lis pendens provisions. Some favoured legislation that would require the court seised to determine its jurisdiction within a specified time. Others favoured a slightly more subtle way to encourage courts in notoriously dilatory Member States to speed up proceedings. This solution would consist in allowing courts seised in Member States other than the court first seised to assert jurisdiction if the court first seised had not determined the issue of its jurisdiction within a reasonable time, such as six months.79 As yet, cartel members or dominant firms do not yet appear to be making a practice of taking the initiative of bringing an action to determine that they are not liable in damages and thus the phenomenon of torpedoes does not yet seem to have manifested itself in the field of private enforcement of competition law. At least two factors make it perhaps unlikely that it would ever become as widespread as in the field of intellectual property. In the first place, it would be well-nigh impossible for members of a cartel to pre-empt actions by all possible claimants. In the second place, one of the factors which is so crucial in intellectual property cases and which encourages recourse to torpedoes is the fact that the validity of certain intellectual property rights, such as patents, is limited in time. An infringer may thus be tempted to bring an action for a negative declaration before the courts of a country which he knows does not have jurisdiction but which is notoriously dilatory. While the case is pending, the operation of Article 27 would bar any positive action on the merits   Case 144/86 Gubisch Maschinenfabrik KG v Giulio Palumbo [1987] ECR 4861.   The Tatry (n 37). 77   Gasser v MISAT (n 63). 78   On torpedo actions generally, see M Wilderspin, ‘La compétence juridictionnelle en matière de litiges concernant la violation des droits de propriété intellectuelle: Les arrêts de la Cour de justice dans les affaires C-4/03, GAT c LUK et C-539/03, Roche Nederland c Primus c Goldeberg’ [2006] RCDIP 777 and references cited therein. 79   See, eg, the reply of the Ligue Internationale du Droit de la Concurrence. This idea had also been floated in the Heidelberg Report at paras 460 and 891, albeit with specific reference to lis pendens where the court second seised has been designated by the parties. 75 76

58  Michael Wilderspin by the patent holder.80 This factor would obviously assume less importance in the competition law field, especially in follow-on actions where the infringement has already been detected, ruled on and, presumably, stopped. However, as the volume of private actions increases, the appearance of torpedoes cannot be ruled out.81 Thus the general interest in finding a solution to this problem applies equally to private enforcement. The option of inserting a provision in the Brussels I Regulation requiring the court first seised to determine its jurisdiction within, say, six months is at first sight attractive. However, it could encounter difficulties. In the first place, it would no doubt prompt debate on whether the legal basis for the Brussels I Regulation would permit such harmonisation of procedural rules.82 In the second place, and more fundamentally, to impose a requirement on a court to determine its jurisdiction within a specified time period might run counter to constitutional principles in some Member States. Substantially the same result could be reached by providing that if the court first seised did not make any determination as to its jurisdiction within six months, it would be deemed to have determined that it did not have jurisdiction.83 This would discourage recourse to torpedoes by litigants seising a court that they knew did not have jurisdiction and would, in cases where the Brussels I Regulation offers the claimant alternative fora, incite litigants to instigate proceedings before courts that were likely to dispose of the case expeditiously. Whilst the proposed solution might be thought to be potentially unfair to a claimant who introduces proceedings in good faith before a particular court only to see that court lose jurisdiction because of the dilatoriness of the court (or the defendant) rather than due to any fault of the claimant, the remedy would lie in the Member States enacting legislation where appropriate to ensure that courts determined their international jurisdiction swiftly and as a preliminary issue. In conclusion, Article 27 should be amended by the insertion of a sentence providing that, if the court first seised has not determined whether or not it has jurisdiction within six months of proceedings being instituted, that court shall be deemed to have determined that it does not have jurisdiction.

D.  Article 28 Insofar as this author is aware, Article 28 Brussels I Regulation does not hitherto appear to have given rise to any particular problems of application in the field of the private enforcement of competition law. Nevertheless, it is worth examining the operation of this provision in order to assess whether any potential shortcomings in its application warrant it being revised. The operation of Article 28 is complementary to that of Article 27 in that, where related actions are proceeding in different Member States, it allows any court other than the court 80   Although the patent holder may be able to apply for an interim injunction, qua provisional measure, on the basis of Art 31 Brussels I Regulation. On this point see Wilderspin, ‘La compétence juridictionnelle’ (n 78) 801 ff. 81   On this point see J Basedow, ‘Jurisdiction and Choice of Law in the Private Enforcement of EC Competition Law’ in J Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, Kluwer, 2007) 248–49. 82  By virtue of Art 81(1) TFEU, ‘the Union shall develop judicial cooperation in civil matters having cross-border implications. The second sentence of that provision provides that such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States. Pursuant to Article 81(2) TFEU measures may be adopted inter alia on (e) effective access to justice and (f) the elimination of obstacles to the proper functioning of civil proceedings’. Arguably these two provisions taken in conjunction would permit this level of harmonisation. 83  See above for the solution proposed to the issue of lis pendens where the court first seised has been seised in defiance of a jurisdiction agreement.

Brussels I: Art 6(1), 23, 27 & 28  59 first seised to stay its proceedings (paragraph 1) and, in certain limited cases, even to decline jurisdiction in favour of the court first seised (paragraph 2). Its application in relation to Article 27 is residual in that it can operate only if the strict conditions of Article 27 are not met. Article 28 may thus apply, for example, where the parties in the different proceedings are not identical or where, even if the parties are the same, the cause of action in the different proceedings is not identical. Article 28 is, measured by the normal canons of the Brussels I Regulation, in one respect unusual in that it confers a certain amount of discretion on the court second seised in determining whether it should stay proceedings or decline jurisdiction. Nevertheless, its application is subject to quite restrictive conditions. On the one hand, Article 28 allows the court second seised to decline jurisdiction only if both actions are pending at first instance, the court first seised has jurisdiction over the action brought before the second court and the law of the court first seised permits the consolidation of the actions. And on the other hand, it should be borne in mind that the simple fact that a related action is pending in the court second seised does not confer any supplementary grounds of jurisdiction on the court first seised. In the field of private enforcement of competition law, Article 28(2) could assume relevance, for example, if party A, a direct purchaser of goods tainted by a cartel, brings an action for damages in forum X against the seller of the goods, party C, whereas an indirect purchaser of such goods, party B, brings a similar action for damages against a different cartel member, party D, in forum Y. On the assumption that the actions are ‘related’, the answer to the question whether Article 28 permits one court to decline jurisdiction in favour of the other will depend on which is the court first seised and whether that court has jurisdiction over the action before the court second seised. These conditions render the operation of Article 28(2) very inflexible and are capable of leading to some arbitrary results. Suppose, in the above example, that party C is domiciled in State X and is sued there on the basis of Article 2 Brussels I Regulation whereas party D is domiciled in State Z but is sued in forum Y, as the court of the place of damage, on the basis of Article 5(3) Brussels I Regulation. Assuming that forum Y would likewise have had jurisdiction in respect of the action against party C on the basis of Article 5(3), whereas forum X would not have had jurisdiction against party D, whether forum X is permitted to decline jurisdiction so as to allow both actions to be concentrated in a single forum (Y) will depend primarily on which of the courts was first seised: in our example, forum X can decline jurisdiction only if it was second seised. If forum Y was second seised, it could not decline jurisdiction over the action against party D, because forum Y does not have jurisdiction in that respect. There may therefore be something to be said in favour of making Article 28 more flexible by abandoning the rule that only the court second seised can stay its proceedings or decline jurisdiction. Clearly, if this were to be done, some mechanism would need to be devised to ensure that only one of the courts having jurisdiction stayed its proceedings or declined jurisdiction but this could be ensured by an appropriate undertaking from the party applying for a stay or by ex officio coordination between the concurrent courts. For the sake of consistency with the recommendation proposed to Article 6(1) (above IV.A) the concluding words of Article 28(3) relating to the avoidance of the risk of irreconcilable judgments arising from different proceedings should also be deleted. It is therefore recommended that Article 28 be amended by: 1.  the deletion of the words ‘other than the court first seised’ in paragraphs (1) and (2); and 2.  the deletion of the concluding words (following the word ‘together’) in paragraph (3).

I.2 Applicable Law in the EU – Rome I and Rome II

5 Private Enforcement of Antitrust Provisions and the Rome I Regulation MARC FALLON* AND STÉPHANIE FRANCQ**

I. Introduction This chapter is dedicated to the analysis of private international law aspects of antitrust litigation taking place in a contractual setting. Contractual relationships involving competition law aspects often involve parties located in different countries or require enforcement of a contract beyond domestic borders. Because these contractual relationships present transnational aspects, any corresponding litigation will raise the question of the applicable law. Before any court located in the European Union, the identification of the applicable law will be governed by the Rome I Regulation.1 The Rome I Regulation contains the conflict-of-law provisions determining the law applicable to contracts and is obligatory for all civil judges in the EU.2 Litigation raising competition law issues in the realm of contractual relationships may take on different forms, depending on the purpose of the claim. For instance, the litigation might witness one party’s attempt to enforce a contract being met with the opposing party’s contention that the contract is void as a consequence of competition law provisions. In such a situation, competition law is used as a shield. The litigation may alternatively relate to various questions listed (as we will see later) in Article 12 Rome I Regulation: the parties may disagree, for instance, on one point of interpretation of the contract, on the quality of performance or on the impact of a partial breach of contract. Competition law can be raised not only by one of the parties as a shield, but also by the judge if he notices a violation in the factual patterns submitted for analysis. Competition law can also be used as a sword: one of the parties might bring a claim against his contractual partner based on a violation of competition law. Or one party may seek to terminate the contract or have it declared void, basing his claim on a violation of competition law. These claims, which are typical claims of civil law and concern the existence, content and performance of a contract, are to be decided with reference to the Rome I Regulation. * Professor at the Université Catholique de Louvain, President of the Institut pour la recherche interdisciplinaire en sciences juridiques. ** Professor at the Université Catholique de Louvain, Holder of the Chair of European Law. 1   European Parliament and Council Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) [2008] OJ L177/6. 2   Except in Denmark. Denmark does not adhere to the Rome I Regulation as a consequence of Art 69 EC.

64  Marc Fallon and Stéphanie Francq In contrast, a complaint lodged by a third party before a competition authority (be it of national or European origin) concerning a violation of competition law by other individuals in a contract is obviously not covered by the Rome I Regulation. Complaints handled by administrative authorities are placed beyond the reach of Rome I, which is limited to ‘civil and commercial matters’ and excludes ‘administrative matters’ (Article 1(1) Rome I Regulation). Administrative authorities do not handle private law aspects of a violation of competition law. Yet another form of litigation concerning competition law in contractual setting is constituted by damage actions or by the request for an injunction (action en cessation) brought by third parties. These claims would be handled, as far as the determination of the applicable law is concerned, by the Rome II Regulation.3 The characterisation of damage actions brought by one contractual partner against the other is more uncertain.4 The aim of this chapter is to explain how the law applicable to international antitrust litigation is determined under the Rome I Regulation. Because of the complex nature of antitrust litigation (mixing questions of pure civil law and questions concerning economic law which are associated with the public sphere), the determination of the applicable law requires a specific process, which is explained in section II of this chapter. Section III will concentrate on specific issues of substantive law raised by EU provisions on competition law. The need to pay specific attention to sub­stantive law derives from the fact that the Rome I Regulation will be called upon only for questions which are not directly solved by substantive EU provisions on competition law. In addition to showing how the provisions of the Rome I Regulation offer rather handy solutions for taking into account the specific nature of antitrust litigation, this chapter will also point out some specific issues which, nonetheless, might prove particularly problematic for civil judges.

II. How Do Antitrust Rules Apply in Contractual Litigation? A.  Basic Principles Governing the Designation of the Lex Contractus i.  The Rules Governing the Identification of the Applicable Law The Rome I Regulation serves to designate the applicable law for conflict-of-laws scenarios that arise in regards to contractual obligations. Thus, the Regulation exclusively concerns the contractual aspects of the litigation.5 The law designated under the Rome I Regulation   See the contribution of S Francq and W Wurmnest in this book.   See the contributions of B Vilà Costa and S Poillot-Peruzzetto & D Lawnicka in this book. 5   See generally: E Cashin-Ritaine, Le nouveau règlement européen ‘Rome I’ relatif à la loi applicable aux obligations contractuelles (Lausanne, Schulthess, 2008); F Ferrari and S Leible (eds), Rome I Regulation, The Law Applicable to Contractual Obligations in Europe (Munich, Sellier, 2009); F Salerno and P Franzina (eds), Regolamento CE No 593/2008 del Parlamento europeo e del Consiglio del 17 giugno 2008 sulla legge applicabile alle obbligazioni contratualli (‘Roma I’), Nuove Leggi civili commentate (Padova, Cedam, 2009); R Plender and M Wilderspin, European Private International Law of Obligations, 3rd edn (London, Sweet & Maxwell, 2009). 3 4

Rome I  65 covers issues of validity, interpretation, performance, extinction and prescription, nullity, and assessment of damages (Article 12 Rome I Regulation). Thus, almost all the questions raised during a contractual litigation should fall under the applicable law to the contract as designated by Regulation Rome I, so that the law of no other State should in principle interfere. The law governing the contract may be chosen by the parties (Article 3 Rome I Regulation). In the absence of a choice made by the parties, the Regulation establishes a list of connecting factors for the most common types of contracts: in particular, sales of goods, provision of services, franchise contracts and distribution contracts (Article 4(1) Rome I Regulation). For contracts not described in the list set out in Article 4 Rome I Regulation (or for contracts whose elements would be covered by more than one of the types enumerated in the list), the law is designated through a close connection test (Article 4(2) Rome I Regulation). To be sure, under Article 4(3) Rome I Regulation, the close connection test may also apply to contracts covered by the list of connecting factors established for the most common types of contracts in Article 4(1) Rome I Regulation: it is then used as an escape clause, allowing the judge to derogate from the law normally applicable on the ground that the contract is manifestly more closely connected with the law of another country (Article 4(3) Rome I Regulation). For instance, under Article 4(1) Rome I Regulation, distribution contracts are governed by the law of the State where the distributor has his habitual residence. The habitual resid­ ence is defined as the place of central administration for a legal person, or the place of business for a natural person acting as a professional (Article 19(1) Rome I Regulation), or the place of establishment of an agency if the contract is concluded or performed through an agency (Article 19(2) Rome I Regulation). The relevant point in time for determining the location of the habitual residence is the time of conclusion of the contract (Article 19(3) Rome I Regulation). The connecting factor of the habitual residence is thus defined in such a way that the contract could hardly be manifestly more closely connected with a country other than the one designated under Article 4(1) Rome I Regulation. Therefore, it is unlikely that Article 4(3) would need to be relied on as an escape clause. The functioning of Article 4 is not, however, always unproblematic. In contracts of research and development, for instance, Article 4(1) Rome I Regulation offers no solution. On the one hand, the characterisation of the contract is uncertain (Is it a contract for a reciprocal provision of services? A contract concerning intellectual property?). On the other hand, even if the contract could be characterised as a reciprocal provision of services, Article 4(1)(a) Rome I Regulation, because it designates the law of the country of habitual residence of the service provider, would eventually lead to the application of the law of two (or more) countries (where the different parties to the contract are resident). In such a case, Article 4(2) Rome I Regulation would apply. Obviously, distribution or franchise contracts are direct targets of Article 101 TFEU and are therefore likely to form the core of private international litigation raising competition law issues. The Rome I Regulation, and especially its Articles 3 and 4, will thus prove of primary importance for these contracts. But it should be kept in mind that Article 101 TFEU has a broader substantive scope. Article 101 TFEU covers any agreement between autonomous parties consenting to behave on the market. This may include lease contracts, licensing of intellectual property rights, research and development contracts, etc. When applying Article 3 or 4 Rome I Regulation, each individual type of contract will raise

66  Marc Fallon and Stéphanie Francq specific difficulties in defining the proper connecting factor. This is particularly the case as concerns licence contracts.6 Special rules of the Regulation open the door to the application of a law other than the lex contractus. A few provisions provide for specific connecting factors, either regarding specific problems (consent, formal validity – Articles 10 and 11 Rome I Regulation) or regarding specific contracts (contracts of carriage, insurance contracts, consumer contracts, employment contracts – Articles 5 through 8 Rome I Regulation). Since these problems or types of contract are less likely to be at the core of private enforcement litigation, these provisions will not be analysed in this contribution.

ii. Exceptions Identification of the law applicable to the contract (the lex contractus) is only the first step in the private international law analysis. Under some circumstances, the law designated under the general provisions of the Rome I Regulation may be either derogated from or superseded by provisions of the law of another country. The reason for this may derive either from the discord between the content of the law normally applicable and important values of the forum, or from the need to apply overriding provisions of a State other than the one designated. A general provision concerns the intervention of overriding mandatory provisions (lois de police). Under Article 9 Rome I Regulation: 1. Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation. 2. Nothing in this Regulation shall restrict the application of the overriding mandatory provisions of the law of the forum. 3. Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

According to Article 9 Rome I Regulation, the court may give effect to mandatory rules of its own system (lex fori), but also to foreign mandatory rules. ‘Foreign’ overriding mandatory rules are qualified as such because they do not belong to the lex fori (covered by Article 9(2) Rome I), nor to the lex contractus (as determined according to Article 3 or 4 Rome I). They may be given effect provided that they are specified by the State of perform­ ance and that they render the performance unlawful. Regarding the application of foreign mandatory rules, the Rome I Regulation is far more restrictive than the Rome Convention (Article 7(1)), wherein the judge was allowed to give effect to overriding mandatory provisions of any foreign State with which the case at hand had a close connection, as long as these provisions called for their application.7 Despite its new restrictive formulation, Article 6   See P Torremans, ‘Licences and assignments of intellectual property rights under the Rome I Regulation’ (2001) Journal of Private International Law (JPIL) 397. 7   Art 9 Rome I Regulation raises numerous questions of interpretation which are not systematically analysed in this contribution. For more detail on the interpretation of this provision, see, eg, S Francq and F Jault-Seseke, ‘Les lois de police, une approche de droit comparé’ in N Joubert and S Corneloup (eds), Le règlement communautaire ‘Rome I’ et le choix de lois dans les contrats internationaux: Actes du colloque des 9 et 10 septembre 2010, Travaux du

Rome I  67 9 Rome I Regulation will prove a key provision in the field of private enforcement (see below II.B.ii and II.C.ii). In addition, mandatory provisions or fundamental values of the forum may fall under the scope of the public policy exception (Article 21 Rome I Regulation). This provision enshrines one of the general escape tools provided for by the Rome I Regulation. Article 21 Rome I allows the judge to refuse the application of one or more provisions of the specified law if they are manifestly contrary to public policy. This provision is rarely used in the field of contract law but could nevertheless be relevant for litigations raising competition law issues. Indeed, Articles 101 and 102 TFEU incorporate values of a fundamental nature that would, as such, trigger the intervention of the public policy clause in the event they were contradicted by some provision(s) of the specified law.8 Other provisions of the Rome I Regulation provide for exceptions directly related to EU law. Except for insurance contracts, the Rome I Regulation gives precedence to other specific provisions of EU law which lay down conflict rules relating to contractual obligations (Article 23). This provision refers only to EU provisions of secondary law that relate to ‘contractual’ obligations and have an impact on the conflict-of-laws process. Article 23 Rome I thus enshrines nothing more than the lex specialis principle. The provisions of EU law, which contain specific conflict rules in the field of contracts and to which Article 23 refers, concern mainly consumer and employment contracts. They could also be analysed as mandatory or even as public policy provisions. Therefore, Article 23 Rome I could also be analysed as an escape device which focuses on overriding mandatory provisions in a way similar to Article 9 Rome I. Another provision directly refers to rules of EU law. Where the parties have chosen the applicable law under Article 3(1) Rome I, Article 3(4) Rome II gives, under certain circumstances, precedence to mandatory provisions of EU law. When all the elements relevant to the situation are located in Member States, the parties may not evade EU mandatory provisions by choosing the law of a non-Member State.

B.  Basic Principles Governing the Applicability of Competition Law With the term ‘competition law’, we refer to EU rules to be found in Articles 101 TFEU and 102 TFEU, as well as to national rules of equivalent effect. We do not refer to other provisions concerning ‘unfair’ trade practices, except where useful for the understanding of some concepts. Concerning competition law in general and EU competition law in particular, several points need to be emphasised. Attention needs to first be dedicated to the influence Credimi, vol 35 (Dijon, LexisNexis Litec, 2011) 357–93; J Harris, ‘Mandatory Rules and Public Policy under the Rome I Regulation’ in F Ferrari and S Leible (ed), Rome I Regulation: The Law Applicable to Contractual Obligations in Europe (Munich, Sellier, 2009) 269; M Hellner, ‘Third country overriding mandatory rules in the Rome I Regulation: Old wine in new bottles?’ (2009) JPIL 447; R Freitag, ‘Eingriffsnormen (international zwingende Bestimmungen), Berücksichtigung ausländischer Devisenvorschriften, Formvorschriften’ in C Reithmann and D Martiny (eds), Internationales Vertragsrecht, 7th edn (Cologne, Verlag Dr Otto Schmidt, 2010) 345. 8   See, eg, Case C-126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I-3055 para 39; Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619 para 31; Case C-8/08 T-Mobile Netherlands BV and others v Raad van Bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-4529 para 49. There has been much discussion on the nature of EU provisions determining their own scope of application: see, eg, S Francq, L’applicabilité du droit communautaire dérivé au regard des méthodes du droit international privé (Brussels/Paris, Bruylant/Librairie générale de droit et de jurisprudence, 2005). For the technical reasons explained below (II.C.i.a and II.C.ii.a), recourse to the public policy exception will rarely be necessary.

68  Marc Fallon and Stéphanie Francq of competition law on contracts, from a substantive point of view (i). Some explanations will then be provided on how competition law is generally perceived in private inter­ national law (ii).

i.  Influence of Competition Law on the Substance and Validity of Contracts a.  General Remarks: the Influence of Competition Law is Incidental in regard to the Contractual Regime Competition law provisions do not aim at regulating the substance of contracts. Their first aim is rather to regulate a given market and the behaviour of the market actors, independently from the nature of the relationships in which they are involved (be they contractual or not). Thus, Articles 101 TFEU and 102 TFEU tend to prevent undertakings from sharing markets, just as provisions on the fundamental freedoms protect the EU market from national measures, and thereby attempt to ensure equality between undertakings.9 In doing so, they serve the proper functioning of the market: therefore, they must be efficient enough to dissuade undertakings from unlawful behaviour.10 To a certain extent, the ‘legal right being protected’11 is the efficient functioning of the market – in particular, the functioning of the EU market (as opposed to national ones).12 Regulation of the behaviour of undertakings on the market is also to be found in national and European provisions on unfair trade practices. For instance, Directive 2005/29 of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market13 mainly aims at protecting consumers’ economic interests, namely from misleading and aggressive practices. As the Directive accurately states, it ‘is without prejudice to contract law and, in particular, to the rules on the validity, formation or effect of a contract’ (Article 3(2) Directive 2005/29). This does not, however, mean that the Directive could not have an impact on a contractual claim. The Directive would come into play in a contractual claim where the merits thereof depended on the lawfulness of the behaviour. By regulating the behaviour of market actors, provisions concerning competition law (like provisions concerning unfair trade practice, as exemplified above with Directive 2005/29) have a direct influence on contracts. To a certain degree, they dictate the content of contracts by prescribing the behaviour of contractual partners; at a minimum, they influence the lawfulness of a contract by prohibiting specific contractual clauses and attaching civil sanctions in case of infringement.14 9   Joined Cases 56/64 and 58/64 Etablissements Consten and Grundig-Verkaufs v Commission of the European Economic Community [1966] ECR 299. 10   Case 26/76 Metro SB-Großmärkte GmbH & Co KG v Commission of the European Communities [1977] ECR 1875. 11   The words are those of Joined Cases T-236/01, T-239/01, T-244/01 to T-246/01, T-251/01 and T-252/01 Tokai Carbon Co Ltd and Others v Commission of the European Communities [2004] ECR II-1181, citing Advocate General Ruiz-Jabaro in Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland A/S, Irish Cement Ltd, Ciments français SA, Italcementi – Fabbriche Riunite Cemento SpA, Buzzi Unicem SpA and Cementir – Cementerie del Tirreno SpA v Commission of the European Communities [2004] ECR I-123 point 89. 12   Tokai Carbon case cited, confirmed by Case C-308/04P SGL Carbon AG v Commission of the European Communities [2006] ECR I-5977. 13  European Parliament and Council Directive 2005/29 of 11 May 2005 concerning unfair business-to-­ consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council [2005] OJ L149/22. 14   See also II.B.i.c below about block exemption regulations.

Rome I  69 Therefore, competition law provisions play a complementary role regarding the contractual regime, ie the whole of parties’ rights and duties as well as legal obligations concerning the contract. In contractual disputes, competition law is usually used as a shield. One party initiates litigation against the other for breach of contractual duties, and the defendant then justifies his position by contending that the contract is void under competition law and should therefore not be performed. Or the defendant claims that he had to adapt his behaviour (and therefore could not entirely respect the content of the contract) because part of the contract was contrary to competition law. Alternatively, the parties agree on the performance of the contract but disagree on the way it is to be performed, and in the course of action, the judge notices that the contract might infringe competition law. These few examples, which are by no means exhaustive, show that the application of competition law is incidental. The contractual regime is determined by the lex contractus, as it is identified by the general conflict-of-laws rules (connecting rules, règles de rattachement) set forth by the Rome I Regulation. However, provisions of competition law (from the lex contractus or from another law) may interact with the general contractual regime of the lex contractus. Competition law provisions thus play a complementary role besides the main role played by the lex contractus. The core aim of competition law rules is to regulate the market, but in order to achieve this goal they use – to a limited extent – civil law remedies against those who would contravene the behavioural obligations they fix. More specifically, competition law provisions play this complementary role in two different ways. First, as market rules they determine which behaviour is lawful for the functioning of the market. In this sense, they are similar to a Highway Code which serves to establish what behaviour is lawful on the roadways. Second, competition law may also contain some civil remedies. EU competition law, for instance, considers restrictive agreements as void and provides the victim with a right to claim for damages. b.  Influence of EU Competition Law on Contractual Litigation The impact of EU competition law provisions in the field of private law is threefold. The first impact of EU competition law on contracts concerns their validity. Agreements prohibited under Article 101 TFEU are ‘automatically void’ (Article 101(2) TFEU). This sanction is a consequence of the fundamental character of Article 101 TFEU. Therefore, the contract is not only voidable, but it is automatically void and the agreement cannot be invoked against third parties.15 Despite the fact that competition law is generally considered of public nature, Article 101 TFEU thus establishes a clear sanction in the field of private law. In addition, the rulings of Manfredi and Courage have made clear that it is ‘open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition’.16 EU competition law provisions also imply some further substantive rules on the assessment of damages in contractual or non-contractual litigation,17 but the exact reach of the impact of EU law in this regard is unclear.18 The third aspect of the influence exercised by EU competition law on contractual litigation concerns the flexiblity tools of EU competition law, ie Article 101(3) TFEU and block exemption regulations. This facet is detailed in the following section.   See the Courage judgment (n 16) para 22.   Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297 para 26; Manfredi (n 8) paras 59–61. 17  eg, Manfredi (n 8) para 100. 18   See III.A below. 15 16

70  Marc Fallon and Stéphanie Francq c.  Influence of Article 101(3) TFEU and Block Exemption Regulations Another impact of competition law on contracts results from the potential influence of EU provisions authorising certain contractual terms despite the fact that they appear at first sight as being contrary to Article 101(1) TFEU. On the one hand, when all the conditions set by Article 101(3) TFEU are fulfilled, Article 101(1) TFEU ‘may be declared inapplicable’. The exclusive competence to declare Article 101(1) TFEU inapplicable was, before 2003, reserved to the Commission. However, Regulation 1/2003 bestowed every national authority and national court with this competence (Article 3(2) Regulation 1/2003). In other words, Article 101(3) now has a direct effect.19 On the other hand, block exemption regulations may contain substantive rules relating to contract terms. In contrast to Article 101(2) TFEU, having a clear impact on contracts, the impact of block exemption regulations on relationships between individuals is more difficult to assert. A typical example is Regulation 330/2010 implementing Regulation 1215/1999 of the Council on vertical agreements.20 The rules of Regulation 330/2010 appear to address the substantive content of vertical agreements, and they thus prompt the parties to either formulate or revise a contract according to its provisions in order to render Article 101(1) TFEU inapplicable. Regulation 1/2003 seems to have increased the effect of such block exemption regulations on contracts. Before the entry into force of Regulation 1/2003, the case-law stated that block exemption regulations do ‘not lay down any mandatory provisions directly affecting the validity or the content of contractual provisions or oblige the contracting parties to adapt the content of their agreements’.21 The parties were free to use the possibilities opened by a block exemption regulation but were not compelled to do so. Under this case-law, the provisions of a block exemption regulation did not have the effect of amending the contract or rendering it void if the conditions laid down in the regulation were not satisfied.22 As such, the block regulations did not provide a cause of action. They could, however, be considered by a national court when applying the national law.23 When deciding, for instance, whether the parties had to adapt part of the contract in order to prevent the contract from being void, a judge could take the block exemption regulation into consideration.24 19   Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1. Recital 4 Regulation 1/2003 refers to a new ‘directly applicable system in which the [courts] of the Member States have the power to apply not only Article [101(1)] and [102] of the Treaty . . . but also Article 101(3) of the treaty’. See also: AP Komninos, ‘Modernisation and Decentralisation: Retrospective and Prospective’ in G Amato and CD Ehlermann (eds), EC Competition Law: A Critical Assessment (Oxford, Hart Publishing, 2007): ‘the courts will be able to address the full range of competition law for the first time’ (p 665) and they are placed ‘on an equal footing with the public enforcers for the first time’ (p 666). 20   Commission Regulation 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices [2010] OJ L102/1. 21   Case 10/86 VAG France SA v Établissements Magne SA [1986] ECR 4071 para 16. 22   ibid paras 12–16. 23   ibid para 15. 24   See, eg, Joined Cases T-185/96, T-189/96 and T-190/96 Riviera Auto Service Etablissements Dalmasso SA, Garage des quatre vallées SA, Pierre Joseph Tosi, Palma SA (CIA – Groupe Palma), Christophe and Gérard Palma v Commission of the European Communities [1999] ECR II-93 para 52: the regulations ‘can assist the national courts in assessing the lawfulness of contractual provisions which come under their scrutiny’; Case T-62/99 Société de distribution de mécaniques et d’automobiles (Sodima) v Commission of the European Communities [2001] ECR

Rome I  71 Under Regulation 1/2003, when the judge applies national competition law to agreements that have an effect on trade between Member States, he may not ‘prohibit’ those agreements that are ‘covered’ by a block exemption – or by Article 101(3) TFEU – (Article 3(2) Regulation 1/2003). Since the block exemption regulations can be relied on by a national court (and apparently have to be taken into consideration when assessing whether the agreement infringes competition law), their substantive provisions might have an impact on the outcome of the contractual litigation. For instance, a ‘vertical’ distribution agreement falling under the scope of Regulation 330/2010 is not authorised if it restricts the buyer’s ability to determine its sale price, without prejudice to the possibility of the supplier’s imposing a maximum sale price or recommending a sale price, provided that they do not amount to a fixed or minimum sale price as a result of pressure from, or incentives offered by, any of the parties(Article 4(a) Regulation 330/2010).25

Conversely, if the agreement conforms to all the substantive conditions prescribed by the block exemption regulation, it is deemed to be ‘covered’ and, as a consequence, not in violation of Article 101 TFEU. However, the Commission or a national competition authority retains the power to ‘withdraw the benefit’ of such regulation when the individual contract has effects that are incompatible with Article 101(3) TFEU (Article 29 Regulation 1/2003). This power is not given to national courts. Does this mean that when a contractual clause does not conform to a substantive provision of a regulation, a national court could – or should – state that such a term is inapplicable or gives rise to damages? Or would this statement exceed the power of the court because it amounts to a ‘withdrawal’ (reserved to the competition authority under Article 3(2) Regulation 1/2003)? According to Assimakis Komninos, the court ‘will apply the block exemption Regulation if the latter is applicable, irrespective of the existence of factors that might justify the withdrawal of the exemption benefit with erga omnes effect by a public authority’ (national or the Commission).26 But since, according to the Commission, a contract ‘covered’ by a block exemption regulation is ‘alleged’ to fulfil the conditions of Article 101(3) TFEU, the court may only ‘decide whether or not the agreement is covered by the II-2579 para 38: ‘The Commission does not have exclusive competence to find that a dealership agreement does not meet the conditions for the block exemption laid down in Regulation No 123/85 and, hence, that that regulation does not apply to the contract concerned. Admittedly, the situation is different with regard to competence to withdraw the benefit of the block exemption pursuant to Article 10 of Regulation No 123/85’. 25   Another interesting example can be found in Commission Regulation 358/2003 of 27 February 2003 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices in the insurance sector [2003] OJ L53/8, now replaced by Regulation 267/2010 [2010] OJ L83/1. Under the former, ‘standard policy conditions must not lead either to the standardisation of products or to the creation of a signi­ ficant imbalance between the rights and obligations arising from the contract’ (Recital 12), and withdrawal by the Commission may occur ‘where recommended standard policy conditions contain clauses which create, to the detriment of the policyholder, a significant imbalance between the rights and obligations arising from the contract’ (Recital 26). This is the case for contracts that: ‘(a) contain any indication of the level of commercial premiums; (b) indicate the amount of the cover or the part which the policyholder must pay himself (the “excess”); (c) impose comprehensive cover including risks to which a significant number of policyholders are not simultaneously exposed; (d) allow the insurer to maintain the policy in the event that he cancels part of the cover, increases the premium without the risk or the scope of the cover being changed (without prejudice to indexation clauses), or otherwise alters the policy conditions without the express consent of the policyholder’ (Art 6). The sanction is that ‘the exemption provided for in Article 1(c) shall not apply’. Significantly enough, the new Regulation no longer includes standard policy conditions (Recital 3) because they are not ‘specific to the insurance sector and, as the review showed, can also give rise to certain competition concerns, it is more appropriate that they be subject to self-assessment’. The trend seems to limit the block exemption concept. 26   Komninos, ‘Modernisation and Decentralisation’ (n 19) 667.

72  Marc Fallon and Stéphanie Francq block exemption Regulation’.27 This means that, ‘in the context of private enforcement, the fact that an agreement falls under a block exemption functions as a non-rebuttable presumption that it is legal under Article [101(3)]’.28 A clear distinction should be drawn between the notions of the ‘scope’ of a regulation and the ‘coverage’ provided by a regulation:29 the former determines whether the contract is governed by the instrument, while the latter concerns the authorisation of certain contractual terms. The identification of these two questions helps to clarify the impact of block exemption regulations in private disputes and the mission of domestic courts in this respect. Three situations may occur. First, the agreement falls into the scope of the Regulation and it fulfils all substantive conditions thereof: the agreement thus benefits from an irrebuttable presumption of compatibility with Article 101 TFEU before the national court – the presumption is rebuttable only before a competition authority that has a monopoly on ‘withdrawal’. Second, the agreement falls outside the scope of the regulation: the national court has to apply Article 101(3) TFEU directly – this means that it has to make an assessment of the four conditions that the contract has to fulfil in order to be authorised. Third, the agreement falls under the scope of the block exemption regulation but does not fulfil one of the substantive conditions: the task of the national court is more difficult to assess. According to Article 101(2) TFEU, the court should declare void any term contrary to the substantive conditions of the regulation. In doing so, the civil judge would formally apply Article 101(2) TFEU in the light of the block exemption regulation.30 However, the rationale of a block regulation is – or rather used to be – only to alleviate procedural requirements,31 without ensuring that compliance with the substantive conditions of the regulation entails compliance with Article 101(3) TFEU and without excluding that a contract violating the regulation could nonetheless be compatible with Article 101(1) TFEU.32 Thus, a national court today should also have the power to apply Article 101(3)   As cited by Komninos (n 19) 667.   Komninos (n 19) 667. 29   The term ‘be covered’ used by the Commission may be ambiguous: does it mean that the contract falls into the material scope of the regulation, or also that it is valid under this one, as the Commission seems to assume? A similar ambiguity is to be found more generally in the case-law about the term ‘be applicable’. A distinction is to be made between the applicability of an instrument and its substantive requirements. For instance, this confusion is to be found in the Commission Guidelines on vertical restraints [2000] OJ C291/1. Here, the Commission states that the block exemption Regulation on vertical restraints contains a list of hard core restrictions ‘which lead to the exclusion of the whole vertical agreement from the scope of application’ of the instrument, whereas this wording rather concerns an agreement which actually falls into the domain of the instrument but does not meet its substantive requirements. 30   Similarly, when applying national rules on the validity or on the performance of a contract, or on damages, the judge would take the content of the regulation into consideration when determining whether the civil law on contracts has been violated. 31   An individual notification to the Commission of any agreement incompatible with Art 81(1) EC used to be required. See for instance, Council Regulation 1534/91 of 31 May 1991 on the application of Article 85(3) of the Treaty to certain categories of agreements, decisions and concerted practices in the insurance sector [1991] OJ L143/1. Pursuant to Recital 7, ‘in view of the large number of notifications submitted pursuant to Council Regulation No 17 of 6 February 1962 . . ., it is desirable that in order to facilitate the Commission’s task, it should be enabled to declare, by way of Regulation, that the provisions of Article 85(1) of the Treaty are inapplicable to certain categories of agreements, decisions and concerted practices’. 32   For a case where the Commission verified the conditions of Art 81(3) and then declared Art 81(1) EC applicable although the agreement was covered by a block exemption, see Case T-62/98 Volkswagen AG v Commission of the European Communities [2000] ECR II-2707. On the other hand, ‘Everything which has not been exempted is [not] to be presumed to be prohibited’: Case 32/65 Italian Republic v Council of the European Economic Community and Commission of the European Economic Community [1966] ECR 389. See also the Commission Guidelines on vertical restraints [2000] OJ C291/01 para 21: a block Regulation creates a ‘safe harbour’ for the undertaking, a ‘presumption of legality’ of the agreement. Furthermore, ‘[i]n respect of the goods or services 27 28

Rome I  73 TFEU, as did the Commission formerly, in order to verify whether its four conditions are fulfilled. Yet, such a power could be paradoxical compared to the exclusive competence of competition authorities to withdraw an authorisation. This exclusivity conferred to competition authorities in this respect may be explained by the fact that the four general conditions laid down in Article 101(3) TFEU are flexible and leave a large margin of appreciation: as such, they appear a tool of a competition policy and exceed the power of a jurisdictional court.33 A national court would accordingly have no power to apply Article 101(3) TFEU to a contract falling outside the scope (material and spatial) of any block regulation when deciding on the nullity of a term of the contract by virtue of Article 101(2) TFEU. Instead, Regulation 1/2003 explicitly confers this power to the court . . . As a conclusion on this point, it seems contradictory to grant national courts the power to apply Article 101(3) TFEU but to deny them at the same time the power to withdraw the benefit of a block exemption regulation. This places national courts in an uneasy situation regarding the application of block exemption regulations: they have to verify whether an agreement falls within the scope of a regulation, but the extent of their power in the actual application of a block exemption regulation is unclear. Therefore, the exact impact of Article 101(3) TFEU and of block exemption regulations in contractual disputes involving competition law issues is difficult to ascertain.

ii.  The Nature of Competition Law from the Point of View of Private International Law As mentioned above (II.B.i.a), because they play a complementary role alongside the contractual regime, competition law provisions never intervene in a vacuum. Rather, they intervene in addition to, in contrast with, or inside the realm of, the law applicable to the contract. The way in which competition law provisions are characterised in private international law (PIL) can be explained with reference to two important features: they embody fundamental values and they determine their own scope of application. These two features may lead to a dual characterisation. From the point of view of PIL, competition law provisions are overriding mandatory rules. It is generally accepted that these kinds of provisions determine their own scope of application, safeguard public interest and command automatic application even in international situations. As such, they present the main features identified as being characteristic of lois de police.34 As far as the scope of application is concerned, Article 101 TFEU, for instance, (as well as Article 102 TFEU) provides its own criteria of applicability in respect of international situations. Thus, Article 101 TFEU applies to an agreement that is

which are not covered by the Block Exemption Regulation, the ordinary rules of competition apply, which means [that] there is no block exemption but also no presumption of illegality’ and, if there is an infringement of Art 101(1), it could remain ‘exemptible’ under Art 101(3). 33   Similarly, the power of the General Court (formerly the Court of First Instance) to review the assessment of the facts by the Commission in the context of Art 101(3): Consten and Grundig v Commission (n 9). On the ‘policy’ aspects of Art 101(3), establishing the original exclusive power of the Commission, see Case C-234/89 Delimitis v Henninger Brau AG [1991] ECR I-935 para 44. 34   See, eg, II.A.ii above, Art 9(1) Rome I, providing a definition of the term ‘overriding mandatory provisions’, which is based on these three identifying aspects (see also the references provided for at n 7).

74  Marc Fallon and Stéphanie Francq ‘operative’ on the territory of the Community.35 More recently, the localising element triggering the application of Article 101 TFEU has been considered to be the implementation of the restrictive practice in the EU.36 In addition, EU competition law provisions embody values that are deemed to belong to the ordre public/‘public policy’ of Member States and thus justify the use of the ‘exception of public policy’ in the sense of private international law. Even if the notion of public policy belongs to the national legal system, its use is placed under the control of the ECJ: in particular, the clause should be used only in the case of an infringement of ‘a fundamental principle’, where giving effect to a foreign judgment or to foreign law would be at variance ‘at an unacceptable degree’ with the legal order of the State.37 However, the fact that a court of a Member State apparently misinterpreted the EU provisions on the free movement of goods was not – as such – considered to be grounds for refusing recognition of the court’s judgment.38 Nevertheless, Articles 101 and 102 TFEU are perceived as fundamental rules of EU law and as being necessary for the good functioning of the internal market.39 Not surprisingly, they were characterised as ‘public policy Community rules’ (together with other rules on consumer protection, in particular Directive 93/13 on unfair contract terms),40 and they fall under (national) clauses of public policy when a foreign judgment does not comply with these rules.41

C.  The Intervention of Competition Law Rules in International Contractual Litigation The reasoning leading to the application of competition law provisions in international contractual litigations will be different for EU competition law (i) and for national competition law (ii).

i.  EU Competition Law a.  Primary Law As has been highlighted earlier, the judge of a Member State dealing with a case of private enforcement might have to consider the application of Article 101 TFEU (or Article 102 TFEU) because this provision embodies market rules and is a mandatory rule of private law having a direct impact on the outcome of such a private litigation. As a practical matter, Article 101 TFEU applies on its own motion because it determines its own scope of appli35   Case 22/71 Béguelin Import Co v SAGL Import Export [1971] ECR 949 para 1: Art 101 applies to an exclusive concession agreement between an EU undertaking and a third State undertaking which prevents the parties from exporting goods from one Member State to another; ‘more especially’, the effect of impeding competition may be due to the combined effects of the agreement and the national legislation on competition (para 14). 36   Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85, C-125/85, C-126/85, C-127/85, C-128/85 and C-129/85 A Ahlström Osakeyhtiö and others v Commission of the European Communities (Wood Pulp) [1994] ECR I-99 paras 16–17: concerning an agreement concluded by third State undertakings in a third State but aiming at the fixing of the price of products to be sold in the EU. 37   Case C-38/98 Régie Nationale des Usines Renault SA v Maxicar SpA [2000] ECR I-2973 para 30. 38  ibid. 39   Courage (n 16) para 20. 40   Case C-168/05 Elisa María Mostaza Claro v Centro Móvil Milenium SL [2006] ECR I-10421; Manfredi (n 8) para 31. 41   Eco Swiss (n 8).

Rome I  75 cation and takes precedence over secondary EU law (thus, over the Rome I Regulation) and over national law (ie the law applicable to the contract) because it is a source of primary EU law. The Rome I Regulation actually has no influence on the application of EU competition law, as far as sources of primary law are concerned. There are two reasons for this. Fundamentally, the Rome I Regulation serves to formally designate national laws, not EU provisions – with the exception of Article 3(4) Rome I. More importantly, primary law always takes precedence over secondary law. In contrast to the rule provided for in one of the first versions of the proposal for a Regulation, the Rome I Regulation in its final version does not contain any explicit provision on the principle of primacy. Yet this absence does not have any impact on the application of Articles 101/102 TFEU or on the functioning of the principle of primacy in general. Articles 101 and 102 TFEU as sources of primary law necessarily take precedence over secondary sources of EU law. The principle of primacy comes into play here as a principle which resolves a conflict between two rules of EU law: the competition law provisions on the one hand and the Rome I Regulation on the other. It can be said that a conflict exists between these rules since EU competition law fixes, as shown above,42 its own scope of application and therefore does not allow other provisions (such as those of the Rome I Regulation) to decide when EU competition law applies. Indeed, Article 101 TFEU is to be applied by itself, as a rule having direct effect: it does not need any other complementary choice-of-law provision set out in a separate source of law. The only task for the court is to determine that the case falls under the scope of applicability of the substantive provisions of EU primary law and that these provisions call for their application irrespective of the law otherwise applicable to the contract. In doing so, the court actually uses a method similar to the one leading to the application of national overriding mandatory provisions pursuant to Article 9 Rome I Regulation. Because Articles 101/102 TFEU apply on their own motion (just like lois de police do), it will probably never be necessary to consider that the values they embody need to be protected under the provision on public policy (Article 21 Rome I). For the legal systems of the Member States, the core principles of EU competition law are integrated into the concepts and values triggering the exception of national public policy.43 From a practical point of view before a European judge, however, if the lex contractus contained provisions even partially contrary to the fundamental rules of EU competition law, the rules of the EU Treaty would apply under their own criteria of applicability if the situation falls within their scope. Therefore, there would be no need to take recourse to Article 21 Rome I. Another question might however arise. Let us assume an anti-competitive agreement entered into by a Japanese undertaking and an American undertaking which has anti-competitive effects in South Africa only and which has been submitted by choice of the parties to the legal system of a country having no law on competition. The case is clearly beyond the reach of EU competition law and also beyond the reach of the national competition law of a Member State: EU competition law and national competition law of Member States do not apply on their own motion because the situation does not fall into their scope. But, if one of the parties demands performance of a contractual obligation before the court of a Member State, would the judge consider enforcing a contract that has clear anti-­ competitive effects when such a result would be contrary to that State’s public policy   II.B.ii above.   This reasoning is close to Eco Swiss.

42 43

76  Marc Fallon and Stéphanie Francq (insofar as it embodies fundamental principles relating to free competition as defined under EU law)? The answer depends on the judge’s interpretation of the forum State’s national public policy. He could engage the public policy exception if he determines that the core values of EU competition law have been given a universal value (when they were integrated into the forum State’s national public policy) irrespective of the question whether the situation presents any contact with the forum. Such an outcome is, however, rather doubtful.44 Practically, the scopes of application projected by competition rules and the lex contractus may converge, depending on the result of the choice-of-law rule applied to the case. For instance, in the field of distribution contracts, in the absence of a choice by the parties, the court will normally apply the law of the State where the distributor has his central administration.45 Presumably, the main effects of the agreement on the market will be located at the same place. The same will thus apply to the competition law aspects of the case and to the civil law aspects of the case because the connecting factors converge. In complex litigation, or in litigation involving numerous parties, the lex contractus might be different for each defendant, even though all are faced with a claim based on the same infringement of competition law. In distribution contracts, for instance, if the parties have not chosen the applicable law, the consequences of the contract’s nullity will be governed by the lex contractus of each distributor, ie the law of the place of establishment of each distributor. As a result, each contract signed by the principal will be submitted to a different law even if the infringement of competition law is identical in each instance. EU competition law will apply, pursuant to its own terms, to each contract independent of the identification of the law providing for the contractual regime. Indeed, the question of the existence of an infringement of competition law and the question of nullity are resolved by a single source of law, ie Articles 101(1) and 101(2) TFEU if the situation falls under their scope. In contrast, since each distribution contract signed by the principal will be governed by a different law (depending on the establishment of the distributor), the applicable law (lex contractus) may diverge on the specific consequences of nullity (ie the questions not resolved by EU law).46 This effect is similar to the outcome of the Mosaikprinzip, which is well known in the field of non-contractual obligations.47 b.  Secondary Law In the EU legal system, the field of competition law is rather specific because all fundamental principles are set forth in the Treaty. Secondary EU law in this field serves only the implementation of the basic provisions of the Treaty without adding to their wording. As mentioned before, a block exemption regulation might be taken into consideration by national judges during a contractual litigation. The problem of the binding nature of block exemption regulations is rather a question of substantive law and has been addressed above (II.B.i.c). From a PIL point of view, even though acts of secondary EU law concerning competition law do not explicitly determine their own scope of application, applicability criteria can be 44   The application of national public policy is usually submitted to various conditions, one of them being related to the degree to which a situation is integrated within the forum (see F Rigaux and M Fallon, Droit International Privé, 3rd edn (Brussels, Larcier, 2005) 322–25, no 7.51–7.53) 45   See II.A.i above. 46   See III.A below. 47   See in this book the contribution of S Francq and W Wurmnest on the Rome II Regulation.

Rome I  77 derived from some substantive provisions of these regulations.48 The criteria of applicability of block exemption regulations do not contravene the criteria set forth by the Treaty, but rather tend to specify them for certain categories of agreements. To be sure, the judge should not take block exemption regulations into consideration regarding situations falling outside their scope. For instance, in the case of distribution agreements, if the market of the distributor is outside the EU or if a regulation explicitly restricts its own scope by excluding some specific EU situations,49 the judge should not apply it. Attention thus needs to be paid to the way in which block exemption regulations specify their own scope of application by implementing the ‘effects’ principles governing the applicability of primary EU com­ petition law. For instance, the Gencor case50 concerned the applicability of Regulation 4064/89 on the control of concentrations between undertakings.51 This Regulation does not contain any express applicability criteria. The Court of First Instance, however, found that the criterion – set by primary law – referring to the implementation of an agreement in the EU was satisfied when parties to a concentration carried out sales in the territory of the Union, irrespective of their place of establishment, the place of the source of supply or the place of the production plant.52 In doing so, the tribunal actually made specific reference to the Wood Pulp ruling of 1993.53 In particular, the judgment in Gencor insists on the criterion of an ‘immediate, substantial and foreseeable effect’.54 Another question relates to the role that should be attributed to the ‘soft’ law elaborated in Commission Communications and Guidelines which is intended to help parties assess the lawfulness of their behaviour.55 From a PIL point of view, the problem raised by soft law could be solved according to the principles governing the designation of a foreign legal system: when applying foreign law, the judge tries to apply it in all its aspects and to take into account all the relevant sources (statutory, case-law, academic literature) of this legal system. Soft law could be seen as a source guiding the interpretation of hard law and thus be taken into consideration by the judge when applying EU competition law.

ii.  National Competition Law The application of national rules on competition is subject to the provisions of the Rome I Regulation. The Rome I Regulation takes precedence over national laws and its very function is to determine when and which national law applies in private litigation. Here, a court dealing with a case of private enforcement has to start its analysis with the provisions of the Regulation. a.  The Interplay of Article 4 and Article 9 Rome I As explained above (I.A), the Rome I Regulation serves to identify the legal regime having general application to the contract applicable law to the contractual regime. The relevant   For more details, Francq, L’applicabilité du droit communautaire dérivé (n 8) 132 ff.   See, eg, in the sector of transports, ibid, 100, 269. 50   Case T-102/96 Gencor Ltd v Commission [1999] ECR II-753. 51   Council Regulation 4064/89 of 21 December 1989 on the control of concentrations between undertakings [1989] OJ L395/1. 52   Gencor (n 50) para 87. 53   Wood Pulp (n 36). 54   Gencor (n 50) para 92. 55   See for instance the Communication of 3 October 2000 relating to the Commission Regulation 2790/1999 [2000] OJ C291/1. 48 49

78  Marc Fallon and Stéphanie Francq competition law provisions to take into consideration may either belong to the lex contractus or to the law of another country. Various provisions of the Rome I Regulation will thus come into play, mainly Articles 4 and 9. For instance, in the case of distribution agreements, which typically raise issues of competition law, Article 4 Rome I leads to the law of the place of central administration of the distributor. This choice-of-law rule designates the substantive provisions on contracts (unless the parties chose another law). Of course, if the situation falls within their scope, the competition law provisions of that legal system will be either applied or taken into consideration. Under Article 9(2) Rome I Regulation, the Regulation does not ‘restrict the application of the overriding mandatory provisions of the law of the forum’. Since national competition laws are generally considered as overriding mandatory rules, competition law provisions of the forum that would have an influence on the contractual dispute should apply. Of course, these rules are applicable only as far as they call for their application to the case at hand. This will not automatically be the case. Consider a restrictive agreement between two parties established, respectively, in Japan and in the US; the effects of this agreement are limited to the Japanese market and a contractual dispute is submitted to a Belgian judge through a choice-of-court agreement: Belgian competition law provisions do not call for their application. In addition, under Article 9(3) Rome I, the judge is allowed to take foreign international mandatory rules into consideration. This is a mere faculty left to the discretion of the judge. As mentioned before, the possibility to give effect to foreign international mandatory rules was limited when the Rome Convention was transformed into a Regulation. Article 9(3) Rome I submits the application of foreign competition law rules to two (cumulative) conditions. Only the provisions of the place of performance of the contract may be taken into account and only insofar as they ‘render the performance unlawful’. Since most national competition rules define their scope of application on the basis of the effects doctrine (or more precisely, by selecting as a connecting factor the place of performance), Article 9(3) Rome I is likely to allow judges to consider foreign competition law provisions that call for their application. As such, despite the new restrictive formulation, the provision has a good chance to lead to satisfactory results.56 From the point of view of competition law, it was certainly wise to maintain the possibility of referring to foreign overriding mandatory rules (even if in a more limited version). Indeed, in the field of contracts, the applicable law may be chosen by the parties. If they choose a law that has no connection whatsoever with the contract and the judge is seised on the basis of a choice-of-court agreement (as in the above example of US and Japanese litigants who submit their contractual dispute to a Belgian 56   Art 9(3) Rome I will probably come to satisfactory results. It will enable the judge to take into account most (if not all) the competition law provisions of national origin which command their application. Of course, there might be cases where the wording of Art 9(3) Rome I will prove too narrow. For instance, assume two French pharmaceutical companies agree to create a new corporation established in the US that will be in charge of the researching, developing and marketing of a new vaccine. The contract between the two companies (by hypothesis submitted to UK law) is performed in the US, but if the new vaccine is sold mainly in France, the agreement has an anti-competitive effect in France. In the event a dispute between the parties is pending before a UK court (the lex contractus being that of the UK), it is unclear whether Art 9(3) Rome I would allow the application of French competition law. For sure, the wording of the provision will raise many questions on the performance of a contract. For instance, where should the exclusive purchasing contract be localised? Restrictive as it is, Art 9(3) Rome I was probably the best compromise that could be reached among the Member States. Indeed, the possibility of applying foreign lois de police was intensively discussed during the preparation phase of Rome I. On these questions, see Francq and Jault-Seseke, ‘Les lois de police’ (n 7).

Rome I  79 judge by way of a jurisdiction clause), parties could elude the application of the relevant antitrust law (in this case, Japanese competition law). Indeed, in this case neither the competition law provisions of the lex fori nor those of the lex contractus claim any applicability. And the only ‘interested’ competition law provisions could be disregarded if the judge did not have the possibility of applying foreign overriding mandatory provisions. Another interesting question is whether, in purely intra-European cases, Article 9(3) Rome I could be regarded as imposing an obligation upon the judge of a Member State to apply the competition law of another Member State where the latter calls for its application. The answer to this question cannot be derived from EU competition law, national competition law or even from the Rome I Regulation. But it could be derived from primary law in the field of the internal market. It has been argued that the automatic application of the overriding mandatory rules of the forum (and the corresponding refusal to apply those of the Member State of origin) could contradict the provisions of primary law relating to the free movement of goods, persons or services.57 To our knowledge, this question has not yet been raised before national courts or the ECJ. b.  Conflict of Competition Laws of Different Legal Systems A last question relating to the impact of rules on competition on international contractual litigations concerns a potential conflict of competition law provisions originating from different legal systems. A conflict between national and EU competition law provisions is to be resolved in favour of the latter. First, generally speaking, the application of a national rule may not hinder the effectiveness of EU competition law.58 Such a conflict would occur when an agreement is allowed by a national law on competition, be it a law of a Member State or that of a third State,59 while the same agreement is prohibited under EU competition law. Such a conflict could also occur when the anti-competitive effect is due to the combined effect of the agreement itself and national legislation,60 where the latter authorises or compels a certain behaviour. More specifically, in the relationship between EU competition law and national competition law of a third State, the latter should be set aside by virtue of the public policy exception (Article 21 Rome I). In the relationship between EU competition law and Member State competition law, the application of national competition law may not have the result of prohibiting an agreement allowed under Article 101(1) TFEU or allowed by virtue of either an exemption in the sense of Article 101(3) TFEU or a block exemption regulation (Article 3 Regulation 1/2003).61 Thus, national law may not render a contract void on the basis of an infringement of national competition law if the same contract is not void under Article 101(2) TFEU.

57   Rigaux and Fallon, Droit international privé (n 44) 142–43, no 4.16, about the Rome I Regulation and the GEDIP/EGPIL discussion at its Rome meeting in 2000 (www.gedip-egpil.eu). 58  See, eg, Case 14/68 Walt Wilhelm and others v Bundeskartellamt [1969] ECR 1 para 6 and Recital 17 Commission Regulation 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices [1999] OJ L336/21. 59   Gencor (n 50). 60   Béguelin (n 35) para 14: ‘an exclusive dealing agreement is liable to affect trade between Member States and may have the effect of impeding competition law if, owing to the combined effects of the agreement and of national legislation on unfair competition, the dealer is able to prevent parallel imports from other Member States into territory covered by the agreement’. 61   See Recital 8 Regulation 1/2003.

80  Marc Fallon and Stéphanie Francq By way of contrast, there is no conflict between national rules on unfair competition and Article 101 TFEU provided that they pursue interests other than the protection of competition against restrictions in the sense of Articles 101 and 102 TFEU.62 Turning to conflicts between competition laws of national origin, true conflicts between opposing national competition law provisions should be quite rare in practice. At the European level, one may assume that a convergence between national systems in the field of antitrust does exist and has recently been intensified due to the entry into force of Regulation 1/2003.63 The European Competition Network (ECN) is supposed to prevent most conflicts in practice. However, Regulation 1/2003 only provides for a ‘close cooperation’ between authorities (Article 11) – not between courts – affording in particular for an exchange of information (Article 12) and including a form of the lis pendens rule (Article 13). But no provision covers potential contradictory results reached by the courts of different Member States applying their own – or the same – national competition law.64 Even if the spatial scope of most national market rules on competition are based on the same criterion of the (national) affected market, the choice-of-law method used is a unilateral one: the market rules of the forum are applicable once the market of the forum is affected, even if the behaviour also affects the market of another Member State. It is therefore theoretically possible that the same behaviour stemming from the same contract will be considered unlawful in one Member State and lawful in another. From a competition law point of view, this is not problematic: the public sanction can be limited to the effect in one State. But from a private law perspective, this is more problematic: here the question is whether the contract exists or not, and a situation where the contract is held valid on one side of the border and invalid on the other side is highly disconcerting for the parties. In private international law such a case is known as a situation boîteuse or a dilemma. Such a situation can be resolved at different levels. At the latest, solutions will need to be found at the stage of recognition and enforcement of a foreign decision.65 But in order to avoid reaching the point of no return where irreconcilable decisions co-exist at the recognition and enforcement stage, Member State courts might have to first consider whether a systematic application of their overriding mandatory rules on competition law would restrict fundamental freedoms guaranteed by the EU Treaty and, accordingly, take

62  The distinction between unfair competition and restriction of competition is made in Art 6 Rome II Regulation. This provision presents the two categories as hermetically separated. Still, the characterisation might be difficult where contract terms which appear to be ‘unfair’ are covered by a block exemption regulation based on Art 101(3) TFEU. 63   See, eg, M Drahos, Convergence of Competition Laws and Policies in the European Community: Germany, Austria and the Netherlands (Leiden, Kluwer, 2002); C Lemaire and J Gstalter, ‘The Silent Revolution Beyond Regulation 1/2003’ (2008) CPI Antitrust Chronicle, available at www.competitionpolicyinternational.com; V Juknevicˇ iu– te˙ and J Capiau, ‘The state of ECN leniency convergence’ (2010) 1 Competition Policy Newsletter 13; for a conceptual analysis, Y Svetiev, ‘Networked Competition Governance in the EU: Delegation, Decentralization or Experimentalist Architecture?’ in CF Sabel and J Zeitlin, Experimentalist Governance in the European Union: Towards a New Architecture (Oxford, Oxford University Press, 2010) 79. 64  The lis pendens or related actions mechanisms of the Brussels I Regulation (Arts 27 and 28 Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1 I) would not apply in a systematic way for such claims because the actions are not necessarily based on the same legal basis, nor intermingled in a way that corresponds to the restrictive definition provided by the ECJ to the term-related action (Case C-144/86 Gubsich Maschinenfabrik KG v Palumbo [1987] ECR 4861; Case C-351/89 Overseas Union Insurance [1991] ECR I-3317; Case C-406/92 The owners of the cargo lately laden on board the ship ‘Tatry’ v the owners of the ship ‘Maciej Rataj’ [1994] ECR I-5439). 65   See the contribution of J Basedow in this book (‘Recognition of Foreign Decisions’).

Rome I  81 into consideration the content of other Member States’ competition law.66 The exact reach as well as the existence of such a potential duty is, however, highly debated. In the relationship between the EU and third States, the ECJ case-law on double fines indicates that true conflicts will seldom be found. The ECJ bases this assumption on the sphere of competence of each legal order: each lawmaker and administrative authority can implement its own law in a parallel fashion within its own sphere of competence, ie the protection of its own market, without giving rise to true conflicts or placing individuals in a dilemma. To the question whether the ne bis in idem principle should prevent the application of an EU fine when the authorities of a third State have already sanctioned the same agreement, the Court, in the Carbon judgment, answered that: 29.  In that regard, the exercise of powers by the authorities of those States responsible for protecting free competition under their territorial jurisdiction meets requirements specific to those States. The elements forming the basis of other States’ legal systems in the field of competition not only include specific aims and objectives but also result in the adoption of specific substantive rules and a wide variety of legal consequences, whether administrative, criminal or civil, when the authorities of those States have established that there have been infringements of the applicable competition rules. 30.  On the other hand, the legal situation is completely different where an undertaking is caught exclusively – in competition matters – by the application of Community law and the law of one or more Member States on competition, that is to say, where a cartel is confined exclusively to the territorial scope of application of the legal system of the European Community. 31. It follows that, when the Commission imposes sanctions on the unlawful conduct of an undertaking, even conduct originating in an international cartel, it seeks to safeguard the free competition within the common market which constitutes a fundamental objective of the Community under Article 3(1)(g) EC. On account of the specific nature of the legal interests protected at Community level, the Commission’s assessments pursuant to its relevant powers may diverge considerably from those of authorities of non-member States.67

In the end, for companies implementing worldwide commercial practices or agreements, this means that they must either adapt their contracts to the most restrictive legislation or adapt each contract with regard to the legislation governing the market on which the contract will be implemented.

D. Conclusion – In international litigation between contractual partners raising competition law issues, the determination of the law applicable to the contract will be made under the general provisions of the Rome I Regulation (chiefly Articles 3 and 4). If competition law provisions of the designated law command their application to the case at hand, they will apply. The application of the competition law of another State (the forum or a country other than the forum or the country whose law applies to the contract) is dealt with under Article 9 Rome I Regulation. In each case, the application of competition law requires verification of whether the competition law provisions in question call for their application (ie to verify the content of the applicability criteria of these provisions). Competition law provisions can be characterised as overriding mandatory rules. 66   Joined Cases C-369/96 and C-376/96 Criminal Proceedings against Jean-Claude Arblade and others [1999] ECR I-8453 para 31. 67   Carbon (n 12).

82  Marc Fallon and Stéphanie Francq – The application of Articles 101/102 TFEU does not depend upon the provisions of Rome I. Articles 101 and 102 TFEU apply on their own motion and according to their own applicability criteria. – Contractual issues can be submitted to the law of one particular State in instances when competition law issues may be governed by the law of another legal system, be it a national legal system or the European legal system. – In complex litigation, or in litigation involving numerous parties, the law applicable to the contractual issues might be different for each contract at stake, even though each defendant is faced with a claim based on the same infringement of competition law (and concerning pan-European agreements, a claim probably based on EU competition law). The question arises whether one single law should be applied to the contractual aspects of the various litigations. – Article 9(3) Rome I is a useful provision which discourages the parties’ efforts at forum and law shopping in order to evade the application of competition law provisions of the ‘interested’ legal system. – Article 21 Rome I on the public policy exception is unlikely to be used in the area of competition law because competition law provisions apply – mainly – as overriding mandatory rules. – The EU lawmaker should clarify the way and extent in which block exemption regulations apply before a national court and impact on private relationships. This question is especially complex in cases where the individual contract falls within the scope of such regulation but does not conform to one of its substantive provisions.

III.  Specific Issue: the Nullity of the Contract or Part Thereof and Its Consequences In this section, we shall focus on some issues of substantive law which are relevant to private enforcement of competition law in contractual relationships on the one hand and to the private international law aspects of this kind of litigation on the other. As explained above, EU competition law provisions, which have an impact on contractual litigations, apply on their own motion, according to their own applicability criteria and irrespective of the determination of the law applicable to the contract made under the Rome I Regulation. In the preceding sections, this chapter has compared the application of EU competition law provisions to the application of overriding mandatory rules. Also, it has shown that the impact of EU competition law in the private sphere is only limited: EU competition law provisions do not resolve all issues that can be raised in a contractual litigation. The question is thus raised as to just how far EU competition law does resolve the typical private law questions that need to be addressed in a private enforcement litigation (III.A.i and III.B.i). Measuring the reach of competition law into the field of private law, especially concerning contractual issues, is a way of determining when the provisions of the Rome I Regulation need to be called upon. Indeed, as it will be explained in more detail below (III.A.ii), all issues that are not resolved by EU law will need to be solved by national law, and for international litigation pending before a European judge, the national law in question will be identified with regard to the provisions of the Rome I Regulation.

Rome I  83

A.  Nullity of the Contract or Part Thereof Under Article 101(2) TFEU: ‘any agreements or decisions prohibited pursuant to this Article shall be automatically void’. This provision has a direct impact on the contractual relationship since it renders void part of the contract or the contract as a whole as far as either specific terms thereof or the contract as a whole infringes competition law. An anticompetitive agreement can thus be constituted by specific terms of a contract or by a contract as a whole. This is the reason why this section addresses the nullity of the contract as a whole or of part of the contract. Article 101(2) TFEU has a direct effect, just like other paragraphs of Articles 101 TFEU and 102 TFEU. Before the enactment of Regulation 1/2003, national courts could not exempt an agreement in the sense of Article 101(3). Since 2003 however, every agreement which satisfies the conditions of Article 101(3) ‘shall not be prohibited’ and ‘no prior decision to that effect [is] required’ (Article 1(2) Regulation 1/2003). As seen above, for the purpose of resolving contractual issues within an international litigation, Article 101(2) TFEU may be considered either as an overriding mandatory provision or as a principle of public policy, directly applicable due to the precedence of primary law. In any event, the provision does not provide for a comprehensive regime governing the contractual relationship. Instead, Articles 101(2) TFEU addresses only one aspect of the contractual relationship, ie the nullity of the anti-competitive agreement, and on that specific point Article 101(2) TFEU stipulates a specific result that may derogate from the substantive law provisions of the law applicable to the contract. In that sense, it plays the role of an escape clause, analogous to Articles 9 and/or 21 Rome I Regulation. And, in the same way, as an overriding mandatory rule its application to international situations is delineated by its own criteria of applicability. Still, this substantive rule declaring a contractual agreement infringing competition law void raises two questions. The first question deals with the material scope of the rule: among the various questions raised when a contract or part of a contract is declared void because it constitutes an anti-competitive agreement, what are the issues covered by Article 101(2) TFEU? The second question concerns the identification of the law applicable to specific issues related to the nullity of the contractual agreement but not answered by Article 101(2).

i.  Material Scope of the Provision on Nullity Article 101(2) TFEU merely states that the agreement is void when it infringes the prohibition set by its first paragraph. According to the Court of Justice, the provision primarily concerns the nature of the sanction: the nullity is automatic and the contractual term declared void may not be invoked against third parties. Thus, following the Courage judgment: [The] principle of automatic nullity can be relied on by anyone, and the courts are bound by it once the conditions for the application of Article [101(1)] are met and so long as the agreement concerned does not justify the grant of an exemption under Article [101(3)] of the Treaty (on the latter point, see inter alia Case 10/69 Portelange [1969] ECR 309, paragraph 10). Since the nullity referred to in Article [101(2)] is absolute, an agreement which is null and void by virtue of this provision has no effect as between the contracting parties and cannot be set up against third parties (see the judgment in Case 22/71 Béguelin [1971] ECR 949, paragraph 29). Moreover, it is

84  Marc Fallon and Stéphanie Francq capable of having a bearing on all the effects, either past or future, of the agreement or decision concerned (see the judgment in Case 48/72 Brasserie de Haecht II [1973] ECR 77, paragraph 26).68

Other questions related to the nullity of the agreement (ie the part of the contract contradicting competition law) do not fall within the scope of the Treaty provision. This is particularly the case for the consequences of the nullity of one part of the contract for the contract itself. Indeed, the sanction established by the EU Treaty concentrates only on the contractual terms that are incompatible with Article 101 TFEU because they have as their object or effect the prevention, restriction or distortion of competition: the rule aims only at ensuring compliance with the Treaty, ie avoiding behaviour that restricts competition. Any enlargement of the nullity consequence to other parts of the contract which are not affected by the prohibition falls ‘outside EU law’, unless they are not severable from the agreement itself: in that case, the EU sanction applies to the contract as a whole.69 The impact of the nullity of the contract or part thereof as regards the relations between the parties to the contract and towards third parties, namely ‘the possibility of seeking compensation for loss caused by a contract’,70 is also not addressed by the Treaty provisions. ‘In the absence of Community rules governing the matter, it is for the domestic legal system of each Member State . . . to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive directly from Community law’.71 Thus, according to the Automec judgment: 50.  Article [101(1) TFEU] prohibits certain anti-competitive agreements or practices. Among the consequences which an infringement of that prohibition may have in civil law, only one is expressly provided for in Article [101(2) TFEU], namely the nullity of the agreement. The other consequences attaching to an infringement of Article [101] of the Treaty, such as the obligation to make good the damage caused to a third party or a possible obligation to enter into a contract (for the possibilities open to the national courts, see the national proceedings in connection with which the judgments of the Court of Justice in Case 126/80 Salonia v Poidomani and Baglieri [1981] ECR 1563, at 1774, and in Case 243/83 Binon v AMP [1985] ECR 2015, at 2035, were given) are to be determined under national law. Consequently, it is the national courts which, where appropriate, may, in accordance with the rules of national law, order one trader to enter into a contract with another. 51.  As freedom of contract must remain the rule, the Commission cannot in principle be considered to have, among the powers to issue orders which are available to it for the purpose of bringing to an end infringements of Article [101(1) TFEU], the power to order a party to enter into contractual relations, since in general the Commission has suitable remedies at its disposal for the purpose of requiring an undertaking to terminate an infringement. 52.  In particular, there cannot be held to be any justification for such a restriction on freedom of contract where several remedies exist for bringing an infringement to an end. This is true of infringements of Article [101(1)] arising out of the application of a distribution system. Such infringements can also be eliminated by the abandonment or amendment of the distribution system. Consequently, the Commission undoubtedly has the power to find that an infringement exists and to order the parties concerned to bring it to an end, but it is not for the Commission to impose upon the parties its own choice from among all the various potential courses of action which are in conformity with the Treaty.72   Courage (n 16) para 22.   Case 56/65 Société Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU) [1966] ECR 235. 70   Courage (n 16) para 25. 71   ibid para 29. 72   Case T-24/90 Automec Srl v Commission [1992] ECR II-2223. 68 69

Rome I  85 In a Court of First Instance case (Riviera Auto73) addressing a refusal by the Commission to compel resellers who were members of the producer’s network to furnish goods to the claimants (non-network member retailers), the Court’s opinion reiterated that the Commission has no exclusive competence to find contractual clauses to be incompatible with the Treaty and that the national courts have such competence owing to the fact that Article 101 TFEU has direct effect (paragraph 48). The Court went on to state: 50.  The Commission may be all the more justified in urging the complainants to seek redress in the national courts since it is for those courts to examine the actual conditions under which the standard-form agreement is to be performed by the parties (cf the judgment in Case T-88/92 Leclerc v Commission [1996] ECR II-1961, paragraphs 122 and 123) and to assess, in the light of the applicable national law, the scope and consequences of any automatic nullity of certain contractual provisions under Article [101(2)] of the Treaty, with particular regard to all the other matters covered by the agreement (Case 319/82 Société de Vente de Ciments et Bétons de l’Est v Kerpen & Kerpen [1983] ECR 4173, paragraphs 11 and 12, and Cabour, cited above, paragraph 51). 51.  It is therefore a matter for the national court to determine, under its own laws, the liability which the parties to the contract may incur as a result of a refusal to sell to resellers outside the network, on the basis of a distribution agreement containing provisions which would be void. 52.  Finally, although the Commission must not fail to take account of the extent of the protection which national courts can give to the rights which complainants have under the Treaty (Automec v Commission, cited above, paragraph 89), it should none the less be observed that the old and the new regulations can assist the national courts in assessing the lawfulness of contractual provisions which come under their scrutiny. 53.  It is in light of the abovementioned principles that it is necessary to consider whether, in the present case, the Commission committed a manifest error of appraisal by dismissing the complaints on the ground of insufficient Community interest in pursuing the investigation (Tremblay and Others v Commission, cited above, paragraph 64).

The dividing line proposed by the ECJ between Article 101(2) TFEU and national law does not prevent all characterisation problems. In particular, the question whether prescription or limitation periods are determined by primary law or by national law remains open. Does the absence of any explicit provision in EU law regarding limitation periods imply that national law automatically applies on that point? More generally, the Treaty failed to enact limitation periods for procedures against individuals, or even against States in the case of State Aids. In the field of competition, there were no limitation periods until 1974, at which time Regulation 2988/7474 made the power of the Commission to impose and execute fines subject to the principle of limitation in the interest of legal certainty: the imposition of penalties is subject to a limitation period of five years commencing on the day on which the infringement is committed or, in the case of continuing infringements, on the day which it ceases (Articles 25 and 26 Regulation 1/2003). But no limitation exists for the finding of an infringement. As a result, the Commission’s ability to declare a contractual term void on the basis of Article 101(2) TFEU is not checked by any limitation period established by EU law. According to the (then) Court of First Instance,75 it is not   Riviera Auto (n 24).   Council Regulation 2988/74 of 26 November 1974 concerning limitation periods in proceedings and the enforcement of sanctions under the rules of the European Economic Community relating to transport and competition [1974] OJ L319/1. 75   Joined Cases T-22/02 and T-23/02 Sumitomo Chemical Co Ltd and Sumika Fine Chemicals Co Ltd v Commission of the European Communities [2005] ECR II-4065 paras 83, 98. 73 74

86  Marc Fallon and Stéphanie Francq open ‘to the Community judicature to criticise the Community legislature for the choices it makes concerning the introduction of rules on limitation and the setting of the corresponding time-limits’ and ‘[t]he failure to set a limitation period for the exercise of the Commission’s powers to find infringements of Community law is not therefore in itself unlawful from the point of view of the principle of legal certainty’. Furthermore, ‘[s]ince limitation itself does not constitute a general principle of law . . ., that same status cannot a fortiori be accorded to a rule requiring the application of one and the same limitation period to the power to find infringements and the power to impose penalties’. This seems to mean that, when applying Article 101(2) TFEU, a national court should set its usual limitation period aside. Consequently, this statement of the Court implies that the issue of a limitation period for the determination of an infringement of EU competition law, namely for declaring an agreement void, is in the domain of EU law. And since EU and national authorities applying EU rules on competition can declare an agreement void without the restriction of a limitation period, one can hardly argue that a national court should heed limitation periods provided for by the lex contractus, unless one assumes that the ‘legal interests protected’76 by competition law are different from the ones considered by civil law. Other issues falling outside the explicit scope of Article 101 TFEU might be affected by the sanction of nullity because they have an inherent impact on the effet utile of this civil sanction. Thus, a choice-of-court clause giving a third State court jurisdiction to settle disputes arising from the parties’ contractual relationship could imply that any resulting judgment, because it was rendered outside the EU, would have been reached without any consideration for the annulment provided for by Article 101(2) TFEU. This has a two-sided impact. First, as a consequence of the overriding mandatory character of this provision, a court of a Member State should refuse to recognise a judgment rendered by the chosen court, following the case-law of the ECJ in the Eco Swiss judgment.77 Second, according to the effet utile principle, the court of a Member State should set aside a choice-of-court agreement in favour of the court of a third State once it is established that the court chosen by the parties would not give due effect to the mandatory EU provision.78

ii.  The Law Applicable to Issues Related to the Nullity of the Contractual Agreement but Falling Outside the Scope of Article 101(2) TFEU The phrasings in some rulings of the European Court of Justice have given the impression that contractual issues not covered directly by Article 101(2) TFEU are governed by the law of the forum. For instance, under the Société de vente de ciments et bétons de l’Est judgment, the Court stated that: The automatic nullity decreed by Article [101(2)] of the Treaty applies only to those contractual provisions which are incompatible with Article [101(1)]. The consequences of such nullity for other parts of the agreement, and for any orders and deliveries made on the basis of the agreement, and the resulting financial obligations are not a matter for [EU] law. Those consequences are to be determined by the national court according to its own law.79   In the sense used by the Carbon judgment (n 12).   Eco Swiss (n 8). 78   See also, for analogous reasoning, the Mostaza Claro judgment (n 40) concerning the recognition of an arbitral award. 79   Case 319/82 Société de Vente de Ciments et Bétons de l’Est SA v Kerpen & Kerpen GmbH und Co KG [1983] ECR 4173 para 12. 76 77

Rome I  87 However, later in the VAG judgment, the Court of Justice elaborated upon this vague phrasing and stated that: 15.  It is for the national court to determine in accordance with the relevant national law the extent and consequences, for the contractual relations as a whole, of the nullity of certain contractual provisions by virtue of Article [101(2) TFEU]. It is on the basis of national law that it is necessary in particular to determine whether such incompatibility may have the effect of obliging the contracting parties to amend the content of their agreement in order to prevent it from being void and, as the case may be, to choose, to that end, the one or the other of the possibilities laid down in Article 5(2) of Regulation n° 123/85 with regard to the duration of the agreement.80

The phrasing ‘relevant national law’ used in the second judgment is broader than the phrasing ‘its own law’ used in the first one. The former formulation (‘its own law’) refers precisely to what is called the law of the forum in private international law, ie the substantive law rules of the State of the court. By contrast, the later formulation (‘relevant national law’) refers commonly to the law of that State as a legal system and designates the whole set of sources of law that are relevant for resolving the case. This covers not only substantive law provisions of the forum but also other provisions that are to be applied in international cases, in particular, choice-of-law rules of the forum. As a result, for all contractual issues not covered by Article 101(2) TFEU (either not explicitly covered or not encompassed by its effet utile), the judge of a Member State needs to identify the applicable law by applying the Rome I Regulation. A comprehensive survey should be made of the ECJ case-law, scrutinising whether the facts at stake were international and which law would be applicable to a claim in contract. For example, considering cases cited above, the Courage case was a purely domestic case since all relevant aspects were located in the United Kingdom. In the Automec case, the applicant was an Italian dealer of BMW cars complaining about the terms of the contract concluded with the Italian importer: the claimant sued this Italian firm, but also the German parent company, BMW AG. The claim against the first defendant was domestic, but the claim against the German parent company was a typical international litigation. The latter claim, however, was probably not rooted in a contractual relation between the Italian retailer and the German parent company and therefore belonged rather to the sphere of the Rome II Regulation. This issue was apparently not raised before the ECJ. By way of contrast, the Riviera Auto litigation concerned an international situation. The applicant was the French importer of VW cars. It lodged a complaint against its parent, VW AG, concerning its refusal to supply based on VW’s standard-form distribution agreement. A claim on compensation for damages resulting from such a refusal should be based on the national law applicable by virtue of the choice-of-law rule of the national court. Be it a German or a French court, the rules of the Rome Convention of 1980 would have been applied, today Articles 3 and 4 Rome I Regulation: the law of the contract would be the one chosen by the parties and, in the absence of a choice, French law would govern as the law of the place of central administration of the distributor. In the English Provimi case,81 two of the claimants were UK firms while the third one was a German company. One of the English claimants sued three members of the Roche group, an English company and two Swiss companies from which it had purchased vitamins. The   VAG (n 21).   Roche Products Ltd and others v Provimi Ltd [2003] EWHC 961, cited by M Wilderspin in his contribution. See also the decision of the Commission [2003] OJ L6/1. 80 81

88  Marc Fallon and Stéphanie Francq other UK claimant, as well as the German claimant, sued the same parties but also sued the German member of the Roche group from which the German claimant had purchased vitamins. While the English court characterised the issue as tortious, one might wonder whether this was exactly the case for all the claims. On the other hand, some of the contractual relations were purely domestic while others had an international character.

B.  Assessment of Damages and Nemo Auditur It follows from section II that, as a general principle, liability issues resulting from an agreement infringing competition rules are not governed by Article 101 TFEU, but depend instead on national law, without prejudice to respecting a set of common fundamental substantive rules inherent to the effectiveness of EU rules on competition. This is in particular the case for questions relating to the assessment of damages and the question whether the principle ‘Nemo auditur’ must be raised against a party to an anti-competitive agreement. Indeed, according to the Riviera Auto Service judgment of the Court of First Instance: 51.  It is [therefore] a matter for the national court to determine, under its own laws, the liability which the parties to the contract may incur as a result of a refusal to sell to resellers outside the network, on the basis of a distribution agreement containing provisions which would be void.82

i.  Taking into Account Substantive Overriding EU Requirements In its Manfredi and Courage judgments, the ECJ ruled that some substantive law principles are to be adhered to by national courts regarding the civil law consequences of anti-­ competitive behaviour (in particular, the compensation of economic loss and the payment of interest); the ECJ further ruled that these courts may provide for punitive damages and limit undue enrichment.83 More fundamentally, the Court also stated that, where common EU rules are lacking, national law should determine the conditions for compensation, under the general requirement that the State has to respect the principles of equivalence and effectiveness when executing EU law.84 In other words, it is up to the national court to, first, identify the national substantive law regime to be applied and, second, to check whether this law is consistent with the fundamental requirements of equivalence and effectiveness. In terms of the choice-of-law process, this means that, as a first step, the court applies its own choice-of-law rules. In a second step, the court gives full effect to the law applicable unless the result is incompatible with the common core defined by Manfredi and Courage. Such an exception might be seen as part of the public policy exception of the private international law system of the court, but it is foremost a direct requirement of substantive EU law. Indeed, these requirements prevail not only when the law normally applicable is a foreign law, but also when it is the law of the forum itself. In this sense, from the point of view of PIL, this common core takes on the guise of overriding mandatory provisions whose spatial scope is determined by a specific applicability rule. This rule logically follows the one governing the competition law rules of Article 101 TFEU. Still, under EU law, the application of the fundamental require  Riviera Auto Service (n 24).   Courage (n 16) paras 26, 30–35; Manfredi (n 8) paras 89–100.   Courage (n 16) paras 29-31; Manfredi (n 8) paras 62–64, 71–72, 77–82, 89–100.

82 83 84

Rome I  89 ments established by the ECJ as a direct consequence of the Treaty is to be analysed as an application of the primacy principle.85 Two approaches toward the same phenomenon are thus co-existent: from the point of view of EU law, the prevalence of the substantive requirements set by EU law is a matter of primacy, while from the point of view of private international law, it can be understood as the application of overriding mandatory rules concerning the civil law consequences of anti-competitive behaviour.

ii.  Ascertaining the Applicable Law When the claimant seeks compensation for damages caused by an infringement of Article 101 TFEU and the case is connected with more than one State, the court will identify by virtue of its relevant choice-of-law rule the national law which governs the issue. This means that the compensation may be governed by a foreign law, be it the law of a Member State or the law of a third State. The claim will not always be in tort. Compensation may be the result of the nullity of a contractual term or of the contract, or of a refusal to perform in the wake of such an infringement. If this is the case, the choice-of-law rules on contracts will apply, ie the Rome I Regulation. Thus, the law applicable according to the Rome I Regulation governs ‘the consequences of nullity of the contract’ (Article 12(1)(e) Rome I Regulation). Of course, this is without prejudice to the characterisation of the claim in tort or in contract. The issue is heavily discussed in the literature on both private international law and substantive law. One question is whether the characterisation of the claim should be determined for both the Rome I and Rome II Regulations by way of an autonomous interpretation (see Recital 11 Rome II Regulation), or if characterisation is submitted to the law of the forum. Whatever the characterisation may be, the provisions of the Rome I Regulation and those of the Rome II Regulation potentially lead to the same results. It must be recalled that the Rome II Regulation contains an illustration of the akzessorische Anknüpfung concept. Indeed, in order to escape from the normally applicable law under Article 4(3) Rome II, the court may take into consideration ‘a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question’. The legislator chose to place this escape clause within the general rule of Article 4 Rome II instead of in Chapter V, concerning common rules applicable to all litigations, as it had been proposed in some earlier drafts.86 Article 4 Rome II (and especially Article 4(3)) is in principle not applicable to litigation involving competition law issues since such litigation is subject to a specific provision, Article 6 Rome II. The general provision of Article 4 Rome II applies only where the interests of one specific competitor are exclusively affected (Article 6(2) Rome II). It is true, however, that such an escape clause taking into account the existence of a previous relationship could be difficult to use in a complex litigation encompassing multiple contracts.87 The nemo auditur principle raises an analogous problem. A specific question is whether it falls under the scope of the unjust enrichment concept of Article 10 of Rome II. In that case, Article 10(1) Rome II refers to the law governing a pre-existing relationship between the parties, such as one arising out of a contract, that is closely connected with the enrichment: it is

  See II.C.i above.   In particular the 1998 proposals of the GEDIP/EGPIL meeting of Bergen, see www.gedip-egpil.eu.   See above concerning distribution agreements.

85 86 87

90  Marc Fallon and Stéphanie Francq debated whether claims involving competition law infringements qualify as unjust enrichment and whether the law of this contract should apply.88

C. Conclusion – The EU substantive rule on automatic nullity of the anti-competitive agreement (Article 101(2) TFEU) does not cover contractual issues severable from the provision that runs afoul of Article 101(1) TFEU. The effect of this rule on these issues depends on the national law applicable by virtue of the choice-of-law rule employed by the court, ie by the Rome I Regulation. Given the absence of a limitation period for the ascertainment of an infringement, a question remains as to the sanction of nullity: does it mean that a national court faces no limitation at all when applying the nullity sanction, or rather that it may refer to national law on that issue? – The common substantive provisions affirmed by the ECJ in the Courage and Manfredi judgments do not define as a whole the regime of compensation for damages resulting from the nullity provided for by Article 101(2) TFEU. This regime is to be found in the national law applicable to the claim on compensation. Nevertheless, this common core of substantive requirements play the role of overriding mandatory rules in the sense of PIL: they are to be applied once the case is covered by the specific applicability rule of Article 101 TFEU itself. From the point of view of EU law, their precedence results from the primacy principle.

88   See also the contribution of S Francq and W Wurmnest in this book. Both the nemo auditur principle and unjust enrichment are mentioned in the Courage judgment as follows: ‘Community law does not prevent national courts from taking steps to ensure that the protection of the rights guaranteed by Community law does not entail the unjust enrichment of those who enjoy them (see, in particular, Case 238/78 Ireks-Arkady v Council and Commission [1979] ECR 2955, paragraph 14, Case 68/79 Just [1980] ECR 501, paragraph 26, and Joined Cases C-441/98 and C-442/98 Michaïlidis [2000] ECR I-7145, paragraph 31)’ (para 30) and: ‘Similarly . . . Community law does not preclude national law from denying a party who is found to bear significant responsibility for the distortion of competition the right to obtain damages from the other contracting party. Under a principle which is recognised in most of the legal systems of the Member States and which the Court has applied in the past (see Case 39/72 Commission v Italy [1973] ECR 101, paragraph 10), a litigant should not profit from his own unlawful conduct, where this is proven’ (para 31).

6 International Antitrust Claims under the Rome II Regulation STÉPHANIE FRANCQ* AND WOLFGANG WURMNEST**

I. Introduction Regulation 864/2007 on the law applicable to non-contractual obligations (Rome II)1 enshrines in its Article 6(3) a special conflict rule for claims based on violations of competition law (or restriction of competition law or violations of antitrust law; the three expressions are used synonymously in this paper). Article 6(3) Rome II seems to have a fairly wide scope of application. From its wording, it is structured as a ‘double-sided rule’ (bilateral rule), thus allowing a judge in Europe to apply competition rules from a country outside Europe when the ‘affected market’ is one of a third State. In contrast, as regards competition law violations in international contexts most national legal systems in Europe structure their rules on the applicable law as ‘one-sided rules’ (unilateral rules). These rules require the application of the respective national competition law when their applicability criteria are fulfilled.2 Some exceptions, however, can be observed, such as Article 137 Swiss Federal Act on Private International Law of 1987 (Bundesgesetz über das Internationale Privatrecht) which seems to have inspired the new European conflict rule.3 The recitals of the Regulation present Article 6(3) Rome II as a mere clarification of the basic rule laid down in Article 4(1) Rome II.4 It is however by no means clear how the * Professor at the Université Catholique de Louvain, Holder of the Chair of European Law. **  Professor at the Leibniz Universität Hannover, Holder of the Chair for German and European Private Law, Economic Law, Comparative and Private International Law. 1   European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) [2007] OJ L199/40. 2  See s 130(2) German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen – GWB). The unilateral structure of the German conflict rule has received much criticism, see J Basedow, ‘Entwicklungslinien des internationalen Kartellrechts’ (1989) Neue Juristische Wochenschrift 627, 633 f; A Heinemann, ‘Die Anwendbarkeit ausländischen Kartellrechts – Probleme der Qualifikation und der Anknüpfung im internatio– nalen Kartellprivatrecht’ in Faculté de droit de l’Université de Lausanne (ed), Mélanges en l’honneur de Bernard Dutoit (Geneva, Librairie Droz, 2002) 115 ff. 3   Some recent private international law codifications in Europe have adopted a rule similar to the Swiss model, see 2005 Bulgarian Private International Law Act, Art 107; 2004 Belgian Private International Law Act, Art 99(2) (2). The entry into force of the Rome II Regulation on 11 January 2009 however pre-empted national conflict rules of EU Member States for cases covered by the Regulation’s scope of application. National conflict rules therefore continue to be important mainly for the enforcement of competition law by national competition authorities. 4   Recital 21 Rome II.

92  Stéphanie Francq and Wolfgang Wurmnest conflict rule for infringement of competition law is to fit into the general structure of the Rome II Regulation. Whereas most conflict rules in the Rome II Regulation call for the application of the law having the closest connection to the case at hand,5 Article 6(3) Rome II is also designed to strengthen the enforcement of competition law through private actions for damages.6 Article 6 Rome II Regulation underwent substantial changes over the course of the co-decision procedure and it seems that its drafters paid little attention to its precise reach. This conflict rule therefore raises numerous questions, not only concerning its practical application but also with regard to fundamental issues on how the rule can be reconciled with general theories of private international law. As commentators have been quick to point out, the special rule for non-contractual claims arising out of a restriction of competition is certainly the most imprecise of all the rules on the applicable law within the Rome II Regulation.7 The difficulties in defining its reach can essentially be traced back to four roots: First, when drafting the conflict rule, little attention was paid to the fact that competition law is of a nature juridique hybride8 thus containing various types of provisions. The core of competition law forms so-called market rules, ie rules that prescribe market actors what kind of behaviour is forbidden (Kartellverbotsnormen). Beside such market rules, competition law sometimes contains, for example, rules prescribing civil remedies, such as an action for damages, in case an undertaking infringes a market rule (Kartelldeliktsnormen). Under traditional (national) conflict-of-laws theory, different conflict rules may be used for the application of market rules and tort law rules. Whereas the first are often considered as a form of public (economic) law having a mandatory character, the latter are seen as classical private law remedies. Second, the Rome II Regulation aims at covering claims raised by private parties for both infringements of national and EU competition law. As far as market rules are concerned at least, EU competition law and national competition law may however set their own criteria of applicability. It should also be underlined that the criteria for the application of market rules laid down in EU competition law and national competition rules may be different. Third, the language used by Article 6(3) Rome II raises many questions when it comes to the practical implementation of this conflict rule: What is a non-contractual obligation arising out of a restriction of competition and according to which criteria is it differ­entiated from a non-contractual obligation arising out of an act of unfair competition governed by   See Arts 4(3), 5(2), 10(4) Rome II.   Art 6(3) Rome II is sometimes described as being directly inspired by the will of the European legislator to promote private enforcement within the EU rather than by the search for a close relationship between the situation and the legal system whose law will be applied, which is the characteristic of Art 4 Rome II and other special conflict rules laid down in the Regulation, see V Pironon, ‘Concurrence déloyale et actes restreignant la libre concurrence’ in S Corneloup and N Noubert (eds), Le règlement communautaire dit ‘Rome II’ sur la loi applicable aux obligations non contractuelles (Paris, Litec, 2008) 111, 119 f; F Rodriguez Pineau, ‘Conflict of Laws Comes to the Rescue of Competition Law: The New Rome II Regulation’ (2009) Journal of Private International Law (JPIL) 311, 312 f; J Fitchen, ‘Choice of Law in international claims based on restriction of competition: Article 6(3) of the Rome II Regulation’ (2009) JPIL 337, 343 f (arguing that Art 6(3) Rome II reconciles conflicting policies). 7   See A Dickinson, The Rome II Regulation (Oxford, Oxford University Press (OUP), 2008) para 6.01 (most ‘outlandish’ rule of the Rome II Regulation); AM Luciani, ‘Regards critiques sur l’article 6 du règlement “Rome II” relative à la loi applicable à la concurrence déloyale et aux actes restreignant la libre concurrence’ (2008) 2428 La Semaine Juridique – Entreprise et Affaires 18, 25 (‘L’article 6 du règlement “Rome II” suscite finalement plus d’interrogations qu’il n’apporte de réponses’); Fitchen, ‘Choice of Law in international claims’ (n 6) 369 (Art 6(3) Rome II lacks ‘clarity’). 8   J Basedow, ‘Souveraineté territoriale et globalisation des marchés: le domaine d’application des lois contre les restrictions de la concurrence’ in Académie de Droit International de la Haye/Hague Academy of International Law (ed), Recueil des Cours/Collected Courses No 264 (The Hague, Martinus Nijhoff Publishers, 1997) 9, 28 ff. 5 6

Rome II  93 Articles 6(1) and (2) Rome II? And how should the affected market be located by a judge who is at the stage of solving the question of the law applicable and has not yet turned to the merits? Fourth, Article 6(3)(b) Rome II seeks to strengthen private antitrust enforcement actions without defining whether this rule applies only to claims for damages and injunctions based on infringements of EU competition law or also to claims based on infringements of national competition law, be it the law of an EU Member State or of a third State, ie nonEU State. A closer look at Article 6(3) Rome II thus reveals a considerable number of interpretation issues. As not all problems can be treated exhaustively in this paper, the authors have therefore chosen to focus on selected issues. Against this background, the paper is structured as follows: after a brief outline of the rather complicated birth of the European conflict rule for international antitrust cases (II), its role within the general system of the Regulation is analysed (III). In this regard a closer look is taken at the Regulation’s general scope of application and the interplay of Article 6(3) Rome II with the other conflict rules contained in the Regulation. The next part addresses the fundamental problem whether the scope of Article 6(3) Rome II is limited to private law norms or whether it also covers the application of market rules (IV). Finally, the paper turns to selected issues regarding the link needed between the anti-competitive conduct and the affected market (V) and the reach of the concentration rule enshrined in Article 6(3)(b) Rome II (VI).

II.  Legislative History The difficulties in applying Article 6(3) Rome II are for a good part rooted in the fact that this conflict rule was given its final form without thorough debate in the very last stage of the legislative process. The Proposal for a Regulation on the law applicable to non-contractual obligations of July 2003 (Rome II Proposal)9 only contained a special conflict rule for ‘unfair competition’. The reasons why it did not address competition law infringements were twofold. First, the European Commission (Commission) did not want to pre-empt the consultations on the Green Paper on damages actions for breach of the EU antitrust rules (Green Paper). At the time the Commission issued its Rome II Proposal, it was also considering possible ways to improve the enforcement of EU competition law by private parties in light of the ECJ having reminded the European legislator in its Courage decision that the right of private parties to claim damages for breach of EU competition law can make a ‘significant contribution to the maintenance of effective competition in the Community’.10 The Commission decided to include the issues of jurisdiction and law applicable to such claims in the Green Paper which was finally published in December 2005, ie some months after 9   Commission, ‘Proposal for a Regulation of the European Parliament and the Council on the law applicable to non-contractual obligations (Rome II)’ (Rome II Proposal) COM (2003) 427 final. 10   Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297 para 27. On the various obstacles to private enforcement in the European arena and possible remedies, see W Wurmnest, ‘Private Rechtsdurchsetzung des EG-Kartellrechts nach der Reform der VO Nr 17’ in P Behrens, E Braun and C Nowak (eds), Europäisches Wettbewerbsrecht im Umbruch (Baden-Baden, Nomos, 2004) 213, 224 ff; AP Komninos, ‘EC Private Antitrust Enforcement: Decentralised Application of EC Competition Law by National Courts’ (Oxford, Hart Publishing, 2008) 160 f.

94  Stéphanie Francq and Wolfgang Wurmnest the publication of the Rome II Proposal.11 Amongst other questions, the Commission asked in its Green Paper whether the business community would favour a conflict rule based on the effects principle or a rule that would follow the lex fori approach.12 The second reason accounting for the delay in the introduction of a conflict rule on restrictions of competition would seem to have been a conflict existing within the Commission on the issue which Directorate General (DG) may draft such a rule: DG Competition as being in charge of the drafting of a future Community instrument aimed at a strengthening of private enforcement of EU competition law, or the (then) DG Justice, Freedom and Security, which was in charge of drafting the Rome II Regulation. The lack of a special rule for restriction of competition law infringements in the Rome II Proposal was criticised since the general rule for tort/delict – (then) enshrined in Article 3 of the Proposal, now Article 4 Rome II Regulation – with its paramount connecting factor of the common habitual residence of the parties does not make sense in claims for damages by private parties for competition law violations.13 Most authors argued that such claims should, in principle, be governed by the effects doctrine.14 Even though the Commission, in principle, had already accepted in 2004 that neither the rule for unfair competition nor the general rule for tort/delict was adequate for claims based on competition law infringements,15 the amended proposal of February 2006 (Amended Proposal)16 continued to lack a special rule for restrictions of competition as the deliberations on the Green Paper had not yet ended. In the Memorandum accompanying the Amended Proposal, the Commission, however, indicated that depending on the replies to the Green Paper for damages actions, it might wish to support a special rule on damages claims for the breach of EU competition law.17 Further, the Amended Proposal kept the conflict rule for unfair competition against the fierce resistance of the European Parliament, which generally questioned the need for any special rule in the area of competition.18 As the Green Paper consultations clearly demonstrated the need for a special rule for competition law infringements, the Commission and the Council finally advocated a con11   Commission, ‘Damages actions for breach of the EC antitrust rules’ (Green Paper) COM (2005) 672 final, 19 December 2005; a detailed analysis of this paper is provided by T Eilmansberger, ‘The Green Paper in Damages Actions for Breach of the EC Antitrust Rules and Beyond: Reflections on the Utility and Feasibility of Stimulating Private Enforcement Through Legislative Action’ (2007) Common Market Law Review 431. 12   Option 31–34 Green Paper on damages actions. 13  See Hamburg Group for Private International Law, ‘Comments on the European Commission’s Draft Proposal for a Council Regulation on the Law Applicable to Non-Contractual Obligations’ (2003) Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ) 1, 19; B Buchner, ‘Rom II und das Internationale Immaterialgüter- und Wettbewerbsrecht’ (2005) Gewerblicher Rechtsschutz und Urheberrecht: Internationaler Teil (GRURInt) 1004, 1011; D Zimmer and A Leopold, ‘Private Durchsetzung des Kartellrechts und der Vorschlag zur “Rom II-VO”’ (2005) Europäisches Wirtschafts- und Steuerrecht 149, 151 f; J Adolphsen, ‘The Conflict of Laws in Cartel Matters in a Globalized World: Alternatives to the Effects Doctrine’ (2005) JPIL 151, 177 f; J Basedow, ‘Jurisdiction and Choice of Law in the Private Enforcement of EC Competition Law’ in J Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, Kluwer, 2007) 229, 243 ff. 14  See Hamburg Group for Private International Law, ‘Comments on the European Commission’s Draft Proposal’ (n 13) 19; Zimmer and Leopold, ‘Private Durchsetzung des Kartellrechts’ (n 13) 154; J Basedow, ‘Perspektiven des Kartelldeliktsrechts’ (2006) Zeitschrift für Wettbewerbsrecht (ZWeR) 294, 299 f. 15   Commission Document COMP/A/1/AS/jw of 16 December 2004. 16   Commission, ‘Amended proposal for a European Parliament and Council Regulation on the law applicable to non-contractual obligations (Rome II)’ COM (2006) 83 final, 21 February 2006. 17   ibid 6. 18   In the first reading of the European Parliament from July 2005 the special rule for unfair competition was deleted together with other special rules. The reason for this was that rapporteur D Wallis preferred the flexibility of a general rule over rigid rules for various classes of non-contractual obligations: see Rapporteur’s explanatory statement to the report for the EP Committee on Legal Affairs Doc PE 349.977, 38 f.

Rome II  95 flict rule based on the effects principle. The Common Position of the Council of September 200619 therefore enlarged Article 6 to include – besides the rule for unfair competition (Articles 6(1), (2) of the Common Position) – a rule for acts ‘restricting free competition’ (Article 6(3) of the Common Position). According to the latter, the law applicable to a noncontractual obligation arising out of a restriction of competition shall be the law of the country on whose market the restriction has, or is likely to have, effect. Moreover the Common Position introduced the prohibition against litigants making their own choice of law and further contained three recitals explaining the basic tenets of the special conflict rule for acts restricting free competition.20 This basic approach was essentially maintained over the entire co-decision procedure. With minor linguistic changes, it was finally adopted in July 2007: the effects principle is laid down in Article 6(3)(a) Rome II Regulation, the choice-of-law prohibition is enshrined in Article 6(4) Rome II Regulation and the recitals clarifying the reach of these rules carry the numbers 21–23. In the very last stage of the legislative process, the debate focused on the need for a special rule for multistate torts. Already in its Green Paper for damages actions, the Commission had voiced the idea of giving the claimant the right to choose the applicable law when the market of more than one State had been affected by the anti-competitive behaviour on which the claim was based. The Commission reasoned that this choice could be limited either to ‘one single applicable law from those laws designated by the application of the principle of affected market’ or widened ‘so as to allow for the choice of one single law, or of the law applicable to each loss separately or of the law of the forum’ (emphasis added).21 Towards the end of 2006, the Commission strongly advocated the inclusion of a special rule for multistate torts which would lead to the application of one single tort law since it considered such a result necessary to strengthen private enforcement.22 The Council, in contrast, was very much opposed to such a procedural rule in favour of the claimants as it did not want to foster forum shopping. The Commission however found a strong ally in the European Parliament. Upon the insistence of the European Parliament’s delegation, the Council – literally at the last minute – abandoned its resistance in the conciliation process. Thus, the Conciliation Committee adopted Article 6(3)(b) Rome II (the so-called ‘concentration rule’) according to which the plaintiff may choose the law of the forum when certain conditions are met. This option right was hailed by the European Parliament as respecting ‘the principle of the application of one single national law (an important point for judges and lawyers)’ while at the same time limiting to a large extent the danger of ‘forum shopping’.23 As Article 6(3)(a) Rome II was for the first time mentioned in the Common Position of the Council of 2006 and the concentration rule enshrined in Article 6(3)(b) Rome II was 19   Common Position 22/2006 of 25 September 2006 adopted by the Council, acting in accordance with the procedure referred to in Art 251 of the Treaty establishing the European Community, with a view to adopting Regulation of the European Parliament and of the Council on the law applicable to non-contractual obligations (Rome II) [2006] OJ C 289E/68. 20   Recitals 19–21 Common Position later became  –  in part with substantial changes – Recitals 21–23 Rome II Regulation. 21   Green Paper on Damages Actions, 11. 22   For details see R Wagner, ‘Das Vermittlungsverfahren der Rom II-Verordnung’ in D Baetge, J von Hein and M von Hinden (eds), Die Richtige Ordnung. Festschrift für Jan Kropholler zum 70. Geburtstag (Tübingen, Mohr Siebeck, 2008) 715, 724. 23  Report of 28 June 2007 on the joint text approved by the Conciliation Committee for a regulation of the European Parliament and of the Council on the law applicable to non-contractual obligations (Rome II) Doc PE 390.527.

96  Stéphanie Francq and Wolfgang Wurmnest essentially adopted in the last minute by the Conciliation Committee, the relevant legislative materials are even scarcer than is usually the case with EU regulations. Therefore, very few interpretation issues can be solved by considering the drafting history.

III.  Foundations of Article 6 Rome II A.  Determining the Scope of the Rome II Regulation i.  General Remarks The Rome II Regulation applies in all EU Member States except Denmark.24 Its material scope is limited to claims arising from non-contractual obligations in civil and commercial matters. As stated in Article 1(1) Rome II the Regulation’s conflict rules do not apply to classic public law matters such as revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii). Article 2 Rome II further clarifies that the term ‘non-contractual obligation’ has to be understood in a broad sense. It is to cover claims for damages and/or injunctions arising out of tort/delict, unjust enrichment, negotiorum gestio and culpa in contrahendo. Both the concept of a ‘non-contractual obligation’ as well as the concept of ‘civil and commercial matter’ are to be defined autonomously.25 To interpret the Regulation’s general scope of application, one can in part rely on the case-law of the ECJ with regard to other regulations of private international law and civil procedural law, especially the rich case-law on the so-called Brussels I Regulation26 or on its forerunner, the Brussels Convention of 1968 (as amended).27 Recently, however, the ECJ has indicated that a simple transfer of the case-law on one regulation, sight unseen, to another Community instrument using the same terms is not always appropriate as the interpretation of each Community instrument has to take into account the objectives and scheme of the instrument in question.28

ii.  Non-Contractual Obligations Rome II applies solely to non-contractual obligations. Contractual claims are covered by the Rome I Regulation.29 The dividing line between contractual and extra-contractual obligations can be drawn, in principle, according to the criteria developed by the ECJ for   Art 1(4) Rome II.   Recital 11 Rome II (regarding the term ‘non-contractual obligation’). The autonomous interpretation of the term ‘civil and commercial matter’ follows from Recital 7 Rome II, which states that the ‘substantive scope and the provisions of this Regulation should be consistent with Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I) and the instruments dealing with the law applicable to contractual obligations’. Under the Regulation 44/2001 (the so-called Brussels I Regulation) the ECJ held that the term ‘civil and commercial matter’ has to be given an autonomous meaning, see Case C-292/05 Eirini Lechouritou and others v Dimosio tis Omospondiakis Dimokratias tis Germanias [2007] ECR I-1519 para 29. 26   Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I) [2001] OJ L12/1. 27   Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters of 27 September 1968 (as amended), for a consolidated text see [1998] OJ C 27/1. 28   Case C-435/06 C [2007] ECR I-10141 paras 40–53. 29   See in this book, the contribution of M Fallon and S Francq. 24 25

Rome II  97 distinguishing matters relating to a contract and matters relating to tort, delict or quasidelict according to Articles 5(1) and (3) Brussels I Regulation. In this context, the ECJ defines contractual obligations under Article 5(1) Brussels I Regulation as obligations that stem from ‘freely assumed’ commitments by one party towards another.30 Against this background, at least damages claims by indirect purchasers directed against a producer who conspired with other producers to fix prices may be considered as non-contractual obligations as the overcharge is not rooted in the contract itself but in the ex ante coordination of the pricing by the cartel. More difficult to judge are claims in the field of refusals to supply by dominant undertakings.31 In such cases, the litigants often have a prior business relationship which is ended unilaterally in one or the other way by one party. Even though a rule of law requiring the supplier (even fully contrary to his will) to enter into a new contract with the plaintiff is not an obligation freely assumed in the strict sense, many commentators argue that claims against parties who are under a duty to deal must be regarded as a contractual matter under the Brussels I Regulation as such claims aim at the conclusion of a contract.32 If one were also to apply this reasoning to the question of applicable law, claims against a supplier to enter into an agreement would be regarded as contractual claims covered by the Rome I Regulation. The applicability of the Rome I Regulation does not, however, mean that the effects test is entirely irrelevant as the competition law prohibitions protecting the affected market would apply as overriding mandatory rules via Article 9 Rome I Regulation.33

iii.  Civil and Commercial Matters The term ‘civil and commercial matter’ aims at excluding claims falling in the realm of public law. Drawing the dividing line between private and public law matters cannot be done by simply looking at the status of the litigants, as not all proceedings between a public authority and a private individual fall outside the Brussels I Regulation. Rather, there is no ‘civil and commercial matter’ in the sense of the Brussels I Regulation when the claim results from a legal relationship in which the public authority ‘is acting in the exercise of its public powers’.34 In other words, a matter is ‘civil’ if neither the claimant nor the defendant has exercised powers ‘going beyond those existing under the rules applicable to relations between private individuals’.35 The ECJ applies, thus, ‘a form of a prerogative rights theory’ according to which proceedings are public law matters ‘if the relation between the parties is determined by rules which authorise or oblige the State as a public authority’.36 30   Case C-26/91 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I-3967 para 15; Case C-27/02 Petra Engler v Janus Versand GmbH [2005] ECR I-481 para 53. 31   A general overview on the distinction between contractual and non-contractual obligations is provided in this book, in the contribution of S Poillot-Peruzzetto and D Lawnicka. 32   P Mankowski, ‘Art 5’ in U Magnus and P Mankowski (eds), Brussels I Regulation – European Commentaries on Private International Law (Munich, Sellier, 2007) para 40; S Leible‚ ‘Art 5 Brüssel I-VO’ in T Rauscher (ed), Europäisches Zivilprozessrecht – Kommentar (Munich, Sellier, 2011) para 20a. 33   See in this book the contribution of M Fallon and S Francq. 34   Case 29/76 LTU Lufttransportunternehmen GmbH & Co KG v Eurocontrol [1976] ECR 1541 para 4; Case 814/79 Netherlands State v Reinhold Rüffer [1980] ECR 3807 para 8; Case C-172/91 Volker Sonntag v Hans Waidmann and others [1993] ECR I-1963 para 20; Case C-167/00 Verein für Konsumenteninformation v Karl Heinz Henkel [2002] ECR I-8111 para 26; Case C-271/00 Gemeente Steenbergen v Luc Baten [2002] ECR I-10489 para 30; Lechouritou (n 25) para 31. 35   Sonntag (n 34) para 22; in a similar fashion Henkel (n 34) para 30; Lechouritou (n 25) para 34. 36   A Dutta, ‘Civil and Commercial Matters’ in J Basedow, K Hopt and R Zimmermann (eds), Max Planck Encyclopaedia of European Private Law (Oxford, OUP, forthcoming 2011) 190.

98  Stéphanie Francq and Wolfgang Wurmnest Against this background, the Rome II Regulation obviously neither covers enforcement actions taken by competition law authorities nor claims for administrative or criminal fines as such sanctions are not civil and commercial matters.37 Less clear is whether the Rome II Regulation covers claims by (consumer) associations that are entitled under a national law to claim the infringing party’s profits. For example under German competition law (Gesetz gegen Wettbewerbsbeschränkungen – GWB) certain associations for the promotion of commercial interests are entitled to sue for injunctive relief and claim the wrongdoers’ profits (as long as the German competition authorities have not skimmed off the entire amount of profit). The associations are, however, not entitled to keep those profits but are under an obligation to transfer collected profits to the federal treasury (section 34a GWB). The fact that the profits have to be transferred to the federal treasury, ie the State, might be an indication that the entire claim is of a public law nature. This is, however, misleading. As German competition law confers upon certain associations the same right as possessed by the competition authorities, such actions are not based on legislation conferring upon a public authority a prerogative of its own. Consequently, claims by those associations to skim off the profits of the wrongdoer fall within the scope of Rome II as they are not public remedies.38 Actions for punitive damages are covered by the Rome II Regulation as far as they also serve a compensatory purpose and do not only intend to punish the tortfeasor.39 If the latter aspect is essentially the only reason why such damages are awarded, actions based on such a claim cannot be regarded as ‘civil and commercial’ matters but are instead a question of criminal law.

B.  Article 6 Rome II in the General System of the Regulation i. Overview Article 6 Rome II is not considered as an exception to the general rule set out under Article 4(1) Rome II, but rather as a clarification thereof (see Recital 21 Rome II). This explanation of the relationship between Article 4 and Article 6 Rome II does, however, not help to clarify the functioning of these provisions. It is not certain whether the localisation of the damage under Article 4 Rome II corresponds exactly to the designation operation that is conducted under Article 6(3) Rome II.40 If Article 6 Rome II was only a clarification of Article 4(1) Rome II, one might wonder whether the provision is necessary or whether its content could have been placed in the recitals. Whether a derogation or a mere implementation of Article 4(1) Rome II, it is clear that Article 6(3) constitutes a special conflict rule 37  P Mankowski, ‘Das neue Internationale Kartellrecht des Art 6 Abs 3 der Rom II-VO’ (2008) Recht der Internationalen Wirtschaft (RIW) 177, 180; W Wurmnest, ‘Art 6 Rom II-Verordnung’ in M Herberger et al (eds), juris PraxisKommentar BGB: Internationales Privatrecht, Band 6, 5th edn (Saarbrücken, Juris, 2010) para 12; DP Tzakas, Die Haftung für Kartellrechtsverstöße im internationalen Rechtsverkehr (Baden-Baden, Nomos, 2011) 323. 38   With respect to German law, claims to skim off the wrongdoers profits are regarded under the majority view as claims falling under the realm of civil law, see A Stadler, ‘Der Gewinnabschöpfungsanspruch: eine Variante des private enforcement?’ in S Augenhofer (ed), Die Europäisierung des Kartell- und Lauterkeitsrechts (Tübingen, Mohr Siebeck, 2009) 117, 126 f (with further references). 39   It follows from Recital 32 Rome II that claims for punitive damages are not generally excluded from the Regulation’s scope. 40   M Hellner, ‘Unfair Competition and Acts Restricting Free Competition: A Commentary on Article 6 of the Rome II Regulation’ (2007) Yearbook of Private International Law (YPIL) 49, 54.

Rome II  99 because it is dedicated to a specific kind of tort and provides for connecting factors that do not necessarily coincide with those of Article 4. As such, it takes precedence over Article 4 Rome II. The relationship between Article 6 and Article 10 Rome II also calls for clarification.41 Some cases based on violations of competition law could generate claims based on ‘unjust enrichment’ which would fall under Article 10 Rome II. Where one cartel member has compensated another cartel member who experienced decreased sales due to a price increase after joining the cartel, the former could perhaps claim reimbursement from the latter after the cartel is declared void and present his claim as one of unjust enrichment. More complicated to qualify are claims introduced by victims of a vertical restriction of competition, like the counter-claim for damages introduced by Crehan in the Courage case against a brewery which was based on the argument that he was being forced to enter into an agreement to purchase beer at inflated prices.42 Admittedly, the question as to which situation qualifies as an unjust enrichment deserves further analysis and the delineation between Chapter II and Chapter III Rome II is of a general nature.43 Recital 29 Rome II underlines that Chapter III applies ‘where damage is caused by an act other than a tort/ delict’. The recital thus presents Chapter III as subsidiary to Chapter II and the two categories of damage claims as mutually exclusive. A choice between the two provisions thus needs to be made.44 Two factors, however, lower the practical importance of the discussion. On the one hand, the non-contractual qualification is likely to be used by the parties in most cases. On the other hand, Article 10(1) Rome II designates the law which is applicable to the relationship existing between the parties, ‘such as one arising out of . . . a tort/delict’. As such, it should lead to the same result as Article 6(3) Rome II. As any other provision of Chapter II of the Rome II Regulation, Article 6(3) will come into play alongside provisions contained in Chapter V (‘Common rules’) and Chapter VI (‘Other provisions’). These two chapters provide for general rules enshrining concepts derived from the general theory of private international law: overriding mandatory rules (Article 16 Rome II), rules of safety and conduct (Article 17 Rome II), public policy (Article 26 Rome II), exclusion of renvoi (Article 24 Rome II), relationship with other provisions of EU law (Article 27 Rome II) and description of the scope of the law applicable (Article 15 Rome II) are the most relevant provisions for our purpose. Finally, Article 6(4) excludes choice-of-law agreements thus limiting the scope of Article 14 Rome II. There is no problem of exclusivity or precedence between Article 6(3) Rome II and the provisions of Chapter V and VI Rome II. They simply come into consideration at the same time, each of them for its own purpose. Thus, Articles 16 or 26 Rome II can, respectively, be used for the purpose of applying the overriding mandatory rules of the forum or for the purpose of refusing the application of specific provisions of the law designated by Article 6(3) Rome II. 41   The question was raised by M Hellner during the conference preparing the publication of this book which was held on 26 March 2010. The authors wish to thank him for his helpful contribution. 42  In Courage, the question of unjust enrichment was raised in another way: the question was whether allocating damages to Mr Crehan, who was a party to a contract infringing competition law, would lead to an unjust enrichment, see Courage (n 10) paras 30 f. If a party were to raise such a defence, Art 10(1) Rome II would refer to the law applicable to the claim for damages, be it contractual or extra-contractual. 43   The complexity of the question is by now well-known and the Regulation does not provide any clear indication in this respect. See for a detailed discussion, Dickinson, The Rome II Regulation (n 7) paras 10.10–10.21. 44   But see M Fallon, ‘Law Applicable to Specific Torts in Europe’ in J Basedow, H Baum and Y Nishitani (eds), Japanese and European Private International Law in Comparative Perspective (Tübingen, Mohr Siebeck, 2008) 261, 269 (apparently leaving the choice of qualification to the claimant in the formulation of his claim).

100  Stéphanie Francq and Wolfgang Wurmnest We will see, however, that the interaction of these various provisions in the context of infringements of competition law is anything but simple.45

ii.  Is Article 6(3) Rome II a Universal Provision? The scope of the Rome II Regulation is universal in two respects. In absence of any limiting provisions, the Regulation covers situations irrespective of whether they have a potential link with the EU or not (first aspect of universality, ie meaning 1). Furthermore, the Regulation provides for the law applicable to those situations irrespective of whether or not the law of a Member State is indicated, as explicitly stated by its Article 3 Rome II (second aspect of universality, ie meaning 2). For the purpose of competition law tort claims, this two-sided universality seems to mean, for example, that a judge of a Member State is to apply the Rome II Regulation in order to determine the applicable law in a dispute between a Japanese and a US party concerning a purported restriction of competition on the Japanese market, and this is to be done irrespective of whether the Regulation’s rules lead to the application of Japanese law or any other law. A closer look at Article 6(3) Rome II, however, reveals that this conflict rule was perhaps not conceived as having the same broad reach as other provisions of the Regulation. Article 6(3) Rome II only applies if there is a ‘non-contractual obligation arising out of a restriction of competition’. Recital 23 Rome II provides a definition of what a restriction of competition under Article 6(3) Rome II is. It refers to practices which produce a distortion of competition ‘within a Member State or within the internal market’ and which are prohibited under Articles 101, 102 TFEU or under the law of a Member State. The wording of Recital 23 Rome II seems to suggest that Article 6(3) Rome II is limited to situations which produce a distortion of competition within the EU and can only command the application of either EU law (Articles 101, 102 TFEU) or the law of a Member State because the affected market is necessarily located within the EU. Another aspect casts doubts on the truly universal nature of Article 6(3) Rome II. When the anti-competitive practice produces effects on the market of several countries, under Article 6(3)(b) Rome II, the plaintiff apparently has the option to bring the whole claim under one single law, ie the law of the forum, provided that two restrictive conditions are met. Firstly, the claim must be pending before the court of a Member State where the defendant has its domicile. Secondly, the market of that Member State must be directly and substantially affected by the restrictive practice.46 The possibility of opting in favour of the lex fori is also available when there are several defendants so long as the claim against each defendant relies on a restriction of competition which ‘directly and substantially affects the market in the Member State of that court’. With its focus on the lex fori, Article 6(3)(b) Rome II is necessarily restricted to claims pending before a Member State court: Rome II is not binding on the courts of third States and cannot contain a rule that would allow the claimant to choose the lex fori when the forum is that of a third State. It follows that Article 6(3)(b) Rome II, in contrast to the general scope of the Regulation, is not universal: it deals only with situations that present a close link with the EU since both the affected market and domicile of at least one of the defendants must be within the EU (contradicting the first aspect of universality, ie meaning 1); and it commands the application of the law of a Member State (contradicting the second aspect of universality, ie meaning 2). One may   IV.C below.   For more details on Art 6(3)(b) Rome II see VI below.

45 46

Rome II  101 wonder why such a solution was chosen for subsection (b) and whether the limited scope of subsection (b) provides any guideline in interpreting the reach of subsection (a). Indeed, the current formulation of subsection (b) is the result of a conscious choice.47 The cumulative reading of Recital 23 and Article 6(3)(b) Rome II sketches a sufficiently clear picture of what the drafters had in mind. As many commentators have pointed out, the main reason for inserting in the Rome II Regulation a provision on multistate torts resulting from a restriction of competition was the intention to promote private enforcement of competition law within the EU.48 Article 6(3)(b) Rome II is a way of prompting private claims that arise from a breach of Articles 101, 102 TFEU and maybe even for infringements of certain national competition laws.49 This intention has to be seen in the light of the old dogma that, as a matter of sovereignty, a court may not give effect to foreign public law and that competition law, at least if enforced by public bodies, must be regarded as public law. The foundations of this theory have been shaken in the last 20 years and it no longer finds much support today.50 Could Recital 23 Rome II be seen as reflecting the remnants of this doctrine? The recital seems to imply that a French judge, for instance, should no longer regard German law as ‘foreign’, as opposed to the still foreign Japanese law. This would mean that Recital 23 Rome II simply elevates the old dogma of the non-applicability of foreign public law to a higher level distinguishing between European and non-European law. In view of all these doubts on the provision’s universality, what is implied for the construction of Article 6(3) Rome II? Many commentators seem to favour the grammatical method of interpretation.51 The plain wording of a provision should prevail over external factors that could cast doubts on its meaning. It has rightly been pointed out that the legal value of recitals is far from clear and that a recital could never overturn the clear meaning of a provision. Accordingly, Article 6(3) Rome II should be divided in two parts: Article 6(3)(a) Rome II would be universal whereas Article 6(3)(b) Rome II would not. This solution, however, is not fully satisfying. Firstly, it demands disregard of Recital 23 Rome II. There is something disturbing about treating a recital as if it were non-existent when recitals are there to guide the interpretation of the text – even though it must be conceded that many recitals in European PIL-instruments are not very carefully drafted. Secondly, the merely grammatical interpretation may also trigger some bizarre results under Article 6(3) (b) Rome II, which will be shown in detail later.52 Thirdly, this interpretation raises a puzzling question. If Article 6(3)(a) Rome II is to be construed as a universal provision, does 47   In order to solve the problem of the Mosaikprinzip, the provision could have been drafted in a totally different way. The drafters could have opted for allowing the parties or the judge to select a law other than that of the forum. For instance, they could have been allowed to select the law of the country whose market is most affected (comparative impairment approach) or the law of the country which had the most significant relationship to the factual situation. The provision would then have been universal insofar as the applicable law is concerned (meaning 2). 48   See the references cited at n 6. 49   On the reach of Art 6(3)(b) see VI.B below. 50   But see EJ Mestmäcker, ‘Staatliche Souveränität und offene Märkte’ (1988) RabelsZ 205, 220 ff. 51   WH Roth, ‘Internationales Kartelldeliktsrecht in der Rom II-Verordnung’ in D Baetge, J von Hein and M von Hinden (eds), Die Richtige Ordnung. Festschrift für Jan Kropholler zum 70. Geburtstag (Tübingen, Mohr Siebeck, 2008) 623, 637; M Wilderspin, ‘Les questions relatives à la loi applicable’ (2009) 2 Concurrences – édition spéciale sous la dir L Idot, Actes du colloque sur le livre blanc sur les actions en dommages et intérêts pour infraction aux règles communautaires sur les ententes et les abus de position dominante 66, 68, No 10; Fitchen (n 6) 353, fn 49; P Mankowski, ‘Ausgewählte Einzelfragen zur Rom II-VO: Internationales Umwelthaftungsrecht, Internationales Kartellrecht, Renvoi, Parteiautonomie’ (2010) Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 389, 396. 52   See VI below.

102  Stéphanie Francq and Wolfgang Wurmnest this mean that the provision determines the conditions under which US antitrust law is to be applied by a European judge? Or put otherwise, can the rule be understood as defining, for example, the scope of application of the Sherman Act? This puzzling observation actually raises another question, ie the question of the nature of the legal provisions designated by Article 6(3) Rome II, which will be addressed later.53 The basic canons of interpretation also call for taking into consideration the object that the legislator has pursued with a particular rule. As mentioned before, Article 6(3) Rome II was also adopted in view of civil actions following infringements of competition law in Europe. If this was the intention of the legislator, Article 6(3) Rome II should be restricted to those cases enumerated in Recital 23 Rome II.54 Neither Article 6(3)(a) nor Article 6(3) (b) Rome II would then be universal regarding the situations covered (meaning 1). The infringement of European competition law, be it EU law or national law, presupposes some kind of relationship with the EU, for example the implementation of the anti-competitive behaviour or agreement within the EU. This interpretation has advantages and dis­ advantages. In terms of advantages, this interpretation favours a similar scope for sub­ sections (a) and (b) of Article 6(3) Rome II and thus avoids the inelegant discrepancies of scope (and logic) within one single provision. This interpretation is also in line with Recital 23 Rome II and does not require the recital to be ignored. As will be shown later, it probably also best corresponds to the drafters’ reasoning concerning the application of competition law, on one hand, and civil law, on the other.55 There is, however, one major disadvantage. This interpretation implies that situations involving infringement of third-State law are to be treated only under Article 4 Rome II. Indeed, if the Regulation is universal, this implies that for those situations not covered by Article 6(3) Rome II, a solution is to be found somewhere else in the Regulation.56 In summary, none of these interpretations is entirely satisfactory. In light of the many doubts raised by each of them, the authors of this paper favour a simple grammatical interpretation. Thus, Article 6(3)(a) Rome II should in our view be considered as universal under the two meaning of that concept (first aspect of universality, ie meaning 1: universality in regard of the situations covered; and second aspect of universality, ie meaning 2: universality in regard of the object of the designation). Article 6(3)(b) Rome II, however, cannot be considered as universal, under either of the two understandings attached to the term.

  See IV below.   Endorsing this position: Komninos, ‘EC Private Antitrust Enforcement’ (n 10) 246.   See IV below. 56  This observation points again at the more general question concerning the legitimacy of the universal scope of application of an EU Regulation. It can be questioned in terms of opportunity (the relevant solutions for intra-Community cases are not systematically adapted to external situations) and in terms of limitation of powers (does Art 65 EC  – as it stood at the time of the adoption of the Rome II Regulation – provide a legal basis for treating situations which have no link whatsoever with the Common Market?). On the second question especially, see J Basedow, ‘Die Harmonisierung des Kollisionsrechts nach dem Vertrag von Amsterdam’ (1997) Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 609; C Kohler, ‘Interrogations sur les sources du Droit international privé européen après le Traité d’Amsterdam’ (1999) Revue Critique de Droit International Privé (RCDIP) 1. 53 54 55

Rome II  103

C.  The Interplay between Articles 6(1) and 6(3) Rome II i. Background Article 6(3) Rome II focuses on the affected market as the relevant connecting factor for non-contractual obligations arising out of a restriction of competition. In turn, the relevant connecting factors for claims based on unfair competition law differ from the effects doctrine. Claims arising out of a violation of unfair competition law are either governed by the law of the country ‘where competitive relations or the collective interests of consumers are . . . affected’ (Article 6(1) Rome II) or – in case of a breach of provisions affecting ‘exclusively the interests of a specific competitor’ – by the law that applies pursuant to the general rule of tort/delict (Article 4 in conjunction with Article 6(2) Rome II). These connecting factors may lead to the application of different laws for claims based on unfair competition law and claims based on restriction of competition law.57 A look at the substantive law side reveals that the dividing line between unfair competition law and restriction of competition law is drawn rather differently in the national legal orders. In some Member States there are certain types of anti-competitive conduct that may simultaneously violate Articles 101, 102 TFEU and the national law of unfair competition. Other Member States prohibit unilateral abuses below the threshold of dominance, often based on the concept of economic dependence.58 These prohibitions concern first and foremost unreasonable discrimination against suppliers or purchasers, boycotts or refusal to deal situations. Such national prohibitions do not violate the requirements of EU law as Regulation 1/2003 allows Member States to adopt and apply within their territory stricter national laws prohibiting unilateral anti-competitive conduct engaged in by undertakings59 as well as unfair trade practices, be they unilateral or contractual.60 Whereas some Member States have regulated such prohibitions for undertakings below the threshold of dominance in their unfair competition laws, others have enacted those prohibitions in their national competition acts. In sum, in many Member States there is a certain overlap between the law of unfair competition and the law against restriction of competition. Against this background, the question arises whether the concepts of ‘unfair competition’ and ‘restriction of competition’ as used in Article 6 Rome II are to be given an auto­ nomous meaning or whether recourse has to be made to national law, either the lex fori or the lex causae, to construe the meaning of these concepts. With regard to the application of 57   Most scholars argue in favour of a differentiation between the market effects principle laid down in Art 6(3)(a) Rome II (Auswirkungsprinzip) and the connecting factor enshrined in Art 6(1) Rome II (Einwirkungsprinzip) see R Hausmann and E Obergfell, ‘Einleitung I’ in KH Fezer (ed), Lauterkeitsrecht, Kommentar zum Gesetz gegen den unlauteren Wettbewerb (UWG) Band 1 (Munich, CH Beck, 2010) paras 198 f; Wagner, ‘Das Vermittlungsverfahren der Rom II-Verordnung’ (n 22) 723; M Illmer, ‘Art 6’ in P Huber (ed), Pocket Commentary on the Rome II Regulation (Munich, Sellier, 2011) para 38-42 . Some maintain, however, that both Arts 6(1) and 6(3) provide for the law of the country where the effects of the unfair or anti-competitive acts materialise, see Hellner, ‘Unfair Competition and Acts Restricting Free Competition’ (n 40) 56; C Honorati, ‘The law applicable to unfair competition’ in A Malatesta (ed), The unification of choice of law rules on torts and other non-contractual obligations in Europe: the Rome II proposal (Padova, CEDAM, 2006) 127, 149. 58   Such rules can be found, eg, in Germany (Sec 20(2)–(4) GWB) and France (Art L 420-2 Commercial Code). For further information see P Këllezi, ‘Abuse below the Threshold of Dominance? Market Power, Market Dominance, and Abuse of Economic Dependence’ in MO Mackenrodt, B Conde Gallego and S Enchelmaier (eds), Abuse of Dominant Position: New Interpretation, New Enforcement Mechanisms? (Heidelberg, Springer, 2008) 55, 61 ff. 59   Art 3(2) Regulation 1/2003. 60   Recital 9 Regulation 1/2003.

104  Stéphanie Francq and Wolfgang Wurmnest Article 6 Rome II to claims for damages arising under Articles 101, 102 TFEU as well as the rules of unfair competition law harmonised by EU law, there can be no doubt that the classification has to be performed according to autonomous European standards. Also with regard to the classification of claims based on national (unfair competition or restriction of competition) law, one should try to develop European principles of classification.61 The ECJ has held that as a general rule, regulations in the field of judicial cooperation in civil matters with cross-border implications are to be interpreted autonomously.62 Otherwise, the functioning of the Common Market would be at peril. Only very exceptionally may the concepts laid down in regulations be classified according to purely domestic law. The Rome II Regulation provides such a narrow exception for certain issues of family law, which are excluded from the Rome II Regulation (Article 1(2)(b) Rome II).63 As neither the recitals nor the text of Article 6 Rome II provide for a similar exception, the concept of ‘unfair competition’ and ‘restriction of competition’ must be given an autonomous meaning, irrespective of whether a claim is based on European or national law.64

ii.  No Need to Distinguish Articles 6(1) and (3) Rome II? Given that there is a certain overlap between national unfair competition laws and restriction of competition laws, inconsistencies could be avoided if the same connecting factor were to apply to claims arising out of restrictions of competition and claims arising out of violations of unfair competition law. With good reasons, commentators have therefore urged the European legislator not to enact different conflict rules for each type of liability.65 The European legislator has however decided to establish two – at least from their wording – different connecting factors in Article 6(1) Rome II and Article 6(3) Rome II. It is therefore doubtful whether it is still possible to argue that the legislator intended ‘no real difference’ between the two connecting factors and that the connecting factor used for unfair competition in Article 6(1) Rome II must be ‘understood as designating the law of the affected market’, as does Article 6(3) Rome II.66 Rather the composition of Article 6 Rome II and the legislative history seems to support the view that the groups of ‘claims for breach of restriction of competition law’ and ‘claims for breach of unfair competition law’ were meant – at least in principle – to be mutually exclusive’.67 Even though the connecting factors used for unfair competition and restriction of competition – both being ‘market-based’ 61   But see Tzakas, Die Haftung für Kartellrechtsverstöße (n 37) 328 ff, 376 ff (arguing that the classification of claims arising from national law should be conducted by recourse to the lex causae as Recital 9 Regulation 1/2003 demands that decisive criterion should be the protective scope of the national law whose applicability is in concreto scrutinised). 62   Case C-443/03 Götz Leffler v Berlin Chemie AG [2005] ECR I-9611 para 45. 63   According to Recital 11 Rome II, the question whether a relationship has a comparable effect to a marriage or other family relationships should be interpreted in accordance with the law of the Member State in which the court is situated. 64  Concurring: Dickinson (n 7) paras 6.17 f; C Handig, ‘Neues im Internationalen Wettbewerbsrecht – Auswirkungen der Rom II-Verordnung’ (2008) GRURInt 24, 26; T Rosenkranz and E Rohde, ‘The law applicable to non-contractual obligations arising out of acts of unfair competition and acts restricting free competition under Article 6 Rome II Regulation’ (2008) Nederlands Internationaal Privaatrecht 435; H Köhler, ‘Einleitung UWG’ in H Köhler and J Bornkamm (eds), Gesetz gegen den unlauteren Wettbewerb (UWG) – Kommentar, 28th edn (Munich, CH Beck, 2010) para 5.31 (all with regard to the concept of unfair competition); Fitchen (n 6) 346 f (with regard to the notion of restriction of competition). 65   See, eg, Basedow, ‘Jurisdiction and Choice of Law’ (n 13) 240. 66   This view is taken by Hellner (n 40) 56. 67   Dickinson (n 7) para 6.31; Rosenkranz and Rohde, ‘The law applicable to non-contractual obligations’ (n 64) 435.

Rome II  105 – will usually point to the same legal order, one has to classify the different claims according to European standards. Such a distinction is also in order as the concentration rule enshrined in Article 6(3)(b) Rome II does only apply to claims arising out of competition law infringements and not to claims arising out of a violation of unfair competition law.68

iii.  The Dividing Line between Unfair Competition and Restriction of Competition If one agrees that Articles 6(1) and (3) Rome II are mutually exclusive and that the borderline between the two conflict rules must be drawn autonomously, the question arises which parameters could be used for such a classification. In our view, the dividing line between Article 6(1) Rome II and Article 6(3) Rome II can best be drawn by having regard to the respective aim (object) of each area of law.69 Indications of the aims of unfair competition and restriction of competition law can be inferred from the Rome II Regulation, the substantive provisions of EU law in these fields and the general principles common to the laws of the Member States. Broadly speaking, unfair competition law aims at ensuring a certain code of conduct on a given market by defining certain prohibited unfair business practices.70 As stated in Recital 21 Rome II, rules of unfair competition ‘should protect competitors, consumers and the general public’, thus making reference to the three main goals of modern unfair competition law. Further indications as to which claims must be regarded as ‘unfair competition based’ can be inferred from the harmonised law on unfair competition. For example, claims arising from violations of provisions based on Directive 2005/29 on unfair commercial practices (such as misleading advertising or practices of harassment, coercion or undue influence)71 must be regarded as falling in the realm of unfair competition. The notion of unfair competition is, however, wider than contemplated by this Directive which covers (for reasons of competence) only ‘B2C-relations’. That the concept of unfair competition must also include ‘B2B-relations’ can be inferred from the Commission’s Memorandum accompanying its Rome II Proposal, which states that modern unfair competition law seeks to protect not only consumers and the public in general but also ‘competitors’.72 Recital 21 Rome II further states that the conflict rule for unfair competition shall also ‘ensure that the market economy functions properly’. This statement is slightly imprecise as ensuring the functioning of the market, ie to keep markets open to (potential) competition, is typically attributed to restriction of competition law. In the words of the ECJ, the objective of EU competition rules is not only to protect ‘the immediate interests of individual competitors or consumers but also to protect the structure of the market and thus competition as such’.73 Therefore, Recital 21 should be understood in the sense that Articles 6(1), (2) Rome II shall 68   Wurmnest, ‘Art 6 Rom II-Verordnung’ (n 37) para 20; but see G Wagner, ‘Die neue Rom-II-Verordnung’ (2008) IPRax 1, 8 (arguing for an analogous application of the concentration rule to non-contractual obligations arising out of acts of unfair competition). 69   Roth, ‘Internationales Kartelldeliktsrecht’ (n 51) 644; Rosenkranz and Rohde (n 64) 436; Mankowski, ‘Das neue Internationale Kartellrecht’ (n 37) 179 (all supporting the view that the interpretation of the rule in question must be effected in light of its aim (object)). 70   Rosenkranz and Rohde (n 64) 436. 71   European Parliament and Council Directive 2005/29 of 11 May 2005 concerning unfair business-to-­consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive) [2005] OJ L149/22. 72   Rome II Proposal, 15. 73   Case C-8/08 T-Mobile Netherlands BV and others v Raad van Bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-4529 para 38.

106  Stéphanie Francq and Wolfgang Wurmnest protect a level playing field on an open market by obliging all participants in a market economy ‘to play the game by the same rules’.74 Turning towards the question of which claims must fall under Article 6(3) Rome II, important hints can be inferred from its Recital 23. This recital explains that the concept of restriction of competition should cover acts prohibited under Articles 101, 102 TFEU. Thus, claims for damages or injunctions for a breach of the substantive rules of EU competition law fall evidently under Article 6(3) Rome II. Recital 23 further explains that national competition rules of an EU Member State may also be covered by Article 6(3) Rome II. The fact that the concept of restriction of competition must be given an autonomous meaning does however not imply that only those rules of national law are covered by Article 6(3) Rome II which have the same scope as the EU competition rules laid down in the TFEU.75 As mentioned above, the classification has to be made in accordance with the object of the claim in question. Thus, Article 6(3) Rome II covers claims based on a breach of national competition rules which – like Articles 101, 102 TFEU – follow the object of keeping markets open by protecting competition as such. If a claim is based on a rule that serves both functions, one has to determine whether the main focus lies on the objective of ensuring fair conduct on a market or establishing or maintaining free competition on a given market in order to properly allocate the claim either to the field of unfair competition or to the field of restriction of competition law.76 Against this background, classification is simple if prohibitions of unfair competition and restriction of competition law obviously follow different objectives. A typical case is the treatment of rebate schemes. Because their nature and factual context make them likely to cause an average consumer to take a transactional decision that he would otherwise not take, rules proscribing rebate schemes are to be regarded as rules of unfair competition in the sense of Article 6(1) Rome II. If the same rebate scheme also infringes a prohibition that aims to prevent a dominant undertaking from using such a scheme to foreclose competitors from the market or to make market entry difficult, the latter prohibition would serve the purpose of maintaining competition on a market such that Article 6(3) Rome II would apply. If a certain set of facts infringes either Articles 101, 102 TFEU or corresponding provisions under national restriction of competition law and at the same time a prohibition of national unfair competition law (which often contains general clauses according to which restrictions of competition may also be prohibited), the main aim of the rules in question can be seen as the maintenance of competition on a market. In such a situation, claims based on restriction of competition law as well as claims based on unfair competition law would only fall under Article 6(3) Rome II. More difficult is the solution of cases based on stricter national rules in the sense of Article 3(2) Regulation 1/2003, for example national rules based on the concept of economic dependence. These rules prohibit undertakings operating below the threshold of market dominance from engaging in abusive practices such as boycotts or discriminations. If these prohibitions are infringed, it is often the case that parallel applicable prohibitions 74   This expression was used in the Commission’s Explanatory Memorandum accompanying the Commission Rome II Proposal, 15. 75   Roth (n 51) 644; T Ackermann, ‘Antitrust Damages Actions under the Rome II Regulation’ in M Bulterman et al (eds), Views of European Law from the Mountain: Liber Amicorum for Piet Jan Slot (Alphen aan den Rijn, Kluwer, 2009) 109, 116. 76   Rosenkranz and Rohde (n 64) 436.

Rome II  107 of national unfair competition law are violated at the same time. As prohibitions based on the concept of economic dependence are, however, grounded – in the broadest sense – in an extensive interpretation of the concept of dominance as enshrined in Article 102 TFEU, claims based on infringements of these prohibitions should fall under Article 6(3) Rome II.77 An exception should be made for ‘strict’ sales below cost prohibitions which apply to undertakings with a very low level of market power. Such prohibitions do not have the protection of competition in mind but the simple protection of (inefficient) competitors, a goal that certainly does not fall in the realm of restriction of competition law as understood by the ECJ. Therefore claims based on a breach of such prohibitions, as for example section 20(4) GWB or Article L121-35 French Commercial Code, should be classified as falling under Article 6(1) and not under Article 6(3) Rome II.78

D.  Necessary Legislative Amendments The analysis has shown that most of the questions discussed above regarding the foundations of Article 6(3) Rome II can be solved by interpretation. In order to underline that the conflict rules for unfair competition (Articles 6(1), (2) Rome II) and the conflict rule for restrictions of competition (Article 6(3) Rome II) concern different areas of law, the European legislature should, however, codify the rules in two separate articles. For the sake of clarity, the recitals should state that Article 6(3)(a) Rome II is a universal provision – which may call for the application of the law of a non-EU Member State – and amend Recital 23 Rome II accordingly.

IV.  Nature of the Rules Designated by Article 6(3) Rome II A.  Problem Stated A more thorny issue regarding the scope of Article 6(3) Rome II concerns its precise reach: When designating the applicable law, does Article 6(3) Rome II cover only the civil aspects of the claim, for example the law of damages, or does it also cover competition law issues, namely the prohibitions set out in European or national competition law(s)?

i.  Various Aspects of Competition Law The answer to this question first requires some clarification on what is meant by ‘competition law’. Competition law covers a wide range of issues and its provisions are therefore sometimes divided in categories. Such a distinction can for example be found in German law, which subdivides competition law into the categories of Kartelldeliktsnormen (tort 77   Tzakas (n 37) 331 f; but see Pironon, ‘Concurrence déloyale’ (n 6) 118 (arguing that all pratiques discriminatoires and tarifaires laid down in the French competition law should be classified as unfair competition in the sense of Art 6(1) Rome II Regulation). 78   See Pironon (n 6) 118 (arguing that the prohibition of any revente à perte serves unfair competition law purposes); but see Tzakas (n 37) 330 ff (arguing that all prohibitions directed at undertakings below the threshold of dominance laid down by the German GWB should fall under Art 6(3) Rome II).

108  Stéphanie Francq and Wolfgang Wurmnest law),79 Kartellverwaltungsrecht (administrative law)80 and Kartellstrafrecht (criminal law);81 the rules pertaining to each of these categories are only put into action as far as the behaviour infringes the fundamental behavioural rules, ie the Kartellverbotsnormen which are  –  according to many (albeit not all) commentators – essentially public in nature. In Germany, the summa divisio relies thus on the behavioural norm on the one hand (what kind of behaviour is prohibited) and on the sanctions provided for a contravening behaviour on the other hand, be they of a civil, administrative or criminal nature. In the con­ tribution dedicated to the Rome I Regulation in this book, the difference between ‘market rules’ and the ‘civil remedies’ afforded to the victims of infringement of the market rules was highlighted, the first category covering the behavioural standards imposed by competition law (this category includes thus the Kartellverbotsnormen) and the second category covering the possible civil sanctions attached to violations of competition law. These categories are by no means isolated hermetically. Rather, they are deeply intertwined since the remedies and sanctions provided in case of infringement of the behavioural rules reflect the importance assumed by the latter in the legal system they derive from, and are deeply rooted in, the legal culture of this system. This interdependency is clear in legal systems where the civil consequences are prescribed by the market rules themselves. This is the case, for instance, in Article 101 TFEU whose paragraph 1 establishes the ‘market rule’ and whose paragraph 2 provides for the nullity of contracts infringing this rule. From the travaux préparatoires, it is not clear whether the various aspects of competition law were taken into consideration when drafting the Rome II Regulation and in particular, its Article 6(3). The wording of the provision opens the door to diverging interpretations.82 The goal of Article 6(3) Rome II is to designate the ‘law applicable to a non-contractual obligation’ and not necessarily the law applicable to an infringement of competition law.83 These problems can be distinguished. Against this background, the questions of interest can be reformulated as follows: does Article 6(3) Rome II only 79   In this category falls, eg, s 33 GWB which provides that victims of infringements of European or German competition law can claim damages. 80   In this category fall, eg, the provisions in the GWB dealing with the administrative proceedings between the German competition authorities and (potential) infringers of competition law and interested third parties. In such a proceeding the competition authorities can, eg, issue injunctions to end anti-competitive conduct (cf s 32 GWB). 81   Certain anti-competitive conduct is a criminal offence under German law, eg, bid rigging (s 298 German Criminal Code, Strafgesetzbuch). Most competition law infringements do not, however, entail a criminal sanction in the strict sense, such as a prison sentence, but ‘merely’ administrative sanctions, such as fines (cf s 81 GWB). 82   For further discussion on this point, IV.C.i below. 83   Groupe Européen de Droit International Privé/European Group for Private International Law (GEDIP/ EGPIL), Proposal for a European Convention on the law applicable to non-contractual obligation – Luxemburg 1998, see Commentary of Art 4 and Art 10, available at www.gedip-egpil.eu/documents/gedip-documents-9pe.html (GEDIP/EGPIL, when commenting on its proposal for a specific presumption in the field of unfair competition law and restriction of competition law, states that even though competition law provisions belong to the sphere of public law, the civil claims based on infringement of competition law can be included in the proposed Convention. The Convention would cover civil and commercial matters and could thus apply to the damage claim related to this field. The applicability of competition law provisions as such should depend on the provision concerning the rules of safety and conduct when the specific presumption of Art 4 covers the civil aspects of the claim); D Ashton and C Vollrath, ‘Choice of court and applicable law in tortious actions for breach of Community competition law’ (2006) ZWeR 1, 16, 22–23 (in arguing for the introduction of a specific provision on damage claims based on infringements of competition law in the future Rome II Regulation, the authors make clear that such a rule would be limited to the designation of the law applicable to the civil redress; because some civil redress may have a direct link to the core conceptions of competition law, the law applicable to the civil redress should be determined under Rome II according to a criteria matching the principle governing the application of the market rules of competition law, ie an effects-based approach).

Rome II  109 designate the law applicable to civil remedies (and does it make a difference if the civil remedies are provided for in the civil code or in the competition law of the designated legal system)? Or should it also be used to select the applicable behavioural norms, which are at the core of competition law?

ii.  Market Rules Determine their Own Scope of Application Another aspect casts doubt on the reach of Article 6(3) Rome II in regard of competition law. Competition law fixes its own scope of application in a unilateral way. The existence of autonomous criteria of applicability established by competition law is a well-known phenomenon. It has been explained at length for EU competition law rules.84 Similarly, national competition law rules are usually considered as lois de police or overriding mandatory rules for the very reason that they fix their own scope of application and require their application in a mandatory fashion to any situation falling within their scope.85 In considering whether Article 6(3) Rome II does or does not cover market rules, it is important to highlight that there is a certain paradox in drafting a multilateral conflict rule in a field that is obviously covered by national law that unilaterally determines its own scope of application. The treatment of the applicability criteria established by competition law rules becomes indeed a problem. If Article 6(3) Rome II were interpreted as covering market rules, this would potentially imply that the Sherman Act would be applied by a judge sitting in an EU Member State if Article 6(3) Rome II commands so, without consideration as to whether the Sherman Act requires its own application.86 Put bluntly, should the traditional criteria determining the applicability of competition law be simply set aside or should they somehow be taken into consideration? If they have to be taken into consideration, where does this approach find its theoretical foundation? Of course, in regard of the autonomous determination of the scope of application of competition law, the formulation of Article 6(3) Rome II appears at first sight satisfactory. The ‘effects doctrine’ is certainly the most widespread criterion used by national legal systems in order to circumscribe their competition law provisions’ sphere of applicability, but the precise shape of this doctrine is very much disputed. Article 6(3) Rome II designates the law of the country whose market is affected and thereby a legal system whose competition law normally commands its application to the case according to the ‘effects doctrine’. Some discrepancies between the criterion of applicability in Article 6(3) Rome II and the criterion of applicability unilaterally selected by competition law, however, cannot be excluded. First, it should be underlined that the criteria of the ‘affected market’ is not exactly the one used by the ECJ in order to determine the scope of application of Articles 101, 102 TFEU.87 84   See M Fallon, Droit matériel général de l’Union européenne, 2nd edn (Louvain-la-Neuve, Bruylant-Academia, 2002) 277–84; EJ Mestmäcker and H Schweitzer, Europäisches Wettbewerbsrecht, 2nd edn (Munich, CH Beck, 2004) 167–70; S Francq, L’applicabilité du droit communautaire dérivé au regard des méthodes du droit international privé (Brussels, Bruylant, 2005) 72; TC Hartley, International Commercial Litigation (Cambridge, Cambridge University Press, 2009) 853; F Wagner-von Papp, ‘§ 11 Internationales Wettbewerbsrecht’ in C Tietje (ed), Internationales Wirtschaftsrecht (Berlin, De Gruyter, 2009) 455, 468 ff. 85   See IV.C.ii below. 86   See III.B.ii above. Considering Art 6(3) Rome II as a universal provision form the point of view of the law applicable triggers the question of the treatment of ‘foreign’ applicability criteria of competition law. 87   The ECJ applies the so-called ‘implementation test’, cf Joined Cases 89/85, 104/85, 114/85, 116/85-117/85 and 125/85 to 129/85 A Ahlström Osakeyhtiö and others v Commission (Woodpulp I) [1988] ECR 5193 paras 16–18. The approach taken by the ECJ has been described as ‘effects principle in disguise’, see M Martinek, ‘Das uneingestandene Auswirkungsprinzip des EuGH zur extraterritorialen Anwendbarkeit der EG-Wettbewerbsregeln’ (1989) IPRax 347, 351. It comes indeed very close to the effects principle although some differences remain, see IE Schwartz and

110  Stéphanie Francq and Wolfgang Wurmnest Second, it is possible that the competition law of the legal system designated on the basis of Article 6(3) Rome II rejects its own application or that the competition law of another system, whose market is not directly affected, claims to be applicable (for instance, in the case of export cartels). Also, Article 6(3)(b) Rome II – read literally – would allow the claimant to opt in favour of the lex fori for all damage sustained (including damage that occurred in non-EU countries).88 Does this imply that the competition law of the lex fori is called upon to recognise the anti-competitive effects which occurred on markets located outside the forum? This seems to contravene the scope of the competition law of the forum, which is likely to be limited to infringements that can be located in its own legal system. How could the lex fori define what behaviour is lawful in another legal system?89 In particular, two aspects of core competition law provisions leave one asking to what degree they are impacted by Article 6(3) Rome II: (i) core competition law provisions generally belong to the public sphere and not as such to the sphere of the law to which Rome II is dedicated, ie the law on private obligations; a quandary results to the extent that within the realm of competition law distinctions need to be drawn between provisions having dissimilar natures; (ii) core provisions of competition law carry their own autonomous criteria of applicability.90 The commentators who have identified this overall dilemma seem to agree that some consideration must be given to the criteria of applicability of competition law.91 The impact given to such applicability criteria and the method for taking them into account, however, differ. The solutions proposed vary also depending on the origin of the competition law provisions that are at stake.

B.  Solution for Articles 101, 102 TFEU The conditions of application of Articles 101, 102 TFEU are quite clear. Since primary law takes precedence over secondary law, the applicability of Articles 101, 102 TFEU cannot depend on Article 6(3) Rome II. The provisions of the Treaty concerning competition law do provide for their own criteria of applicability which Article 6(3) Rome II cannot set aside. In many cases, the situations where the ‘affected market’ is located in the territory of an EU Member State will correspond to cases where trade between Member States has been affected and the distortion of competition is located within the internal market so that the criteria of applicability of Articles 101, 102 TFEU are fulfilled. It is, however, not certain that the convergence of applicability criteria is systematic. The definition of the ‘affected market’ does not necessarily derive from the definition provided for by the Commission concerning the relevant market.92 There will also be cases where the law of a Member State J Basedow, ‘Restrictions on Competition’ in K Lipstein (ed), International Encyclopaedia of Comparative Law (Tübingen, Mohr Siebeck, 1995) paras 35–58; Wagner-von Papp, ‘§ 11 Internationales Wettbewerbsrecht’ (n 84) 470 ff. 88   Policy reasons speak however in favour of a limitation of the concentration rule, see VI.B below. 89   The problem is best understood in favour of an analogy to the Highway Code: when an accident has occurred in Germany, the French Code de la route does not apply even if French law governs the question of liability for damages according to Art 4(2) Rome II. The issue whether the defendant has infringed a traffic rule is governed by German law as the wrongful act leading to the damage to place in Germany. See also IV.C.iii below. 90  For a general theoretical background in respect of this discussion, see M Martinek, Das internationale Kartellprivatrecht (Heidelberg, Verlag Recht und Wirtschaft, 1987) 45 ff. 91   These authors are cited below, each of them under the position they stand for. 92   Commission Notice on the definition of relevant market for the purposes of Community competition law [1997] OJ C372/5. See V.A below.

Rome II  111 is applicable under Article 6(3) Rome II but where Articles 101, 102 TFEU do not command their own application (in the absence of an effect on trade between Member States for instance). Therefore, it is in any case necessary to apply primary competition law provisions under their own criteria of applicability before turning to Article 6(3) Rome II in order to identify the law applicable to damages. Interestingly enough, the scope of the national law applicable to non-contractual obligations will be restricted to questions not solved under EU law itself. The ruling in Courage establishes the obligation to pay damages in cases of infringements of EU competition law.93 Some authors have discussed whether EU law may go further (and if so, how much further) in providing the exact conditions of liability and compensation.94 However, the ECJ thus far has not spelled out precise conditions that have to be met in order to be awarded damages but instead has limited itself to measuring national law against the yardstick of the principles of equivalence and effectiveness.95 These principles apply however under the conditions of applicability of EU competition law and take precedence over the law designated by Article 6(3) Rome II. Primacy is indeed attached to any rule of the Treaty concerning competition law, be it the express ‘market rules’ of Articles 101, 102 TFEU or any condition of civil liability derived from the effet utile of these provisions.96 In sum, the application or Articles 101, 102 TFEU is placed outside the reach of Article 6(3) Rome II by way of primacy because these provisions already set their own applicability criteria. We shall now turn to the question of national competition law’s criteria of applicability.

C.  Possible Solutions for Market Rules of National Origin The Rome II Regulation offers several possibilities for taking into consideration the applicability criteria of national market rules. As we shall see, each possible solution offers pros and cons. Generally speaking, the core difficulty resides in reconciling the wording of the Regulation with the general principles of private international law.

i.  Article 6(3) Rome II as an ‘Open Gate’ Amongst the commentators who expressly addressed the point whether Article 6(3) Rome II also designates the applicable national competition law (ie market rules), some have proposed a two-step approach. These commentators argue that Article 6(3) Rome II also covers the competition law aspects of the claim. The market rules that will serve as a benchmark for the defendant’s behaviour are those of the country whose market is affected and only those competition rules belonging to the law applicable under Article 6(3) Rome II are to be taken into account. The first step of the reasoning is that the provision determines what legal system is competent for both private aspects and competition law aspects (in the strict sense) of the claim.97 The second step consists in taking the criteria of applicability of the   Courage (n 10) paras 26–27.   Komninos (n 10) 243 f. 95  See Courage (n 10) para 29; Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619 paras 58 f; for an analysis of the European law of damages flowing from the ECJ’s case-law see R Nazzini, ‘Potency and Act of the Principle of Effectiveness: The Development of Competition Law Remedies and Procedures in Community Law’ in C Barnard and O Odudu (eds), The Outer Limits of EU Law (Oxford, Hart Publishing, 2009) 401. 96   Roth (n 51) 634; Komninos (n 10) 244. 97   Roth (n 51) 635. 93 94

112  Stéphanie Francq and Wolfgang Wurmnest designated competition law into consideration. If the competition law of the designated legal system does not require its application by its own terms, this refusal is taken into consideration as a question of substantive law.98 Following this reasoning, the limitations set by the designated law as to its own applicability need to be respected as a matter of substantive law. This approach is thus based, in essence, on the theory of ‘self-limited rules’.99 Less clear is what this approach means for competition law provisions which are not part of the lex causae, but which would claim their application to the case at hand. If consideration of the applicability criteria is purely a matter of substantive law, the law of the States where the parties are established could not be taken into consideration because only the substantive provisions of the law designated by Article 6(3) Rome II should be determinative of this issue. One author apparently addresses the problem as a question of interpretation of the criteria of the ‘affected market’. If this criterion is construed in a sufficiently wide manner, it should allow the application of all competition law provision that assert their own application.100 This is the reason why we refer to this interpretation of Article 6(3) Rome II as the ‘open gate’ approach. The combination of a ‘self-limited rules’ approach with the idea of Article 6(3) Rome II as an ‘open gate’ is perfectly compatible with the wording of the Regulation. Article 6(3) Rome II is formulated in such a broad way that one naturally tends to interpret the provision as covering both the law on liability and damage as well as the market rules. The wording of Article 15 Rome II reinforces this interpretation. According to sections (a), (b) and (c) of this provision, the law applicable to non-contractual obligations governs ‘the basis . . . of liability’, ‘the grounds for exemption of liability’ and ‘the remedy claimed’. At first sight, the description of the scope of the applicable law appears to mean that competition law is included since it will constitute the basis for liability.101 The ‘open gate’ approach certainly proposes the best way of reconciling, on the one hand, the existence of a bilateral rule presumably covering competition law rules (ie market rules) with, on the other, the fact that these same rules purport to determine their own scope of application. It is an approach entirely dedicated to coping with the potential discrepancies between the connecting factor of the bilateral rule and the unilaterally determined connecting factor of the competition law rules. As such, in regard of the current wording of the Regulation, the ‘open gate’ approach offers a sound practical solution. The ‘open gate’ approach does, however, present a few disadvantages. First, it is unclear that the wording of the Regulation commands this interpretation. Article 6(3) and Article 15 Rome II could be read as provisions that do not deal with core provisions of competition law. Article 6(3) states that its goal is to identify the ‘law applicable to a non-contractual obligation arising out of a restriction of competition’. The law 98   Roth (n 51) 636, 641 (insisting that the problem of the applicability criteria of competition law is considered as a substantive law question and does not contradict the exclusion of renvoi set forth by Art 24); Hellner (n 40) 62. 99   On this theory see G Kegel, ‘Die selbstgerechte Sachnorm’ in E Jayme and G Kegel (eds), Gedächtnisschrift für A Ehrenzweig (Heidelberg, CF Müller, 1976) 51; K Lipstein, ‘Inherent Limitations in Statutes and the Conflict of Laws’ (1977) ICLQ 884; K Lipstein, ‘Les normes fixant leur propre domaine d’application; les expériences anglaise et américaine’ in Comité Français de Droit International Privé (ed), Travaux du Comité Français de Droit International Privé (Paris, Pédone, 1979) 187. 100   Roth (n 51) 636 (presents the connecting factor of the affected market as ‘ein ‘offener’Anknüpfungspunkt . . . der im Regelfall die anwendungswilligen Kartellrechte erfassen wird, um dann die notwendige Feinsteuerung dem Sachrecht zu überlassen. Dadurch wird . . . verhindert, dass anwendungswillige Kartellrechte durch eine zu eng formulierte allseitige Kollisionsnorm von einer Anwendung ausgeschlossen werden’). 101   Note that the French version of Art 15(a) Rome II refers to the ‘conditions de la responsabilité’.

Rome II  113 designated apparently focuses on the question of damages (the ‘law applicable to a noncontractual obligation’) while the question whether there is an infringement of competition law could be treated as a distinct question (‘arising out of a restriction of competition’). Turning to Article 15 Rome II, this provision states that the lex causae also determines the ‘basis for liability’. It is however possible to differentiate: it is one thing to state that an infringement of competition law triggers liability; it is another to define under what circumstances there is an infringement of competition law. The former concerns the ground (or ‘basis’) of liability and is a typical question of civil law (‘Does Article 1382 of the Belgian Civil Code apply or Article 1382 of the French Civil Code?’) or, in countries where the civil remedies are provided for by the law on competition, of Kartelldeliktsrecht (see for instance section 33 GWB).102 The latter is a distinct question which involves the application of the ‘market rules’ of competition law and can only be answered by these rules themselves when one maintains that they define their own scope of application. It is by no means a persuasive argument that the ‘market rules’ (Verbotsnormen) that are to be taken into account for the assessment of liability are only those of the lex causae. For instance, in the case of traffic accidents, the question whether the driver committed a fault is considered under the Highway Code of the country where the accident took place. Some statements of the Commission back up the differentiation between the basis for liability and the question of the existence of an infringement of competition law. Indeed, when describing its understanding of Article 15(a) Rome II, the Commission referred to typical concepts of civil law regulated in Article 1382 Belgian or French Civil Code.103 Also, Recital 23 Rome II is – as already mentioned – likely the expression of the reasoning process which the legislator had in mind. This Recital apparently proposes to first check whether there is an infringement of competition law under Articles 101, 102 TFEU or under the law of a Member State before turning to Article 6(3) Rome II. Following this line of reasoning, one could argue that competition law issues must be addressed according to different criteria before turning to question of the law applicable to damages as designated by Article 6(3) Rome II. Second, this approach has a direct influence on the manner in which Article 6(3) Rome II is to be construed, especially the notion of the relevant market and the nature of the link required between the anti-competitive conduct and the affected market.104 As explained above, the ‘open gate’ approach proposes an extensive notion of the term ‘affected market’, so broad that the genuine usefulness of the conflict rule can be doubted. In addition, this wide interpretation of the connecting factor is not only valid for the designation of ‘market rules’ but also for the private law applicable to the damage claim, and it thus enhances the 102   A similar dividing line can be found in other contexts of liability, such as for instance the civil sanctions deriving from violations of fundamental rights. The question of the existence of a violation of fundamental rights may be regarded as distinct from the question whether a civil action can be brought in order to claim damages in compensation of the harm suffered due to this violation (on the question whether the Alien Tort Statue does by itself open a cause of action in case of violation of human rights, see WS Dodge, ‘Historical Origin of the Alien Tort Statute: A Response to the Originalists’ (1995-1996) Hastings International and Comparative Law Review 221, 238 ff; KC Randall, ‘Further Inquiries into the Alien Tort Statute and a Recommendation’ (1985-1986) NYU Journal of International Law and Politics 474, 477 ff). 103   See Rome II Proposal, comment of Art 11: ‘The expression . . . refers to intrinsic factors of liability. The following questions are particularly concerned: nature of liability (strict or fault-based); the definition of fault, including the question whether an omission can constitute a fault; the causal link between the event giving rise to the damage and the damage; the persons potentially liable; etc’. It is important to note that the reference to the ‘definition of the fault’ means, in the context of competition law, the specification whether the violation of competition rules is an act that qualifies as one giving rise to liability – without specifying which competition rules eventually spell out the prohibition. 104   See V below.

114  Stéphanie Francq and Wolfgang Wurmnest Mosaik-effect (ie the distributive application of the law of the various countries whose markets are affected). Additionally, the ‘open gate’ approach presupposes the taking into consideration of the law of many different ‘affected markets’ before stepping back from the application of those laws that are ‘self-limited’ and placing the situation outside their scope of application. Eventually, the two-step approach that considers competition law provisions as ‘self-limited rules’ cannot be coherently applied under subsections (a) and (b) of Article 6(3) Rome II. The latter allows the claimant to opt in favour of the lex fori under certain circumstances. This choice can be made even in presence of co-defendants who reside in States other than the forum. Are the market rules of the lex fori applicable to all behaviours and practices that are submitted to the judge’s appreciation? Or should the competition law of the lex fori remain applicable only for those which fall into its scope of application? In this case, under which standard should the practices not falling within the scope of competition law provisions of the lex fori be evaluated? The commentator that has elaborated the most detailed version of the ‘open gate’ approach solves the problem by proposing to limit the scope of subsection (b) of Article 6(3) Rome II to the question of damages and leaving the question of the applicable competition law provisions to subsection (a) (thus to the Mosaikprinzip).105 This solution introduces logical discrepancies between subsections (a) and (b) of Article 6(3) Rome II, which are hardly explainable but for purely practical reasons: the scope of Article 6(3) Rome II should be coherent under subsections (a) and (b) because both deal with the ‘law applicable to a non-contractual obligation arising out of a restriction of competition’. Third, the ‘open gate’ approach is not coherent in theoretical terms. On the one hand, the theory is based on the assumption that the existence of applicability criteria in competition law is a problem of substantive law. These criteria can thus be dealt with after the designation of the applicable law. On the other hand, the practicability of this approach rests on a specific interpretation of the connecting factor of Article 6(3) Rome II and thus takes place at the stage of the designation of the applicable law. In sum, the ‘open gate’ approach corresponds to the apparent literal meaning of the Rome II Regulation but is less justifiable from a theoretical point of view.

ii.  Market Rules as Overriding Mandatory Rules (Article 16 Rome II) Competition law provisions have up to now primarily been considered as overriding mandatory rules.106 As mentioned above, they qualify as overriding mandatory rules because they defend the public interest, fix their own scope of application and require their

  Roth (n 51) 647–48.   For France: L Idot, ‘Les conflits de lois en droit de la concurrence’ (1995) Journal du Droit International – Clunet (JDI Clunet) 321; for Germany: Roth (n 51) 628–31 (two main theories were competing, one stood for the application of foreign competition law through a ‘Sonderanknüpfung’ – equivalent to the theory of the lois de police – and the other one proposed a bilateralisation of s 130(2) GWB); for Austria: H Heiss and LD Loacker, ‘Die Vergemeinschaftung des Kollisionsrechts der außervertraglichen Schuldverhältnisse durch Rom II’ (2007) Juristische Blätter 613, 644; H Ofner, ‘Die Rom II-Verordnung – Neues Internationales Privatrecht für außervertragliche Schuldverhältnisse in der Europäischen Union’ (2008) Zeitschrift für Europarecht, Internationales Privatrecht und Rechtsvergleichung 13, 18; For the Netherlands: Rosenkranz and Rohde (n 64). Generally speaking: C Kessedjian, ‘Competition’ in C McLachlan and P Nigh (eds), Transational Tort Litigation: Jurisdictional Principles (Oxford, Clarendon Press, 1996) 171, 172; Komninos (n 10) 241; national competition law is cited in the GiulianoLagarde Report on the Rome Convention as an example of overriding mandatory rule, see Report on the Convention on the law applicable to contractual obligations by M Giuliano and P Lagarde [1980] OJ C282/1. 105 106

Rome II  115 application in a mandatory way.107 As shown in the contribution on Rome I, there is no doubt that under that Regulation market rules are treated as overriding mandatory rules.108 For the sake of consistency between the two ‘sister regulations’, it is therefore natural to presume that core competition law provisions (ie market rules) should be considered as overriding mandatory rules under Article 16 Rome II. Considering market rules as overriding mandatory rules leaves the application of competition law provisions to their own criteria of applicability.109 In a first step, the unilateral will of application of competition law provisions is taken into account and, in a second step, the law applicable to the civil remedies is determined according to the bilateral conflict rules.110 More precisely, the competition law provisions of the lex causae (designated under Article 6(3) Rome II) are of course taken into consideration if these provisions command their application:111 however, competition law provisions of other countries may also claim their application (as lois de police – overriding mandatory provisions) if the situation at hand falls within their scope. The result is almost the same as that reached under the ‘open gate’ approach but is more straightforward. By taking the competition law provisions’ criteria of applicability as a starting point, the approach takes only into consideration the competition law provisions that assert themselves as applicable. As such, the application of competition law as overriding mandatory rules respects the nature of market rules. This approach also prevents courts from imposing their applicability criteria on foreign norms, which possess their own applicability criteria: it seems indeed rather odd to consider that Article 6(3) Rome II should tell judges in Europe when the Sherman Act applies despite the fact that the Sherman Act fixes its own scope of application. This is not to say that the jurisdiction of the forum is ‘submitted’ to the ‘will of application’ of foreign mandatory rules. Even if presenting the question of the application of foreign overriding mandatory rules is beyond the purpose of this contribution,112 it should nonetheless be recalled that the forum always keeps a margin of appreciation on the question whether foreign mandatory provisions should be applied. Considering market rules as overriding mandatory rules and applying them as such also has the advantage of enhancing coherency in the treatment of competition law provisions under Rome I and Rome II. It is difficult to understand why competition law provisions would be treated as overriding mandatory rules under Rome I but not under Rome II.113 A 107   On the various definitions of the concept of overriding mandatory rules and the importance of the public interest defended by the law at stake, see M Kuckein, Die ‘Berücksichtigung’ von Eingriffsnormen im deutschen und englischen internationalen Vertragsrecht (Tübingen, Mohr Siebeck, 2008) 12. 108   See in this book the contribution of M Fallon and S Francq. 109   M Béhar-Touchais, ‘Abus de puissance économique et droit international privé’ (2010) Revue Internationale de droit économique 37, 43, 49 (stating that the connecting factor of Art 6(3) Rome II will often coincide with the criteria independently established by the overriding mandatory rules, the role of which is to prohibit anti-­ competitive behaviour. Apparently, the qualification of the behaviour as anti-competitive is thus left to market rules operating as overriding mandatory rules according to their own criteria of applicability); P Wauthelet ‘Concurrence déloyale et actes restreignant la libre concurrence’ (2008) Revue de Droit Commercial Belge 502, 506 (suggesting that market rules are placed outside the reach of Art 6(3) Rome II because they determine their own scope of application). 110   Such a two-step approach apparently corresponds to what the legislator had in mind when drafting Recital 23 Rome II. See IV.C.i above. 111   The ‘open gate’ approach and the ‘overriding mandatory rules’ approach agree on the fact that overriding mandatory rules of the lex causae should only apply when they command their application. 112   See especially P Mayer, ‘Les lois de police étrangères’ (1981) JDI Clunet 277 ff; K Schurig, ‘Zwingendes Recht, “Eingriffsnormen” und neues IPR’ (1990) RabelsZ 217 ff. 113   L Idot, ‘Le cas du droit de la concurrence dans les textes de référence’ in M Fallon, P Lagarde and S PoillotPeruzzetto (eds), La matière civile et commerciale, socle d’un code européen de droit international privé? (Paris, Dalloz, 2009) 171, 183 para 35.

116  Stéphanie Francq and Wolfgang Wurmnest coherent application of Rome I and Rome II is not only requested by Recital 7 Rome II, it also has long-term consequences as regards a possible European Private International Law Code and the progressive elaboration of a common theoretical background in which such codification could be rooted.114 This alternative two-step approach (the ‘overriding mandatory rules’ approach) seems to be more logically and theoretically consistent, but it suffers from various weaknesses. First and foremost, its efficiency is drastically limited by the wording of Article 16 Rome II. Contrary to Article 7 Rome Convention and Article 9 Rome I, which both leave some room for taking foreign overriding mandatory rules into consideration (albeit to different degrees),115 Article 16 Rome II refers only to the overriding mandatory rules of the forum. It can, of course, be discussed whether the silence of Article 16 Rome II in respect of foreign overriding mandatory rules amounts to a prohibition against taking them into consideration.116 Some scholars argue that the question should simply be considered as not being regulated by Rome II and left to the domain of national judges.117 One commentator rightly points out that the reservation expressed by some Member States in regard of Article 7(1) Rome Convention was never interpreted in those States as a ban on taking foreign overriding mandatory rules into consideration.118 But if the wording of Rome II, as it currently stands, is to be taken literally,119 the ‘overriding mandatory rules’ approach is not realistic. First, the overriding mandatory rules of the forum may lack any relevant connection to the case at hand. Moreover, foreign mandatory rules might demonstrate relevant contact with the situation and assert their applicability. Under such combination of circumstances, Article 16 Rome II does not solve the problem stated in the beginning of this section. Generally speaking, it should be underlined that the relationship as a whole between Article 16 and Article 6(3) Rome II deserves some clarification. The introduction of Article 6(3) Rome II raises one puzzling question: does the existence of a multilateral conflict rule especially dedicated to damage caused by competition law infringements prohibit the simultaneous use of the rule relating to overriding mandatory rules? An affirmative answer would mean that a judge sitting in a Member State whose law is not applicable under Article 6(3) Rome II is not allowed to apply the market rules of the forum when those rules would be otherwise applicable under Article 16 Rome II.120 Indeed, multilateral conflict 114   On the importance of consistent interpretation of the private international law instruments in the EU see M Fallon, P Lagarde and S Poillot-Peruzzetto (eds), La matière civile et commerciale, socle d’un code européen de droit international privé? (Paris, Dalloz, 2009). 115   As far as ‘foreign’ overriding mandatory rules are concerned, Art 9(3) Rome I enables the judge to apply the overriding mandatory rules of the state of performance of the contract as far as they render the performance unlawful. In contrast, Art 7 Rome Convention did not limit the possibility of applying foreign mandatory rules in such a way. 116   Béhar-Touchais, ‘Abus de puissance économique’ (n 109) 52 (suggesting that this is a question of interpretation). 117   J von Hein, ‘Europäisches Internationales Deliktsrecht nach der Rom II-Verordnung’ (2009) Zeitschrift für Europäisches Privatrecht 7, 24; Heiss and Loacker, ‘Die Vergemeinschaftung des Kollisionsrechts’ (n 106) 644. 118   von Hein, ‘Europäisches Internationales Deliktsrecht’ (n 117) 24. 119   This view is taken by R Plender and M Wilderspin, European Private International Law of Obligations, 3rd edn (London, Sweet & Maxwell, 2009) No 27-007: ‘Thus art 16 makes clear that only the overriding mandatory rules of the forum can displace the applicable law; the overriding mandatory rules of third states having no role to play’. 120   Concurring: Heiss and Loacker (n 106) 630; Ofner, ‘Die Rom II-Verordnung’ (n 106) 18 (according to these scholars, the usual qualification of national competition law as overriding mandatory rules is not allowed any more due to the existence of Art 6(3) Rome II). But see Béhar-Touchais (n 109) 48 f (stating that some French rules characterised as overriding mandatory rules by the French Cour de Cassation continue to apply as such despite the fact that they could qualify as rules on unfair competition or as competition law rules under Arts 6(1)

Rome II  117 rules dedicated to specific areas of law or entailing a specific protection on the one hand and the general provision on overriding mandatory rules on the other, can be considered as complementary or as mutually exclusive. When the question was raised under the Rome Convention, the German Supreme Court (BGH) opted for the latter solution.121 The ECJ will at some point be seised with this question, which has become all the more acute with the multiplication of specific conflict rules under Rome II. In sum, the ‘overriding mandatory rules’ approach makes sense from a theoretical point of view, but it is more difficult to reconcile with the literal meaning of the conflict rules laid down in the Rome II Regulation.

iii.  Market Rules as Rules of Safety and Conduct (Article 17 Rome II) Article 17 Rome II focuses on ‘rule of safety and conduct’. It provides that ‘in assessing the conduct of a person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability’. The impact of this provision is limited. It intervenes only when the law applicable to liability is not that of the country where the harmful event took place. The judge is allowed to take the foreign rules on safety and conduct into consideration as ‘local data’ and enjoys in this respect a certain margin of appreciation (‘as a matter of fact and in so far as is appropriate’). It can hardly be questioned that market rules could qualify as ‘rules of safety and conduct’.122 Even though ‘market rules’ are not inspired by ‘safety’ objectives, they prohibit a certain ‘conduct’ on the market and therefore determine the lawfulness of certain business strategies. Article 17 Rome II was directly inspired by Article 7 of the Hague Convention on road traffic accidents and Article 9 of the Hague Convention on product liability.123 The analogy with traffic accidents helps one to understand how market rules could operate as rules of safety and conduct: when an accident occurs in England but the law applicable is that of another State, English traffic law is consulted in order to assess whether the behaviour of the tortfeasor was lawful. Taking English traffic law into consideration helps, for instance, in assessing the existence of an unlawful conduct required by the law applicable to the merits. Market rules claiming application to the case at hand could equally be taken into consideration in order to assess the behaviour of those who supposedly infringed competition law. On the one hand, Article 6(3) would determine the law applicable to or 6(3) Rome II) 50 (insisting on the flexibility left to the judge in the definition of the scope of application of overriding mandatory rules intervening in the realm of unfair practices and anti-competitive behaviour); C Handig, ‘Rom II-VO: Auswirkungen auf das Internationale Wettbewerbs- und Immaterialgüterrecht’ (2008) Wirtschaftrechtliche Blätter 1, 12 (citing competition law provisions as an example of overriding mandatory rules under Art 16 Rome II); T Petch, ‘The Rome II Regulation: An Update’ (2006) Journal of International Banking Law and Regulation 449, 511 (commenting on the revised proposal of Regulation and suggesting that national judges could always apply competition law as overriding mandatory rules, despite the adoption of the future Art 6(3) Rome II and that party autonomy should therefore be authorised under this provision). 121   A similar question was raised under the Rome Convention with regard to the relationship between its Art 5 (consumer protection) and Art 7 (overriding mandatory rules) and was eventually brought before the German Bundesgerichtshof, see BGH, 19 March 1997 (1998) IPRax 285 (note W Ebke, ‘Schuldrechtliche Teilzeitwohnrechte an Immobilien im Ausland und kein Widerrufsrecht: Zum Ende der Altfälle’ (1998) IPRax 263; French translation in (1998) RCDIP 610 note Lagarde); the BGH decided that Art 7 Rome Convention could not be used in order to obtain the application of German law if German law was not designated by Art 5 Rome Convention. 122   See GEDIP/EGPIL, Proposal for a European Convention (n 83) (according to the GEDIP/EGPIL Proposal, market rules should apply as rules of safety and conduct). 123   Rome II Proposal, comment of Art 13.

118  Stéphanie Francq and Wolfgang Wurmnest liability (ie the law stating the conditions of the liability such as the causal link or the nature of damage) and on the other hand, Article 17 would intervene, within the realm of the law applicable to the merits, in order to refer to the rules of conduct the tortfeasor should have respected. The two provisions can operate simultaneously.124 The major disadvantage of Article 17 Rome II is that its relies on a connecting factor – the place of ‘the event giving rise to the liability’ – which is often difficult to apply in the field of competition law. Under a first and literal interpretation, the event giving rise to liability could for example, be understood as the conclusion of an anti-competitive agreement. This interpretation raises two problems: (i) How can the judge locate the place where the agreement was entered into? (ii) Even if he can identify this place, does the country where the agreement was entered into present any relevant connection with the case at hand? Anti-competitive agreements are often concluded in countries where none of the parties have a registered office and in which the agreement will have no effect. In such cases, it is doubtful that the competition law of the country within the territory of which the agreement was entered should apply to judge whether the agreement was anti-competitive or not. Other constructions of the ‘event giving rise to liability’ are, however, possible and maybe more in tune with current conceptions of private international law in the field of non-contractual obligations.125 In the field of private enforcement, several propositions have been formulated including the place of implementation of the anti-competitive agreement and the place of the affected market.126 Other contributors in this book have shown how the localisation of the event giving rise to liability needs to be specified depending on the circumstances of the violation of competition law.127 For instance, in case of organisations, which are likely to favour cartels (such as a shipping conference), irrespective of the exact place where the anti-competitive agreement between members of the organisation was entered into, the event giving rise to liability could be located at the seat of the organisation.128 Article 17 Rome II is a provision with wide potential (not only in the field of private enforcement), yet one that calls for further analysis and specification, especially in the field of private enforcement. The interpretation of this provision, however, should not be tailored to the peculiarities of just one kind of litigation. In sum, the application of Article 17 Rome II bypasses the difficulties raised by the coexistence of Article 6(3) Rome II on the one hand and the autonomous determination of the scope of application of market rules on the other. This approach makes sense in regard 124   In the course of the debate on Rome II, the European Parliament suggested that Art 17 Rome II should not apply to issues covered by Art 6(3) Rome II, see Report on the proposal for a regulation of the European Parliament and the Council on the law applicable to non-contractual obligations (Rome II) adopted 7 July 2005 A6-0211/2005, Amendment 14, 11, Amendment 45, 31. By rejecting the proposed Amendment, the Commission made clear that nothing stands against the qualification of the core provisions of competition law as ‘rules on conduct’, see Commission Amended Proposal, 4. 125   As one commentator puts it, in private international law, the localisation of the country in which the agreement was concluded is not attached too much importance because it can be fortuitous or impossible to identify; see ML Niboyet, ‘Les questions de compétence judiciaire’ (2009) 2 Concurrences – édition spéciale sous la dir L Idot, Actes du colloque sur le livre blanc sur les actions en dommages et intérêts pour infraction aux règles communautaires sur les ententes et les abus de position dominante 62, 63. The case-law of the ECJ, for instance, offers examples of alternative ways of localising the event giving rise to liability. For instance in case of defamation, where the event giving rise to liability was both difficult to identify and to locate, the ECJ located it at the place of establishment of the editing company, see Case C-68/93 Fiona Shevill and others v Presse Alliance SA [1995] ECR I-415. 126   Niboyet, ‘Les questions de compétence judiciaire’ (n 125) 63 (highlighting that in most cases the place of the event giving rise to liability will coincide with the localisation of the damage). 127   See the contribution of B Vilà Costa for first insights and that of J Basedow (contribution dedicated to the ‘International Cartels and the Place of Acting’) for a more detailed analysis on this specific point. 128   Concurring: B Vilà Costa (n 126) and J Basedow (n 126).

Rome II  119 of the nature of market rules, but its efficiency in competition cases depends on the localisation of the country where the harmful event took place.

D.  Necessary Legislative Amendments The overview has shown that a great deal of uncertainty surrounds the reach of Article 6(3) Rome II. The way in which the applicability criteria set by competition law should be treated under Rome II is currently uncertain. Several possibilities have been analysed above. Each of them presents pros and cons, the major difficulty being identifying a solution which is sound in terms of logic and private international law theory and, at the same time, consistent with the wording of the Regulation. Article 6(3) Rome II could be construed as an ‘open gate’. Under this approach, Article 6(3) Rome II designates not only the law applicable to damages, but also the law determining whether the behaviour of the parties is lawful (ie the application of market rules). Article 6(3) Rome II should, however, be construed in a flexible manner. First, if the market rules of the competition law of the country designated under Article 6(3)(a) Rome II do not demand application, they should not be applied. Second, if competition law provisions (market rules) of another country claim application, this application should be rendered possible. A different approach would be to limit the application of Article 6(3) Rome II to the rules of civil law (Kartelldeliktsrecht) and to use other provisions of the Regulation in a way that fully respects the nature and the autonomous criteria of applicability of market rules (Kartellverbotsnormen). But given the law as it stands, the effectiveness of these alternative approaches relying either on Article 16 Rome II (overriding mandatory provisions) or on Article 17 Rome II (rules of safety and conduct) depends on a rather broad interpretation of these provisions, as Article 16 Rome II refers only to the application of the lex fori and Article 17 Rome II only allows application of the rules of safety and conduct of the country where the event giving rise to liability took place. In regard of the above, it is difficult to favour at this stage one approach over the others. From the perspective of consistency between Rome I and Rome II, it would make sense to adapt the wording of Article 16 Rome II in order to allow the judge to also apply foreign market rules as overriding mandatory rules. In the meantime, practitioners will find in the previous section tools of interpretation of each relevant provision (Article 6(3), Article 16 and Article 17 Rome II) enabling them to apply the Regulation as it stands and still respect the criteria of applicability of competition law.

V.  The Law of the Affected Market, Article 6(3)(a) Rome II Article 6(3)(a) Rome II demands the localisation of the market affected by the restriction of competition. The Rome II Regulation is thus based on the effects doctrine.129 Two major 129   See Roth (n 51) 639 f; Ackermann, ‘Antitrust Damages Actions’ (n 75) 113; Rodriguez Pineau, ‘Conflict of Laws Comes to the Rescue of Competition Law’ (n 6) 321; U Immenga, ‘Das Auswirkungsprinzip des internationalen Wettbewerbsrechts als Gegenstand einer gemeinschaftsrechtlichen Verordnung’ in F Baur et al (eds), Festschrift für Gunther Kühne zum 70. Geburtstag (Frankfurt am Main, Verlag Recht und Wirtschaft, 2009) 725, 732.

120  Stéphanie Francq and Wolfgang Wurmnest issues arise when applying this doctrine. The first concerns the methods to be used to identify the relevant market and the second the nature of the link required between the anti-competitive conduct and the market affected.

A.  Defining the Relevant Market When applying Article 6(3)(a) Rome II to claims for breach of competition law, as a first step one has to define the geographical market affected by the anti-competitive conduct. The concept of ‘market’ is generally understood to denote a coincidence of supply and demand for a particular product or service (or their substitutes) in a particular geographic area.130 It seems to be common sense that the relevant market for the purposes of conflict law is to be identified along lines similar to those used when applying the substantive rules of EU competition law.131 Under the substantive rules of EU competition law, the definition of the relevant market is, for example, decisive in determining whether an undertaking holds a dominant position according to Article 102 TFEU. The application of Article 101 TFEU also demands a market definition, in particular to determine whether an agreement can be exempted according to Article 101(3) TFEU. It is conceded that the ‘transfer’ of the general market definition principles shaped under substantive law to Article 6(3)(a) Rome II makes sense for reasons of consistency. Yet full congruence between private international law and substantive law will not always be possible to the extent that Article 6(3)(a) Rome II can conceivably point to a law that has a completely different way of constructing markets for the purposes of competition law than EU law does. However, such situations are rather hypothetical as the basic principles of market definition are generally accepted in most States having competition laws. Nonetheless, the transfer of the market delineation rules of substantive competition law to private international law has its limits. The definition of a market under the substantive rules of EC competition law combines the product market and the geographic market. The relevant product market includes, in essence, all those products (and/or services) which are regarded as reasonably interchangeable by the purchasers of these products or services, for reasons such as the products’ physical or technical characteristics, their price-level or their intended use.132 The relevant geographic market comprises the area – as stated in the summary of ECJ case-law offered by the Commission in its market definition Notice of 1997 – ‘in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those area’.133 130   Schwartz and Basedow, ‘Restrictions on Competition’ (n 87) para 35-11; Basedow, ‘Souveraineté territoriale et globalisation des marchés’ (n 8) 43. 131   See Hellner (n 40) 59 f; Dickinson (n 7) para 6.62; but see Fitchen (n 6) 358 f (arguing that the market analysis under Art 6(3) should be carried out in a ‘less abstract’ and more simplified manner). 132   Commission Notice on the definition of relevant market for the purposes of Community competition law [1997] OJ C372/5 para 7. This definition is derived from the following case law Case 6/72 Europemballage Corporation and Continental Can Company Inc v Commission of the European Communities [1975] ECR 495 para 32; Case 85/76 Hoffmann-La Roche Co AG v Commission of the European Communities [1979] ECR 461 paras 21–35; Case 31/80 NV L’Oréal and SA L’Oréal v PVBA ‘De Nieuwe AMCK’ [1980] ECR 3775 para 25. 133   Commission Notice on the definition of relevant market for the purposes of Community competition law [1997] OJ C372/5 para 8.

Rome II  121 In competition law litigation, defining the relevant market is often a very complex investigation involving the assessment of many economic factors.134 Moreover, markets are delineated according to economic criteria without taking into account State borders. In turn, for matters of private international law, it suffices however to apply a ‘simplified analysis’ given that the judge has merely to link the effects of a given anti-competitive activity to one or more national legal systems, ie to the territory of one or more countries. This task is slightly different from the market delineation in many competition cases in which the exact definition of the relevant market is often decisive for the illegality of the conduct in question.135 As far as follow-on actions are concerned, however, the judge can (or in some jurisdictions must) rely to a large extent on the market delineation carried out by the European Commission or a national competition authority. In this context, as well as in market definition matters in stand-alone actions, the decisive factor is not where the purchasers and suppliers are located, but the geographic area in which the supply and demand coincide. An ‘economic market’ spanning over the national borders of one country (regional or worldwide markets) must therefore be divided into ‘legal sub-markets’ in order to locate the applicable national law for each claimant or each class of claimants. On this basis the relevant market is the geographic area into which a product is offered and sold to be consumed, resold or processed.136 Services affect the geographic market in which they are performed.137 The identification of the affected market in light of the aforementioned general principles is often a question of degree. Assume that two competitors seated in country A and B infringe Article 101 TFEU (or a similar prohibition of national law) by agreeing to fix, control or maintain prices in relation to the goods that they supply. Such price-fixing agreements are prohibited to ensure that the other market side can choose amongst competitive offers. Price fixing by producers therefore usually affects all markets in which the first buyers are operating. Offer and demand coincide in this geographic area as it is there that the cartelised products are offered and purchased for consumption.138 If the producers agree to fix prices for countries A, B and C, then potential customers operating in these countries are affected. If in such a case a buyer seated in country A resells the products to a buyer located in E, it is doubtful whether the market of country E is affected.139 Can such effects be regarded as indirect consequences so that these markets are not affected in the sense of Article 6(3)(a) Rome II? The answers to questions such as these depend on how one regards 134   For an overview on economic market factors that may be taken into account in the market delineation analysis, see R O’Donoghue and AJ Padilla, The Law and Economics of Article 82 EC (Oxford, Hart Publishing, 2006) 63 f. 135   eg, the wider one draws the relevant product market, the lesser are the chances that an undertaking will be found dominant. Without a finding of dominance, the prohibitions laid down in Art 102 TFEU do not apply. In turn, the narrower one defines the relevant product market, the stronger will be the position of the incumbent on that market. The stronger the dominant position, the higher the likelihood that conduct protecting that position leads – together with other factors – to anti-competitive foreclosure prohibited under Art 102 TFEU, see Commission, ‘Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings’ (Communication) [2009] OJ C45/7 paras 19 f. 136   Schwartz and Basedow (n 86) para 35-11. 137  ibid. 138   Hellner (n 40) 59; see also F Vischer, ‘Art 137’ in D Girsberger et al (eds), Zürcher Kommentar zum IPRG, 2nd edn (Zurich, Schulthess, 2004) para 10; M Rehbinder, ‘Art 130’ in EJ Mestmäcker and U Immenga (eds), Wettbewerbsrecht, Band 2: GWB – Kommentar zum deutschen Kartellrecht, 4th edn (Munich, CH Beck, 2007) para 156. 139   For the application of the law of State E to the claim of the indirect purchaser (at least in intra-Community disputes) see Tzakas (n 37) 564 f.

122  Stéphanie Francq and Wolfgang Wurmnest the nature of the link required between anti-competitive conduct and the market affected. This question will be discussed in more detail in the next section.

B.  Nature of the Link Required As a starting point, it is important to note that the Community legislator has avoided the use of the implementation criterion used by the ECJ140 and has decided instead that the effects doctrine shall be the relevant connecting factor.141 Therefore, it seems to be common sense that neither the seat of the acting undertakings nor the place in which the event giving rise to the damage occurred has any relevance in determining the applicable law according to Article 6(3)(a) Rome II. Infringements of competition law, however, regularly concern restrictions on the supply of goods which are often channelled by the distribution chain into various countries. The effects doctrine can therefore lead to the application of very ‘remote’ laws. Against this background, a controversy has arisen as to whether and to what extent the effects doctrine should be limited. This debate is rooted in the fact that most national legal systems do not apply the effects test without further qualifications.142 Under US law, for instance, for the Sherman Act to apply the Foreign Trade Antitrust Improvements Act of 1982 demands a ‘direct and substantial, and reasonably foreseeable effect’ on the US market.143 Article 137(1) Swiss Act on Private International Law provides that claims based upon a breach of competition law shall be governed by the law of the State in whose market the direct effect of the restraint of competition to the injured party occurs (‘auf dessen Markt der Geschädigte von der Behinderung unmittelbar betroffen ist’). And also under German law, there is a broad consensus that for reasons of practicability only ‘direct and appreciable effects’ on the German market trigger the application of the GWB.144 Furthermore, with regard to the international reach of the EU merger control provisions (Regulation 139/2004) the General Court has decided that these provisions apply only when the proposed concentration has an ‘immediate, substantial and foreseeable effect’ on the internal market.145 In turn, Article 6(3)(a) Rome II does not explicitly mention any restrictions on the effects doctrine, unlike Article 6(3)(b) Rome II which only applies if a ‘direct’ and ‘substantial’ effect on the market of the forum State can be demonstrated. Moreover, attempts during the course of the legislative history to introduce such limitations to the effects principle failed. Recital 20 of the Council’s Common Position stating that the effect of a restriction of competition must be ‘direct and substantial’, was dropped during the conciliation process without indicating the reasons for doing so. Despite the lack of any restriction mentioned   Woodpulp I (n 86) paras 16–18.   Mankowski (n 37) 177; Roth (n 51) 639 f; Ackermann (n 75) 113; Plender and Wilderspin, European Private International Law of of Obligations (n 119) 20-058; Rodriguez Pineau (n 6) 321. 142   For an overview see Wagner-von Papp (n 84) 459 f. 143   15 USC Section 6a states: ‘Sections 1 to 7 of this title shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless (1) such conduct has a direct, substantial, and reasonably foreseeable effect (A) on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations; or (B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States; and (2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this title, other than this section. If sections 1 to 7 of this title apply to such conduct only because of the operation of paragraph (1)(B) then sections 1 to 7 of this title shall apply to such conduct only for injury to export business in the United States’. 144   Rehbinder, ‘Art 130’ (n 138) paras 163–74 (‘direkte und spürbare Wirkungen’). 145   Case T-102/96 Gencor Ltd v Commission [1999] ECR II-753 para 92. 140 141

Rome II  123 in the Regulation itself, it seems that a limitless application by the effects test is not warranted. There is however no agreement on the criteria to be used to restrict the effects principle. Whereas some authors require that the effect on a market must be ‘direct’ to trigger the application of a given law,146 others argue that such an impact must (also) be ‘substantial’.147 Others favour adding the requirement of foreseeability148 and again others advocate a de minimis threshold.149 In our view, the prerequisite of a direct effect flows from the fact that Article 6(3) Rome II is to a certain extent a clarification of the general rule found in Article 4 Rome II.150 As it is common ground that indirect consequences of the damage to the protected interest are irrelevant for determining the country where the damage occurs under Article 4 Rome II,151 this issue seems also evident with regard to Article 6(3) Rome II: indirect effects are therefore not market effects and should not be taken into account in determining the law applicable to a non-contractual obligation arising out of a restriction of competition.152 In light of the drafting history, the criterion of ‘substantial’ effects should, in turn, not be used when deciding on the law applicable to a certain case.153 Consequently, there is no spill-over protection at the level of private international law analysis. A national law may apply even though the effects occurring in the respective country are of a rather negligible magnitude. Whether these effects are sufficient for a violation of that national law is a matter to be determined by the applicable law. Thus, spill-over protection moves from the level of private international law to the level of substantive law.154 Finally, the criterion of foreseeability should not play a major role in international competition cases as the conflict rule Article 6 Rome II – unlike Article 5 Rome II – does not mention it. The heated debate on abstract criteria used to limit the reach of the effects doctrine should however not be overemphasised. Economic effects cannot be easily translated into legal prerequisites. There are no objective standards to measure, for example, direct or substantial effects precisely.155 The application of such limiting factors is thus a matter of degree. The question is more how ‘direct’ an effect must be to trigger the application of a given law. Thus the criterion of direct effects serves as a form of ‘remoteness-test’ to limit the liability of the defendant.156 In our opinion its specific application should be made according to the protective scope of the allegedly infringed market rules at hand, thus forming groups of cases for which sufficient effects on a given territory can be assumed.   Illmer (n 57) paras 99-101.   S Leible and M Lehmann, ‘Die neue EG-Verordnung über das auf außervertragliche Schuldverhältnisse anzuwendende Recht (“Rom II”)’ (2007) RIW 721, 730; Hellner (n 40) 61 f. One commentator even suggests applying a threshold of a 5% market share held by the defendant on the relevant market as a quantitative benchmark to measure ‘substantial’ effects, see Mankowski (n 37) 186. 148   Mankowski (n 37) 185. 149   Roth (n 51) 641. 150   See Recital 21 Rome II. 151   See G Hohloch, ‘Place of Injury, Habitual Residence, Closer Connections and Substantive Scope: the Basic Principles’ (2007) YPIL 1, 10; W Wurmnest, ‘Art 4’ in M Herberger et al (eds), juris PraxisKommentar BGB: Internationales Privatrecht, Band 6, 5th edn (Saarbrücken, Juris, 2010) para 13; Illmer (n 57) para 99. 152   Illmer (n 57) para 99. 153   Dickinson (n 7) para 6.65; Rodriguez Pineau (n 6) 322 f; Illmer (n 57) para 102. 154   Illmer (n 57) para 102. 155  D Baetge, ‘The Extraterritorial Reach of Antitrust Law between Legal Imperialism and Harmonious Coexistence: The Empagran Judgment of the U.S. Supreme Court from a European Perspective’ in E Gottschalk, R Michaels, G Rühl and J von Hein (eds), Conflict of Laws in a Globalized World (Cambridge, Cambridge University Press, 2007) 220, 232. 156   Wagner-von Papp (n 84) 478. 146 147

124  Stéphanie Francq and Wolfgang Wurmnest

C.  Necessary Legislative Amendments The foregoing overview has shown that the interpretation and application of the effects doctrine strongly depend on the facts of the case. Shaping the reach of the effects doctrine is however a task that should be left to courts and commentators. Thus, legislative amendments regarding the connecting factor enshrined in Article 6(3)(a) Rome II are not warranted.

VI.  The Right to Choose the Law of the Forum, Article 6(3)(b) Rome II A.  General Remarks Article 6(3)(b) Rome II gives the person seeking compensation for damage the right to base his claim exclusively on the lex fori ‘when the market is, or is likely affected in more than one country’, provided that two conditions are satisfied. First, at least one of the defendants has to be domiciled (in the sense of Article 23 Rome II) in the Member State of the forum. Thus, the forum State must be a Member State, not a foreign State.157 Second, the market of the forum must be amongst those directly and substantially affected by the restriction of competition out of which the non-contractual obligation arises on which the claimant relies. In case the claimant sues multiple defendants, he can nonetheless base the claim on the law of the forum if the restriction of competition on which the claim against each of these defendants relies also directly and substantially affects the market of the forum. If these two prerequisites are satisfied, the person seeking compensation can in accordance with the forum’s procedural rules choose to base his claim on the law of the forum.158 This concentration rule aims at reducing costs and burdens for private plaintiffs, thereby fostering the private enforcement of competition law within the EU.159 If an anti-­competitive act has effects in several jurisdictions, different national rules may apply according to the Mosaikprinzip. Article 6(3)(b) Rome II intends to a certain extent to simplify such complex cases as it allows the case to be judged on the merits according to one single law. The prerequisite of direct and substantial effects on the market of the forum State shall limit forum shopping. It ensures that plaintiffs can rely on the concentration rule only when the anticompetitive action has a strong connection to the Member State before whose courts the proceedings are brought. It is not entirely settled under what conditions a certain market must be regarded as ‘directly and substantially’ affected by the anti-competitive conduct. As a starting point commentators seem to agree that this prerequisite demands a more intensive link between the anti-competitive conduct and the market of the forum than required

  Wagner, ‘Die neue Rom-II-Verordnung’ (n 68) 8.   Dickinson (n 7) para 6.73.   Fallon, ‘Law Applicable to Specific Torts in Europe’ (n 44) 268; Rodriguez Pineau (n 6) 323.

157 158 159

Rome II  125 under 6(3)(a) Rome II.160 But the difficulty is how such a link may be demonstrated in practice. In price-fixing cases, for example, one way would be to measure the amount of goods sold at inflated prices on a given market. If, for example, the cartel covers Luxembourg and Germany and one million items are sold at cartelised prices in Germany whereas 50,000 items are sold in Luxembourg, then only the German market would be ‘directly and substantially’ affected by the price fixing. This solution would lead to the outcome that in most cases suits could not be concentrated in smaller EU Member States since in those States the amount of sold goods is much lower than in larger countries with more demand. Another way to demonstrate the required link would be to look at the coverage of the various markets. If, for example, a cartel manages to fix prices for 100 per cent of the goods sold in Luxembourg but not all suppliers of the German market join the price-fixing campaign such that only 40 per cent of the goods are sold in Germany at inflated prices, it can be argued that a plaintiff can invoke the concentration only before courts in Luxembourg. In our view, the latter interpretation would set too many incentives for forum shopping and should therefore not be followed.

B.  Unwritten Limitations of the Concentration Rule? i.  Problem Stated Apart from the two prerequisites mentioned above, Article 6(3)(b) Rome II does not explicitly prescribe further qualifications to the concentration rule. Such limitations could however flow from its aim (object). Yet, the precise aim of the concentration rule – apart from the vague and general assertion that this rule intends to help private plaintiffs in competition law suits – is difficult to track down as the right to opt for the lex fori was written into Rome II in the very last stage of the legislative process.161 Therefore the legislative materials are not of great help in determining the precise scope of the concentration rule. It seems that the European legislator – having first and foremost EU law in mind – agreed on a compromise formula and left the determination of its contours to the courts and to academia. Things are complicated further by the fact that the issue of the reach of the concentration rule is closely intertwined with the question whether or not Article 6(3) Rome II shall cover market rules. A simple example will illustrate this point. Assume that a cartel of producers offers goods at inflated prices in, inter alia, France and Switzerland. The Swiss buyers sue one cartel member for damages at its domicile in France and opt for the lex fori. Assuming further, for the sake of argument, that the French market is directly and substantially affected by the cartel (and – which is by no means certain – that the Swiss plaintiffs are entitled to rely on the concentration rule),162 the question arises which parts of the claim are governed by French law. If one argues that market rules (Kartellverbotsnormen) are not covered by Article 6(3) Rome II and instead apply as either overriding mandatory rules or as rules of safety and conduct,163 the plaintiff ’s choice under Article 6(3)(b) affects 160   Mankowski (n 37) 189 f; Roth (n 51) 646; U Scholz and G Rixen, ‘Die neue Europäische Kollisionsnorm für außervertragliche Schuldverhältnisse aus wettbewerbsbeschränkendem Verhalten’ (2008) EuZW 327, 331; KH Fezer and S Koos, ‘Internationales Wirtschaftsrecht’ in J von Staudinger (ed), Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen (Staudinger BGB) (Berlin, Sellier – de Gruyter, 2010) para 361. 161   See II above. 162  Whether plaintiffs from non-EU countries having sustained damages abroad shall possess the right to invoke Art 6(3)(b) Rome II is another issue, which will be discussed below (VI.B.ii). 163   See IV.C.ii, iii above.

126  Stéphanie Francq and Wolfgang Wurmnest the applicable law of damages only. Applying the lex fori to the law of damages at the plaintiff ’s choosing might be acceptable as the question of the illegality of the conduct flowing from the infringement of a market rule, ie the prohibition of a cartel, is judged according to its own applicability criteria. In the case at hand the market rules applicable are those of Swiss law as the plaintiffs were affected on the Swiss market. If in turn one argues that Article 6(3) Rome II – at least in principle – also determines the law governing the market rules,164 then – without further qualification – the plaintiff ’s choice according to Article 6(3)(b) Rome II would lead to the result that the law opted for also determines whether or not the cartel members infringed a competition law provision (depending on the facts of the case either Article 101 TFEU or its French equivalent). The latter result is perplexing as the cartel member could be held liable even if his conduct were legal under Swiss law. The following sections discuss possible restrictions of the concentration rule based on the assumption that Article 6(3) Rome II covers market rules.

ii.  Limitations with Regard to the Application of National Competition Law Against the background that the concentration rule primarily intends to strengthen the private enforcement of EU competition law, it is argued that the concentration rule covers merely infringements of Articles 101, 102 TFEU and should not be applied to cases in which the claimant bases his claim on national competition law.165 It is further argued that such a limitation would be in line with Regulation 1/2003 which allows Member States to apply stricter rules for unilateral conduct by dominant undertakings but which does not intend that these rules are applied ‘all over Europe’ at the plaintiff ’s choosing.166 Such a general exclusion of national competition law goes however too far. There is no hint in the Regulation indicating that Article 6(3)(b) Rome II, unlike Article 6(3)(a) Rome II, is not to cover national competition rules. Additionally the danger that national rules would apply ‘all over Europe’ can be limited. A first safety valve is the ‘directly and substantially affected market’ prerequisite, which bars application of the concentration rule in many cases. If for example a UK-based non-dominant firm sells its products below cost in the UK and also markets some of its products at below-cost prices in Germany, its pricing strategy would – under certain circumstances – be found to constitute an abusive practice under section 21 German GWB but not under the UK Competition Act 1998. If a German competitor were to sue the alleged predator in Germany, it could only base its claim regarding losses sustained on the UK market on German law if the German market were substantially affected by the pricing campaign. As the majority of the goods in our example were sold in the UK, the concentration rule could not be invoked. The ‘directly and substantially affected market’ prerequisite is however not sufficient to avoid unjust results as a simple variation of the aforementioned example shows. Assume that a firm having its central administration in Germany launches a below-cost pricing campaign primarily on the German market but with some products also being marketed in the UK. Assume further that a UK competitor has suffered damage on the UK market as a consequence of the low pricing campaign, this competitor – at least from the wording of Article 6(3)(b) Rome II – could invoke the concentration rule and thus claim damages   See IV.C.i above (for national competition law).   Scholz and Rixen, ‘Die neue Europäische Kollisionsnorm für außervertragliche Schuldverhältnisse’ (n 160) 331 f. 166   Tzakas (n 37) 576 f. 164 165

Rome II  127 according to German law even though the pricing campaign were legal under the UK Competition Act 1998. Against this background it seems necessary to distinguish between market rules and tort law when applying Article 6(3)(b) Rome II. To avoid inconsistencies, the choice of the plaintiff should only cover the applicable tort law and not the relevant competition prohibitions proscribing the conduct in question. Otherwise, plaintiffs could claim damages based on a national law of damages even if the country in which they sustained their damage does not prohibit such conduct at all. Against this background, the question as to whether a certain conduct has violated a competition rule – an analysis which for damages claims based on tort law of a civil law country is often enshrined in the prerequisites of faute or Rechtswidrigkeit – has always to be judged according to the Mosaikprinzip.167 Moreover, given that the concentration rule is intended to foster private enforcement of competition law within the EU, one can read the additional limitation into Article 6(3)(b) Rome II that a plaintiff that has sustained damages on a market outside the EU – such as in the Swiss/French cartel case mentioned above168 – is not entitled to invoke the concentration rule at all.

iii.  Limitations with Regard to the Kind of Damage Sustained by the Plaintiff A second limitation concerns the damage that a plaintiff has sustained. Article 6(3)(b) Rome II applies ‘when the market is, or is likely to be, affected in more than one country’ (emphasis added). It is not entirely clear whether that means that the anti-competitive conduct in question, for example the price-fixing cartel, has effects in multiple markets (which is relatively often the case) or whether the person seeking compensation for damage has sustained harm in more than one jurisdiction (which is far less often the case). If one argues that the object of the concentration rule is to alleviate costs and burdens that flow from the Mosaikprinzip, only claimants that have sustained damage in at least two different jurisdictions could rely on the concentration rule.169 Without such a limitation there is the danger that a plaintiff could evade unfavourable rules of the country in which he has sustained the damage by suing the defendant abroad under the (more favourable) rules of the lex fori. For example, if a claimant from State A realises that his claim against a price-fixing cartel is prescribed by the statute of limitations in force in State A, it would be troubling if he were allowed to move to State B and invoke the law of State B (which has a longer period of limitation) just because he lodges the suit at the defendant’s domicile and this litigation is later joined by other claimants that sustained damages in B (or in other countries). In sum, the object of the concentration rule justifies its application only when a claimant has suffered damages in at least two different jurisdictions. This limitation also makes sense when one is of the opinion that Article 6(3) Rome II does not cover market rules at all.

167   Such a solution is proposed by Roth (n 51) 646 ff; Ackermann (n 75) 120 f; Wurmnest (n 37) paras 31–33; but see A Rushworth and A Scott, ‘Rome II Regulation: Choice of Law for Non-contractual Obligations’ (2008) Lloyd’s Maritime and Commercial Law Quarterly 274, 282; Wagner (n 68) 8; Fezer and Koos, ‘Internationales Wirtschaftsrecht’ (n 160) para 360 (all arguing that the claimant’s choice also encompasses the competition law of the forum, ie its market rules). 168   See VI.B.i above. 169   Such a solution is advocated by Tzakas (n 37) 573 f.

128  Stéphanie Francq and Wolfgang Wurmnest

C.  Necessary Legislative Amendments In our view, there are good reasons to restrict the scope of the concentration rule. Such restrictions could be read into Article 6(3)(b) Rome II by way of interpretation. For the sake of legal certainty, however, the European legislature should clarify the limitations of the concentration rule in a recital.

VII. Conclusion The theoretical foundations of the conflict rule for international competition cases are currently unsettled. Several possibilities for putting Article 6(3) Rome II on a solid theoretical fundament have been discussed. None of the explored solutions are entirely convincing. Some can be more easily reconciled with the Regulation’s wording whereas others fit better into traditional private international law theory. Under the law as it stands, Article 6(3) Rome II could on the one hand be construed as an ‘open gate’. Under this approach, Article 6(3) Rome II designates not only the law applicable to damages, but also the law determining whether the behaviour of the parties is lawful or not. This is however not a hard-and-fast rule. The judge has first to accept that the market rules of the competition law of the country designated under Article 6(3)(a) Rome II may not demand application. Second, in case competition law provisions (market rules) of another country purport to be applicable, the judge should allow their application. On the other hand, the applicability of Article 6(3) Rome II could be limited to the rules of civil law (Kartelldeliktsrecht). Under this approach other provisions of the Regulation would need to be relied upon in order to respect the nature and the autonomous criterion of applicability of market rules (Kartellverbotsnormen), namely either Article 16 Rome II (overriding mandatory provisions) or Article 17 Rome II (rules of safety and conduct). This approach would seem capable of yielding satisfactory results in practice only if Articles 16, 17 Rome II were construed broadly. The foregoing overview has further demonstrated that the application of the effects doctrine strongly depends on the facts of the case. Shaping the reach of the effects doctrine is, however, a task that should be left to courts and commentators. Thus, legislative amendments regarding the connecting factor stated in Article 6(3)(a) Rome II are not warranted. Finally, the concentration rule enshrined in Article 6(3)(b) Rome II should not be interpreted in a way such that European Courts become the ‘antitrust policemen of the world’. Against this background the European legislature should amend the Rome II Regulation as follows: 1. In order to underline that the conflict rules for unfair competition (Articles 6(1), (2) Rome II) and the conflict rule for restrictions of competition (Article 6(3) Rome II) concern different areas of law, the European legislature should codify the rules in two separate articles. 2. For the sake of clarity, Recital 23 should be amended to state that only Article 6(3)(a) Rome II – and not Article 6(3)(b) Rome II  –  is a universal provision which may call for the application of the law of a non-EU Member State and deal with anti-competitive practices which do not affect the internal market.

Rome II  129 3. From the perspective of the consistency of Rome I and Rome II, the wording of Article 16 Rome II should be aligned at least in part with the wording of Article 9 Rome I in order to allow the judge to also apply foreign market rules as overriding mandatory rules. 4. For the sake of legal certainty the European legislature should clarify the limitations of the concentration rule in a recital. The limitations warranted depend to some extent on the construction of Article 6(3)(a) Rome II. For example, if market rules are covered by Article 6(3) Rome II, it should be made clear that they are not covered by Article 6(3)(b) and that the illegality of the conduct must be assessed consistent with the Mosaikprinzip. If Article 6(3) Rome covers only the civil consequences, such a limitation is not compulsory.

7 Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law) SYLVAINE POILLOT-PERUZZETTO* AND DOMINIKA LAWNICKA**

I. Introduction While the legal nature of behaviour is indifferent for the purpose of application of effectoriented and almost self-sufficient competition rules,1 private international law (PIL), even though it operates on the basis of its own original method, refers to national legal concepts which are adapted and, if necessary, enlarged in order to fit the variety of international situations involving private persons. As with any claim analysed using a conflict-of-laws method, an action for damages2 resulting from an infringement of Articles 101 or 102 of the Treaty on the Functioning of the European Union (TFEU) requires characterisation. The purpose of characterisation3 is to question the dominant nature of the claim in order to determine the corresponding legal category and ultimately identify an appropriate connecting factor (for example, parties’ nationality, place of the performance of the contract, domicile of the defendant, etc). The connecting factor contained in the conflict rule finally leads to a substantive law applicable to the claim.4 In that respect, claims founded on *  Professor at the Université Toulouse 1 Capitole, Institut de recherche en droit européen, international et comparé. **  Attaché temporaire d’enseignement et de recherche, Université Toulouse 1 Capitole, Institut de recherche en droit européen, international et comparé. 1   The self-sufficiency of Arts 101 and 102 TFEU ([2008] OJ C115/47) is only illusory. Paradoxically, despite the fundamental role of competition policy in the European construction, EU competition rules are incomplete when it comes to establishing the civil consequences of their breach: L Idot, ‘Le droit de la concurrence’ in A Fuchs, H Muir-Watt and E Pataut (eds), Les conflits de lois et le système juridique communautaire (Paris, Dalloz, 2004) 256–81, 276. 2   Terms ‘Action for damages’, ‘claim for damages’, ‘private enforcement actions’ as well as ‘action for antitrust damages’ used in this chapter should be understood as synonymous for the purpose of our study. They all refer to actions seeking compensation for economic loss resulting from an infringement of Arts 101 or 102 TFEU. 3   The issue of characterisation in private international law has been largely discussed in literature. See generally H Batiffol and P Lagarde, Traité de droit international privé, vol 1, 8th edn (Paris, Librairie générale de droit et de jurisprudence (LGDJ), 1993) 474–90; B Audit, Droit international privé, 4th edn (Paris, Economica, 2006) 165–78; P Mayer and V Heuzé, Droit international privé, 10th edn (Paris, Montchrestien, 2010) 119–32. See also JG Collier, Conflict of Laws, 3rd edn (Cambridge, Cambridge University Press (CUP), 2001) 13–19. 4   See on this point B Audit, ‘Qualification et droit international privé’ (1994) Droits. Revue française de théorie juridique 55, 59: ‘Les conflits de lois de droit privé sont normalement résolus selon le procédé de la “règle de

132  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka Articles 101 and 102 TFEU may be qualified either as torts or as contracts which results in the application of different connecting factors and different substantive laws for legal actions originating in the same unlawful anti-competitive behaviour. Nevertheless, this ambiguous duality should not encourage antitrust litigators to any form of manipulation on the stage of characterisation. The scientific nature of the analysis should be preserved and in no way be ‘dominated’ by empiricism.5 The traditional distinction between contractual and non-contractual categories, which originates in national private international laws of Member States, was formally introduced in the European legal order with the entry into force of the Brussels Convention.6 Yet, although the categories proposed in Brussels I Convention may, at first sight, seem similar to categories of national legal orders, their specificity and independence were affirmed early on7 by the European Court of Justice (the Court), bringing about much confusion in their implementation. Indeed, the issue of characterisation in European private international law (EU PIL) of claims for antitrust damages gives rise to several difficulties. First of all, the concepts of contractual and non-contractual matters are, as are the concepts of civil and commercial matters, subject to the autonomous interpretation of the Court irrespective of the result of a characterisation of the same legal issue in national legal orders of Member States.8 Until the entry into force of the Rome II Regulation,9 the same claim could be considered a tort in the field of conflicts of jurisdictions and a contract when it came to determine the applicable law.10 The accomplishment of construction of EU PIL in the field of civil and commercial matters through the adoption of Rome I11 and Rome II Regulations may, in

conflit”. Schématiquement, celui-ci consiste à répartir les relations de droit privé en catégories, auxquelles est associé un rattachement qui désigne dans un cas donné l’ordre juridique compétent. Le mécanisme s’analysant en un enchaînement “qualification-rattachement” pour conduire à la loi applicable, l’opération de qualification est, au sens propre, décisive’. 5   T Azzi, ‘Bruxelles I, Rome I, Rome II: regard sur la qualification en droit international privé communautaire’ (2009) Recueil Dalloz 1621 para 22. 6   1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters [1972] OJ L299/32. 7   Case 29/76 LTU Lufttransportunternehmen GmbH & Co KG v Eurocontrol [1976] ECR 1541 para 3. 8   The method of autonomous interpretation gives rise to much controversy as solutions elaborated by the Court have often been considered as unsatisfactory. An author argues that the gaps left empty by the Court are ultimately filled in by courts of Member States which results in the return of lex fori characterisation. See M Audit, ‘L’interprétation autonome du droit international privé communautaire’ (2004) Journal du Droit International – Clunet (JDI Clunet) 790, 811–16. 9  European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-­ contractual obligations (Rome II) [2007] OJ L199/40. 10  See on this point H Gaudemet-Tallon, Compétence et exécution des jugements en Europe Règlement No 44/2001 Conventions de Bruxelles et de Lugano, 3rd edn (Paris, LGDJ, 2002) 171; Azzi, ‘Bruxelles I, Rome I, Rome II’ (n 5). The question was directly addressed by Advocate General Jacobs in his Opinion presented to the Court in the Handte case. The co-existence of two qualifications for the same issue, although described as ‘paradoxical’, was accepted since the consequences it induces, according to the Advocate General Jacobs, are not believed to be serious and, in addition, such paradoxes are frequent in private international law: Case C-26/91 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I-3967, Opinion of Advocate General Jacobs, para 23. 11   European Parliament and Council Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) [2008] OJ L177/6. S Francq, ‘Le règlement Rome I sur la loi applicable aux obligations contractuelles’ (2009) JDI Clunet 41; H Kenfack, ‘Le règlement 593/2008 du 17 juin 2008 sur la loi applicable aux obligations contractuelles (“Rome I”), navire stable aux instruments efficaces de navigation ?’ (2009) JDI Clunet 3; G Légier, ‘Le règlement “Rome II” sur la loi applicable aux obligations non contractuelles’ (2007) 47 La Semaine Juridique Edition Générale I 207.

Contractual and Non-contractual Matters  133 this context, announce the end of this ambiguous duality of characterisation.12 In that respect, Recital 6 Rome I and Rome II Regulations emphasise the necessary consistency in their reciprocal relations. Hence, our further analysis requires some developments relating to the meaning of terms ‘contractual’ and ‘delictual’ as resulting from the case-law of the Court developed for the purpose of application of Articles 5(1) and 5(3) Brussels I Regulation.13 Although the issue of the interpretation of ‘contractual matters’ was first brought up in the context of the Peters14 case where the Court refused to interpret the concept of ‘contractual matters’ in the light of national substantive laws of Member States,15 the first true (yet incomplete) definition was probably laid down in Arcado where the Court stated: The concept of matters relating to a contract is to be regarded as an independent concept which, for the purpose of the application of the convention, must be interpreted by reference principally to the system and objectives of the convention in order to ensure that it is fully effective.16

The same principle was affirmed in relation to ‘delictual matters’ in Kalfelis which provided that the concept of tort, delict or quasi-delict is to be interpreted autonomously and covers all claims which seek to establish the liability of the defendant and ‘which are not related to a “contract” within the meaning of Art 5(1)’.17 Therefore, not only did Kalfelis lay down a double condition for qualification of torts but it also created a link of interdependence between contractual and delictual matters suggesting the residual character of the latter. The definition was developed in Handte18 which specified the meaning of ‘related to a contract’ and stated that a claim cannot be characterised as contractual unless the litigating parties are connected one towards another by freely assumed obligation(s).19 The 12   See especially Azzi (n 5) para 21: ‘Il n’y a donc pas de place ici pour une approche dualiste. La règle de conflit de juridictions et la règle de conflit de lois ne sont, ni l’une ni l’autre, objet de qualification. En revanche, l’une et l’autre contribuent à la détermination de cet objet, lequel réside dans les règles substantielles’. Yet, it should be noted that, since private international law clearly distinguishes issues of jurisdiction and of law applicable to the same legal problem, the unity of characterisation may be judged as unnecessary or illegitimate. 13   Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1, hereinafter ‘Brussels I Regulation’. It should be noted, in this respect, that none of the decisions mentioned below refers to anti-competitive behaviour in the meaning of Arts 101 and 102 TFEU which gives rise to a question of their application and adaptability in the field of actions for antitrust damages. 14   Case 34/82 Martin Peters Bauunternehmung GmbH v Zuid Nederlandse Aanemers Vereniging [1983] ECR 987. 15   ibid para 9. 16   Case 9/87 Arcado v Haviland [1988] ECR 1539 para 11. 17   Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others [1988] ECR 5565 para 17. 18   Case C-26/91 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I-3967 para 15; H Gaudemet-Tallon, ‘De la compétence juridictionnelle pour connaître du litige opposant le sous-­ acquéreur au fabricant en raison des vices de la chose’ (1992) Revue critique de droit international privé (RCDIP) 726. 19  The Handte judgment (n 18) is, in our opinion, of utmost importance in the context of actions for antitrust damages, as it clearly states the priorities of the Court as far as the interpretation of the Brussels Convention is concerned. See especially paras 16–20:

‘16  Where a sub-buyer of goods purchased from an intermediate seller brings an action against the manufacturer for damages on the ground that the goods are not in conformity, it must be observed that there is no contractual relationship between the sub-buyer and the manufacturer because the latter has not undertaken any contractual obligation towards the former. 17  Furthermore, particularly where there is a chain of international contracts, the parties’ contractual obligations may vary from contract to contract, so that the contractual rights which the sub-buyer can enforce against his immediate seller will not necessarily be the same as those which the manufacturer will have accepted in his relationship with the first buyer.

134  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka definition in its full version was applied in Réunion européenne20 where the residual nature of the concept of tort (in relation to contract) was confirmed as the Court first verified whether there was a commitment freely assumed by one party towards another and, in the absence of such a commitment, analysed the purpose of the action. The delictual qualification was confirmed as the aim of the claim was to establish the liability of the defendant. It is true that the difficulties induced by the absence of equivalence between European and national PIL concepts and solutions have been erased to some extent21 due to the progress of the Area of Freedom, Security and Justice. For instance, Rome I Regulation provides specific conflict-of-law rules for distribution and franchise contracts and thus partly solves a long controversy concerning the qualification of these agreements.22 Other issues remain unsolved as, notwithstanding the solutions laid down by the Court and the evolution of the Area of Freedom, Security and Justice, the criteria for the distinction between contractual issues and issues in matters of tort remain unclear and have turned out to be extremely tricky to implement in the field of competition law.23 Although it is excessively difficult to operate, it is not the characterisation itself that we will focus on but the consequences of the implementation of the distinction between contracts and torts from the perspective of both competition law enforcement and victims’ compensation.

18  The objective of strengthening legal protection of persons established in the Community, which is one of the objectives which the Convention is designed to achieve, also requires that the jurisdictional rules which derogate from the general principle of the Convention should be interpreted in such a way as to enable a normally wellinformed defendant reasonably to predict before which courts, other than those of the State in which he is domiciled, he may be sued. 19  However, in a situation such as that with which the main proceedings are concerned, the application of the special jurisdictional rule laid down by Article 5(1) of the Convention to an action brought by a sub-buyer of goods against the manufacturer is not foreseeable by the latter and is therefore incompatible with the principle of legal certainty. 20  Apart from the fact that the manufacturer has no contractual relationship with the sub-buyer and undertakes no contractual obligation towards that buyer, whose identity and domicile may, quite reasonably, be unknown to him, it appears that in the great majority of Contracting States the liability of a manufacturer towards a sub-buyer for defects in the goods sold is not regarded as being of a contractual nature’ (emphasis added). 20   Case C-51/97 Réunion européenne v Spliethoff ’s Bevrachtingskantoor BV [1998] ECR I-6511 paras 14–23 (1999) RCDIP 322, note by H Gaudemet-Tallon. 21   Yet, one cannot speak of a complete correspondence of the texts: some gaps remain since even unified private international law cannot foresee and embrace all national specificities. See in this context, E Bartin ‘De l’impossibilité d’arriver à la suppression définitive des conflits des lois’ (1897) 24 Journal du droit international privé 225–55, 466–95, 720–38. 22   Distribution contracts are as of now considered as having for their object a performance of a service (Recital 17 Rome I Regulation (n 11)) which not only simplifies the conflict-of-jurisdictions (Art 5(1) Brussels I Regulation) and conflict-of-laws analysis, but also has a powerful impact on private enforcement. The question of the connecting factor for such contracts will be examined later in this chapter. 23   We will deal with difficulties of implementation of the distinction within the categories and between the categories later in this chapter. Three of the decisions mentioned above: Arcado (n 16), Kalfelis (n 17) and Handte (n 18), are of great interest in the context of actions for damages and will therefore be analysed below.

Contractual and Non-contractual Matters  135

II.  Preliminary Question: Is the Debate Related to the Distinction between Contractual and Non-Contractual Spheres an Odd Issue in the Context of Actions for Damages Based on a Breach of EU Competition Law? The issue of the distinction between contract and torts for private actions based on infringement of competition law could indeed be considered odd, or at least unconventional, since it was addressed neither in European texts relating to actions for damages for breach of EC competition law, nor in the literature. Oddly enough, the adoption of the Rome II Regulation inspired many discussions on the distinction between unfair competition and free competition24 or between intellectual property cases and competition cases25 but very few related to the unusual (from an antitrust perspective) distinction between contract and tort.26 In the Commission’s White Paper on Damages actions for breach of the EC antitrust rules,27 the issue is not mentioned at all, as if the new EU PIL rules had erased any difficulty28 as explained in the Commission Staff Working Paper: The Commission believes that Art 6(3) of Regulation 864/2007 [hereinafter ‘Rome II Regulation’] contains an appropriate applicable law rule enabling claimants to effectively use their right to obtain antitrust damages in case of an infringement of the EC competition rules. In particular these new rules, read together with the rules on jurisdiction [Regulation 44/200129], allow for procedural economy as they provide claimants with the option to have their case for antitrust damages heard by one court applying one single law, even in situations where more than one defendant 24   A Dickinson, The Rome II Regulation: The Law Applicable to Non-Contractual Obligations (Oxford, Oxford University Press (OUP), 2008) 391; T Rosenkranz and E Rohde, ‘The law applicable to non-contractual obligations arising out of acts of unfair competition and acts restricting free competition under Article 6 of the Rome II Regulation’ (2008) 4 Nederlands Internationaal Privaatrecht 435; AM Luciani, ‘Regards critiques sur l’article 6 du règlement Rome II relatif à la loi applicable à la concurrence déloyale et aux actes restreignant la libre concurrence’ (2008) La Semaine juridique – Entreprise et Affaires (JCP/E) 2428. Concerning the issue of private international rules applicable to private enforcement of competition rules see J Basedow, ‘Jurisdiction and choice of law in the private enforcement of competition law’ in J Basedow (ed), Private enforcement of competition law (Alphen aan den Rijn, Kluwer, 2007); L Idot, ‘Les conflits de lois en droit de la concurrence’ (1995) JDI Clunet 321; ‘Quelques pistes pour la résolution des conflits de droit de la concurrence en matière de distribution’ (1993) Droit et pratique du commerce international 214; ‘Le cas du droit de la concurrence dans les textes de référence’ in M Fallon, P Lagarde and S Poillot-Peruzzetto (eds), La matière civile et commerciale, socle d’un code européen de droit inter­ national privé? (Paris, Dalloz, 2009) 171; V Pironon, ‘L’entrée du droit de la concurrence dans le règlement “Rome II”: bonne mauvaise idée?’ (2008) 2 Europe 6. 25   See Rosenkranz and Rohde, ‘The law applicable to non-contractual obligations’ (n 24) 436. 26   See S Poillot-Peruzzetto, ‘Conflits de lois et conflits de compétence pour les actions privées fondées sur les atteintes aux règles communautaires de concurrence’ (2009) 18 Revue Lamy droit des affaires (RLDA) 104, 108; M Béhar-Touchais, ‘L’article 6 du Règlement Rome II et les pratiques restrictives de concurrence internationales’ (2010) 22 Revue Lamy de la Concurrence (RLC) 11; Azzi (n 5) para 12. 27   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008; see also Commission, ‘Staff Working Paper accompanying the White Paper on Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2008) 404, 2 April 2008. 28   The question of PIL rules applicable to actions for compensation was discussed following the publication by the Commission of the ‘Damages actions for breach of the EC antitrust rules’ (Green Paper) COM (2005) 672 final, SEC (2005) 1732, 19 December 2005, para 2.8. The inclusion of a ‘specific’ rule relating to restrictions of competition in the Rome II Regulation had been foreseen as an option in the Green Paper. However, one may doubt if Art 6 could be considered as a truly ‘specific’ rule. 29   Brussels I Regulation.

136  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka is involved and where the damages occurred in several Member States. The Commission therefore does not consider it necessary to further address the issue of applicable law in the White Paper.30

At the same time, the White Paper (paragraph 1.2) reaffirms the universal character of the right to compensation for antitrust infringements: In view of the foregoing and in line with the requirement set out by the Court of Justice that any victim of antitrust infringements must be able to exercise his right to compensation effectively, the issues addressed in the White Paper concern, in principle, all categories of victim, all types of breach of Article 81 and 82 and all sectors of the economy. 31

As Article 5(3) Brussels I Regulation and Article 6(3) Rome II Regulation refer exclusively to delictual matters, one may conclude that in the Commission’s view all claims for compensation originating in breach of competition rules are supposed to be qualified as torts. Yet, Article 6(3) Rome II Regulation, considered by the Commission as a specific rule for actions for antitrust damages, only deals with ‘law applicable to non-contractual obligation arising out of a restriction of competition’ which indicates that Rome I Regulation is applicable to anti-competitive behaviour involving contractual obligations. However, while the Rome II Regulation seems to recognise implicitly the existence of the distinction in the field of private enforcement of competition law, the borders of the concept of ‘non-­ contractual obligation arising out of a restriction of competition’ have not yet been defined and it remains unclear whether the distinction is based on the nature of the relations between the parties, or whether claims for antitrust damages should always be considered as based upon tort irrespective of the source of the restriction. The existence of the general distinction between contractual and non-contractual obligations as such does not give rise to a controversy and we do believe that it should be maintained. Firstly, the roots of the distinction clearly derive from legal orders of Member States (namely national substantive laws related to the regime of obligations) and the national conflict-of-laws rules maintain this general national substantive distinction, as private international law rules are a projection for international situations of the national solutions. Secondly, although the European legal system deals with private international law rules on the basis of an original concept in the Area of Freedom, Security and Justice, its legal rules are inspired by the national conflict-of-laws rules32 even though the main aim of this initiative was the creation of an area of mutual recognition of judgments. In addition, the European solutions are influenced by private international law rules for jurisdiction and applicable law which establish a clear distinction between contractual situations and torts to determine the jurisdiction33 or the applicable law. Thirdly, the existence of the distinction does not conflict in principle with European substantive law. The European cases based on competition law clearly conclude, on the basis of the principle of procedural autonomy of Member States, that it is upon national laws to determine the substantive regime of private actions. In that respect, the Court put forward that the exercise, through a private action, of the individual right conferred by EU   Para 9 Staff Working Paper.   Due to the entry into force of the Treaty of Lisbon, Arts 81 and 82 of the Treaty Establishing European Community (EC Treaty) were replaced by Arts 101 and 102 TFEU (n 1). 32   See Recital 2 Rome II Regulation and Recital 2 Rome I Regulation. 33   See Brussels Convention (n 6) which foresees two different solutions when the defendant has his domicile within the EEC depending on the basis of the situation. 30 31

Contractual and Non-contractual Matters  137 law has to be dealt with by national law. Accordingly, it should be noted that the Court does not interfere with the concepts of substantive law of the Member States provided that they do not render excessively difficult or practically impossible the exercise of rights deriving from EU law. Irrespective of this division at the national and international level (both for substantive rules and private international law rules) as well as at the European level (for EU private international law rules), it has to be emphasised that no such distinction exists in antitrust law, which is effect-oriented contrary to nature-oriented PIL rules. Both in European competition law and in national competition policies the main distinctions cover prohibited behaviours, namely common behaviour (through cartels) or unilateral conduct (through abuse of dominant position). As it will be explained below, the founding principles of actions for damages for breach of competition law, laid down by the Court in the Courage 34 and Manfredi 35 judgments, require an articulation between methods and concepts applied respectively in EU PIL and European competition law. In Courage the Court held that European law provides a right for any individual to claim damages for loss caused to them by a contract or by conduct liable to restrict or distort competition36 and that, in the absence of EU rules governing the matter, it is for the national law to determine the jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding these rights.37 The Court emphasised that such a right is also granted to the victim whose antitrust injury results from a contractual relation and might not be refused on the sole basis that the plaintiff is a party to an agreement. In addition, in Manfredi it was held: Article 81 must be interpreted as meaning that any individual can rely on the invalidity of an agreement or practice prohibited under that Article and, where there is a causal relationship between the latter and the harm suffered, claim compensation for that harm.38 34   Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297; see also, for a comment on the case, J Drexl, ‘Do we need “Courage” for International antitrust law?’ in J Drexl (ed), The Future of Transnational Antitrust: From Comparative to Common Competition Law (Bern/Alphen aan den Rijn, Staempfli Publishers/ Kluwer, 2003) 311; L Idot (November 2001) Europe 12; R Klages, ‘La jurisprudence de la Cour de justice et du Tribunal de première instance’ (2001) Revue du droit de l’Union européenne 1003; S Ramet, ‘CJCE, 20 septembre 2001, Courage, aff C-453/99’ (2002) JCP/E 1; GA Cumming, ‘Courage Ltd v Crehan’ (2002) European Competition Law Review (ECLR) 199; A Jones and D Beard, ‘Co-contractors, Damages and Article 81: The ECJ finally speaks’ (2002) ECLR 246; O Odudu and J Edelman, ‘Compensatory damages for breach of Article 81’ (2002) European Law Review (Eur Law Rev) 327; G Monti, ‘Anticompetitive agreements: the innocent party’s right to damages’ (2002) Eur Law Rev 282; W Van Gerven, ‘Crehan and the Way Ahead’ (2006) European Business Law Review 269. 35   Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619; P Iannuccelli, ‘La Cour botte en touche sur la réparation civile des dommages causés par une infraction aux règles de concurrence’ (2006) 9 RLC 67; M Chagny, ‘Le contentieux indemnitaire des pratiques anticoncurrentielles: la Cour de justice invitée au débat sur le Livre vert’ (2006) 9 RLC 86; F Zivy, ‘Il faudra encore attendre un peu pour en savoir plus’ (2006) 4 Concurrences 118; L Idot, ‘Précisions sur le régime de l’action en réparation’ (October 2006) Europe 24; J Philippe, T Janssens (2006) Gazette du Palais Nos 305–308, 12; C Prieto, ‘Chronique de jurisprudence du Tribunal et de la Cour de justice des Communautés européennes: Concurrence’ (2007) JDI Clunet 671; G Afferni (2007) European Review of Contract Law 179. 36   Courage (n 34) para 26 reads as follows: ‘The full effectiveness of Article 85 of the Treaty and, in particular, the practical effect of the prohibition laid down in Article 85(1) would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort com­ petition’. 37   Courage (n 34) para 29. 38   Manfredi (n 35) operative part, para 2.

138  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka In the light of the intentionally general wording of the Courage and Manfredi decisions, it is clear that all types of antitrust damages may be recovered in the context of private actions for antitrust damages. Indeed, the Court granted all individuals a fundamental right to compensation for harm resulting from infringements of Article 101 or Article 102 TFEU.39 The term ‘individuals’ concerns, on the one hand, victims who are part of an agreement infringing competition rules (Courage), and, on the other hand, victims whose loss results from conduct or an agreement which is external to their will (Manfredi).40 Therefore, in the light of the landmark judgments of the Court in the Courage and Manfredi cases, which should be considered as foundations of the private enforcement of competition law, the right to compensation for harm caused by antitrust infringements has to be enforced and the distinction based on the contractual or delictual nature of the claim is, in this respect, irrelevant.41 Hence, solutions proposed in EU PIL for actions for antitrust damages have to be considered of utmost importance since they lead to application of two different sets of conflict-of-law rules for claims arising from the same anti-competitive behaviour but based upon obligations of differing natures. The aim of this chapter is to assess the existence of the distinction and to demonstrate, on the basis of European principles, namely competition policy and the Area of Freedom, Security and Justice, that no distinction should be made as to the legal framework governing private actions whether they are based on a contract or on tort. The demonstration of the results of our research will be followed by a proposal of a solution which maintains the distinction but guarantees equivalent results for both contract and tort.

III.  Assessment of the Distinction between Contractual and Non-Contractual Claims Arising out of a Restriction of Competition The assessment of the distinction requires an analysis of the existence of specific instruments or provisions of European law (A) and a demonstration of the existence of a real distinction both as far as the reasoning and the solutions are concerned (B). 39   Courage (n 34) para 24. The solution refers both to Arts 101 and 102 TFEU as para 23 mentions the direct effect of both provisions even though the conclusion is made on the sole basis of Art 101. 40   Courage (n 34) paras 25, 26. The judgment refers, in general terms, to compensation in case of breach of competition rules in case of loss caused by a contract or by conduct liable to restrict or distort competition. Accordingly, no distinction is made with respect to the possibility for Member States to prohibit unjust enrichment (Courage (n 34) para 30). Moreover, the lack of distinction is clearly intentional. Manfredi does not make the distinction either as far as the situation of the claimant is concerned: any individual can rely on a breach of Art 101 TFEU before a national court and therefore rely on the invalidity of an agreement or prohibited practice, provided there is a causal relationship between the latter and the harm, Manfredi (n 35) para 59–61. 41   As in Courage (n 34) the infringement resulted from the combined effect of several agreements making up the distribution network and in the light of the importance attached by the Court to the analysis of economic power of the plaintiff, one may wonder if it is actually possible to qualify a claim for antitrust damages as contractual. Indeed, the breach of competition law in the Courage case seems to be external to the will of the plaintiff as his power of decision was insignificant. In reality, the decision was taken on a different level of the network and outside the contractual scheme in which the plaintiff was involved. Accordingly, it is not the contractual relation between the plaintiff and the defendant as such that gave rise to the breach of antitrust law.

Contractual and Non-contractual Matters  139

A.  Distinction of the Texts The distinction clearly appears from the European texts.42 As far as the applicable law is concerned, there are two different texts: the Rome I Regulation which deals with contractual obligations and the Rome II Regulation relating to non-contractual obligations. Both texts provide solutions for compensation in the event of a restriction to competition, depending on the legal context in which the restriction arises. As far as the determination of jurisdiction is concerned, there is a single text, the Brussels I Regulation, which nevertheless provides the plaintiff contemplating the possibility of bringing an action for antitrust damages with the following option: the plaintiff may choose between the general solution established by Article 2 and, alternatively, Article 5(1) for contracts or Article 5(3) for torts.

B.  Distinctions as Far as the Reasoning and the Solutions are Concerned As far as the reasoning and the solutions are concerned, the distinction is crucial not only for the issue of determining jurisdiction but also for the issue of the applicable law.

i.  The Distinctions and the Issue of Determining Jurisdiction It is clear that the reasoning is similar for contracts and torts for several issues: – for the issue and the regime of the choice of jurisdiction by the parties;43 – for the issue and the regime of a situation involving a plurality of defendants;44 – for the issue and the regime of lis pendens45 and related actions;46 and – for the general principle of jurisdiction of the courts of the State of the defendant’s domicile.47 There is however an important difference related to parallel jurisdiction with the options offered to the plaintiff in cases of contract (Article 5(1)) or in cases of tort (Article 5(3)).48 In cases of contract, the plaintiff may opt for the courts of the place of performance of the obligation in question;49 the place of performance of the obligation in question shall be the place of delivery of the goods in the case of a sale of goods, and the place where the services were provided or should have been provided in the case of a provision of services.50 42   S Poillot-Peruzzetto, ‘Conflits de lois et conflits de compétence pour les actions privées fondées sur les atteintes aux règles communautaires de concurrence’ (2009) 18 RLDA 104–08. 43   Art 23 Brussels I Regulation. 44   ibid Art 6(1). 45   ibid Art 27. 46   ibid Art 28. 47   ibid Art 2. 48   In case of restriction of competition affecting territories of several Member States, the Mines de potasse d’Alsace and Fiona Shevill case-law should be applied to determine options conferred to the applicant as well as the scope of the competence of the judge: Case 21/76 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735 paras 7–25 and Case C-68/93 Fiona Shevill and others v Presse Alliance SA [1995] ECR I-415 paras 18–33. 49   Art 5(1)(a) Brussels I Regulation, Tessili case-law being applicable if the place of delivery or the place of performance is unspecified: Case 12-76 Industrie Tessili Italiana v Dunlop AG [1976] ECR 1473 paras 12–15. 50   Art 5(1)(b) Brussels I Regulation.

140  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka In cases of tort, the plaintiff may opt for the courts for the place where the harmful event occurred or may occur. The following examples illustrate the functioning of the abovementioned provisions. a. Tort A case of a potential distributor established in Germany but doing business in Luxembourg who meets the conditions for selective distribution but who has not been accepted by the manufacturer established in France. This potential distributor sues the manufacturer for damages and the action is based on breach of competition rules. In this case the parties have the possibility of deciding on the jurisdiction. In the absence of choice, the distributor may sue in France (as the place of domicile of the defendant, but also as the place of the harmful event, namely where the decision was made by the manufacturer). He may also sue in Luxembourg as the place where the harm occurred. b. Contract A case of an exclusive distributor established in Germany and having exclusivity for Luxembourg. The distributor does not comply with conditions imposing a total export ban, and as a result the manufacturer delivers the goods with difficulties and delay. The distributor sues the manufacturer established in France for nullity and damages on this basis. As in the previous example, the parties may also agree on the jurisdiction. In the absence of an electio fori clause, the distributor may opt for the courts of France (place of domicile of defendant) but also for the courts of the places of delivery (Germany or Luxembourg) if the litigation is qualified as a litigation related to the sale of goods. However, if the litigation is qualified as a litigation related to the general distribution relationship (and not to the specific sale of goods), on the basis of Article 5(1)(a) the place of exclusivity could be the basis of jurisdiction, namely Luxembourg. In this situation too, if the questionable possibility to agree on the jurisdiction in a matter where public interests are developed does exist, the options offered to the plaintiff in addition to the judge of the domicile of the defendant are different.

ii  The Distinction and the Issue of Applicable Law As far as the issue of applicable law is concerned, despite the existence of two different texts, there are also similarities in the reasoning for contracts and torts. In that respect, the general reasoning and possible use of the exceptions arising for public policy51 or overriding mandatory rules52 are similar. There are however important differences as far as the elements of the reasoning and the solutions are concerned. The purpose of our chapter is not to assess the relevance, in the context of private actions for damages, of solutions provided by the existing texts in EU PIL,53 but to assess the relevance of a differentiated treatment of claims, whether they are based upon Rome I or Rome II.   Art 21 Rome I Regulation, Art 26 Rome II Regulation.   Art 9 Rome I Regulation, Art 16 Rome II Regulation. 53   See in this respect the chapters related to Brussels I on the one hand and on Rome I and Rome II on the other hand. 51 52

Contractual and Non-contractual Matters  141 a.  Differences Based on the Assessment of a Specific Policy Firstly, in case of restraints on competition, a specific rule is foreseen for non-contractual obligations54 while there is no definite rule related to such restraints in the Rome I Regulation. The comparison has to be made as the Rome I Regulation also sets out detailed rules not only for contracts having a specific object but also for contracts involving specific persons (protection of consumers, employees and insured parties). Secondly, the specific connecting factor foreseen for non-contractual obligations is based on territoriality.55 On the contrary, the general connecting factor in the Rome I Regulation is classic (party autonomy, residence of one party) unless the public policy exception or overriding mandatory rules exception is used to set aside party autonomy in an action for compensation based on a restriction of competition. b.  Differences Based on the Specification of the Policy There is a specific reference to punitive damages as a way to exclude the applicable law on the basis of public policy only in Recital 32 Rome II Regulation, but no equivalent provision for contractual obligations.56 The specific grounds for action based on competition are only foreseen in the Rome II Regulation.57 It has to be added that only the Rome II Regulation provides a specific definition of restriction of competition,58 although the definition itself might be criticised. Also, the necessity of taking into account ‘in so far as appropriate’ the ‘rules of safety and conduct in operation in the country in which the harmful act was committed’ when it is not the applicable law is only foreseen for non-contractual obligations.59 c.  Differences between Solutions on the basis of Examples The first examples cover vertical relations, whether for a distribution agreement or a potential agreement, and horizontal relations for cartels. 1. Vertical Situation: Distribution Agreement (i)  Tort Involving One Defendant (Article 6(3)(a) Rome II) Case of a potential distributor established in Germany but active in Luxembourg who meets conditions of selective distribution but who has not been accepted by the manufacturer established in France and therefore sues for damages. As per Article 6(3)(a) Rome II Regulation, the applicable law will be the law of the affected market, namely the law of Luxembourg. (ii)  Contract Involving One Defendant (Articles 3 and 4 Rome I) Case of an exclusive distributor having its residence in Germany and benefiting from exclusivity for Luxembourg. If the distributor does not comply with conditions imposing a total   Art 6 Rome II Regulation as a specific rule compared to the general rule of Art 4.   Art 6(3) Rome II Regulation. 56   For the interest of such a provision see Luciani (n 24) 23–24, paras 31–37. 57   Recital 21 Rome II Regulation but only for unfair competition. 58   Recital 23 Rome II Regulation. 59   ibid Recital 34. 54 55

142  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka export ban and receives the goods with difficulties and delay, he may sue the manufacturer established in France for nullity and damages on this basis. If the parties agreed on the application of Swiss law, this law will apply unless the competition rules are qualified as overriding mandatory rules and applied not only to determine fault but also to determine the amount of damages. If the parties did not agree on the applicable law, as per the Rome I Regulation, the law of the distributor’s habitual residence will apply, namely German law, even for an affected market in Luxembourg, unless Article 4(4) Rome I Regulation is applied, but there is no predictability in that respect. (iii)  Tort Affecting Several Markets (Article 6(3)(b) Rome II – First Sentence) Case of a potential distributor established in Germany but active in Germany, Belgium and Luxembourg who meets the selective distribution conditions but who has not been accepted by the manufacturer established in Germany, and therefore sues for damages. On the basis of the Brussels I Regulation, the plaintiff may choose between the French courts (as place of the defendant’s domicile) and the courts of Germany, Belgium and Luxembourg (as places of occurrence of the tort). Each court will apply the Rome II Regulation: as per Article 6(3)(a) the court will apply the laws of the affected markets. However, on the basis of Article 6(3)(b), the German court, being the court of the defendant’s domicile, may apply German law (lex fori) for harm done in all markets provided that the German market is directly and substantially affected and that the plaintiff asks for such a centralisation. (iv)  Contract Affecting Several Markets (Article 4(1)(f) Rome I) An exclusive distributor established in Germany benefits from exclusivity for Luxembourg, the Netherlands and Belgium. As the distributor does not comply with conditions imposing a total export ban, the manufacturer limits the deliveries and delivers with significant delay. Therefore the distributor sues the manufacturer established in France for nullity and damages. If the parties agreed on the application of Swiss law, this law will apply unless the competition rules are qualified as overriding mandatory rules and used not only to determine fault but also to determine the amount of damages. If the parties did not agree on the applicable law, as per the Rome I Regulation, the law of habitual residence of the distributor will apply, namely German law, even if the affected markets are Luxembourg, the Netherlands and Belgium (Article 4(1)(f)). There is a single applicable law but it is not particularly linked to the situation as it is not connected to any of the markets affected by the anti-competitive behaviour. This problem could however be resolved by the application of Article 4(4) Rome I Regulation, but again, without any predictability. (v)  Contract Affecting Several Markets (Article 4(2) Rome I) A licensee has an exclusive licence for France and Germany from an English licensor. The licensee sues his licensor for nullity and damages as the licensor retains exclusivity on improvements to the invention. If the parties agreed on the application of Swiss law, this law will apply unless the EU competition rules are qualified as overriding mandatory rules and used not only to determine fault but also to determine the amount of damages.

Contractual and Non-contractual Matters  143 If the parties did not agree on the applicable law, the law of habitual residence of the licensor, namely English law, will apply even for affected markets in France and Germany. There is a single applicable law but the applicable law is not particularly linked to the situation. 2.  Horizontal Situations: Cartels In cartel situations, there are several defendants, namely the members of the cartel. A distinction has to be made, or at least could be made, between three cases depending on the legal situation of the plaintiff facing a cartel with respect to the various members of the cartel: he may have no agreement at all with the various members of the cartel, he may have an agreement with each member of the cartel, he may have an agreement with some members of the cartel and none with the others. (i)  Tort Affecting Several Defendants and Several Markets60 (Article 6(3)(b) Second Sentence): the Plaintiff Has No Agreement at All with the Members of the Cartel A French company sues for damages on the basis of a boycott by a cartel formed by a German, an Italian and a Spanish firm, bringing evidence that the three firms decided not to sell their products to the French company. The Brussels I Regulation is applicable as the defendants have their domicile in the territory of the EU. On the basis of the Regulation, the French company has the choice between the German, Italian or Spanish courts to sue the three defendants.61 The court, whichever it is, will apply the Rome II Regulation to determine the applicable law. On the basis of the Regulation, the court judge will apply its lex fori for the whole claim and against all of the defendants if the plaintiff seeks centralisation and provided that the market in the court’s State is directly and substantially affected.62 There is therefore a centralisation of the litigation and a single applicable law for the common behaviour. There is also a clear risk of forum shopping. (ii)  Contractual Claim Involving Several Defendants: the Plaintiff Has a Contract with All Members of the Cartel A firm established in Germany sues on the basis of its contracts of sale with its two different suppliers; it brings evidence of a price-fixing cartel. The first supplier is established in France, the second in Spain. As far as jurisdiction is concerned, the French or the Spanish courts have jurisdiction on the basis of Article 6(1) Brussels I Regulation. As far as the applicable law is concerned and if the situation is qualified as a contractual situation, Rome I will be applicable. In that respect, if the parties agreed in both contracts on the application of Swiss law, this law will apply unless the competition rules are qualified as overriding mandatory rules and used not only to determine fault but also to determine the amount of damages. If not, the action against the distributor established in France will be governed by French law and the action against the distributor established in Spain by Spanish law.

  Example given in the White Paper.   Art 6 Brussels I Regulation.   Art 6(3) Rome II Regulation.

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144  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka In this case there is no possibility to have a single applicable law for the same behaviour unless Article 4(4) Rome I Regulation is applied, but again, there is the problem of predictability. (iii)  Claim Based both on Tort and Contract: the Victim Has a Contractual Relationship with a Member (or Members) of the Cartel and a Non-Contractual Relationship with Another Member (or Members) A distributor for France and Spain, having its residence in France, brings an action against its manufacturer in Germany, its seller, and the not-wholly-owned subsidiary of this seller which organises the delivery. The action is based on the organisation of systematic late deliveries because of parallel imports carried out by the distributor. As per the Brussels I Regulation, the German and Spanish courts have jurisdiction (providing there is no electio fori clause in the distribution agreement). If the action is brought against both companies and based on a cartel, the differences between the two legal relations could be taken into account. In that respect, the applicable law will be the law of the residence of the distributor, namely French law, for the contractual relationship between the distributor and the manufacturer, and the law of the affected markets, namely French law and Spanish law, for the matters in tort arising between the subsidiary and the distributor. Therefore, two different substantive laws will be applied to a claim for damages based on the same behaviour. Of course, the existence of an agreement might be considered as irrelevant for the purpose of compensation for loss sustained and may be excluded from the analysis. That would be the case if it is argued that it is an action against an unlawful behaviour, irrespective of the legal situation between the plaintiff and the defendant. d.  Results of the Comparison It does result from the cases that the solutions based on contract or on tort are conflicting. Above all, as far as contractual situations are concerned, the reasoning is based on the parties’ autonomy and the overriding mandatory rule method, with some uncertainties for the qualification of overriding mandatory rules63 at the stage of evaluating the harm done. By contrast, there is no possibility of choice when it comes to torts and the conflict-of-law rule is based on the territorial connection. Accordingly, different connecting factors are used depending on the existence of a contractual or a non-contractual obligation even though the action is based on the same unlawful act. There is therefore an opposition between the law of the affected market and the law of residence. In addition, as far as the predictability of results of the analysis in concerned, there is a possible uncertainty if Article 4(4) Rome I is applied. By contrast, the Rome II Regulation provides relative certainty. Furthermore, in the event that there are several defendants, there is a centralisation of the litigation for contracts and torts with a risk of forum shopping. However, in the case of a cartel, set up against the plaintiff by its contractually-bound commercial partners, several laws will be applied even though the litigation is centralised. Thus, in the case of a mixed situation, if the plaintiff has a contractual relationship with one of defendants and a non  Lois de police, in French.

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Contractual and Non-contractual Matters  145 contractual relationship with another defendant, two different methods and two different laws may be applied despite the fact that the procedure originates from the same unlawful and anti-competitive act. Finally, in the case of contractual obligations, the overriding mandatory rules of a Member State or European mandatory rules may be used if all elements are situated in one or in several Member States (Article 3(3) and (4) Rome I Regulation). On the contrary, the Rome II Regulation simply refers to the ‘lex loci damni’ as if it were not clear what the status of EUcompetition rules is in the legal orders of the European Union and its Member States. These divergences between solutions, which are nevertheless applied to situations based on the same prohibited behaviour, conflict with several principles of the EU legal order.

IV.  How the Distinction Conflicts with European Principles In order to explain how the previous results conflict with European principles (B) it is necessary to assess, on the basis of the various existing texts, the European principles involved (A).64

A.  The European Principles Involved The main principles involved are related to the specificity of the European legal order, but also and in parallel, to competition policy as a pillar of the internal market, and to the Area of Freedom, Security and Justice.

i.  Specificity of the European Legal Order and Its Directions The Courage case refers to the specificity of the new European legal order.65 As per the early van Gend & Loos case,66 European rules have direct effect if sufficiently clear, precise and unconditional. In addition, the system is based on the principle of full effectiveness. In this context, the individual rights approach67 should be analysed as a way to reinforce the effectiveness of EU law. In line with Courage where the principle of effectiveness was applied for the very first time in the context of private enforcement, the Court distinctly stated in Manfredi that the national rules related to the determination of jurisdiction and concerning the procedure must not render practically impossible or excessively difficult the exercise of rights conferred by EU law.68   Rather than dealing with the classic national arguments in favour of the distinction.   Courage (n 34) para 19. 66  Case 26/62 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration [1963] ECR 1. 67  In van Gend & Loos (n 66) the Court held that individual rights arise when they are expressly granted but also by virtue of obligations imposed on individuals, Member States and Community institutions. 68   Courage (n 34) para 29, Manfredi (n 35) para 72: ‘in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction to hear actions for damages based on an infringement of the Community competition rules and to prescribe the detailed procedural rules governing those actions, provided that the provisions concerned are not less favourable than those governing actions for damages based on an infringement of national competition rules and that those national provisions do not render practically impossible or excessively difficult the exercise of the right to seek compensation for the harm caused by an agreement or practice prohibited under Article 81 EC’. 64 65

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ii.  Competition Policy as a Pillar of the Internal Market It is clear that competition rules are essential for the construction of the internal market.69 In addition, the various texts in question for the organisation of private actions based on restriction of competition rules refer to the importance of competition policy as a basis for the implementation of private actions; the effects of such an importance are easily assessed both at national and European levels. a.  The Importance of the Basis The White Paper states that the particularities of actions based on a breach of competition rules are not sufficiently taken into account by traditional civil rules.70 Does that mean that classic neutral conflict-of-laws rules are not adapted, since the European rules have to achieve a specific aim, namely ‘that all victims of infringements of EC competition law have access to effective redress mechanisms so that they can be fully compensated for the harm they suffered’?71 Do the conflict-of-laws rules have to be substantial? The document also directly states that private actions are a way to ensure the effective application of competition rules: Effective remedies for private parties also increase the likelihood that a greater number of illegal restrictions of competition will be detected and that the infringers will be held liable. Improving compensatory justice would therefore inherently also produce beneficial effects in terms of deterrence of future infringements and greater compliance with EC antitrust rules.72

It specifies the links between private and public actions: Another important guiding principle of the Commission’s policy is to preserve strong public enforcement of Articles 81 and 82 by the Commission and the competition authorities of the Member States. Accordingly, the measures put forward in this White Paper are designed to create an effective system of private enforcement by means of damages actions that complements, but does not replace or jeopardise, public enforcement.73

The Courage ruling also refers to the specific function of private actions for competition. It explains that individual rights to claim damages make a significant contribution to the maintenance of effective competition (in the European Union).74 It has to be added that Courage does not make any distinction between contractual and non-contractual obligations; the only important distinction made relates to public and private action as far as the extent of the parties’ liability is concerned (paragraph 35). The Manfredi case also refers to the link between private actions and the aims of com­ petition rules – ‘the practical effect of the prohibition of Article 81 would be put at risk if it were not open to any individual to claim damages for loss caused by a contract or by a conduct liable to restrict competition’.75 The case also mentions that ‘actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community’.76   Courage (n 34) para 20.   Para 1.1 White Paper. 71   ibid para 1.2. 72  ibid. 73  ibid. 74   Courage (n 34) para 27. 75   ibid para 26; Manfredi (n 35) para 60. 76   Manfredi (n 35) para 91. 69 70

Contractual and Non-contractual Matters  147 Finally, even the Rome II Regulation itself refers to the aims of competition rules and their importance.77 b.  The Effects of the Basis in Competition Law: the Specificity of Private Actions Based on Competition in the Member States78 Even at the national level, the legal framework governing private action based on a breach of competition law is specific. It is specific as in some Member States these actions are heard by specific courts. Also, the beneficiaries of the rights thereby conferred are not only firms but also consumers. The issue of a possible collective action has been raised in relation to breaches of competition law. The link between the national authorities’ decisions and the national courts is also a specificity of private actions, and in that respect the issue of cooperation between national authorities and national courts has been raised. Finally, there are distinct proceedings related to public actions based on breaches of competition rules which may have an effect on private actions, namely the leniency and settlement procedures. As a result of this specificity, the idea is suggested that the breach of competition rules should be sufficient to prove the existence of fault. Indeed the White Paper argues that as far as the necessity for some Member States to prove fault in case of breach of Article 101 and 102 is concerned, the White Paper supports the position of the Member States which do not require to prove fault as a condition of an antitrust damages claim. For the Commission, any fault requirements made by the Member States should be limited on the basis of the principle of effectiveness: The Commission therefore suggests a measure to make it clear, for the Member States that require fault to be proven, that once the victim has shown a breach of Article 81 or 82, the infringer should be liable for damages caused unless he demonstrates that the infringement was the result of a genuinely excusable error.79

iii.  The Area of Freedom, Security and Justice Both the Rome I and Rome II Regulations refer directly to the Area of Freedom, Security and Justice.80 Even though this area is not clearly defined and covers fields which are not totally homogeneous, some guidelines or principles derive from this new objective of European construction. The various texts involved mention some of them which have to be taken into account in order to assess the relevance of the said distinction. a.  Predictability, Legal Certainty and Justice The principle of predictability is presented as a link between the internal market and the Area of Freedom, Security and Justice; indeed the reference to the internal market is made by Recital 1 Rome II Regulation, and by Recital 1 Rome I Regulation; in addition Recital 6 of both Regulations clearly refers to the necessity of predictability.   See Recital 21 Rome II Regulation.   J Riffault Silk, ‘Private enforcement of European competition law: a short review of national judicial decisions’ (2008) 16 RLC 93. 79   Para 2.4 White Paper. 80   Recital 1 Rome II Regulation and Recital 1 Rome I Regulation. 77 78

148  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka Legal certainty and justice are essential elements of the Area of Freedom, Security and Justice.81 In that respect, Recital 14 Rome II Regulation refers to this principle to justify the choice of a general rule and specific rules. b.  Fundamental Place of the European Citizen The European citizenship was a way to enrich the European construction by new values in addition to the economic objectives. The Area of Freedom, Security and Justice is particularly designed to guarantee the rights of individual, in particular by their access to justice. Some texts in question mention European citizens, even if there is often an odd shift from the concept of citizen to the reality of the consumer of justice. A reference to the rights of any citizen is made in the White Paper.82 The Courage and Manfredi rulings also refer to the specific rights of individuals created by the European legal order.83 c.  Simplification of Litigation The idea that access to justice should be ensured by the European legal order explains the necessity of providing for the simplification of complex situations. In that respect, the Rome II Regulation provides a specific solution for complex situations in order to avoid the multiplicity of applicable laws (Article 6(3)(b)). d.  No Distortion of Competition between Litigants The necessity to avoid distortion of competition between European litigants84 is also a key element of the construction of the Area of Freedom, Security and Justice. In that respect, Recital 13 Rome II Regulation provides: ‘uniform rules applied irrespective of the law they designate may avert the risk of distortion of competition between European litigants’. e.  Consistency among the European Texts Between the three texts related to the above rules of private international law, there is a common key, namely the scope of the three instruments which cover civil and commercial matters. On this basis the necessity of coherence among the texts has been emphasised. The affirmation of the necessity of coherence between the three texts, which all relate to civil and commercial matters, appears in Recital 6 Rome II Regulation which refers to consistency between the Rome II Regulation and the Brussels I Regulation and in Recital 6 Rome I Regulation which refers to consistency among the Rome I, Brussels I and Rome II Regulations. The requirement for consistency arises out of the choice between a general text and, if necessary, texts for specific matters:85 ‘A situation where conflict of laws rules are dispersed among several instruments and where there are differences between these rules, should be avoided’.   See also Handte (n 18).   Right of ‘any citizen’, see para 1.1 White Paper. 83   Courage (n 34) para 19. 84   For the purpose of the present chapter, the adjective ‘European’ refers solely to Member States of the European Union and to the Member States of the European Economic Area. 85   See Recital 35 Rome II Regulation and Recital 40 Rome I Regulation. 81 82

Contractual and Non-contractual Matters  149 The evidence of the will for more consistency also derives from the importance of public interests in the Rome I and Rome II Regulations, presented as a basis for the use of public policy and overriding mandatory rules. In that respect, Recital 32 Rome II Regulation provides that ‘considerations of public interest justify giving the courts of the Member States the possibility, in exceptional circumstances, of applying exceptions based on public policy and overriding mandatory provisions’. The same provision is set out in Recital 37 Rome I Regulation. The evidence of the will for consistency also explains the solution of Article 6(3)(b) Rome II Regulation, as a means of coordination between the Rome II Regulation and the Brussels I Regulation in the event of multiple defendants, even if the final result might be criticised.

B.  The Elements of the Conflict On the basis of the differences previously explained and in accordance with the main principles deriving from competition policy and from the Area of Freedom, Security and Justice, it is possible to identify three types of difficulties, namely three types of conflict between the present situation based on the said distinction and the European principles described above.

i.  The Difficult Implementation of the Distinction between Contractual and Non-Contractual Obligations Conflicts with Certainty, Predictability, Necessity of Simplification and Effectiveness of Competition Policy Two types of conflict should be distinguished: the conflict related to the implementation of the distinction between the categories and the conflict originating from the enforcement of the distinction within the categories. a.  Conflicts Resulting from the Existence of the Primary Distinction between Contractual and Non-Contractual Obligations In some cases, the distinction between contractual and non-contractual situations will not be easy. As previously stated, the issue of characterisation is raised not only to determine the jurisdiction but also the applicable law. In both cases the European Court of Justice developed some solutions but this case-by-case method conflicts with European principles. Concerning the issue of jurisdiction, as seen in the introduction, the concept of matters relating to a contract is autonomous and does not cover the situations where there is no free agreement between the parties. Accordingly, in the light of the Handte decision, a claim of a sub-buyer against the manufacturer may be easily qualified as a tort. However, in most situations the implementation of the case-law is difficult and requires a case-by-case analysis of the obligation in question. Such a difficulty occurs, for instance, when a distributor sues his supplier for damages on the grounds of a sudden termination of commercial relations. Indeed, under the Arcado86 judgment, claims for compensation of economic loss sustained as a result of a sudden

  Arcado, above n 16.

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150  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka repudiation of a contract fall under the scope of Article 5(1) Brussels I Regulation87 as they are included in the concept of ‘contractual matters’. Few critical remarks may however be addressed in this respect as Arcado decision refers to agency agreements and it is doubtful whether the solution is fully transposable to contracts which commonly give rise to competition issues, such as distribution agreements. Indeed, the decision of the Court is based on the idea that ‘a claim for compensation for the wrongful repudiation of such an agreement as the basis for such compensation is the failure to comply with a contractual obligation’. The Court further stated that the contractual nature of the claim results from the provisions of Council Directive 86/653 of 18 December 1986 on coordination of laws of the Member States relating to self-employed commercial agents88 which lays down a selfemployed agent’s entitlement to notice and, therefore, to compensation for lack of such notice. There is no doubt that the decision guarantees an effective protection to commercial agents who often are the ‘weak’ party in the agreement. It is however uncertain whether parties to a distribution agreement should also take advantage of such protection. Although the interpretation of concepts of EU PIL has to remain autonomous, the progress made on the level of national legal orders of Member States could provide new arguments to the debate – especially in the context of the revision of the Brussels I Regulation. For instance, as the French Cour de Cassation has repeatedly affirmed89 claims for a sudden termination of a commercial relationship are based on tort. Indeed, while the goal of the Arcado decision is the protection of commercial agents, the substantive rule of French law seeks,90 on the contrary, the protection of the market. In addition, assuming that the claim is characterised as tort, and the contract provides an electio fori clause, should this be put into force irrespective of the non-contractual nature of the act giving rise to the litigation?91 In practice, if the relationship between the parties is considered as transactional, the electio fori clause will be enforced irrespective of the nature of the claim.92 For instance, that would be the case if a buyer introduced an action against a cartelised seller for compensation of damages sustained as a result of establishment of a pricing cartel.93 The qualification of a claim based both on a tort and a contract brings up further problems. For instance, what is the qualification in case of a sudden breach of contract of distribution and subsequent acts of unfair competition by the manufacturer on the territory of   In addition to the general rule provided in Art 2 Brussels I Regulation.   Council Directive 86/653 of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents [1986] OJ L382/17. 89   Cour de Cassation (France) (1st Civil Law Chamber) 22 October 2008, Monster Cable v AMS (2008) I-233 Bulletin; Cour de Cassation (France) (1st Civil Law Chamber) 13 January 2009, Delor Vincent v Renault Agriculture (2009) IV-3 Bulletin; Cour de Cassation (France) (1st Civil Law Chamber) 7 July 2009, Mécanic v La Redoute et Les 3 Suisses (2009) IV-96 Bulletin; see on this point M Béhar-Touchais (n 26) paras 3–4. 90   Béhar-Touchais (n 26) para 3. 91   Monster Cable v AMS (n 88); See especially D Bureau, H Muir-Watt, ‘L’impérativité désactivée?’ (2009) RCDIP 1; Béhar-Touchais (n 26) paras 11–12. 92   The distribution contract in question contained both ‘electio fori’ and ‘choice of law’ clauses. The rule prohibiting in France sudden breach of commercial relations (Art L442-6, I-5 French Commercial Code) has a status of an overriding mandatory rule. Yet, despite the ‘delictual’ nature of the claim as well as the probability that the US courts would not apply French overriding mandatory rules, the French Cour de Cassation decided to enforce the electio fori clause of the contract. This case not only recalls the distinction in PIL between the issues of jurisdiction and law applicable but also strengthens the importance of the control of foreign judgments during their recognition and enforcement in Member States of the EU. See on this point B Ancel and H Muir-Watt, ‘Les jugements étrangers et la règle de conflit de lois’ in H Gaudemet-Tallon, Vers de nouveaux équilibres entre ordres juridiques (Liber amicorum) (Paris, Dalloz, 2008) 135. 93   According to Prof Basedow such a claim would be based upon tort: Basedow (n 24) 232. 87 88

Contractual and Non-contractual Matters  151 the distributor? For the French Cour de Cassation it has to be a contractual matter as the acts of unfair competition are subsequent.94 It should be recalled in this respect that, as the Court stated in Kalfelis,95 when the action is based ‘concurrently on tortious or delictual liability, breach of contract and unjust enrichment’, the court with jurisdiction on the basis of Article 5(3) Brussels Convention ‘does not have jurisdiction over that action in so far as it is not so based’. However, if neither Article 5(1) nor 5(3) Brussels I Regulation may apply, because of the mixed nature of the claim, the plaintiff still has two options: he may either ‘bring his action in its entirety before the courts for the domicile of the defendant’ or use the exception of lis pendens. Finally, it is quite certain that in a case of repudiation of a contract which provided for a prorogation of jurisdiction, such an electio fori clause would also be enforced in relation to the claim based on tort. Indeed, according to Professor Basedow: ‘Unless the choice of court agreement is invalid under Art. 81 sect. 2, it will be honoured by the courts since the Brussels I Regulation does not allow for the review of abusive choice of court agreements’. Therefore, ‘The occurrence of biased choice of court clauses has to be taken into account in the debate on the appropriate connecting factor for the choice of the applicable law’96 (emphasis added). As far as the issue of applicable law is concerned, the distinction between contractual and non-contractual obligations is defined in the Rome II Regulation. As per Recital 11, ‘the concept of non-contractual obligations varies from one Member State to another. Therefore for the purposes of the Regulation non-contractual obligation should be understood as an autonomous concept’. In addition, Recital 10 Rome I Regulation reads as follows: ‘obligations arising out of dealings prior to the conclusion of the contract are covered by the Rome II Regulation’. In brief, neither the Rome II nor the Rome I Regulations seem to provide a clear definition of contractual and non-contractual matters. It is true that the caselaw relating to the interpretation of the Brussels I Regulation may be helpful to some extent. However, as shown above, the difficulties of characterisation will persist in relation to obligations for which neither of the texts provides any specific rule. It may be argued that the lack of predictability and certainty will be a risk factor and will negatively affect enforcement of competition rules and of victim’s right to redress. Indeed, since the texts do not provide a plaintiff with a clear answer on the competent court and the law applicable to the case, the plaintiff may prefer not to sue at all. Therefore, the unpredictability of the result of the action may neutralise the incentive to sue and ultimately undermine the effectiveness of private enforcement. b.  Conflicts Resulting from the Difficulties of Implementation of the Distinction within the Categories As far as the jurisdiction is concerned, difficulties of implementation of the distinction within the categories could be avoided by a specific reference to competition matters in the Brussels I Regulation. Indeed, in case of a contract, when Article 5(1)(b) Brussels I Regulation is not applicable, the general rule of Article 5(1)(a) has to be enforced. It requires identification of the place where the litigious obligation should have been performed. According to Tessili,97 94   Cour de Cassation (France) (1st Civil Law Chamber) 15 May 2001, Optelec v Soc Midtronics BV (2001) I-134 Bulletin (2002) RCDIP 86, commentary by P Lagarde. 95   Kalfelis (n 17) paras 14–21. 96   J Basedow (n 24) 233. 97   Tessili (n 49).

152  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka the place of the performance of this obligation has to be determined in accordance with substantive law applicable to the contract. Yet, in the absence of a ‘choice-of-law’ clause, it is necessary to apply the conflict-of-law rules provided by the Rome Convention or the Rome I Regulation. While the Rome I Regulation98 provides specific rules for distribution and franchising agreements, provisions of the Rome Convention99 require application of a general connecting factor. The case-law of the French Cour de Cassation reflects the difficulty of the analysis. First of all, the distribution agreement is usually composed of a framework dis­ tribution (or partnership) agreement and several implementing agreements.100 The provisions falling under the scope of EU antitrust law are usually included in the framework agreement. Yet, such an agreement cannot be qualified either as a contract of sale of goods or as a contract for services.101 It is also difficult to establish which of the contractual obligations is ‘characteristic’ and finally identify the place where this obligation should be performed under the terms of contract.102 This difficulty should no longer lead to uncertainty and unpredictability of solutions as the Rome I Regulation provides specific rules for distribution and franchise agreements. Under Recital 17 a distribution agreement is a contract for services, the execution of which is performed in the country of residence of the distributor.103 Therefore, the general rule of Article 5(1)(b) Brussels Regulation may from now on be applied in order to establish a court’s jurisdiction. As far as the applicable law is concerned, despite this main distinction, the Rome II Regulation refers to a previous contract as a clue for a closest link.104 In this case, the delictual qualification of the claim remains unchanged but the Rome II Regulation provides for a possibility of a different connecting factor which is deemed to be more appropriate given the specificity of the relation between the parties. However, it is not clear which link has to be taken into account in such a situation. Moreover, in case of breach of a distribution contract and subsequent unfair practices, there might be a possibility to apply the same law on the basis of contractual obligations and non-contractual obligations. Of course, it could be argued that Article 4 does not apply when Article 6 does apply and that the provision of Article 4(3) does not cover competition matters.105 In summary, the difficulties of implementation of the distinction lead to uncertainty and unpredictability of results and, therefore, make unenforceable the right to compensation for harm caused by infringements of Articles 101 and 102 TFEU.

  See on this point Azzi (n 5) para 9; Idot (n 24) 171, 185–86.   1980 Rome Convention on the law applicable to contractual obligations (Rome Convention) [1998] OJ C27/34, Art 4. 100   Idot (n 24) 185. 101   Cour de Cassation (France) (1st Civil Law Chamber), 23 January 2007 Waeco France v Waeco International (2007) I-30 Bulletin (exclusive dealership agreement); Cour de Cassation (France) (1st Civil Law Chamber) 5 March 2008, Cecil v Wolman (2008) I-61 Bulletin (exclusive distribution agreement). According to the French case-law the performance of the characteristic obligation resides in the right of exclusivity from which the distributor benefits (on given geographical market) and which is granted by the supplier. For an outstanding study of French case-law relating to conflicts of law in the field of distribution agreements see ME Ancel, ‘Les contrats de distribution et la nouvelle donne du règlement Rome I’ (2008) RCDIP 561. 102   Art 4(2) Rome Convention (n 98). 103   Art 4(1) Rome I Regulation (n 11) reads as follows: ‘(e) a franchise contract shall be governed by the law of the country where the franchisee has his habitual residence; (f) a distribution contract shall be governed by the law of the country where the distributor has his habitual residence’. 104   Rome I Regulation (n 11) Art 4(3). 105   See Dickinson (n 24) 397–99. 98 99

Contractual and Non-contractual Matters  153

ii.  The Variety of the Solutions Induced by the Existence of the Distinction Conflicts with Principles of the Area of Freedom, Security and Justice as well as with the Objective of Effectiveness of EU Competition Law a.  Different Choice of Jurisdiction for the Plaintiff Conflicts with the Principle of Non-Distortion of Competition between the Litigants when they Sue for Damages on the Basis of a Breach of Competition Rules The possibility for the plaintiff to opt for another court than the court of the domicile of the defendant and to have a different choice depending on the nature of the obligation might be a distortion of competition between the plaintiffs. This possibility of choice as such does not seem contrary to competition policy even though it favours forum shopping in a matter where public interests are involved. Indeed, despite the fact that competition policy does not make any distinction between contractual obligations and non-contractual obligations, the plaintiff will probably opt for the court which will apply a satisfactory law. The situation is therefore different from the choice of jurisdiction by both parties which may result in the exclusion of laws providing effective compensation. Thus, it does not seem that the general European principle of effectiveness may be considered as disregarded in a case where the plaintiff chooses between different options provided by the Brussels I Regulation, as the plaintiff will opt for the court which will apply the most efficient law as far as damages are concerned. The situation is therefore different from the electio fori hypothesis where the choice of jurisdiction derives from an agreement between the parties. b.  Possible Party Autonomy in Case of Contractual Obligations Conflicts with Competition Policy and with the Principles of the Area of Freedom, Security and Justice It has been stated that as far as contractual obligations are concerned, there is a possibility for the parties to agree on the applicable law. Article 6(4) of the Regulation related to noncontractual obligations forbids such a choice of law. It has to be added that a choice of law is also possible for the case of arbitration.106 Of course the judge may use the exception of overriding mandatory provisions (Article 9) in order to apply the law of the affected market but as it is not an obligation (Article 9(2) states that ‘nothing in this Regulation shall restrict the application of the overriding mandatory provisions of the law of the forum’) and different solutions may arise from the various Member States.107 Also the exclusive reference made to the overriding mandatory provisions of the State of performance is not suited to competition matters where the law of the place of the anti-competitive effects would be more appropriate. This possibility of choice for contracts by contrast with the lack of choice for non-­ contractual obligations108 directly conflicts with the principle of non-distortion of competition between the litigants. It also conflicts with the necessity for consistency between the European rules.

  See Luciani (n 24) para 28.   It should also be noted that some Member States of the Union are not familiar with the exception of overriding mandatory rules. For instance, Polish PIL does not yet provide for such an exception. 108   Except the choice for the plaintiff in case of several defendants as per Art 6(3) Rome II. 106 107

154  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka As far as competition is concerned this possibility of choice ignores the public interest which is the basis of the private action arising out of a restriction of competition. It therefore directly conflicts with the general principle of effectiveness of European law. It may also conflict with the necessity of guaranteeing the rights of individuals based on Articles 101 and 102 TFEU. c.  Different Connecting Factors and Different Reasonings whether the Obligation Is Contractual or Non-Contractual for the Same Prohibited Behaviour Conflicts with the Principle of Consistency and with the Necessity not to Distort Competition between the Litigants d.  Possible Use of Article 4(4) Rome I Regulation for a Contractual Obligation Conflicts with the Necessary Predictability of the Solutions for the Plaintiff e.  The Impossibility of Adoption of a Single Applicable Law to an Action Brought against Several Defendants (Namely Distributors) on the Basis of Several and Similar Contractual Obligations109 May Be Considered in Conflict with at Least Three European Principles Firstly, the rule of Article 4(1) Rome I may clash with competition policy interests, as in some cases the designated substantive laws may have no connection with the market affected by the unlawful agreement. That will be the case if the distributor is not active in his country of residence. Indeed, in such a situation, the law of the place of residence will not coincide with the market affected by the anti-competitive practices. Secondly, the distributive application of more or less favourable regimes of compensation may be considered, from the defendants’ point of view, as contrary to the principle of distortion of competition between the litigants. Thirdly, it could be argued that this situation conflicts with the necessity of simplification which is part of the right to access to justice. Hence, the relevance of this argument could be questioned.110

iii.  The Lack of Specific Rules for Contract Conflicts with the Objective of Effectiveness of European Competition Policy and the Principle of Consistency Even though this difficulty is not significant, it is unwelcome that competition policy interest is affirmed for non-contractual obligations and not for contractual obligations. In particular the substantive European policy in relation to punitive damages, namely the possibility for a State to require punitive damages but also the possibility for a Member State to set aside the applicable law if it provides punitive damages, should be extended to contractual obligations. This lack of specific provisions related to action based on breach of competition rules collides not only with the idea that private actions are based on competition policy but also 109   Indeed, as shown above, in case of an action brought against several defendants on the basis of several distribution agreements, there is no possibility to adopt the same applicable law even though the practices developed are similar. 110   Actions for antitrust damages illustrate the difficulty of balancing different principles arising, on the one hand, from the Area of Freedom, Security and Justice and, on the other hand, from European competition policy. Yet at some point of the analysis a choice has to be made and, in our opinion, in the case of an action brought against several defendants on the basis of several contractual relations, the balance should be shifted in favour of the principle of effectiveness of competition law.

Contractual and Non-contractual Matters  155 with the principle of consistency between the various texts and in particular the texts related to civil and commercial matters. Finally, the distinction shows the inconsistency of methods and approaches: while competition law, as an overriding mandatory rule, requires its application in case of a contract, it is clearly not considered as an overriding mandatory rule in the Rome II Regulation.

V.  Proposals of Means of Convergence From a civil law point of view it is clear that the distinction between contractual and noncontractual obligations has to be maintained. However as far as the regime of an action for damages is concerned, irrespective of its contractual or non-contractual nature, the differences of treatment should be erased. As shown above, the present normative situation, despite its solid foundations, leads to contradictory and inconsistent results. Firstly, the unpredictability of solutions provides no incentive to sue and, therefore, is of no interest both from public and private perspective. Secondly, the co-existence of two different sets of rules for claims originating in the same anti-competitive behaviour leads to an unjustified difference in treatment of victims. This phenomenon may be accentuated by the fact that the border between contract and tort is sometimes extremely thin111 which brings about a risk of an arbitrary characterisation. In the light of the results of our comparison, we conclude that, for the sake of effectiveness of private actions, a restriction of Article 101 or 102 TFEU should be considered as a breach of (statutory) legal duty, whose consequences related to the regime of the private action for compensation for economic loss should not differ whether there is a contractual or a non-contractual relationship between the plaintiff and the defendant. Therefore we suggest a set of formal solutions and substantive common solutions which could be adopted in the context of the future revision of the Brussels I, Rome I and Rome II Regulations. It should be noted that the following proposals refer to the issue of applicable law for a claim for damages based on anti-competitive behaviour and do not deal with the issue of the substantive scope of applicability of competition law in the context of such action.

A.  Formal Solution As far as the formal solution is concerned, there is a choice between a single text dealing with all issues related to private actions, namely jurisdiction, applicable law and also substantive rules of procedure, and the use of the three texts, namely the Rome I, Rome II and Brussels I Regulations, but with similar provisions.

i.  The Solution of Formal Unity of Competition Matters Through a Single Text Formal unity based on the necessity of complying with competition policy would lead to the adoption of a single text dealing specifically with obligations which arise from restrictions to 111   In the Provimi case, victims were requested by the court to decide on their own whether the claim was based on a contractual or a non-contractual obligation. See on this point the contribution of M Wilderspin.

156  Sylvaine Poillot-Peruzzetto and Dominika Lawnicka competition. The text would cover all the relevant issues: jurisdiction and applicable law instead of the Brussels I, Rome I and Rome II Regulations.112 A single text would have the advantage of providing consistency for a matter which clearly involves public interest. The problem however would be the place of unfair competition which should be excluded, even though the Rome II Regulation mentions the importance of public interest at its roots.

ii.  The Solution of Formal Diversity through Three Texts Containing Equivalent Provisions – the material scope of the Rome II Regulation could be extended to cover all situations whether based on contractual or non-contractual obligations and, as far as jurisdiction is concerned, the substantive scope of the Brussels I Regulation would not change; or – the distinction between the Rome I and Rome II Regulations could be maintained but in the Rome I Regulation, specific provisions for breach of competition would be added and they would be similar to the solutions provided in the Rome II Regulation, whatever these solutions are113 (in this case the material scope of the Brussels I Regulation was not amended); or – a new and specific text could provide specific conflict of jurisdiction and conflict of laws rules for a breach of competition rules.

B.  Substantive Common Solutions In order to guarantee the effectiveness of the right to compensation for harm suffered due to an infringement of Articles 101 and 102 TFEU, and whatever the formal solution adopted, we suggest a new normative scheme based on the exclusion of party autonomy for both choice of forum and choice-of-law issues, which would also provide: – a common and unique definition of restriction of competition; – a general reasoning based on a conflict-of-laws rule, including possible use of the public policy exception or overriding mandatory provisions; – a specific conflict-of-law solution for obligations based on restriction to competition reflecting the importance of the public interest involved; – a specific connecting factor in order to link private and public action and which could take into account the place of anti-competitive effects; and – a specific solution in case of several defendants; – a specific reference to punitive damages as a way to exclude the applicable law on the basis of public policy (as per Recital 32 Rome II Regulation) in cases where several markets are affected, leading to different courts having jurisdiction and different substantive laws being applicable.

112   Alternatively, the solution of formal unity could be achieved if these provisions were included in the future directive on rules governing actions for damages for infringement of Arts 101 and 102 TFEU. 113   See on this issue the contribution of W Wurmnest and S Francq as well as the contribution of B Vilà Costa.

Contractual and Non-contractual Matters  157

VI. Conclusion It is clear that the answer to the issue of the relevance of the distinction for private actions based on a breach of competition rules depends on the importance the European legislator wishes to grant to competition policy in the legal framework governing such ‘private’ matters. While the question may seem irrelevant from the perspective of national PIL rules, it is in fact of utmost importance in the context of internal market objectives. However, private enforcement exceeds the sphere of pure market considerations and may play a major role in the development prospects of the Area of Freedom, Security and Justice. Indeed, in addition to the public policy interest, actions for damages should also reflect the values and methods promoted by the Area of Freedom, Security and Justice as they may provide arguments to work towards more consistency. Indeed, in the case of private enforcement, the principle of effectiveness of competition rules gives a strong incentive to progress, while the Area of Freedom, Security and Justice constitutes an appropriate framework in which the system may evolve.

I.3 Alternative Forms of Litigation

8 International Litigation and Competition Law: The Case of Collective Redress DIMITRIOS-PANAGIOTIS L TZAKAS*

I. Introduction Dealing with the issue of collective redress in international antitrust litigation constitutes a significant challenge given the fact that a consolidation of principles emanating from three different disciplines is required. An insightful analysis has to address the procedural peculiarities of collective redress instruments juxtaposed with the doctrine of private inter­ national law and the policy considerations underpinning EU competition law. Inevitably, a handful of aspects must be handled ranging from court jurisdiction to the binding effect and recognition of such judgments. The controversy surrounding collective redress may even be observed in the US, the country with the most developed class litigation culture.1 Widely cited in this context is the publication of Arthur Miller’s ‘Of Frankenstein Monsters and Shining Knights’.2 Other scholars similarly refer to a ‘Jekyll and Hyde reputation’.3 This chapter focuses on the peculiarities of both representative and collective actions in disputes resulting from cross-border infringements of Article 101 or 102 TFEU (formerly 81, 82 EC). Departing from an assessment of the prerequisites laid down in the EU competition law relating to an effective private antitrust enforcement, features of the collective redress remedies of selected Member States will be illustrated. The evaluation of existing diversities aims to illuminate the deficiencies observed as regards the jurisdictional and conflict-of-laws context of intra-EU collective litigation and to highlight the need for legislative action at EU level. The chapter adopts the terminology used in EU documents. Subsequently, the term ‘representative action’ describes actions brought by a natural or legal person on behalf of two or more individuals who are not themselves party to the action, and aimed at obtaining either injunctive relief or damages for the individual harm caused to the interests of all * Dr Dimitrios-Panagiotis L Tzakas, Advocate (Athens Bar), LL.M. Former Research Fellow, Université Catholique de Louvain, Chair of European Law. 1   On the growth in the number of class actions in the US, see JH Beisner, M Shors and J Davidson Miller, ‘Class Action “Cops”: Public Servants or Private Entrepreneurs?’ (2005) 57 Stanford Law Review 1441, 1444–45. 2   A Miller, ‘Of Frankenstein Monsters and Shining Knights: Myth, Reality and the “Class Action Problem” ’ (1979) 92 Harvard Law Review 664. 3   AG Mackay, ‘Appealability of Class Certification orders under Federal Rule of Civil Procedure 23(F): Toward a Principled Approach’ (2002) 96 Northwestern University Law Review 755.

162  Dimitrios-Panagiotis L Tzakas those represented (and not to the representative entity).4 Collective actions characterise claims of individuals or businesses which are combined into one single action.5 A differ­ entiating formulation will be used only when national collective redress instruments are considered.

II.  The Requirements Emanating from EU Competition Law EU competition law explicitly prescribes only the nullity of any agreement which falls under the prohibiting rule of Article 101(1) TFEU and does not merit exemption pursuant to Article 101(3) TFEU. Although in the absence of a specific Community rule the establishment of civil remedies for antitrust violations has been widely seen as being subject to the remedial and procedural autonomy of the Member States, attempts to ascertain an autonomous EU law remedy can be traced back to the opinion rendered by the Advocate General Walter Van Gerven in the case Banks.6 The European Court of Justice (ECJ) in Courage v Crehan 7 and Manfredi 8 explicitly endorsed the role of private actions in maintaining and safeguarding undistorted competition and thus gave rise to a lively debate on the legal basis of the right to damages.9 The Court ruled that: The full effectiveness of Article 85 of the Treaty and, in particular, the practical effect of the prohibition laid down in Article 85(1) would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition (emphasis added).10

Under the light of the Court’s reasoning and in the absence of concrete Community rules, the legal systems of the Member States have to designate the courts having jurisdiction and lay down detailed procedural rules. According to the ECJ, the Member States do not enjoy absolute or unlimited freedom since the national rules can neither be less favourable than those governing similar domestic actions (principle of equivalence) nor render 4   Commission, ‘Staff Working Paper accompanying the White Paper on Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2008) 404, 2 April 2008, para 49; A Renda et al, ‘Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios’ final report submitted to the Commission on 21 December 2007, 270–71. 5   Para 57 Staff Working Paper Accompanying the White Paper. 6   Case C-128/92 H J Banks & Co Ltd v British Coal Corporation [1994] ECR I-1209. 7   Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297. 8   Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619. 9   Affirming a Community right: C Jones, Private Enforcement of Antitrust Law in the EU, UK and USA (Oxford, Oxford University Press (OUP), 1999) 146–52; AP Komninos, EC Private Antitrust Enforcement, Decentralised Application of EC Competition Law by National Courts (Oxford, Hart Publishing, 2008) 170–74; N Reich, ‘The “Courage” Doctrine: Encouraging or Discouraging Compensation for Antitrust Injuries?’ (2005) 42 Common Market Law Review (CMLRev) 35, 38–39. Against: G Berrisch, E Jordan and RS Roldan, ‘EU Competition and Private Actions for Damages’ (2004) 24 Northwestern Journal of International Law & Business 585, 587–91; T Lettl, ‘Der Schadensersatzanspruch gemäß § 823 Abs 2 BGB i.V. mit Art 81 Abs 1 EG’ (2003) 167 Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht 473, 475–77; W Wurmnest, ‘Private Durchsetzung des EG-Kartellrechts nach der Reform der VO Nr 17’ in P Behrens, E Braun and C Nowak (eds) Europäisches Wettbewerbsrecht im Umbruch (Baden-Baden, Nomos, 2004) 213, 221–24. 10   Courage (n 7) para 26. See also Manfredi (n 8) paras 60, 90.

Collective Redress  163 the exercise of rights conferred by the Community law practicably impossible or excessively difficult (principle of effectiveness).11 The above-mentioned jurisprudence addressed solely the standing of single individuals and affirmed their eligibility to claim compensation for damages suffered as a result of anti-competitive practices infringing Article 101 TFEU. Notwithstanding the controversial discussion concerning the Community-law basis of civil antitrust liability, the impact of the Court’s reasoning on collective redress instruments remains unclear and still constitutes a matter of interpretation.12 Assuming the existence of a Community-based right in damages, it should be asked if collective or representative actions compose ‘constitutive’ or ‘executive conditions’ of this right.13 Whereas in the first case such an evaluation could lead to the obligation of the Member States’ laws to enable or foresee collective redress instruments, in the second case the role of Community law is restricted to controlling the existing remedies in light of the principles of equivalence and effectiveness. As far as collective actions are concerned, it is beyond doubt that the consumers will rarely initiate individual actions before the Member State courts due to the small value of individual damages suffered as a result of anti-competitive practices.14 According to the Advocate General Francis Jacobs: ‘collective rights of action are an equally common feature of modern judicial systems’.15 John Temple Lang16 considers as likely that Article 10 EC (now as amended Article 4(3) TEU) imposes on national courts a duty ‘to enable groups of consumers or other individuals to join together to claim compensation in accordance with the principles stated in Crehan’. Furthermore, in light of the ECJ decision in Océano Grupo,17 he advocates for ‘a special duty on national courts to ensure that citizens get rights under Community law that in practice they may not otherwise be able to obtain’.18 However, it remains questionable if this finding could build a solid basis for such interference with the Member States’ procedural autonomy19 under the present state of law.20   Courage (n 7) para 29. See also Manfredi (n 8) para 62.   See also J Fitchen, ‘Choice of Law in International Claims Based on Restrictions of Competition: Article 6(3) of the Rome II Regulation’ (2009) 5 Journal of Private International Law (JPIL) 337, 339 fn 7, who is considering class or representative actions as ‘the most nebulous’ of the remedies. 13  W Van Gerven, ‘Of Rights, Remedies and Procedures’ (2000) 37 CMLRev 501, 513, 526–29. See also Komninos, EC Private Antitrust Enforcement (n 9) 173–76. 14   Commission Staff Working Document, Public Consultation: Towards a Coherent European Approach to Collective Redress, SEC(2011)173 final, 4 February 2011, paras 4-6; Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008, 4; paras 24–25, 39–40 Staff Working Paper Accompanying the White Paper. 15   Opinion in Case C-195/98 Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst v Republik Österreich [2000] ECR I-10497 para 47. cf also Gorraiz Lizarraga and others v Spain (App No 62543/00) ECHR 2004‑III para 38. See furthermore Case C-199/08 Erhard Eschig v UNIQA Sachversicherung AG [2009] ECR I-8295 paras 61–64. 16   J Temple Lang, ‘Developments, Issues, and New Remedies: The Duties of National Authorities and Courts under Article 10 of the EC Treaty’ (2004) 27 Fordham International Law Journal 1904, 1917. 17   Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial SA v Rocío Murciano Quintero [2000] ECR I-4941. See also Case C-372/99 Commission of the European Communities v Italian Republic [2002] ECR I-819 paras 14–16. 18   J Temple Lang, ‘European Community Competition Policy: How Far Does it Benefit Consumers?’ (2004) 18 Boletín Latinoamericano de Competencia, available at http://ec.europa.eu/competition/publications/blc/ boletin_18_3.pdf, 128, 133. cf also F Cafaggi and HW Micklitz, ‘Introduction’ in F Cafaggi and HW Micklitz (eds), New Frontiers of Consumer Protection (Antwerp, Intersentia, 2009) 1, 19. 19   See also V Milutinovic, ‘Private Enforcement: Upcoming Issues’ in G Amato and CD Ehlermann (eds), EC Competition Law, A Critical Assessment (Oxford, Hart Publishing, 2007) 753. But see WH Roth, ‘Sammelklagen im Bereich des Kartellrechts’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 109, 121. 20   On the diversity of the Member States’ collective redress instruments and procedural traditions see Renda et al (n 4) 272–76, 295. 11 12

164  Dimitrios-Panagiotis L Tzakas Obliging the legislation of the Member States to provide for mechanisms which allow aggregation of several individual claims in a single proceeding seems to be based on a farreaching view of the acquis communautaire and of the effectiveness of the EU competition rules. An obligation de résultat21 of the national courts and laws to offer effective judicial protection by means of collective actions has not been addressed by the European Commission.22 Furthermore, the ECJ in Manfredi23 was very reluctant to scrutinise the Italian rules on the competence of domestic courts. Instead, the Court merely obliged the Italian judges to scrutinise the relevant domestic provisions pursuant to the principles of equivalence and effectiveness. Setting further requirements on procedural issues seems to overburden the national legislation and neglect the national peculiarities.24 Not coincidentally, the pre-draft Directive on rules governing damages actions for infringements of Articles 101 or 102 TFEU merely prescribes an obligation to ensure that two or more injured parties having suffered harm caused by the same infringement can jointly bring an action for damages which has to be treated as one single action. From the standpoint of representative actions, the question to be addressed is whether a collective entity in the form of a certified consumer association or an association representing cartel victims can be qualified as ‘each individual’ pursuant to the wording of the ECJ.25 An affirmative answer would confirm their eligibility to claim damages and injunctive relief on behalf of harmed individuals, thus inducing the national legislators and courts to grant them standing. Indeed, this concept could enhance the effectiveness of the EU competition rules, foster a solid culture of litigation and improve private antitrust enforcement in the EU. It cannot be overlooked, however, that too many questions remain unanswered in case this approach were to be adopted. Which associations have standing? Under which conditions can they initiate court proceedings? Which model (opt-in or opt-out) is appropriate? How are obtained damages to be distributed? If collective entities are considered in abstracto as ‘each individual’ pursuant to the wording of the ECJ jurisprudence, national laws setting specific requirements for standing will be deemed to infringe primary Community law. For these reasons, the issue26 should fall under the scope of the procedural autonomy of the Member States.27 Nevertheless, existing collective redress instruments should not contravene the preconditions of Community law and especially the principles of equivalence and effectiveness.28 21   See AP Komninos, ‘New Prospects for Private Enforcement of EC Competition Law: Courage v Crehan and the Community Right to Damages’ (2002) 39 CMLRev 447, 480. 22   The Commission speaks broadly of ‘balanced measures that are rooted in European legal culture and traditions’. See White Paper on damages actions, 3. See also para 16 Staff Working Paper Accompanying the White Paper. 23   Manfredi (n 8) paras 70–72. cf also Case C-432/05 Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern [2007] ECR I-2271 paras 40–44, 62, 64–65. 24   Commission Staff Working Document, Public Consultation, paras 8-9; Berrisch, Jordan and Roldan, ‘EU Competition and Private Actions for Damages’ (n 9) 596. See also Lettl, ‘Der Schadensersatzanspruch’ (n 9) 492; Milutinovic, ‘Private Enforcement’ (n 19) 753. cf also Komninos (n 9) 221, 232–33 who is addressing collective claims within the procedural law framework of the EU private antitrust enforcement. From the perspective of Greek law, see A Mikroulea, ‘Verbandsklage auf Schadensersatz im griechischen Verbraucherschutzgesetz’ in KJ Hopt and D Tzouganatos (eds), Europäisierung des Wirtschaftsrechts (Tübingen, Mohr Siebeck, 2006) 309, 328 considering class actions as incompatible with the Greek legal system. 25   Courage (n 7) para 26; Manfredi (n 8) paras 60, 63, 90, 95. 26   The matter is not addressed by para 37 Staff Working Paper Accompanying the White Paper, where solely the standing of indirect purchasers is affirmed. cf also Komninos (n 9) 221, 232–33; Milutinovic (n 19) 754–55. 27   cf also N Reich, ‘Legal Protection of Individual and Collective Consumer Interests’ in HW Micklitz et al (eds), Understanding EU Consumer Law (Antwerp, Intersentia, 2009) 317, 351. 28   See also Reich, ‘The “Courage” Doctrine’ (n 9) 64–65.

Collective Redress  165

III.  Current State of Collective Redress in the EU A.  Collective Redress in the Legal Systems of the Member States The above-described absence of a collective Community remedy necessitates an illustration of the evolving patchwork of national collective redress mechanisms in the EU. Although this analysis is restricted to the legal systems of selected Member States,29 it is reflective of the procedural and conflict-of-laws obstacles arising in international antitrust litigation.

i.  Representative Actions Representative actions are prescribed by the laws of various Member States with, however, significant differences concerning the relief to be granted. The same can be observed with regard to the representative entities entitled to bring collective proceedings. A brief depiction of the German, English and French provisions in this field illuminates the significant divergences which also impact the jurisdictional and conflict-of-laws analysis which ensue. In Germany, allowing qualified consumer associations to pursue collective remedies has been endorsed by the Monopolies Commission30 and many scholars.31 Although the initial Drafts32 of the Seventh Amendment of the Act against Restrictions of Competition (Gesetz gegen Wettbewerbsbeschränkungen – GWB) had foreseen such remedies allowing trade and qualified consumer associations to seek an injunction or the cessation of anti-competitive practices, this proposition failed on the political compromise within the German Conciliation Committee. The enacted section 33(2) GWB only allows claims for cessation or injunction by certain associations, provided the infringement affects the interests of their members. The prerequisites for standing are the legal capacity of the association, the promotion of commercial or independent professional interests and the ability, in particular with regard to their human, material and financial resources, to actually exercise their statutory functions.33 A peculiarity of the German competition law is the collective remedy enshrined in section 34a GWB which entitles the mentioned associations to require the wrongdoer to surrender to the federal budget the economic benefit obtained at the expense of multiple purchasers or suppliers.34 29   For an analysis of the representative actions provided by several Member State laws in the fields of unfair competition law, see TMJ Möllers and A Heinemann, The Enforcement of Competition Law in Europe (Cambridge, Cambridge University Press, 2007) 199 ff. See furthermore D Fairgrieve and G Howells, ‘Collective Redress Procedure: European Debates’ (2009) 58 ICLQ 379; R Mulheron, ‘The Case for an Opt-Out Class Action for European Member States: A Legal and Empirical Analysis’ (2009) 15 Columbia Journal of European Law 409, 415–27. 30  Monopolkommission, Sondergutachten 41: Das allgemeine Wettbewerbsrecht in der Siebten GWB-Novelle (Baden-Baden, Nomos, 2004) 47–52. 31  K Schmidt, ‘Zivilprozess und Europakartellrecht: Verheißungen und Befürchtungen im Licht von Verfahrensrecht und Wettbewerbspolitik’ in P Gottwald and H Roth (eds), Festschrift E Schumann (Tübingen, Mohr Siebeck, 2001) 405, 420–22; R Hempel, Privater Rechtsschutz im Kartellrecht (Baden-Baden, Nomos, 2002) 317–21. 32  Deutscher Bundestag, Drucksache 15/3640 of 12 August 2004, 11, 53; Deutscher Bundestag, Drucksache 15/5049 of 9 March 2005, 17; Deutscher Bundesrat, Drucksache 441/04 of 28 May 2004, 13, 93. 33   cf also D Seeliger, ‘Kollektiver Rechtsschutz im Kartell- und Wettbewerbsrecht’ in C Meller-Hannich (ed), Kollektiver Rechtsschutz im Zivilprozess (Baden-Baden, Nomos, 2008) 73, 83–84. 34   C Alexander, ‘Marktsteuerung durch Abschöpfungsansprüche’ (2006) 61 JuristenZeitung (JZ) 890; A Stadler, ‘Der Gewinnabschöpfungsanspruch: eine Variante des private enforcement?’ in S Augenhofer (ed), Die Europäisierung des Kartell- und Lauterkeitsrechts (Tübingen, Mohr Siebeck, 2009) 117.

166  Dimitrios-Panagiotis L Tzakas English law provides in section 47B Competition Act 1998 (as inserted by section 19 Enterprise Act 2002) a special remedy allowing ‘specified bodies’ to bring proceedings before the Competition Appeal Tribunal (CAT) which comprise consumer claims – and also monetary claims – made or continued on behalf of at least two individuals.35 The remedy adopts the opt-in model since a claim may only be made or continued in the proceedings with the consent of the individual concerned. Section 47B(9) requires the representative entities to be ‘specified’ in an order made by the Secretary of State36 in accordance with criteria set for the purposes of the section.37 The damages or any other sum (except costs or expenses) awarded in respect of a consumer claim included in proceedings under section 47B must be awarded to the individuals concerned.38 French law prescribes several collective redress instruments which may be generally initiated in the collective interest and allow the recovery of injuries resulting from antitrust violations. Under Article L421-1 Consumer Code, in case of infringements constituting a criminal offence,39 qualified associations having the statutory object of protecting consumer interests may exercise the rights conferred upon civil parties in respect of events directly or indirectly prejudicing the collective interest of consumers (action civile). Complementing this remedy – which allows compensation for suffered injuries – Article L421-2 Consumer Code provides for a grant of injunctive relief in the form of cessation of the illicit behaviour.40 More far-reaching is the joint representative action (action en représentation conjointe) enshrined in Article L422-1 Consumer Code,41 according to which any approved association recognised as being representative on the national level may institute legal proceedings to obtain reparation before any court on behalf of consumers (at least two) who have provided an authorisation. Furthermore, it is required that several consumers, identified as natural persons, suffered individual damages caused by the same business act.42 Furthermore, trade or professional associations are entitled under Article 35   cf also Office of Fair Trade, ‘Private Actions in Competition Law: Effective Redress for Consumers and Business, Discussion Paper’ (2007) available at www.oft.gov.uk/shared_oft/reports/comp_policy/oft916.pdf, 13 ff. 36   See, eg, The Specified Body (Consumer Claims) Order 2005, SI 2005/2365. 37   The criteria set out by the Department for Business Innovation and Skills (BIS) are: (a) the body is so constituted, managed and controlled as to be expected to act independently, impartially and with complete integrity; (b) the body is able to demonstrate that it represents and/or protects the interests of consumers. This may be the interests of consumers generally or specific groups of consumers; (c) the body has the capability to take forward a claim on behalf of consumers; and (d) the fact that a body has a trading arm will not disqualify it from being able to bring consumer group claims, provided that the trading arm does not control the body, and any profits of the trading arm are only used to further the stated objectives of the body. Available at www.berr.gov.uk/files/file11957. pdf. 38   See O Dayagi-Epstein, ‘Representation of Consumer Interest by Consumer Associations: Salvation for the Masses?’ (2007) 3 Competition Law Review 209, 218–21; K Holmes, ‘Public Enforcement or Private Enforcement? Enforcement of Competition Law in the EC and UK’ (2004) 25 European Competition Law Review (ECLR) 25, 32–33; B Rodger, ‘Private Enforcement and the Enterprise Act: An Exemplary System of Awarding Damages’ (2003) 24 ECLR 103, 108. For the problems faced in the Replica Football Shirts litigation, see C Hodges, The Reform of Class and Representative Actions in European Legal Systems (Oxford, Hart Publishing, 2008) 24–26. 39   The penal sanctions in case of antitrust violations are prescribed in Art L420-6 Commercial Code. 40   See H Beuchler, ‘Länderbericht Frankreich’ in HW Micklitz and A Stadler (eds), Das Verbandsklagerecht in der Informations- und Dienstleistungsgesellschaft (Münster, Landwirtschaftsverlag, 2005) 57, 81–94; J Calais-Auloy and F Steinmetz, Droit de la consommation, 7th edn (Paris, Dalloz, 2006) 642–45. 41   Beuchler, ‘Länderbericht Frankreich’ (n 40) 125–41; Calais-Auloy and Steinmetz, Droit de la consommation (n 40) 650–51; R Martin, ‘L’action en représentation conjointe des consommateurs’ (1994) 68 Juris-Classeur Périodique La Semaine Juridique I-3756. 42   For litigation brought before French courts in the case of a conspiracy of mobile phone operators to fix market share see C Prieto, ‘Inciter les actions en dommages et intérêts en droit de la concurrence: Le point de vue d’une concurrentialiste’ (2009) Concurrences, édition spéciale, L Idot (ed), Actes du colloque sur le livre blanc sur les actions en dommages et intérêts pour infraction aux règles communautaires sur les ententes et les abus de position

Collective Redress  167 L470-7 Commercial Code to commence actions for damages or injunctive relief with regard to facts directly or indirectly harming fair competition or the collective interest of the profession or sector they represent.43

ii.  Collective Actions Whereas representative actions are prescribed in some form by several national legislations, antitrust litigation initiated by means of collective actions is not that widespread. In the procedural systems of some Member States like Germany44 or France,45 collective antitrust proceedings remain unknown. The lack of such group litigation mechanisms has led to the development of alternative ways of pursuing damage claims by cartel victims. Thus, after a hard core cartel in the cement sector had been uncovered by the German Federal Competition Authority, a Belgian corporation (CDC Cartel Damage Claims SA) acquired the damage claims of many affected companies by way of purchase and assignment and initiated proceedings before the German Courts.46 Nonetheless, the prominent tendency observed in many Member State laws to introduce collective actions cannot be neglected. This is the case of the Swedish Group Proceedings Act 200247 and the Finnish Act on Class Actions No 444/2007,48 both of which adopt general procedural mechanisms allowing aggregation of individual claims and prescribe the opt-in requirement. The English Group Litigation Order49 enshrined in Part 19III of the dominante 8, 9; V Magnier, ‘Class Actions, Group Litigation & Other Forms of Collective Litigation, Protocol for National Reporters: France’, available at www.law.stanford.edu/display/images/dynamic/events_media/France_ National_Report.pdf, 20, 22. 43   See Cour de Cassation (France) (Ch comm), Decision of 24 November 2009, No 08-13052; L Usunier, ‘Collective Redress and Class Actions in France’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 293, 301-1. 44   See Bundeskartellamt, ‘Private Kartellrechtsdurchsetzung, Stand, Probleme, Perspektiven, Diskussionspapier vom 26.9.2005’, www.bundeskartellamt.de/wDeutsch/download/pdf/Diskussionsbeitraege/05_Proftag.pdf, 30–31 according to which class actions following the US model are concluded as contravening the principle of party disposition as well as the right to be heard. 45   The introduction of class actions in case of antitrust violations has been welcomed by the Conseil de la Concurrence, ‘Avis du 21 septembre 2006 relatif à l’introduction de l’action de groupe en matière de pratiques anticoncurrentielles’ available at www.autoritedelaconcurrence.fr/doc/classactions.pdf. On the legislative initiatives, see L Cadiet, ‘Future Prospects for Collective Redress in Europe: Toward a System of Class Actions? The State of Play in France’ (2008) 13 Zeitschrift für Zivilprozeß International (ZZPInt) 3. 46   See BGH, Order of 7 April 2009 (2009) 9 Gewerblicher Rechtsschutz und Urheberrecht Rechtsprechungs-Report 319. cf also LG Düsseldorf, Zwischenurteil of 21 February 2007 (2007) 62 Betriebs-Berater 847, note G Weidenbach. For the proceedings in Germany, see the homepage of the Belgian Corporation www.carteldamageclaims.com/ english/cement_cartel_D.htm. See also H Koch, ‘Internationaler kollektiver Rechtsschutz’ in C Meller-Hannich (ed), Kollektiver Rechtsschutz im Zivilprozess (Baden-Baden, Nomos, 2008) 53, 54–55. Similar proceedings have been initiated in Austria by the Austrian Association for consumer protection (VKI). See on this topic S Augenhofer, ‘Private enforcement: Anforderungen an die österreichische und deutsche Rechtsordnung’ in S Augenhofer (ed) Die Europäisierung des Kartell- und Lauterkeitsrechts (Tübingen, Mohr Siebeck, 2009) 39, 57–59. 47  For the Swedish law, see P Dopffel and JM Scherpe, ‘“Grupptalan”: Die Bündelung gleichgerichteter Interessen im schwedischen Recht’ in J Basedow et al (eds), Die Bündelung gleichwertiger Interessen im Prozeß (Tübingen, Mohr Siebeck, 1999) 429; A Mom, ‘Länderbericht Schweden’ in HW Micklitz and A Stadler (eds), Das Verbandsklagerecht in der Informations- und Dienstleistungsgesellschaft (Münster, Landwirtschaftsverlag GmbH, 2005) 497; U Stengel and P Hakeman, ‘Gruppenklage – Ein neues Institut im schwedischen Zivilverfahrensrecht’ (2004) 50 Recht der Internationalen Wirtschaft 221. 48   M Välimäki, ‘Introducing Class Actions in Finland: an Example of Lawmaking without Economic Analysis’ available at http://ssrn.com/abstract=1261623. See also Finnish Ministry of Justice, Press Release of 12 April 2007, available at www.om.fi/en/Etusivu/Ajankohtaista/Uutiset/Uutisarkisto/Uutiset2007/1175668512999. 49  Hodges, The Reform of Class and Representative Actions (n 38) 53–57; R Mulheron, The Class Action in Common Law Legal Systems: A Comparative Perspective (Oxford, Hart Publishing, 2004) 94–102.

168  Dimitrios-Panagiotis L Tzakas Civil Procedure Rules (CPR, r 19.10–19.15) also introduces a flexible managerial instrument allowing collective proceedings for individual claims which encompass common or related issues of fact or law. Similar collective actions requiring an initiating act on the part of class litigants can be identified in the draft law which is to be enacted in Italy.50 The widespread acceptance of opt-in collective mechanisms should not, however, overshadow the several acts of national legislation, albeit somewhat reluctant, which adopted opt-out proceedings to a limited extent and under specific requirements. Noteworthy is the Danish Administration of Justice Act51 as well as the Norwegian Dispute Act 2005.52 A restricted form of the opt-out model is also entailed in Part 19II CRP (r 19.6) concerning the representative action.53 The oldest and most far-reaching opt-out mechanism can be found in the Portuguese Act 83/9554 which grants the right of popular participation in legal proceedings concerning the prevention, cessation or legal pursuit of various infringements including antitrust violations.55 Furthermore, a specific regime based on a settlement-only opt-out model is stipulated by Article 7:907 Dutch Civil Code;56 the provision does not allow the aggregation of several claims, providing rather that the wrongdoer and an association/foundation (acting in the common interest of harmed individuals) may jointly petition a court in order to confer binding effect to a settlement reached between them.

B.  The Propositions of the European Commission In the Green Paper on ‘Damages actions for breach of the EU antitrust rules’57 the European Commission takes into account the fact that consumers or purchasers having suffered small damages after a cartel infringement are rarely going to bring their claims before a court. Thus, emphasis is placed on the protection of their interests through the adoption of a cause of action for consumer associations. A further proposal concerns the 50   A Barba, ‘Die italienische kollektive Schadensersatzklage zum Schutz der Verbraucher’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 243; R Caponi, ‘The Collective Redress Action in the Italian Legal System’ (2008) 13 ZZPInt 13. 51   Danish Ministry of Justice, Department of Law, ‘New rules on class actions under Danish law’, available at www.justitsministeriet.dk/fileadmin/downloads/rules.pdf; T Bogelund, ‘Introduction of class actions in Denmark’ (September 2007) 13 Young Lawyers’ Committee Newsletter 23; E Werlauff, ‘Class actions in Denmark: from 2008’, available at www.law.stanford.edu/display/images/dynamic/events_media/Demark_Legislation.pdf. 52   C Bernt-Hamre, ‘Class Actions, Group Litigation & Other Forms of Collective Litigation in the Norwegian Courts’, available at www.law.stanford.edu/display/images/dynamic/events_media/Norway_National_Report.pdf. Generally on the collective redress instruments of the Nordic States, see H Lindblom, ‘Group Litigation in Scandinavia’ (2008) 13 ZZPInt 85; K Viitanen, ‘Nordic Experiences on Group Actions for Compensation’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 219. 53  Mulheron, The Class Action in Common Law Legal Systems (n 49) 92–93; Fairgrieve and Howells, ‘Collective Redress Procedure’ (n 29) 396. 54   HS Antunes, ‘Class Actions, Group Litigation & Other Forms of Collective Litigation (Portuguese Report)’, available at www.law.stanford.edu/display/images/dynamic/events_media/Portugal_National_Report.pdf; JL da Cruz Vilaça, PM de Nápoles and D Choussy, ‘National Report Portugal’, available at http://ec.europa.eu/competition/ antitrust/actionsdamages/national_reports/portugal_en.pdf, 4–5. 55   See furthermore the proposals for the introduction of a class action in the Belgian law: G Closset-Marchal and J van Compernolle (eds), Vers une ‘Class Action’ en Droit Belge? (Brussels, La Charte, 2008); W Eyskens and N Kaluma, ‘La class action et le droit belge: Va-et-vient de part et d’autre de l’Atlantique’ (2008) 127 Journal des Tribunaux (JT) 481. 56   WH van Boom, ‘Collective Settlement of Mass Claims in the Netherlands’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 171. 57   Commission, ‘Damages actions for breach of the EC antitrust rules’ (Green Paper) COM (2005) 672 final, 19 December 2005, 8–9. See also Commission, ‘Staff Working Paper, Annex to the Green Paper, Damages actions for breach of the EC antitrust rules’ (Staff Working Paper) SEC (2005) 1732, 19 December 2005, paras 188–201.

Collective Redress  169 enactment of a special provision for collective action by groups of purchasers other than final customers. The White Paper58 acknowledges the need for mechanisms allowing the aggregation of individual claims and therefore suggests the adoption of representative actions brought by qualified entities, which are either officially designated in advance or certified on an ad hoc basis by a Member State, to initiate proceedings on behalf of some or all of their members. As far as collective actions are concerned, the White Paper endorses the opt-in model and insists on the requirement of an explicit positive act from the part of the harmed individuals intending to combine their claims into one single proceeding.59 The two mechanisms are considered as complementary to each other. The reasoning of the European Commission underlies a twofold objective: effective collective redress mechanisms have to be introduced whilst multiple recoveries for the same harm should be avoided.60 The pre-draft Directive prescribes in Article 4 a group action brought by two or more individuals having suffered harm caused by the same infringement of Articles 101 or 102 TFEU. The opt-in requirement is endorsed since it is spoken of an action for damages jointly brought by the claimants. The group action has to be treated as one single action. As far as representative actions are concerned, Article 5(1) pre-draft Directive obliges the Member States to ensure that qualified entities can bring an action for damages on behalf of injured parties having suffered harm caused by the same violation. Named as such in Article 6(1) pre-draft Directive are bodies which represent legitimate interests and are designated by a Member State as entities generally entitled to bring representative actions on behalf of injured parties, or bodies which represent legitimate interests of their members and are authorised by a Member State in relation to a specific infringement of Articles 101 or 102 TFEU. The eligibility conditions have, according to Article 6(2) pre-draft Directive, to be defined by the Member States. More precisely, it has to be ensured that the body has the capacity to effectively bring a representative action and that it is acting in the best interests of those it represents. These qualified entities shall define the group of injured parties on behalf of which they initiate proceedings without being required to identify individually all injured parties belonging to this group. All persons who may have claims for damages within the scope of the action have to be appropriately informed by the qualified entity. The court can approve the means of notification or request amendments. On 4 February 2011, the Commission launched a horizontal public consultation, aimed at identifying the common legal principles underpinning the Member States legal traditions on 58   White Paper on damages actions, 4. See also paras 39–56 Staff Working Paper Accompanying the White Paper; Commission Staff Working Document, Accompanying document to the White Paper on Damages actions for breach of the EC antitrust rules, Impact Assessment, SEC (2008) 405, 2 April 2008. See also R Becker, ‘Schadensersatzklagen bei Verstoß gegen das Kartell- und Missbrauchsverbot: Europäische Vorgaben und Vorhaben’ in S Augenhofer (ed), Die Europäisierung des Kartell- und Lauterkeitsrechts (Tübingen, Mohr Siebeck, 2009) 15, 29–31; Roth, ‘Sammelklagen im Bereich des Kartellrechts’ (n 19) 124–32. Reluctant on the introduction of damage actions brought by associations A Stadler, ‘Collective Action as an Efficient Means for the Enforcement of European Competition Law’ in J Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, Kluwer, 2007) 195, 205–06. 59   White Paper on damages actions, 4; para 58 Staff Working Paper Accompanying the White Paper. But see R Gaudet, ‘Turning a blind eye: the Commission’s rejection of opt-out class actions overlooks Swedish, Norwegian, Danish and Dutch experience’ (2009) 30 ECLR 107. 60  White Paper on damages actions, 4; paras 60–61 Staff Working Paper Accompanying the White Paper. cf furthermore the parallel initiative in the fields of consumer protection law: Commission, ‘Consumer Collective Redress’ (Green Paper) COM (2008) 794 final, 17 November 2008; Consultation Paper for Discussion on the Follow-Up to the Green Paper on Consumer Collective Redress, available at http://ec.europa.eu/consumers/ redress_cons/docs/consultation_paper2009.pdf.

170  Dimitrios-Panagiotis L Tzakas collective redress. In that respect, the added value of collective redress mechanisms as means to improve the enforcement of EU legislation or to ensure the effective protection of victims’ rights has to be substantiated.61 The consultation intends to shed light on the relation between any form of collective redress instruments and enforcement of EU law by public authorities, the compliance of such initiatives with EU legal principles, for example those of subsidiary, proportionality and effectiveness, and the binding nature of any future act on this field (para 13). Of importance is also the specification of concrete features of any future collective redress system which shall on the one hand ensure procedural efficiency and effectiveness and on the other hand put in place adequate safeguards to avoid lengthy and costly litigation (para 16). Attention is also shifted to the standing of the entity entitled to initiate representative actions and the notification that has to be provided to the victims (paras 17–18). The consultation paper discusses the enactment of concrete safeguards against abusive litigation (paras 21–26) as well as issues of financing collective redress. Specific reference is, furthermore, made to the cross-border aspects of collective redress encompassing both jurisdictional and conflict-oflaw issues (para 28).

IV.  Specific Issues Raised by Collective Redress Instruments Pending the forging of a uniform pan-European framework on collective redress mechan­ isms in case of anti-competitive practices, many specific issues regarding such proceedings will be regulated under the traditional private international law approaches of the Member States. Although a certain degree of legal integration cannot be denied, especially after the enactment of the Rome II Regulation,62 it has to be emphasised that the existing harmonisation remains fragmentary and insufficient for ensuring effective cross-border litigation. In the absence of Community rules a considerable amount of legal uncertainty is generated by the diverging approaches of the national laws regarding the requirements for initiating proceedings by or on behalf of individuals residing outside the forum State. In order to identify existing obstacles hampering effective cross-border antitrust litigation, the following sections aspire in the light of the Commission’s Working Papers to categorise the national procedural peculiarities.

A.  Representative Actions i.  Recognition of the Representative Entity The first question arising in case of cross-border antitrust litigation brought by a foreign representative entity is the matter of its recognition, which subsequently determines its admissibility as a party to the domestic court proceedings.63 The diverging approaches con  Commission Staff Working Document, Public Consultation, para 12.  European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-­ contractual obligations (Rome II) [2007] OJ L199/40. 63   C Kessedjian, ‘L’action en justice des associations de consommateurs et d’autres organisations représentatives d’intérêts collectifs en Europe’ (1997) 33 Rivista di Diritto Internazionale Privato e Processuale 281, 295; A Morin, ‘Group Action and the Settlement of Cross-Border Consumer Disputes: A French Perspective’ in HW Micklitz and N Reich (eds) Public Interest Litigation before European Courts (Baden-Baden, Nomos, 1996) 419, 421. cf also B Audit, Droit International Privé, 8th edn (Paris, Economica, 2008) 369. 61 62

Collective Redress  171 cerning the appropriate connecting factors used in order to recognise foreign legal persons and designate the law applicable to them are rooted in the traditions underlying the Member States legal systems. While the ‘real seat theory’ postulates the applicability of the laws of the country where the central administration of a foreign legal person is situated, the ‘incorporation theory’ shifts attention exclusively to the law under which the legal person has been incorporated.64 The ECJ jurisprudence in the cases Überseering 65 and Inspire Art 66 has only to a limited extent mitigated the existing discrepancies.67 According to the Court, Articles 49 and 54 TFEU (formerly 43 and 48 EC) preclude a Member State from denying companies incorporated under the laws of another Member State legal capacity and, consequently, the capacity to bring legal proceedings before its national courts, even if the company transfers its administration seat to the territory of the forum State. In Cartesio,68 however, the ECJ ruled that as EU law now stands, Articles 49 and 54 TFEU are to be interpreted as not precluding national legislation according to which a company incorporated under the law of a Member State is prohibited from transferring its seat to another Member State whilst retaining its status as a company governed by the law of the Member State of incorporation. Furthermore, it has to be noted that the freedom of establishment and consequently the reach of the aforementioned judgments are limited by Article 54 TFEU. Treating legal persons in the same way as natural persons for the purposes of this Community right is reserved only for companies or firms. These comprise ‘companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making’. It thus remains debatable69 whether the freedom of establishment enshrined in Article 54 TFEU includes foreign representative entities and, more precisely, consumer or trade associations.70 The impact of an answer in the negative can be alleviated by the fact that, in contrast to compan­ ies, the statutory and real seat of such entities usually coincides71 so that their recognition will not fail. Unquestionably, any future legislative action at EU level has to address this issue and guarantee or set requirements for the recognition of legal persons representing the collective interests of harmed consumers or businesses.72

64  See P Kindler, ‘Internationales Handels- und Gesellschaftsrecht’ in HJ Sonnenberger (ed) Münchener Kommentar zum Bürgerlichen Gesetzbuch, vol 11, 4th edn (Munich, CH Beck, 2006) 130 ff. 65   Case C-208/00 Überseering BV v Nordic Construction Company Baumanagement GmbH [2002] ECR I-9919. 66   Case C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd [2003] ECR I-10155. 67   See also EM Kieninger, ‘The Law Applicable to Corporations in the EC’ (2009) 73 Rabels Zeitschrift für ausländisches und internationales Privatrecht 607. 68   Case C-210/06 Cartesio Oktató és Szolgáltató bt para 124. 69   Answering this question in the negative P Jung, ‘Artikel 48 EGV’ in J Schwarze (ed), EU-Kommentar, 2nd edn (Baden-Baden, Nomos, 2009) 686 para 7. 70   For the applicability of Arts 49 and 54 TFEU on foundations see D Zimmer and K Raab, ‘Inspire Art und Stiftungen’ (2004) Non Profit Law Yearbook 105. 71   M Fallon, ‘An Essay on the Mutual Recognition of Group Actions (Governmental, Organizational or Class Actions) in Cross-Border Consumer Conflicts within the European Community’ in T Bourgoignie (ed), Group Actions and Consumer Protection, L’Action Collective et la Défense des Consommateurs (Brussels, Kluwer, 1992) 245, 252. 72   Cf also Commission Staff Working Document, Public Consultation, para 25.

172  Dimitrios-Panagiotis L Tzakas

ii.  Admissibility of the Type of Action The next question arising in collective antitrust litigation before foreign courts is the admissibility of the type of action. It is commonly accepted73 that because of its procedural nature the issue is governed by the law of the forum State (lex fori) pursuant to the generally acknowledged principle: forum regit processum. However, it remains unclear if the term ‘type of action’ relates only to the general categories of collective redress (such as governmental, representative or collective actions)74 or if it also includes the type of relief provided by the laws of the forum State. Even scholars75 endorsing a restrictive interpretation admit that it seems quite unlikely that in the absence of a special Community rule a Member State court would be willing to permit proceedings based on a right or remedy which is not also prescribed for domestic associations. This is the case when the national law does not provide for representative actions in antitrust violations as well as when only injunctive relief may be obtained by such actions. In light of the ECJ rulings in Courage and Manfredi, it is very questionable whether a national judge can be obliged to sustain the admissibility of collective proceedings initiated by foreign associations.

iii.  Defining the Eligible Representative Entities a.  Conflict-of-Laws Issues The existing diversity in the laws of the Member States regarding the remedies prescribed for representative entities creates a significant amount of legal uncertainty as far as the initiation of collective proceedings from foreign associations is concerned. Although it could be argued76 that the remedy provided to representative entities constitutes a matter governed by the law applicable on the merits, it remains unclear under which conditions foreign associations can bring collective proceedings before the domestic courts based on the law of the forum or another Member State. In the continental legal systems, a distinction is normally drawn between the standing of representative entities (Verbandsklagebefugnis, qualité pour agir en justice) and the existence of a right to sue (Aktivlegitimation, intérêt à agir).77 73   D Bureau and H Muir Watt, Droit International Privé, vol I, Partie Générale (Paris, Presses Universitaires de France (PUF), 2007) 189; Fallon, ‘An Essay on the Mutual Recognition of Group Actions’ (n 71) 254–55; A Halfmeier, Popularklagen im Privatrecht (Tübingen, Mohr Siebeck, 2006) 283; WF Lindacher, ‘Die internationale Verbandsklage in Wettbewerbssachen’ in H Prütting and H Rüssmann (eds), Festschrift G Lüke (Munich, CH Beck, 1997) 377, 384–85; P Rott, ‘Cross-Border Collective Damage Actions in the EU’ in F Cafaggi and HW Micklitz (eds), New Frontiers of Consumer Protection (Antwerp, Intersentia, 2009) 379, 385–86. cf also Koch, ‘Internationaler kollektiver Rechtsschutz’ (n 46) 60–61. 74   Fallon (n 71) 254–55. 75   See especially Fallon (n 71) 252. See also Kessedjian, ‘L’action en justice des associations de consommateurs’ (n 63) 292–93; Morin, ‘Group Action and the Settlement of Cross-Border Consumer Disputes’ (n 63) 424; Rott, ‘Cross-Border Collective Damage Actions’ (n 73) 386. 76   cf E Schaumburg, Die Verbandsklage im Verbraucherschutz- und Wettbewerbsrecht (Baden-Baden, Nomos, 2006) 149–50. 77   On the German law see K Maurer, Grenzüberschreitende Unterlassungsklagen von Verbraucherschutzverbänden (Münster, LIT Verlag, 2001) 56; HW Micklitz, ‘Efficacité internationale de l’action en suppression des clauses abusives: Le point de vue allemand’ (2000) 52 Revue Internationale de Droit Comparé 867, 871; S Tsantinis, Aktivlegitimationen und Prozeßführungsbefugnisse von Individuen und Organisationen im UWG-Prozeßrecht (Frankfurt am Main, Peter Lang, 1995) 17–23, 28–31. On the French law, see H Croze, C Morel and O Fradin, Procédure civile (Paris, Éditions du Juris-Classeur, 2003) 125 ff; G Cornu and J Foyer, Procédure Civile, 3rd edn (Paris, PUF, 1996) 334 ff; S Amrani Mekki, ‘Inciter les actions en dommages et intérêts en droit de la concurrence: Le point de vue d’un processualiste’ (2009) Concurrences, édition spéciale, L Idot (ed), Actes du colloque sur le livre blanc sur les actions en dommages et intérêts pour infraction aux règles communautaires sur les ententes et les abus de position dominante 11, 14–16.

Collective Redress  173 The law governing the prerequisites for representative entities when bringing proceedings before foreign courts as well as the elaboration of an appropriate conflict-of-laws rule have been vigorously debated. The dispute flows from the diverging approaches in determining the juridical nature of the above-mentioned requirements. Do they constitute procedural or substantive law questions? In the latter case which law should be applicable? Is the issue appropriately considered under the law applicable on the merits or under the law applicable to the collective entity? In French law the standing of collective entities has been deemed to be governed by the law applicable on the merits,78 whereas the right to sue is held principally79 as a procedural issue falling under the scope of the lex fori. With regard to the requirement of an existent and actual interest (intérêt né et actuel), the Cour de Cassation80 affirmed its procedural nature and addressed this question pursuant to the law of the forum State; in contrast the law applicable on the merits has to be taken into consideration only if it does not attribute such rights to the claimant. Noteworthy is the fact that under the prevailing approach in Germany the standing of collective entities is a procedural matter and thus governed by the lex fori,81 whereas the right to sue constitutes a substantive law matter governed by the law applicable on the merits.82 For these reasons, it has to be remarked that the patchwork of national collective remedies as well as the divergent understanding of the requirements for representative entities in the EU Member States reveal significant deficiencies and hamper legal certainty regarding the outcome of litigation as endeavoured by Recital 6 Rome II Regulation. The applicability of a single national law83 in order to scrutinise the requirements for a foreign association launching collective proceedings before the courts of the forum State could indeed facil­ itate cross-border collective litigation. In light, however, of the fundamental disparities of the national laws it remains questionable if this approach is viable. The exclusive application of the lex fori results in broad forum shopping in the EU since it is certain that an association will seek to bring the claims of the represented individuals before the courts of a Member State providing the most far-reaching remedies and compensation possibilities. It is arguable that in such cases more rights are granted to the representative entity than under the law applicable on the merits or under the law of the State of its incorporation. 78  Audit, Droit International Privé (n 63) 369–70; Kessedjian (n 63) 293. See also, from the perspective of the Belgian law, Fallon (n 71) 252–56. 79  But cf Kessedjian (n 63) 298–99, who differentiates between legitimate interest (intérêt légitime), judicially protected interest (intérêt juridiquement protégé), personal and direct interest (intérêt personnel et direct) and existent and actual interest (intérêt né et actuel). 80   Cour de Cassation (France) (1st Civil Law Chamber), Decision of 4 December 1990 (1991) 80 Revue Critique de droit international privé (RCDIP) 558 note ML Niboyet-Hoegy; (1991) 118 Journal du Droit International – Clunet (JDI Clunet) 370 note D Bureau; Audit (n 63) 369. 81   OLG Köln, Decision of 12 May 1995 (1995) 10 Verbraucher und Recht (VuR) 289, 290; LG Aachen, Decision of 10 December 1993 (1994) 9 VuR 37 note HW Micklitz; LG München, Decision of 2 April 1992 (1993) Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts 265, 266; Koch (n 46) 60–61. cf also Lindacher, ‘Die internationale Verbandsklage in Wettbewerbssachen’ (n 73) 385–89. cf furthermore Cour d’appel de Bruxelles, 29 June 1989 (1989) 108 JT 749 note L Van Bunnen. 82  OLG Köln (n 81) 291–92; H Koch, ‘Internationale Verbandsklage?’ (1996) 11 VuR 67; Maurer, Grenzüberschreitende Unterlassungsklagen (n 77) 73; C Michailidou, Prozessuale Fragen des kollektiven Rechtsschutzes im europäischen Justizraum (Baden-Baden, Nomos, 2007) 338–39; Micklitz, ‘Efficacité internationale de l’action en suppression des clauses abusives’ (n 77) 871, 874, 878–79. cf also BGH, Decision of 26 November 1997 (1998) 13 VuR 171 note N Reich; OLG München, Decision of 15 June 1993 (1993) Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts 267–68. 83   But see Resolution of the Institute of International Law (session of Cambridge 1983), ‘The Conflict-of-Laws Rules on Unfair Competition’ in Yearbook, vol 60, Part II (Paris, Pedone, 1984) 300–01.

174  Dimitrios-Panagiotis L Tzakas Departing from a doctrinal standpoint, it seems reasonable in case of infringements of Article 101 or 102 TFEU to scrutinise the prerequisites for collective proceedings under the law applicable on the merits as this will be designated by the appropriate choice-of-law rules. Since the existence of a Community remedy providing for the eligibility of associations to bring claims before court in a representative capacity can hardly be alleged, it seems appropriate to address such questions in accordance with the lex causae.84 The existence of uniform conflict-of-laws rules enshrined in the Rome II Regulation could be deemed to ensure both efficient and orderly disposition of disputes. The Rome II Regulation does not explicitly deal with these issues such that it remains unclear if the general provision of Article 15(a) providing that the law applicable under the Regulation shall govern ‘the basis and extent of liability’ also includes representative entities’ standing and right to sue. Furthermore, Article 15(f) Rome II Regulation, according to which the applicable law also governs the matter of ‘persons entitled to compensation for damage sustained personally’, seems to argue in favour of this approach.85 This implies that the applicable law, as will be designated by the provisions of the Rome II Regulation, should govern both the eligibility of harmed individuals86 (with, of course, due consideration of the Community law requirements expressed in the ECJ rulings in Courage and Manfredi) as well as the entitlement of a collective entity to bring proceedings on behalf of represented individuals. The concept underlying this proposition is that if the represented claimants have an established right to sue under the tort law of a Member State, the same law should prescribe the requirements for representative actions. Under the basic conflict-of-laws rule enshrined in Article 6(3)(a) Rome II Regulation, which adopts the effects doctrine as well as the mosaic principle, it can be expected that the law applicable on the merits87 will coincide with the law governing the recognition of the representative entity. This is the case, for example, where a trade association incorporated under German law and representing enterprises who have been harmed by an anti-­ competitive practice implemented in Germany seeks injunctive relief under section 33(2) GWB before foreign courts. However, the above-described coincidence of the law applicable on the merits and the law governing the representative entity cannot be always ensured. First, the law applicable to the collective entity, which in normal cases will be a legal person, will be designated by a different conflict-of-laws rule than the law applicable on the merits. Secondly, the concentration rules enshrined in Article 6(3)(b) Rome II Regulation grant to the plaintiff and more precisely to the representative entity the right to base the raised claims on the lex fori. This could amount to the same outcome as the classification of standing as a procedural issue, without disregarding though that the lex fori will be applied in concreto as lex causae. 84   cf also in the fields of intellectual property law, Recital 18 and Art 4 Council Directive 2004/48 of 29 April 2004 on the enforcement of intellectual property rights [2004] OJ L157/45. See also Schaumburg, Die Verbandsklage im Verbraucherschutz- und Wettbewerbsrecht (n 76) 240. 85   See A Dickinson, The Rome II Regulation: The law applicable to non-contractual obligations (Oxford, OUP, 2008) 586, paras 14.42–14.44. But cf Cafaggi and Micklitz, New Frontiers of Consumer Protection (n 18) 4; Lindacher (n 73) 389. 86   FJ Garcimartín-Alférez, ‘The Rome II Regulation: On the way towards a European Private International Law Code’ (2007) 7 The European Legal Forum I-77, I-89; E Rodriguez Pineau, ‘Conflict of Laws Comes to the Rescue of Competition Law: The New Rome II Regulation’ (2009) 5 JPIL 311, 319. cf also G Wagner, ‘Die neue Rom II Verordnung’ (2008) 28 Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1, 15. 87   This approach presumes that the requirements of the connecting factors will be assessed with reference to the person of the harmed individuals.

Collective Redress  175 If Article 6(3)(b) Rome II Regulation is interpreted literally, a German consumer association certified under the German consumer protection law representing exclusively German consumers who have suffered damages because of an anti-competitive practice affecting the markets in more than one country could initiate legal proceedings before the English courts under section 47B Competition Act 1998.88 Although this result seems odd since under German law no collective redress remedies are available for consumer associations, it can be argued that in this context the entity is making use of a right already existing in favour of the individuals it represents. Nevertheless, the application of the rule amounts to far-reaching forum shopping which allows each association to evade the restricting legal framework applicable under the general rule of Article 6(3)(a) Rome II Regulation. The problems arising from the applicability of the lex fori could be mitigated by also applying or taking into account the law applicable to the collective entity.89 Although this approach could be a viable means of diminishing the potential for forum shopping, it remains questionable if the formation of such conflict-of-laws rules is allowed under the Rome II Regulation. Besides, it seems quite uncertain that the right to initiate collective proceedings in case of antitrust violations has been attributed to a qualified body by the laws of its incorporation. Equally debatable is the implementation of the rule when the entity represents individuals residing in different Member States or undertakings having suffered damages in more than one Member States. b.  Questions of Interchangeability or Substitution The described discrepancies regarding the representative entities which are eligible to launch collective proceedings before the domestic courts pose, furthermore, problems of interchangeability or substitution. The main question in that respect is ‘whether the institutions representing the same aspect of the case correspond to each other to such an extent as to be interchangeable’.90 As far as representative actions are concerned, the core issue consists not merely in recognising the validity of a foreign administrative act certifying a consumer association, but much more in considering if foreign entities – fulfilling the requirements prescribed by foreign laws – are eligible to commence actions provided by the national legislation exclusively for domestic entities.91 More specifically, it is a matter of interpretation of section 47B Competition Act 1998 if the term ‘specified body’ also applies to associations certified under foreign laws. The same problem could arise under French

88   Provided that the seat of the tortfeasor is located in England and that the English market is directly and substantially affected by the concrete restraint of competition, then the German consumer association can – according to the wording of Art 6(3)(b) Rome II Regulation – bring English law into application. 89   cf C Kessedjian, R Garnett and G Verhoosel, ‘Transnational Group Actions’ in International Law Association, Report of the Seventy-Third Conference (London, International Law Association, 2008) 534, 543, 545; A Morin, ‘Les Actions Collectives Transfrontalières: Rapport Français’ in B Stauder (ed), Les Actions Collectives Transfrontalières des Organisations de Consommateurs (Zurich, Schulthess, 1997) 69, 76–77; ML Niboyet-Hoegy, ‘Note’ (1991) 80 RCDIP 560, 564–65. cf also Kessedjian (n 63) 294. 90  K Lipstein, Principles of the Conflict of Laws, National and International (The Hague, Martinus Nijhoff Publishers, 1981) 103. See also Bureau and Muir Watt, Droit International Privé (n 73) 474–78; J Kropholler, Internationales Privatrecht, 6th edn (Tübingen, Mohr Siebeck, 2006) 231–34. 91   Affirmative from the perspective of the German law: Lindacher (n 73) 385–86 who sustains standing of foreign associations under the perspective of the comitas. Affirmative from the perspective of the Belgian law: JY Carlier, ‘Les Actions Collectives Transfrontalières: Rapport Belge’ in B Stauder (ed), Les Actions Collectives Transfrontalières des Organisations de Consommateurs (Zurich, Schulthess, 1997) 45, 58–59. cf also Fallon (n 71) 254, 256; Kessedjian (n 63) 283.

176  Dimitrios-Panagiotis L Tzakas law since the joint representative action under Article L422-1 Consumer Code is restricted92 to approved associations recognised as being representative on a national level.93 Such problems have been encountered in the fields of consumer protection law where – at least before the enactment of the Directive 98/2794 – standing for foreign consumer associations has been denied.95 On the one hand, it can be argued that the principle of effectiveness of EU competition law militates against denying standing to foreign collective entities. Furthermore, a forbidden discrimination can be alleged from the perspective that foreign representative entities are excluded from commencing collective redress mechanisms which remain restricted to domestic plaintiffs.96 On the other hand, it seems questionable if the national legislator or the national judge can be forced to afford certain persons more powers than they possess under the law of their origin.97 The same reasoning applies if Article 3(3) pre-draft Directive – providing that Member States shall not be prevented from maintaining or introducing other forms of actions for damages – is understood as also allowing more far-reaching mass litigation instruments and especially representative actions. Whether safeguarding the effectiveness and the deterrent effect of EU competition rules is sufficient to justify this outcome remains unclear. c.  The Commission’s Proposals Taking all these deficiencies into account the need for legislative action at the EU level seems imperative in order to ensure effective cross-border antitrust litigation and to tackle the identified obstacles. The Commission Staff Working Paper98 takes into consideration the fact that ‘the court competent to hear a damage claim may be located in a Member State different from the one where the qualified entity willing to bring an action is located’. For that reason the adoption of a rule providing that ‘entities having standing in one Member State should automatically be granted standing in all other Member States, without having to be certified in the latter’ is expressly endorsed.99 The Commission Consultation Paper seems to endorse the same policy rationale as well.100 Adopting a pan-European rule resolves problems regarding the admissibility of representative actions, guarantees a level playing 92  See Maurer (n 77) 68–70 who rejects the standing of foreign associations. See also J Calais-Auloy, ‘Les actions en cessation exercées dans l’intérêt des consommateurs (droit français, droit communautaire)’ in L Krämer, HW Micklitz and K Tonner (eds) Liber amicorum N Reich (Baden-Baden, Nomos, 1997) 789, 800. 93   See Arts R411-1–R411-6 Consumer Code. See also Beuchler (n 40) 142–47; Calais-Auloy and Steinmetz (n 40) 650–51; D Hoffmann, ‘Directive “Actions en cessation en matière de protection des intérêts des consommateurs” (Dir 98/27/CE du 19/5/98)’ (2000) 8 European Review of Private Law 147, 149. 94   Council Directive 98/27 of 19 May 1998 on injunctions for the protection of consumers’ interests [1998] OJ L166/51. 95   See KJ Hopt and D Baegte, ‘Rechtsvergleichung und Reform des deutschen Rechts –Verbandsklage und Gruppenklage’ in J Basedow et al (eds), Die Bündelung gleichwertiger Interessen im Prozeß (Tübingen, Mohr Siebeck, 1999) 11, 35. 96   cf E Kapnopoulou, Das Recht der mißbräuchlichen Klauseln in der Europäischen Union (Tübingen, Mohr Siebeck, 1997) 250; P Lakkis, Der kollektive Rechtsschutz der Verbraucher in der Europäischer Union (Bielefeld, Verlag Ernst und Werner Gieseking, 1997) 152–54; Micklitz (n 77) 876. 97   Audit (n 63) 370 fn 3. cf also Fallon (n 71) 258; Morin, ‘Les Actions Collectives Transfrontalières’ (n 89) 76–77. 98   Para 55 Staff Working Paper Accompanying the White Paper. 99   See also J Stuyck, ‘EC Competition Law After Modernisation: More Than Ever in the Interest of Consumers’ 2005 (28) Journal of Consumer Policy 1, 22 who suggests supplementing the list of Community law provisions in the annex of the Directive 98/27 with a reference to Arts 101 and 102 TFEU in order to improve consumer protection and the effet utile of the EU Competition rules. 100   Commission Staff Working Document, Public Consultation, paras 25, 28.

Collective Redress  177 field101 in the Internal Market (Art 26 TFEU) and enhances the enforcement of the EU competition rules. Furthermore, the described obstacles which arise from the divergent approaches of the Member States regarding collective redress instruments can, thus, be surmounted. Taking into consideration the experience in consumer protection law, especially after the enactment of Directive 98/27, it can be assumed that granting ‘a pan-European passport’ for representative entities amounts to the adoption of a specific intra-EU conflict-of-laws rule based on the principle of the country of origin.102 Indeed, scholars103 identify in Article 4 Directive 98/27 a choice-of-law rule establishing the incorporation theory. Consequently, the national law of the Member State of incorporation governs not only the lawful formation of a consumer association, but also its standing. Furthermore, problems of interchangeability or substitution with the figures prescribed in the domestic laws can be surmounted104 since the mutual recognition of foreign collective entities is guaranteed.105 From that perspective it is arguable – as the European Commission suggests – that once an entity has been certified or authorised in an ad hoc basis under the laws of a Member State, its standing has to be recognised by all national courts in the EU. Since it cannot be expected that a future EU legislative act will include an exhaustive provision on the requirements for the associations or representative entities which are entitled to initiate collective proceedings abroad, the establishment of minimum requirements could outweigh the potential for abuse, alleviate forum shopping concerns and mitigate the discrepancies which currently arise when the legal provisions on standing contradict the law either applicable on the merits or to the representative entity.106 Especially after the enactment of Directive 98/27 it is well-established in the context of consumer protection that the law conferring standing to consumer associations can differ from the law applicable on the merits.107 For that reason, also, Article 6(5) pre-draft Directive prescribes that qualified entities designated in one Member State in accordance with the conditions set out in the directive shall, without any additional requirements, have the right to bring representative actions in all other Member States pursuant to the procedural rules of the forum. The same shall also apply to entities authorised to commence proceedings with regard to a specific infringement. As far as the ad hoc certification of representative entities is concerned, the Commission addresses the issue ‘according to the procedures laid down in the national law of their 101   See also Commission Staff Working Document (n 58) 24, 36; pre-draft Directive Recital 3; Milutinovic (n 19) 755. 102   Augenhofer, ‘Private enforcement’ (n 46) 52. cf also Commission, ‘Access of consumers to justice and the settlement of consumer disputes in the Single Market’ (Green Paper) COM (93) 576 final, 16 November 1993, 77–80. 103   H Koch, ‘Die Verbandsklage in Europa’ (2000) 113 Zeitschrift für Zivilprozeß 413, 437–38. cf Michailidou, Prozessuale Fragen des kollektiven Rechtsschutzes (n 82) 305; P Rott and A von der Ropp, ‘Stand der grenzüberschreitenden Unterlassungsklage in Europa’ (2004) 9 ZZPInt 3, 11; Schaumburg (n 76) 150–51. But see Maurer (n 77) 55, 66. 104   cf however the disappointing results illustrated in the Commission Report concerning the application of the Directive 98/27, available at http://ec.europa.eu/consumers/enforcement/docs/report_inj_en.pdf, 5. 105   Calais-Auloy and Steinmetz (n 40) 647–48; Hoffmann, ‘Directive “Actions en cessation”’ (n 93) 151; Hopt and Baegte, ‘Rechtsvergleichung und Reform des deutschen Rechts’ (n 95) 36; Kessedjian (n 63) 294–95; Maurer (n 77) 42; Micklitz (n 77) 872. 106   See also after the enactment of the Directive 98/27, P Rott, ‘Das Internationale Privatrecht der Unterlassungsklage qualifizierter Einrichtungen’ in HW Micklitz et al (eds), Verbraucherschutz durch Unterlassungsklagen (Baden-Baden, Nomos, 2007) 265, 280. 107   Koch (n 46) 61; Micklitz (n 77) 874; E Schaumburg, ‘Die neue Verbandsklage’ (2002) 55 Der Betrieb 723, 725.

178  Dimitrios-Panagiotis L Tzakas Member State’.108 Unquestionably, the prescribed requirements concerning the primary task of such entities (protection of the defined interests of their members other than by pursuing damages claims) and the grant of sufficient assurance that abusive litigation is avoided can, indeed, diminish the potential for abuses.109 Assuming that a future rule leaves a certain margin of appreciation to the national legislators, it remains, however, unclear which courts or authorities have jurisdiction to grant an ad hoc certification as well as which law should govern the certification procedure. As to the last point, the application of the lex fori, the law applicable on the merits pursuant to Article 6 Rome II Regulation or the law under which the entity has been incorporated would all be conceivable candidates. Providing guidance on this issue would enhance cross-border collective proceedings. Arguable could be the introduction of a rule that confers jurisdiction over granting a general or an ad hoc certification to the National Competition Authority (NCA) of the Member State where the real or statutory seat of the representative entity is situated. The certification order should be communicated to the European Commission, and the relevant information should be available to the other members of the European Competition Network (ECN), thus promoting significant transparency.

iv.  Represented Individuals Similar problems can arise as far as concerns the initiation of proceedings by collective entities on behalf of foreign individuals (consumers or enterprises). Authorising a single association to represent individuals who have suffered harm in the territories of different Member States may indeed seem consistent with the objective of creating an Internal Market without internal frontiers in which free movement of goods, persons, services and capital pursuant to Article 26(2) TFEU (formerly 14(2) EC) is ensured.110 Although consumer associations are more likely (according to their statutes or to the certification granted)111 to represent and safeguard the interests of persons located in the domestic market,112 this cannot be generally eliminated,113 especially in case of trade associations. Safeguarding the rights resulting from antitrust violations as far as it concerns under­ takings originating from different Member States or doing business in the whole EU territory could ensure the full effectiveness and the practical effect of the EU Competition rules. It is, however, uncertain if the representation of harmed individuals should be regulated by the same law governing standing. The German Federal Court of Justice114 in a case of a 108   Para 53 Staff Working Paper Accompanying the White Paper. The same is prescribed in Arts 6(1) and (2) pre-draft Directive. 109   ibid. See also Art 6(2) pre-draft Directive. 110   cf also N Reich, ‘Note’ (1998) 13 VuR 174, 175. 111   See Rott, ‘Das Internationale Privatrecht der Unterlassungsklage qualifizierter Einrichtungen’ (n 106) 280 who considers Directive 98/27 as not hindering the Member States from rejecting remedies in the interest of consumers residing in another Member State than the consumer association bringing proceedings. But see Hoffmann (n 93) 152. 112   Morin (n 63) 422; Micklitz (n 77) 871, 873; Rott (n 73) 389. cf also OLG Köln (n 81) 292–93 which does not generally deny such a possibility. cf furthermore European Parliament and Council Regulation 2006/2004 of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation) [2004] OJ L364/1 Art 11(1). 113   See, eg, the application of the Fédération Internationale de l’Automobile (a governing body of worldwide motor sports established under French law) for designation as a ‘specified body’ under Section 47B Competition Act 1998, available at www.berr.gov.uk/files/file51475.pdf. 114   BGH (n 82) 171, 172–74. cf also BGH, Decision of 15 November 1991 (1991) 44 Neue Juristische Wochenschrift (NJW) 1054, 1055. See furthermore Rott (n 73) 388.

Collective Redress  179 representative action brought before the German courts by a German consumer association relied on the fact that the business practice in question constituted an act of unfair competition producing effects only in the French market so that only French law was applicable on the merits. The court’s decision did not turn on the issue of a domestic consumer association’s standing where only the interests of foreign EU consumers are at stake; rather, the court rejected the association’s right to sue under the German law since the matter was being decided under the law applicable on the merits, French law, to which the plaintiff had not referred. After the enactment of the Rome II Regulation it remains questionable whether this issue is excluded from the scope of the Regulation according to Article 1(d) or whether it should be governed by the law applicable on the merits pursuant to Article 15(f). In the latter case the mosaic principle enshrined in Article 6(3)(a) Rome II Regulation would lead to the distributive application of several national laws providing different collective redress instruments.115 The recourse to the concentration rules of Article 6(3)(b) Rome II Regulation can mitigate such inefficiencies116 without, however, dispelling the above-­ mentioned concerns about forum shopping. For that reason, many scholars distinguish this issue and allege that the representative authorisation is properly governed by the law applicable to the collective entity.117 From the perspective of a future legislative act dealing with the problems of EU private antitrust enforcement, the distinction proposed by the European Commission between generally qualified and ad hoc authorised entities is of primary importance. The first are eligible to bring actions for damages on behalf not only of identified, but also in rather restricted cases of identifiable victims which are not necessarily their members.118 In contrast, ad hoc certified entities are authorised to represent before courts only the interests of their members. This is the situation of trade associations in any given industry. The certification of such entities is subject to ‘the procedures laid down in the national law of their Member State’.119 The wording of the Commission does not also exclude the representation of harmed individuals or enterprises located in another Member State than the one where certification has been obtained. The personal or territorial scope of the certification, as far as foreign claimants are concerned or restitution for damages incurred beyond the territory of the Member State granting certification is sought, seems thus to be considered a matter of interpreting future legislative acts. Given that any legislative measure 115   The seat of the representative entity is in this respect irrelevant. The rule prescribes the application of the laws of the country where the market is, or is likely to be, affected. A distributive application is required, however, only in cases where the damages occurred in more than one market. 116   Becker, ‘Schadensersatzklagen bei Verstoß gegen das Kartell- und Missbrauchsverbot’ (n 58) 22. 117   Carlier, ‘Les Actions Collectives Transfrontalières’ (n 91) 58–61; Fallon (n 71) 253–54, 261. cf also OLG Köln (n 81) 292–93 which scrutinises the statutes of the association initiating collective proceedings. According to the court, it should be of importance whether the reach of its responsibilities considered from a personal, operational and territorial perspective allow the protection of the interests of foreign consumers. See also Koch, ‘Internationale Verbandsklage?’ (n 82) 68; Maurer (n 77) 98–99. 118   Para 52 Staff Working Paper Accompanying the White Paper. Noteworthy is the fact that the proposals of the European Commission are based on the compensation of the harm suffered by specific individuals and not on pecuniary indemnity for moral damage. This, in contrast, is the case according to Greek consumer protection law (Act 2251/1994) which prescribes the right of qualified consumer associations to sue for moral injury relating to the general consumer interests harmed by an infringement. The pecuniary indemnity may be granted only once for each violation. For more details on this remedy, see Mikroulea, Verbandsklage auf Schadensersatz’ (n 24) 309; A Papathoma-Baegte, ‘Die Verbandsklage im griechischen Recht’ in J Basedow et al (eds), Die Bündelung gleichwertiger Interessen im Prozeß (Tübingen, Mohr Siebeck, 1999) 187. 119   Para 53 Staff Working Paper Accompanying the White Paper. See also Art 6(1) pre-draft Directive.

180  Dimitrios-Panagiotis L Tzakas shall ensure a level playing field in the Internal Market, there is no reason to exclude such possibilities. Of interest though remains the elaboration of specific criteria concerning the affiliation of foreign claimants. Especially in cases of identifiable victims (or of a defined group of injured parties whose members are not individually identified pursuant to Article 5(2) predraft Directive), the initiation of parallel proceedings through different associations on behalf of overlapping groups of claimants is well imaginable.120 Furthermore, this situation could amount to ‘a race to the courtroom’ among entities seeking compensation in favour of the widest possible group of harmed individuals. The adoption of a specific provision could provide valuable guidance to judicial or administrative authorities in regard to the exercise of their powers as well as the scope of the certification to be granted.121 Otherwise, the reasonableness of the complementary interrelationship of collective and individual actions122 would be undermined since parallel representative actions would lead to multiple recoveries of the same harm.123 With regard to this problem, the adoption of an authorisation system offers an arguable solution. Thereafter, an authorisation from an entity having its real seat in the Member State in the market of which the (identifiable) harmed individuals suffered damages should be required before commencing any representative action on behalf of these persons. The entity granting the power of authorisation should be eligible to initiate collective proceedings pursuant to the laws of its real seat. Furthermore, it is best placed to provide effective notification to the putative domestic claimants as well as to undertake the distribution of the damages to them.

v.  Distribution of Damages A further question relates to the determination of the law governing the distribution of the compensation obtained. The significant disparities of the Member States’ laws on this issue, as described above, should not be allowed to motivate representative entities to forum shopping. A trade association, for example, would be very interested in skimming off the profits of a cartel member under German law without being obliged to surrender the obtained benefits to the federal budget. In order to constrain ‘cherry picking’ tactics it is appropriate to adopt a coherent conflict-of-laws approach. The national law applicable on the merits which prescribes the collective remedy allowing a representative entity to commence proceedings before the courts of the forum State should also govern the distribution of the damages obtained. A dépeçage or a limited use of the claimant right, enshrined in Article 6(3)(b) Rome II Regulation solely with regard to the matter of the distribution of the obtained damages, has to be disallowed.

120   B Hess, ‘Cross-border Collective Litigation and the Regulation Brussels I’ (2010) 30 IPRax 116, 119. cf also Roth (n 19) 134. On the problem of ‘dueling’ or ‘overlapping’ class actions in the US, see R Wasserman, ‘Dueling Class Actions’ (2000) 80 Boston University Law Review 461; G Miller, ‘Overlapping Class Actions’ (1996) 71 New York University Law Review 514; AS Weinstein, ‘Avoiding the Race to Res Judicata: Federal Antisuit Injunctions of Competing State Class Actions’ (2000) 75 New York University Law Review 1085. 121   On the identifiability of class plaintiffs under US law see Guillory v American Tobacco Co [2001] WL 290603 (ND Ill 2001). 122   White Paper on damages actions, 4; paras 60–61 Staff Working Paper Accompanying the White Paper. 123   cf also A Stadler, ‘Rechtspolitischer Ausblick zum kollektiven Rechtsschutz’ in C Meller-Hannich (ed), Kollektiver Rechtsschutz im Zivilprozess (Baden-Baden, Nomos, 2008) 93, 111–12.

Collective Redress  181 The Commission Staff Working Paper124 proposes using the awarded damages to directly compensate the harm suffered by all those represented in the action. This approach should not raise any particular conflict-of-laws issues. Debatable, however, are the private inter­ national law underpinnings of a solution which would allow damage funds to be distributed to related entities or to be used for related purposes. The European Commission suggests introducing the cy près doctrine or allowing distribution to public interest foundations.125 It cannot be neglected, however, that the resort of US courts to the cy près doctrine126 has often been criticised by federal courts.127 Furthermore, one should distinguish between four main distribution mechanisms:128 (i) government escheat where the damage funds are unconditionally deposited into the State treasury in order to be used by the government at its own discretion129 or for a specific purpose;130 (ii) the claimant fund-sharing mechanism allowing class members who submitted claims to divide the funds obtained pro rata;131 (iii) the establishment of a trust fund directly financing projects which are beneficial for the class members or financing existing organisations to support their projects; and (iv) the price rollback concept where the court orders a limited-time reduction of the price of the defendant’s products which should correspond to the amount of the unclaimed damage funds. In case such issues are not exhaustively regulated by a future EU legislative act and are, instead, left to the discretion of national legislators, a law applicable to distribution questions has to be designated. A selection has to take place between the lex fori, the law applicable on the merits pursuant to Article 6(3) Rome II Regulation and the law under which certification of the collective entity has been granted. De lege ferenda, the matter of the distribution of damages should be governed by the mosaic principle and, in particular, by the law(s) designated under the basic rule of Article 6(3)(a) Rome II Regulation. The applicability of the concentration rules should be excluded. However, it is noteworthy that Article 5(6) pre-draft Directive prescribes merely that the awarded damages in the course of a representative action shall be distributed, to the largest possible extent, to the injured parties represented without addressing the issue of the use of undistributed funds. Whether this implies the adoption of a claimant fund-sharing mechan­ism remains open. A legislative clarification is certainly needed.

  Paras 47, 56 Staff Working Paper Accompanying the White Paper.   ibid. But cf Augenhofer (n 46) 53; Roth (n 19) 121.  Also called the ‘fluid recovery procedure’. See JR McCall et al, ‘Greater Representation for California Consumers: Fluid Recovery, Consumer Trust Funds, and Representative Actions’ (1995) 46 The Hastings Law Journal (HLJ) 797, 808. 127   See on the jurisprudence of the Federal courts and on the criticism expressed NA DeJarlais, ‘The Consumer Trust Fund: A Cy Pres Solution to Undistributed Funds in Consumer Class Actions’ (1987) 38 HLJ 729, 738–48. 128   See generally State of California v Levi Strauss & Co 715 P 2d 564, 571–75 (Cal 1986); DeJarlais, ‘The Consumer Trust Fund’ (n 127) 751–62; McCall et al, ‘Greater Representation for California Consumers’ (n 126) 808–10. 129   This is the so-called ‘unconditional escheat’. See Re Folding Carton Antitrust Litigation 744 F 2d 1252 (7th Cir 1984). 130   In the latter case an ‘earmarked escheat’ is spoken of. cf State of West Virginia v Chas Pfizer & Co 314 F Supp 710 (SD NY 1970) affirmed 440 F 2d 1079 (2d Cir 1971). 131  See Beecher v Able 575 F 2d 1010 (2d Cir 1978); Re Chicken Antitrust Litigation American Poultry 669 F 2d 228 (5th Cir 1982). 124 125 126

182  Dimitrios-Panagiotis L Tzakas

B.  Collective Actions Different issues arise in the case of collective actions which rely on the aggregation of tort claims resulting from anti-competitive practices affecting the markets of several Member States. From the outset, it should be observed that the requirements which allow a collective action and affirm affiliation to the group are procedural in nature. In contrast to representative claims where a legal entity initiates proceedings on behalf of two or more individuals who are not themselves party to the proceeding, in collective actions the main point of interest lies in the aggregation of tort claims resulting from anti-competitive practices. This amounts to the application of the lex fori which will in turn ascertain the admissibility of collective actions, set the preconditions for certification and determine the course of joint proceedings.132 Restrictions concerning the nationality of the plaintiffs should not be allowed in intra-Community cases since such discrimination contravenes EU primary law.133 The European Commission endorses in the White Paper134 the introduction of opt-in collective actions allowing victims to combine into one single action their individual claims for the harm they suffered. The same model is also endorsed by Article 4 pre-draft Directive. It remains debatable though if the consolidation of claims based on the anti-competitive effects produced in different Member States could obstruct such proceedings. Considering the distributive application of several national laws under the mosaic principle enshrined in Article 6(3)(a) Rome II Regulation, it is arguable that the aggregation of claims for damages suffered in the markets of several Member States could complicate the collective proceedings. The concentration rules of Article 6(3)(b) Rome II Regulation135 can only tackle this problem to a limited extent. In the US obstacles to affirming the grant of class certification which arise from the application of different substantive laws136 to the claims of the class members have been addressed by the predominance or superiority requirement under Rule 23(b)(3) Federal Rules of Civil Procedure.137 Considering the US class action litigation experience,138 in the event that several different Member State laws are applicable it seems 132   Bureau and Muir Watt (n 73) 189; Fallon (n 71) 256; Halfmeier, Popularklagen im Privatrecht (n 73) 283; A Stadler, ‘Die grenzüberschreitende Durchsetzbarkeit von Sammelklagen’ in M Casper et al (eds), Auf dem Weg zu einer europäischen Sammelklage? (Munich, Sellier, 2009) 149, 159. cf also C Kessedjian, ‘Le droit entre concurrence et coopération’ in Vers de nouveaux équilibres entre les ordres juridiques, Liber amicorum H Gaudemet-Tallon (Paris, Dalloz, 2008) 118, 128. 133  Approving of the participation of foreign claimants in Swedish class actions, Stengel and Hakeman, ‘Gruppenklage – Ein neues Institut’ (n 47) 228. 134   White Paper on damages actions, 4; para 58 Staff Working Paper Accompanying the White Paper. See also Augenhofer (n 46) 54. 135   Becker (n 58) 22. 136   See the leading case of Phillips Petroleum Co v Shutts 472 US 797, 818–23 (1985). See also Re Bridgestone/ Firestone Inc 288 F 3d 1012, 1015 (7th Cir 2002); Re Simon II Litigation 211 FRD 86, 166 (ED NY 2002) according to which the plaintiffs’ claims rest on State law, whereas the choice-of-law rules come from the State in which the federal court sits. 137   Stirman v Exxon Corp 280 F 3d 554, 564–65 (5th Cir 2002); Zinser v Accufix Research Institute Inc 253 F 3d 1180, 1189–90 (9th Cir 2001); Castano v American Tobacco Co 84 F 3d 734, 741–44 (5th Cir 1996); Re Vivendi Universal SA Securities Litigation 241 FRD 213 (SD NY 2007); Re Alstom SA Securities Litigation 253 FRD 266, 281–82 (SD NY 2008); Re Baycol Products Litigation 218 FRD 197, 207–08 (D Minn 2003). See generally RP Phait, ‘Resolving the “Choice-of-Law Problem” in Rule 23(b)(3) Nationwide Class Actions’ (2000) 67 The University of Chicago Law Review 835. 138   See also from the perspective of US law, Re Diamond Shamrock Chemicals Co 725 F 2d 858, 861 (2d Cir 1984) cert denied 465 US 1067 (1984); Miner v Gillette Co 428 NE 2d 478, 483–84 (Ill 1981); Re Baycol Products Litigation (n 134) 197, 207–08. But see Re Bridgestone/Firestone (n 133) 1012, 1020. On the certification trends in

Collective Redress  183 appropriate to divide the class into subclasses so that collective redress may be granted much more effectively, rather than to decline certification for class members whose claims are governed by different laws.139

V.  Jurisdictional Aspects The jurisdiction of a Member State court in case of collective proceedings will be determined under the Brussels I Regulation140 or, if the Regulation is not applicable, the autonomous domestic civil procedure rules.141 It is unanimously accepted142 that individual tort claims arising from infringements of the EU competition rules constitute a civil or commercial matter falling under the scope of application of the Brussels I Regulation pursuant Article 1(1). This should similarly be the case if such claims are brought before the courts of a Member State by a representative entity.143 The existence of a civil or commercial matter should also be accepted for proceedings relating to the remedy prescribed in section 34a GWB.144 The applicability of the Brussels I Regulation should, furthermore, be affirmed if the plaintiffs’ claims are brought before a Member State court by means of a collective action145 provided under the domestic legislation. The Decision of the Higher Regional Court of Koblenz146 denying the existence of a civil or commercial matter in the case of a US antitrust class action for the purposes of the Hague Service Convention of 15 November 1965 can be neither generalised nor held as indicative for class proceedings prescribed by the laws of the EU Member States.147 In case of collective proceedings concerning civil claims arising from antitrust violations the provisions of Articles 2148 (domicile of the defendant), 5(3)149 (place where the harmful

the US with regard to choice-of-law concerns and, more specific, the applicability of multiple States’ laws, see G York-Erwin, ‘The Choice-of-Law Problem(s) in the Class Action Context’ (2009) 84 New York University Law Review 1793, 1802–10. 139   See also Stadler, ‘Die grenzüberschreitende Durchsetzbarkeit’ (n 132) 161–62. cf also Kessedjian, Garnett and Verhoosel, ‘Transnational Group Actions’ (n 89) 549. 140   Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1. 141   cf also Morin (n 63) 423. 142   Commission Green Paper (n 57) 10; Commission Staff Working Paper (n 57) para 237; D Ashton and C Vollrath, ‘Choice of Court and Applicable Law in Tortious Actions for Breach of Community Competition Law’ (2006) Zeitschrift für Wettbewerbsrecht 1, 4; Becker (n 58) 22–23; Komninos (n 9) 250. 143   See Case C-167/00 Verein für Konsumenteninformation v Karl Heinz Henkel [2002] ECR I-8111 paras 26–31. See furthermore BGH, Decision of 12 October 1989 (1990) 10 IPRax 318; Carlier (n 91) 53–54, 57; Morin (n 63) 423; Rott and von der Ropp, ‘Stand der grenzüberschreitenden Unterlassungsklage’ (n 103) 5; C Michailidou, ‘Internationale Zuständigkeit bei vorbeugenden Verbandsklagen’ (2003) 23 IPRax 223. 144   Although the funds obtained have to be surrendered to the federal budget, the remedy shall not be considered as a public remedy, but rather as a private sanction. See Alexander, ‘Marktsteuerung durch Abschöpfungsansprüche’ (n 34) 892–95; Stadler, ‘Der Gewinnabschöpfungsanspruch’ (n 34) 125–26. 145   Concurring from the perspective of Swedish class actions, Stengel and Hakeman (n 47) 227. 146   Decision of 27 June 2005 (2006) 26 IPRax 25. But see A Piekenbrock, ‘Zur Zustellung kartellrechtlicher treble damages-Klagen in Deutschland’ (2006) 26 IPRax 4, 8. 147   Rott (n 73) 381–82. 148   cf also Kessedjian, ‘Le droit entre concurrence et coopération’ (n 132) 129–31. 149   The applicability of the rule in case of collective proceedings initiated by consumer association has been affirmed by the ECJ in Henkel (n 143) paras 46–50.

184  Dimitrios-Panagiotis L Tzakas event occurred)150 and 6(1) (case of multiple defendants) Brussels I Regulation will be of primary importance. The courts of the forum State should have jurisdiction for all claims brought by the representative entity or for all class members.151 From the standpoint of Article 5(3) Brussels I Regulation regarding the place where the (primary or immediate) damage occurred, it has to be noticed that this alternative jurisdiction allows parallel proceedings limited to the harm suffered within the territory of each one of the forum States. Furthermore, it has to be asked whether the ECJ ruling in Shevill152 applies also in civil antitrust liability. An answer in the affirmative would hamper participation in the collective proceedings as far as concerns individuals having suffered damages in the territories of several Member States. As far as concerns the applicability of the Articles 15–17 Brussels I Regulation relating to jurisdiction over consumer contracts, it has to be borne in mind that the ECJ excluded consumer associations from their reach.153 Although the Court explicitly denied qualifying a consumer association as ‘consumer’, some scholars154 question whether this should be accepted when such associations initiate collective (at least opt-in) proceedings claiming damages on behalf of defined individuals. It is, however, very questionable whether the ECJ will revisit this approach and whether civil antitrust liability may constitute a matter relating to a contract as required by Article 15 Brussels I Regulation.155

VI.  Applicable Law The enactment of the Rome II Regulation signals the creation of uniform choice-of-laws rules regulating, among others, the law applicable on questions of civil antitrust liability. The conflict-of-laws rules enshrined therein are also applicable when the tort claims of harmed individuals are brought by a representative entity156 or aggregated in class proceedings.157 The arguments advocating the existence of a civil or commercial matter for the purposes of the Brussels I Regulation are valid in this context as well since Recital 7 Rome II Regulation dictates the consistency between the two acts as far as the substantive scope is concerned. The basic rule on designating the applicable law in case of non-contractual obligations arising out of a restriction of competition is established in Article 6(3)(a) Rome II Regulation. 150   Covering both the place where the (primary or immediate) damage occurred and the place of the harmful event giving rise to it. See the leading Case 21/76 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735. 151   This is explicitly acknowledged by the Swedish legislator. See Stengel and Hakeman (n 47) 227–28. See also Stadler (n 132) 156–57. 152   Case C-68/93 Fiona Shevill and others v Presse Alliance SA [1995] ECR I-415. 153   Henkel (n 143) paras 32–33. cf also Case C-89/91 Shearson Lehmann Hutton Inc v TVB [1993] ECR I-139 para 20–24. 154   Koch (n 46) 59; Michailidou, ‘Internationale Zuständigkeit’ (n 143) 226–27. But see Rott (n 73) 383; Stadler (n 132) 158. 155   The issue has not been addressed by the Commission Green Paper (n 57) 10; Commission Staff Working Paper (n 57) paras 237–39. 156  Dickinson, The Rome II Regulation (n 85) 402, para 6.23; Garcimartín-Alférez, ‘The Rome II Regulation’ (n 86) I-86. cf also Rott (n 73) 392. 157   D Bureau and H Muir Watt, Droit International Privé, vol II, Partie Spéciale (Paris, PUF, 2007) 407. cf also Kessedjian, Garnett and Verhoosel (n 89) 559.

Collective Redress  185 According to this, the law of the country where the market is, or is likely to be, affected shall be applicable. The rule constitutes a bilateral implementation of the effects doctrine, which is widely158 accepted as the connecting factor governing the applicability of the antitrust laws. Enjoying general acceptance159 is the view that the basic rule of Article 6(3)(a) Rome II Regulation adopts the ‘mosaic principle’ which requires applying the competition laws of several countries on a distributive basis provided the anti-competitive practice produced effects in the markets of these States. The non-contractual obligation will be fragmented and governed insofar by each law applicable pursuant to Article 6(3)(a) Rome II Regulation as the claimed damages are localised in the territory of the regulating State. In collective redress litigation this approach could lead to an accumulation of the laws applicable on the merits since it is well established160 that the requirements laid down by the connecting factor will be determined by reference to the persons suffering damages caused by an antitrust violation. In order to mitigate these deficiencies two concentration rules have been introduced in Article 6(3)(b) Rome II Regulation which allow the plaintiff to base his claims solely on the lex fori. This right is provided only if the anti-competitive practice affects the markets of more than one country, the claimant sues in the court of the domicile of the defendant or one of the co-defendants and the market in that Member State is amongst those directly and substantially affected by the restriction of competition.161 The concentration rules are apt to facilitate collective redress since it seems certain that collective proceedings will be initiated before the courts of a Member State whose laws will be designated as being solely applicable under Article 6(3)(b) Rome II Regulation. The above-mentioned deficiencies concerning the affirmation of standing and a right to sue cannot, however, be ignored.

VII.  Recognition and Enforcement of Collective Redress Rulings It is no exaggeration to say that the recognition and enforcement of collective redress rulings in Europe and, especially, the issue of their conformity with the procedural public policy of EU Member States has been mostly addressed by US courts.162 In particular, US 158   For a comprehensive analysis of the private international law aspects regarding cross-border restrictions of competition, see I Schwartz and J Basedow, ‘Restrictions on Competition’ in International Encyclopedia of Comparative Law, Vol III, Private International Law (Tübingen, Mohr Siebeck, 1995) ch 35. 159  Dickinson (n 85) 422–23, para 6.64; Fitchen, ‘Choice of Law in International Claims’ (n 12) 355–58; P Mankowski, ‘Das neue Internationale Kartellrecht des Art 6 Abs 3 der Rom II-Verordnung’ (2008) 54 Recht der Internationalen Wirtschaft 177, 188–89; Rodriguez Pineau, ‘Conflict of Laws Comes to the Rescue of Competition Law’ (n 86) 322; U Scholz and G Rixen, ‘Die neue europäische Kollisionsnorm für außervertragliche Schuldverhältnisse aus wettbewerbsbeschränkendem Verhalten’ (2009) 20 Europäische Zeitschrift für Wirtschaftsrecht 327, 330. 160   Fallon (n 71) 249; Rott and von der Ropp (n 103) 10. cf also Kessedjian, Garnett and Verhoosel (n 89) 559. 161   See generally Dickinson (n 85) 424–26, paras 6.68–6.73; Fitchen (n 12) 365–69; Mankowski, ‘Das neue Internationale Kartellrecht’ (n 159) 189–92; Rodriguez Pineau (n 86) 323–26; Wagner, ‘Die neue Rom II Verordnung’ (n 86) 8; Scholz and Rixen, ‘Die neue europäische Kollisionsnorm’ (n 159) 331–32. 162   In a case generating considerable controversy, the German courts have addressed the issue of whether compliance with a request for service of US class actions would infringe the State’s sovereignty or security pursuant to Art 13 Hague Service Convention of 15 November 1965. See generally KJ Hopt, R Kulms and J von Hein, Rechtshilfe und Rechtsstaat, Die Zustellung einer US-amerikanischen class action in Deutschland (Tübingen, Mohr Siebeck, 2006); AS Ghassabeh, Die Zustellung einer punite damages-Sammelklage an beklagte deutsche Unternehmen (Frankfurt am Main, Peter Lang, 2009). See also Bundesverfassungsgericht (BverfG), Decision of 14 June 2007 (2007) 61 Wertpapier-Mitteilungen (WM) 1392; BVerfG, Decision of 24 January 2007 (2007) 62 JZ 1046 note A Stadler.

186  Dimitrios-Panagiotis L Tzakas courts scrutinise if the preclusive effect of the anticipated ruling will be recognised by the European courts in order to fulfil the superiority requirement under Rule 23(b)(3) of the Federal Rules of Civil Procedure with regard to absentee claimants domiciled in an EU Member State. According to the leading case H Bersch v Drexel Firestone: ‘while an American court need not abstain from entering judgment simply because of a possibility that a foreign court may not recognize or enforce it, the case stands differently when this is a near certainty’.163 The ‘near certainty standard’ has, however, been revisited in the recent judgment Re Vivendi Universal Securities Litigation164 where the court decided to diminish the burden of proof required in order to establish superiority since, to the extent that the case includes absentee European claimants, contradicting affidavits had been submitted relating to the recognition of an opt-out class action ruling by the EU courts. The court stated: ‘Where plaintiffs are able to establish a probability that a foreign court will recognize the res judicata effect of a US class action judgment, plaintiffs will have established this aspect of the superiority requirement’.165 Of importance has been, among others, the opt-out model adopted by Rule 23 Federal Rules of Civil Procedure which has been deemed as contravening the procedural traditions of civil law countries. Consequently, the exclusion of French,166 English and Dutch nationals from the proposed class was rejected since it has been held as more likely than not that the courts in these countries would affirm the preclusive effect of a US judgment or settlement; this was, however, not the case for German and Austrian putative claimants. Besides the recognition of US class action rulings, the conformity of class proceedings with the procedural public policy of some Member States demonstrates an important intra-Community perspective. Since a significant number of Member States have introduced collective proceedings, the issue of attributing a binding effect to such judgments has a primary importance. From that perspective, a differentiation between opt-in and opt-out proceedings has to be made at the outset. Whereas in the first case conformity with the procedural public policy of civil law countries is generally accepted,167 it is a matter of lively discussion whether the opt-out requirement168 contravenes fundamental constitutional and procedural principles. Setting aside issues relating to the award of punitive or tremble damages,169 a variety of maxims underlying the procedural traditions of continental legal 163   H Bersch v Drexel Firestone 519 F 2d 974, 996 (2nd Cir 1975) cert denied 423 US 1018 (1975). See also CL-Alexanders Laing & Cruickshank v B Goldfeld 127 FRD 454, 459–60 (SD NY 1989); M Ansari v New York University 179 FRD 112, 116–17 (SD NY 1998); Cromer Finance Ltd v M Berger 205 FRD 113, 134–35 (SD NY 2001); Re Royal Dutch/Shell Transport Securities Litigation 380 F Supp 2d 509, 547 (D NJ 2005). 164   Re Vivendi (n 134) 213, 230–33. See also Re Alstom (n 134) 266, 282; H Muir Watt, ‘Régulation de l’économie globale et l’émergence de compétences déléguées: sur le droit international privé des actions de groupe’ (2008) 97 RCDIP 581. 165   ibid 233. 166   Opposite in regard to French claimants Re Alstom (n 134) 266, 282–87. 167   On the recognition of Swedish opt-in class action rulings in Germany, see Stengel and Hakeman (n 47) 228. 168   A preliminary question is whether persons who have neither affirmed their participation nor explicitly excluded themselves from the class action can be regarded as parties to the proceedings and be bound by the judgment. Answering the question in the negative from the standpoint of the French law, J Lemontey and N Michon, ‘Les “class actions” américaines et leur éventuelle reconnaissance en France’ (2009) 136 JDI Clunet 535, 549–50. cf also, from the perspective of the Swiss law, I Romy, ‘Class actions américaines et droit international privé suisse’ (1999) 8 Aktuelle juristische Praxis / Pratique juridique actuelle 783, 793–94. 169   Such problems can also arise in cases of individual proceedings. For the recognition of such awards in Germany, see P Hay, ‘The Recognition and Enforcement of American Money-Judgments in Germany: The 1992 Decision of the German Supreme Court’ (1992) 40 The American Journal of Comparative Law 729.

Collective Redress  187 systems  –  such as the principle of party disposition,170 due process principles,171 the right to be heard,172 the French principle ‘nul ne plaide par procureur’173 or the prohibition of popular actions174 – have been held as militating against the recognition of opt-out class proceedings. An exhaustive analysis of all these aspects would exceed by far the scope of this chapter. As far as intra-Community cases are concerned, it has to be scrutinised whether the provisions of the Brussels I Regulation and the jurisprudence of the ECJ can effectively mitigate recognition obstacles in case of judgments rendered by the courts of Member States adopting the opt-out model. In this context it has to be borne in mind that the Brussels I Regulation intends to facilitate the functioning of the Internal market through, inter alia, the elimination – as far as is possible – of difficulties concerning the recognition and enforcement of judgments of the Member States’ courts.175 From the perspective of due process requirements, an ad hoc analysis as to whether an effective notification on the class proceedings has been provided to the absent claimants cannot be excluded from the scope of the public policy clause. Instead, this approach is appropriate to safeguard the fundamental procedural rights.176 The effective implementation of the right to be heard requires pursuant to the ECJ177 a notification addressed to the aggrieved party provided its identity is known. From the standpoint of Article 6 ECHR, of note is the judgment Colozza and Rubinat v Italy where in a criminal context the European 170  Bundeskartellamt (n 44) 30–31; Deutscher Bundestag, Drucksache 15/5091 of 14 March 2005, 17; LG Stuttgart, Decision of 24 November 1999 (2001) 21 IPRax 240; S Einhaus, Kollektiver Rechtsschutz im englischen und deutschen Zivilprozessrecht (Berlin, Duncker & Humblot, 2008) 484–85; A Leufgen, Kollektiver Rechtsschutz zugunsten geschädigter Kapitalanleger (Baden-Baden, Nomos, 2007) 141–42; R Mann, ‘Die Anerkennungsfähigkeit von US-amerikanischen “class action-Urteilen”’ (1994) 47 NJW 1187, 1188–89; R Schütze, ‘Die Zustellung US-amerikanischer Class Actions und die Anerkennung und Vollstreckbarkeitserklärung US-amerikanischer Class Action-Urteile und -Vergleiche’ in National and Kapodistrian University of Athens, Faculty of Law (ed), Essays in Honour of K Kerameus (Athens, Ant N Sakkoulas Publishers, 2009) 1245, 1252. cf also C Greiner, Die Class Action im amerikansichen Recht und deutscher Ordre Public (Frankfurt am Main, Peter Lang, 1998) 175, 185–89. But see Fairgrieve and Howells (n 29) 407; JC Spindler, Anerkennung und Vollstreckung ausländischer Prozessvergleiche unter besonderer Berücksichtigung der US-amerikanischen Class Actions Settlements (Konstanz, Hartung-Gorre Verlag, 2001) 245–47. 171   Lemontey and Michon, ‘Les “class actions” américaines’ (n 168) 553–54; WH Rechberger, ‘Importware Class Action?’ in E Bernat, E Böhler and A Weilinger (eds), Festschrift H Krejci, vol II (Vienna, Verlag Österreich, 2001) 1831, 1846–47; Seeliger, ‘Kollektiver Rechtsschutz’ (n 33) 87. 172  Bundeskartellamt (n 44) 30–31; A Stadler, ‘Bündelung von Verbraucherinteressen im Zivilprozeß’ in T Brönneke (ed), Kollektiver Rechtsschutz im Zivilprozeßrecht (Baden-Baden, Nomos, 2001) 17–18. But see Greiner, Die Class Action im amerikansichen Recht (n 170) 175–85; A Pinna, ‘Recognition and Res Judicata of US Class Action Judgments in European Legal Systems’ (2008) 1 Erasmus Law Review 31, 44–46, 56–59; Spindler, Anerkennung und Vollstreckung ausländischer Prozessvergleiche (n 170) 245–47. 173   cf Amrani Mekki, ‘Inciter les actions en dommages et intérêts en droit de la concurrence’ (n 77) 16. But see S Guinchard, ‘Le droit français en matière de Class Action’ in G Closset-Marchal and J van Compernolle (eds), Vers une ‘Class Action’ en droit belge? (Brussels, La Charte, 2008) 47, 54–56. See also, from the perspective of the Belgian law, J van Compernolle, ‘L’introduction d’une Class Action en droit belge: Compatibilité ou incompatibilité avec les principes fondamentaux du droit processuel?’ in G Closset-Marchal and J van Compernolle (eds), Vers une ‘Class Action’ en droit belge? (Brussels, La Charte, 2008) 165, 172–76. 174   Mann, ‘Die Anerkennungsfähigkeit von US-amerikanischen “class action-Urteilen”’ (n 170) 1188–89. cf also Lindacher (n 73) 379. But see OLG Frankfurt, Decision of 21 March 1991 (1992) 12 IPRax 166, 168; OLG München, Decision of 7 June 2006 (2006) Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts 378, 379. 175   Case C-281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ and others [2005] ECR I-1383 para 33. cf also Case C-159/02 Gregory Paul Turner v Felix Fareed Ismail Grovit, Harada Ltd and Changepoint SA [2004] ECR I-3565 para 24; Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-14693 para 72. 176   cf also Kessedjian, Garnett and Verhoosel (n 89) 568–71; Einhaus, Kollektiver Rechtsschutz im englischen und deutschen Zivilprozessrecht (n 170) 485–86. But see Stadler (n 132) 167. 177   Case C-32/95P Commission of the European Communities v Lisrestal [1996] ECR I-5373 paras 35–38.

188  Dimitrios-Panagiotis L Tzakas Court of Human Rights required diligent efforts on the part of prosecution authorities in order to locate and notify an accused person. A mere presumption of awareness resulting from notifications being lodged in public registries has been held as insufficient.178 The Higher Regional Court of Düsseldorf179 ruled that service by publication should be deemed as infringing German public policy if the claimant does not prove that he has done what is necessary and what is possible to determine the unknown place of the defendant’s residence. The ad hoc examination of the notification rendered to absentee class members180 should, thus, be held not merely as conforming to the Community-related restrictions181 regarding the standard of public policy assessments, but as fundamentally required.182 A further noteworthy aspect is the principle of party disposition according to which only the litigants can determine the private rights brought before the court. However, it has to be observed that the principle constitutes neither an imperative nor an axiom prohibiting any diverging provision.183 Regarding this fundamental principle not as imperative, but rather as a prohibition of ‘judicial patronising’,184 an attenuation of its scope can be accepted especially as long as Community interests are at stake. Concerns relating to the principle of party disposition can be, therefore, outweighed when efficiency-related considerations and sufficient procedural guarantees are ensured. From that perspective it seems odd if the recognition of an opt-out Danish class action ruling were to be denied185 although the Danish court specifically acknowledged that the aggregated claims due to their small size might not be furthered in individual proceedings such that the opt-in model would not represent the most appropriate manner of handling the claims.186 It remains debatable, however, whether the Community interests187 or the need to preserve the full effectiveness of EU competition law can dictate the recognition of class action rulings rendered by courts of Member States which generally allow opt-out proceedings.188 178   Colozza and Rubinat v Italy Series A no 89 (1985) ECHR para 28–30. See also T v Italy, judgment of 12 October 1992, Application No 14104/88, paras 27–30; Yavuz v Austria, judgment of 27 May 2004, Application No 46549/99, para 49; F Jacobs, R White and C Ovey, The European Convention on Human Rights (Oxford, OUP, 2006) 190. 179   Decision of 29 November 1999 (2002) 13 International Litigation Procedure 71, 73. cf also Cour de Cassation (France), Decision of 30 June 2004 (2005) 16 International Litigation Procedure 266. 180   See also J Stuyck, ‘Public and Private Enforcement in Consumer Protection: General Comparison EU–USA’ in F Cafaggi and HW Micklitz (eds), New Frontiers of Consumer Protection (Antwerp, Intersentia, 2009) 63, 81 characterising arguments that opt-out proceedings are at variance with due process requirements as ‘speculation’. 181   See Case C-7/98 Dieter Krombach v André Bamberski [2000] ECR I-1935 paras 22–23; Case C-38/98 Régie Nationale des Usines Renault SA v Maxicar SpA [2000] ECR I-2973 paras 27–28 where it has been ruled that while the Member States remain principally free to determine, according to their own conceptions, the content of the public policy clause, the limits of that concept are a matter of interpretation for the Brussels I Regulation so that the latter will be reviewed by the ECJ. 182   cf also the notification requirements laid down in Art 5(3) pre-draft Directive. cf also Spindler (n 170) 243– 44. 183   See also P Mankowski, ‘Affidavit’ 2001 WL 34836489, paras 22–25. 184  ‘Rechtliche Bevormundung’. See EC Stiefel and R Stürner, ‘Die Vollstreckbarkeit US-amerikanischer Schadensersatzurteile exzessiver Höhe’ (1987) 38 Versicherungsrecht 829, 830. 185   M Fallon and DP Tzakas, “Res Judicata Effects of Foreign Class Action Rulings in the EU” in Boele-Woelki et al. (Eds.), Convergence and Divergence in Private International Law: Liber Amicorum Kurt Siehr, (Eleven International Publishing, 2010), pp 653, 668–669. See also, from the perspective of the Italian law, Caponi, ‘The Collective Redress Action in the Italian Legal System’ (n 50) 15–16. 186   On the requirements of the Danish law for opt-out class proceedings see Bogelund, ‘Introduction of class actions in Denmark’ (n 51) 24–25; Werlauff, ‘Class actions in Denmark’ (n 51) 5. 187   cf Komninos (n 9) 258–59. For the recognition of class settlements under Dutch law in Germany see Stadler (n 132) 163–65. 188   cf also Art 5 pre-draft Directive adopting an opt-out mechanism for representative actions.

Collective Redress  189

VIII. Conclusion The aforesaid analysis has made clear the vital need for rules which are ‘pragmatic, clear and free from uncertainty’189 as the only means to provide effective cross-border collective redress in antitrust cases. The astonishing diversity190 of the Member States’ laws and the various procedural and conflict-of-laws obstacles arising in collective proceedings are certain to hamper the private enforcement of EU competition rules as well as to render mass litigation mechanisms a purely domestic affair. These considerations can only validate the eloquent wording of R Mulheron that ‘the so-called Frankenstein monster of a [US] class action would be a more welcoming sight than the frustratingly absent Loch Ness monster of effective compensatory redress’.191

  Fitchen (n 12) 343.   See D Waelbroeck, D Slater and G Even-Shoshan, ‘Study on the Conditions of Claims for Damages in Case of Infringement of EC Competition Rules’ available at http://ec.europa.eu/competition/antitrust/actionsdamages/ comparative_report_clean_en.pdf. 191   Mulheron, ‘The Case for an Opt-Out Class Action for European Member States’ (n 29) 453 (citation omitted). 189 190

9 Arbitration and EU Competition Law ASSIMAKIS P KOMNINOS*

I. Introduction Any discussion of the application of EU competition rules by courts, especially in the transnational context, cannot ignore arbitration. Arbitration is long-recognised by States as a dispute resolution mechanism alternative to litigation. It is the creation of the private autonomy of the parties, who withdraw the regulation of their disputes from State justice through a contract, the arbitration agreement. The arbitrators are called upon to resolve a certain dispute that has been submitted to them by the parties and do so by applying the law that is applicable to the merits of the dispute.1 To designate that law, they must, like State courts, have access to private international law methods. The agreement to arbitrate is an enforceable contract that binds the parties and excludes the courts’ jurisdiction to deal with the dispute. The arbitrators’ final decision, the arbitral award, produces the same fundamental effects as a judgment: it enjoys res judicata and, subject to certain formalities, is enforceable. In most developed legal systems, courts may not review arbitral awards in their substance (révision au fond), except for very narrow grounds, and may set them aside or refuse their recognition or enforcement, if certain conditions are met, which are rather exceptional, especially in the case of foreign arbitral awards. In the following sections, we examine, first, the historical dimension of the position of arbitration in the context of competition law enforcement, second, the powers of arbitrators to apply EU competition law, third, the private international law questions pertaining to the main theme, fourth, the links between arbitration and competition authorities *  Dr Assimakis P Komninos, Local Partner, White and Case LLP; visiting research fellow, University College London; Visiting Professor, IREA, Université Paul Cézanne Aix-Marseille III; former Commissioner and Member of the Board, Hellenic Competition Commission. The author expresses only his personal views. 1   This may be the law of a State, but also legal principles not connected to any particular State, of a trans­ national nature. Such can be the lex mercatoria or the international law merchant, or the UNIDROIT Principles of Contract Law. Arbitrators may also be bound to decide by reference to no law whatsoever, usually ex aequo et bono or as amiables compositeurs. For more details see KP Berger, The Creeping Codification of the Lex Mercatoria (The Hague, Kluwer, 1999); M Rubino-Sammartano, ‘Amiable compositeur (Joint Mandate to Settle) and ex bono et aequo (Discretional Authority to Mitigate Strict Law: Apparent Synonyms Revisited)’ (1992) 9(1) Journal of International Arbitration (JIA) 5; E Gaillard and J Savage (eds), Fouchard, Gaillard, Goldman on International Commercial Arbitration (The Hague, Kluwer, 1999) 801 ff; F Marella, ‘Choice of Law in Third-Millennium Arbitrations: The Relevance of the UNIDROIT Principles of International Commercial Contracts’ (2003) 36 Vanderbilt Journal of Transnational Law 1137, 1158 ff.

192  Assimakis P Komninos (notably the European Commission), and finally, the question of the review of arbitral awards on public policy grounds.

II.  Modernised EU Competition Law and Arbitration A.  From Distrust to Embrace In the early stages of EU competition law enforcement, arbitration was treated with some suspicion by the antitrust enforcement milieu. This suspicion, not to say hostility, was due to the fear that arbitration could be used by companies as a dangerous platform to break the antitrust rules, without risking detection by the Commission, national competition authorities or State courts.2 The specific characteristics of confidentiality, neutrality and finality of arbitration were seen as particularly alarming.3 Such a possibility was correlated with anecdotal evidence that international arbitrators sitting in non-EU jurisdictions, which were important arbitration centres, were not paying due deference to the EU competition rules.4 The arbitration milieu, on its part, initially saw EU competition law and the wide powers of enforcement of the European Commission with some suspicion, if not fear. The public policy nature of the competition rules and the fact that, until comparatively recently, these rules were not considered arbitrable, created a rather defensive attitude of arbitrators who were usually preferring to avoid dealing with such problematic questions, rather than risk their awards’ non-enforcement or annulment on public policy or non-arbitrability grounds.5 At the same time, arbitration specialists rejected what they saw as the Commission’s interventionist and disrespectful approach vis-a-vis arbitration.6 This state of affairs has changed profoundly in the last 15 years.7 The Commission stopped obliging the parties to an exempted agreement to notify future arbitral awards, and current block exemption regulations do not contain provisions on the withdrawal of the block exemption’s protection in the event of an offending arbitral award. Indeed, of late, one may even speak of an embrace of arbitration by the Commission as an alternative dispute resolution mechanism that can be complementary and ancillary to 2   See J Werner, ‘Application of Competition Laws by Arbitrators: The Step Too Far’ (1995) 12(1) JIA 21, 23, referring to a real case: two EU companies had concluded an agreement infringing Art 101 TFEU. The agreement was subject to Swiss law and arbitration took place in Switzerland. Only one copy of the agreement existed, and this was hidden in a Swiss bank. When the dispute started, the arbitrators were asked to examine the contract, but not to mention it in their decision. 3   ibid 23–24. 4   ibid 23; C Baudenbacher, ‘Enforcement of EC and EEA Competition Rules by Arbitration Tribunals Inside and Outside the EU’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford, Hart Publishing, 2003) 341–43. 5   See N Shelkoplyas, The Application of EC Law in Arbitration Proceedings (Groningen, Europa Law Publishing, 2003) 160 fn 49. 6   Initially, the Commission had imposed duties on private parties, through some old individual and block exemptions, to notify to it arbitration proceedings and arbitral awards. The Commission had also intervened once in the past to enjoin parties from enforcing an arbitral award that was considered objectionable. See further AP Komninos, ‘Arbitration and the Modernisation of European Competition Law Enforcement’ (2001) 24 World Competition 211. 7   See Komninos, ‘Arbitration’ (n 6) 216 ff.

Arbitration  193 competition law enforcement. Thus, there has been a whole series of merger decisions,8 clearing concentrations subject to certain conditions or obligations, one of which is recourse to arbitration for certain disputes. In those cases, arbitration is used as a procedural remedy that ensures that parties comply by their – usually – behavioural commitments. The same has also happened in the antitrust area with some pre-2004 exemption decisions pursuant to Article 101(3) TFEU9 and some post-2004 commitment decisions pursuant to Article 9 Regulation 1/2003.10 This ‘delegation’ of competition law enforcement to private justice constitutes a clear indicator of complementarity between arbitration and competition law.11 The same change of climate can be sensed on the arbitration side. Arbitrators currently feel much more at ease with competition rules and apply or refer to them as a matter of course; indeed, exceptionally they even raise them ex officio.12 Arbitrators and arbitration specialists have also viewed positively the recent embrace of arbitration by the Commission and the proposed use of arbitration in Commission decisions.13 This has meant increased opportunities for arbitration in an area where its flexibility, informality and swiftness can be critical.

8   See further L Idot, ‘Une innovation surprenante: L’introduction de l’arbitrage dans le contrôle communautaire des concentrations’ (2000) Revue de l’Arbitrage (Rev Arb) 591; M Blessing, Arbitrating Antitrust and Merger Control Issues (Basle, Helbing & Lichtenhahn, 2003); G Blanke, The Use and Utility of International Arbitration in EC Commission Merger Remedies, A Novel Supranational Paradigm in the Making? (Groningen, Europa Law Publishing, 2006); F Heukamp, Schiedszusagen in der Europäischen Fusionskontrolle (Cologne, Carl Heymans Verlag, 2006); G Blanke, ‘The Use of Arbitration in EC Merger Control: Latest Developments’ (2007) 28 European Competition Law Review (ECLR) 673; G Blanke and B Sabahi, ‘The New World of Unilateral Offers to Arbitrate: Investment Arbitration and EC Merger Control’ (2008) 74 Arbitration: the Journal of the Chartered Institute of Arbitrators (Arb) 211; G Blanke, ‘International Arbitration and ADR in Conditional EU Merger Clearance Decisions’ in G Blanke and P Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners (Alphen aan den Rijn, Kluwer, 2011) 1605–724. 9   See, eg, Commission Decision (EEC) 89/467 of 12 July 1989 relating to a proceeding pursuant to Article 85 of the EEC Treaty (UIP) [1989] OJ L226/25; Commission Decision (EC) 96/546 of 17 July 1996 relating to a proceeding under Article 85 of the EC Treaty and Article 53 of the EEA Agreement (Atlas) [1996] OJ L239/23; Commission Decision (EC) 99/781 of 15 September 1999 relating to a proceeding under Article 81 of the EC Treaty (British Interactive Broadcasting/Open) [1999] OJ L312/1; Commission Decision (EEC) 93/403 of 11 June 1993 relating a proceeding pursuant to Article 85 of the EEC Treaty (EBU/Eurovision System) [1993] OJ L179/23, renewed in Commission Decision (EC) 2000/400 of 10 May 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty (Eurovision) [2000] OJ L151/18. See Komninos (n 6) 217; G Blanke, ‘The Use of International Arbitration under Article 81(3) of the EC Treaty and under Article 9 of Regulation 1/2003’ (2008) 6 Zeitschrift für Schiedsverfahren (SchiedsVZ) 234, 236 ff. 10   See, eg, Commission Decision (EC) 2005/396 of 19 January 2005 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53(1) of the EEA Agreement (Joint selling of the media rights to the German Bundesliga) [2005] OJ L134/46; Commission Decisions (EC) 2007/836, 2007/831, 2007/841, 2007/788 of 13 September 2007 relating to a proceeding pursuant to Article 81 of the EC Treaty (Opel, Toyota Motor Europe, Fiat and DaimlerChrysler – Access to technical information). 11   The term ‘delegation’ is not used in the strictly legal sense, but rather in a political science one. Indeed, legally speaking, the public enforcement powers of the Commission cannot be delegated to private parties (trustees, arbitrators or other experts); cp Case T-201/04 Microsoft Corp v Commission [2007] ECR II-3601 paras 1264 ff. 12   See generally L Radicati di Brozolo, ‘Arbitrage commercial international et lois de police: Considérations sur les conflits de juridictions dans le commerce international’ (2005) 315 Collected Courses of the Hague Academy of International Law 265, 445 ff; G Blanke and R Nazzini, ‘Arbitration and ADR of Global Competition Disputes: Taking Stock (Part II)’ (2008) 1 Global Competition Litigation Review (GCLR) 78, 79 ff; H Van Houtte, ‘The Application by Arbitrators of Articles 81 & 82 and their Relationship with the European Commission’ (2008) 19 European Business Law Review (EBLR) 63, 65. 13   See, eg, Blessing, Arbitrating Antitrust (n 8) 194–97; and generally G Blanke and R Nazzini, ‘Arbitration and ADR of Global Competition Disputes: Taking Stock (Part I), (Part II), (Part III) & (Part IV)’ (2008) 1/2/3 GCLR 46 (Part I), 78 (Part II), 133 (Part III) and (2009) 2 GCLR 1 (Part IV).

194  Assimakis P Komninos

B.  How Competition Law Issues Arise in Arbitration Arbitrators usually come across competition law issues in an incidental way. In most cases there will be a contractual dispute and the competition law question will be raised as a defence by the defendant. The contract – typically a distribution, licensing or cooperation agreement – will contain an arbitration clause and the plaintiff will advance claims based on breach of contract, while the defendant will raise the anti-competitive nature and nullity of the contract (shield litigation). However, EU competition law can also be pleaded as a sword before arbitrators. This could happen in case of a co-contractor’s damages claim because of harm incurred through his counterparty’s violation of the competition rules or in a similar case involving a member of an illegal cartel and his direct purchasers. In most of these rather rare cases, typically, there will be a pre-existing arbitration clause (clause compromissoire). On the other hand, it is rare to see a non-contractual liability case be decided by arbitrators, if there is not yet any arbitration clause, since it would be almost impossible for the litigants to conclude an arbitration agreement after the dispute has arisen (compromis). In sum, the way a competition law-related dispute arises before the arbitrators is quite similar to the way it arises before the courts.

C.  Arbitrability of EU Competition Law An old question of theoretical and practical significance has been the ‘arbitrability’ of competition law-related disputes, ie whether the parties to an arbitration clause can submit to arbitration such disputes and whether the arbitrators themselves have the power to decide them. It is basically the contractual nature of private arbitration that gives rise to this question. Arbitration is the creation of private autonomy and, for this reason, it has long been debated whether disputes concerning laws protecting the public interest can be settled and submitted to arbitration. Then, competition law by definition places limits upon private autonomy.14 First, if we take Article 101 TFEU as our paradigm, the nullity of anti-competitive agreements is absolute and must be raised by courts ex officio, notwithstanding the will of the litigants. Second, during the civil proceedings, a competition authority may wish to intervene as amicus curiae and make submissions if the protection of the public interest so requires. Third, parties cannot settle their disputes through an in-court or out-of-court settlement that runs counter to competition law. Last, private parties cannot dispose of the antitrust rules or exclude their applicability. This has important consequences for the treatment of the competition rules in the course of a dispute both domestically and internationally. Domestically, the Treaty competition rules constitute mandatory public law provisions,15 primarily aiming at safeguarding the public interest and thus restricting freedom of contract (ius cogens, dispositions impératives, zwingende Bestimmungen). The General Court has 14   A recognition of a high degree of private autonomy is a sine qua non condition for the establishment of effective competition in the market. However, it is also possible that private autonomy might be exercised in an anti-competitive way. Indeed, competition law does nothing more than to impose limits on private autonomy in order to protect the public interest. 15   See, eg, H Schröter in H Schröter, T Jakob and W Mederer (eds), Kommentar zum Europäischen Wettbewerbsrecht (Baden-Baden, Nomos, 2003) 98.

Arbitration  195 stressed that ‘the public policy nature of competition law is specifically designed to render its provisions mandatory and to prohibit traders from circumventing them in their agreements’.16 As a result, private parties cannot conclude a contract and explicitly or implicitly decide that their contract will not be subject to EU competition law. The application of the prohibition provisions of Articles 101 and 102 TFEU is obligatory, automatic, and independent of the parties’ will (ius cogens).17 Internationally, they cannot be set aside by the parties’ choice of a foreign law18 since they are mandatory in the private international law sense (lois d’application immédiate). They are applicable notwithstanding the lex causae and irrespective of whether the parties have chosen a certain applicable law. All these elements of competition law had led in the past to the exclusion of the arbitrability of antitrust-related disputes, because of their public policy (ordre public) nature. This attitude, however, was reversed in the 1980s and early 1990s and it can now be said with certainty that arbitrability of competition law disputes is generally accepted in all jurisdictions with developed antitrust regimes.19 Indeed, it is not an overstatement to say that, while arbitrability remains in principle a question governed by State (municipal) law, the increased internationalisation of arbitration law and practice and the emergence of transnational principles have led to a general transnational principle of arbitrability (favor arbitrandi).20 Arbitrability of competition law-related disputes can now be considered such a transnational principle. The 1999 Eco Swiss 21 ruling of the Court of Justice by implication also supports this proposition.22 The Court, by deciding on the duties of national courts to safeguard the 16   Case T-128/98 Aéroports de Paris v Commission [2000] ECR II-3929 para 241. See also Case T-34/92 Fiatagri and New Holland Ford v Commission [1994] ECR II-905 para 39; Case C-126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I-3055 para 39; Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619 para 31. 17   See also Commission Decision (EC) 2002/759 relating to a proceeding under Article 81 of the EC Treaty of 5 December 2001 (Luxembourg Brewers) [2002] OJ L253/21 para 62, which refers to Art 101(1) TFEU as a ‘rule of public policy’. 18   In this case, foreign law means the law of a country that is not an EU Member State, since EU competition law is an integral part of all EU Member States’ laws; therefore, the choice of any national law within the EU would not lead to an application of ‘foreign’ law with respect to the Treaty competition rules. 19   In the United States, see Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc (Mitsubishi) 473 US (1985) 614; Kotam Elecs Inc v JBL Consumer Prods Inc 93 F 3d 724 (11th Cir 1996); Seacoast Motors of Salisbury Inc v Daimler-Chrysler Motors Corp 271 F 3d 6 (1st Cir 2001); Baxter International Inc v Abbott Laboratories 315 F 3d 829 (7th Cir 2003), (2003) XXVIII Yearbook Commercial Arbitration (YCA) 1154; JLM Industries Inc and others v Stolt-Nielsen SA and others 2004 US App LEXIS 22253 (2d Cir 2004), (2005) XXX YCA 963. In France, see Paris Court of Appeal (CA Paris) 19 May 1993, Labinal SA v Mors and Westland Aerospace Ltd (1993) Rev Arb 645, with a comment by L Idot (1993) 7 Europe 10, 11; CA Paris, 14 October 1993, Sté Aplix v Sté Velcro (1994) Rev Arb 164, with a comment by L Idot (1994) 4 Europe 12. See also more recently CA Paris, 20 March 2008, Jacquetin v Intercaves – RG No 06/06860. In Italy, see Corte di Cassazione, 21 August 1996, No 7733, Telecolor SpA v Technocolor SpA (1997) 47 Giustizia Civile (Giust Civ) I-1373, with a comment by N Falvella (1997) 47 Giust Civ I-1375; Corte d’Appello Bologna, 11 October 1990, COVEME SpA v CFI – Compagnie Française des Isolants SA (1993) 3 Rivista dell’arbitrato (Riv Arbitrato) 77, with comments by F Rosi (1993) 3 Riv Arbitrato 79 and F Caporale (1993) 7 Diritto Commerciale Internazionale 725. In England and Wales, see ET Plus SA and others v Welter and others [2006] Lloyd’s Rep (Comm) 251; [2005] EWHC 2115. See also generally A Mourre, ‘Arbitrability of Antitrust Law from the European and US Perspectives’ in G Blanke and P Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners (Alphen aan den Rijn, Kluwer, 2011) 3–67. 20  See M Lehmann, Die Schiedsfähigkeit wirtschaftsrechtlicher Streitigkeiten als transnationales Rechtsprinzip (Baden-Baden, Nomos, 2003); M Lehmann ‘A Plea for a Transnational Approach to Arbitrability in Arbitral Practice’ (2004) 42 Columbia Journal of Transnational Law 753. 21   Eco Swiss (n 16). 22   See in this sense, L Radicati di Brozolo, ‘Arbitrato, diritto della concorrenza, diritto comunitario e regole di procedura nazionali’ (1999) 9 Riv Arbitrato 665, 670 ff; P Landolt, Modernised EC Competition Law in International

196  Assimakis P Komninos effectiveness of EU competition law and to refuse to recognise or to set aside arbitral awards that offend against the public policy (ordre public) of the forum, implicitly ruled on the arbitrability of those rules.

D.  Competences of Arbitrators in the Decentralised System of Enforcement Until 1 May 2004, arbitrators had been applying Articles 101 and 102 TFEU on numerous occasions, although, like national judges, they did not have jurisdiction to apply Article 101(3) TFEU,23 which, pursuant to Article 9(1) Regulation 17 of 1962,24 was reserved to the sole power of the Commission to apply. There is no doubt that with the abolition of this enforcement monopoly of the Commission, like State judges, arbitrators are now able to apply the third paragraph of Article 101 TFEU.25 In so doing, arbitrators would not be granting ‘exemptions’ under Article 101(3) TFEU, since the giving of an ‘exemption’ is no longer possible under the system of legal exception, but rather they would be applying Article 101 TFEU as a whole, exactly like courts.26

Arbitration (The Hague, Kluwer, 2006) 101; JF Poudret and S Besson, Comparative Law of International Arbitration (London, Sweet & Maxwell, 2007) 298. 23   In other words, Art 101(3) TFEU was not arbitrable under the Regulation 17 enforcement system. 24   Council Regulation 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty [1962] JO L13/204 (French Edition). 25   See Komninos (n 6) 219 ff; L Idot, ‘Arbitration and the Reform of Regulation 17/62’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford, Hart Publishing, 2003) 316–17; M Dolmans and J Grierson, ‘Arbitration and the Modernization of EC Antitrust Law: New Opportunities and New Responsibilities’ (2003) 14(2) International Court of Arbitration Bulletin 37, 49; C Nourissat, ‘L’arbitrage commercial international face à l’ordre juridique communautaire: Une ère nouvelle?’ (2003) Revue de Droit des Affaires Internationales/International Business Law Journal (RDAI/IBLJ) 761, 768–69; C Liebscher, ‘Arbitration and EC Competition Law – The New Competition Regulation: Back to Square One?’ (2003) 6 International Arbitration Law Review (Int ALR) 84, 90–91; L Radicati di Brozolo, ‘Antitrust: A Paradigm of the Relations between Mandatory Rules and Arbitration: A Fresh Look at the “Second Look”’ (2004) 7 Int ALR 23, 33; R Nazzini, ‘International Arbitration and Public Enforcement of Competition Law’ (2004) 25 ECLR 153, 155–56; S Bastianon, ‘Il decentramento del diritto comunitario della concorrenza e l’arbitrabilità delle controversie antitrust’ (2004) 9 Danno e Responsabilità 353, 359–61; W Abdelgawad, ‘L’arbitrage international et le nouveau règlement d’application des articles 81 et 82 CE’ (2004) Rev Arb 253, 255–64; M Bowsher, ‘Arbitration and Competition’ in T Ward and K Smith (eds), Competition Litigation in the UK (London, Sweet & Maxwell, 2005) 428–29; H Van Houtte, ‘Distribution Arbitration and European Competition Law’ in Arbitration and Commercial Distribution, Reports of the Colloquium of CEPANI of November 17th 2005 (Brussels, Bruylant, 2005) 95–96; D Thalhammer, ‘Die Rolle der Schiedsgerichte bei der Durchsetzung von EG-Kartellrecht unter dem Regime der VO 1/2003: Zugleich ein Beitrag zu 1 Ob 270/03t und § 124 KartG’ (2005) 19 Wirtschaftsrechtliche Blätter 62, 64–65; T Eilmansberger, ‘Die Bedeutung der Art 81 und 82 EG für Schiedsverfahren’ (2006) 4 SchiedsVZ 5, 8; Landolt Modernised EC Competition law (n 22) 101–04; K Hilbig, Das gemeinschaftsrechtliche Kartellverbot im internationalen Handelsschiedsverfahren, Anwendung und Gerichtliche Kontrolle (Munich, CH Beck, 2006) 99–107; L Idot, ‘La place de l’arbitrage dans la résolution des litiges en droit de la concurrence’ (2007) Recueil Dalloz 2681, 2683; A Howard, V Rose and P Roth, ‘The Enforcement of the Competition Rules in the Member States’ in P Roth and V Rose (eds), Bellamy & Child European Community Law of Competition (Oxford, Oxford University Press (OUP), 2008) 1478; MC Boutard-Labarde et al, L’application en France du droit des pratiques anticoncurrentielles (Paris, Librairie générale de droit et de jurisprudence (LGDJ), 2008) 774; S Dempegiotis, ‘EC Competition Law and International Commercial Arbitration: A New Era in the Interplay of These Legal Orders and a New Challenge for the European Commission’ (2008) 1 Global Antitrust Review (GAR) 135, 140; G Blanke and R Nazzini, ‘Arbitration and ADR of Global Competition Disputes: Taking Stock (Part I)’ (2008) 1 GCLR 46, 52–55. 26   Thus, it is better to avoid speaking of arbitrators ‘granting individual exemptions’, as some authors do (see, eg, JF Poudret and S Besson, Comparative Law (n 22) 299), and instead speak of the arbitrators’ jurisdiction to ‘apply’ Art 101(3) TFEU.

Arbitration  197 The fact that Regulation 1/2003 does not mention arbitration should not come as a surprise, as State laws do not normally contain individual rules on the arbitrability of every single dispute but rather rely on general criteria. Under the old system, arbitrators applied the first two paragraphs of Article 101 TFEU, without having been authorised to do so under any provision of EU competition law. Their jurisdiction to do so is well-established and it has been confirmed by national courts and by implication by the Court of Justice alike.27 If there was an intention for some reason to bar arbitrators from applying Article 101(3) TFEU, an express provision would undoubtedly have been included to this end. By not having done so and by emphasising the fact that Article 101 TFEU will be applied as a whole, Regulation 1/2003 has fully accepted the arbitrators’ competence to apply Article 101(3) TFEU.28 Any other solution would create serious problems of a procedural nature. Even if the arbitrator could somehow separate paragraph (3) from Article 101 TFEU, which is no longer possible since Article 101 TFEU must now be applied as an integrated norm, the question would arise as to whom they would have to send the issue to be decided. Certainly not to the Commission, since the latter would no longer have jurisdiction to give an individual exemption, neither to the European Court of Justice, since the latter – ever since the ruling in Nordsee,29 confirmed in Eco Swiss 30 and Denuit 31 – cannot accept preliminary references from arbitrators.32 Thus, they would have no other option but to send this specific issue to national courts. However, it is no longer possible or meaningful for a court to issue a separ­ate decision of exemption or a declaration of applicability of Article 101(3) TFEU, other than to apply Article 101 TFEU as a whole. If, however, the arbitrators were to refer the whole question of the applicability of Article 101 TFEU to courts, this would lead to retrogression and would strip arbitrators of their well-established competence to apply Article 101(1), (2) TFEU. Leaving aside any legal arguments,33 a policy argument against the application of Article 101(3) TFEU by arbitral tribunals relies on the supposed inability of arbitrators to get 27   See, eg, Case C-393/92 Gemeente Almelo and others v Energiebedrijf Ijsselmij NV [1994] ECR I-1477; Eco Swiss (n 16). 28   See in this sense D Edward, ‘The Modernisation of EC Antitrust Policy: Issues for Courts and Judges’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford, Hart Publishing, 2001) 569; Komninos (n 6) 221. 29   Case 102/81 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095. 30   Eco Swiss (n 16) paras 32, 33. 31   Case C-125/04 Guy Denuit and Betty Cordenier v Transorient – Mosaïque Voyages and Culture SA (Denuit) [2005] ECR I-923. 32   On the non-availability of the preliminary reference mechanism to arbitrators and on possible indirect ways for arbitrators to seise the ECJ, see also AP Komninos, ‘Assistance to Arbitral Tribunals in the Application of EC Competition Law’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford, Hart Publishing, 2003) 367 ff. 33   Recently, a commentator has stressed that the arbitrators’ jurisdiction to apply Art 101(3) TFEU is derived from the direct effect of that provision, which is the result of Art 1 Regulation 1/2003, therefore the above legal argumentation is unnecessary; see R Nazzini, ‘A Principled Approach to Arbitration of Competition Law Disputes: Competition Authorities as Amici Curiae and the Status of their Decisions in Arbitral Proceedings’ (2008) 19 EBLR 89, 93. However, the reality is more complicated. It is not true that Regulation 1/2003 conferred direct effect on Art 101(3) TFEU; Art 1 Regulation 1/2003 only changed the enforcement system and abolished the administrative authorisation system and the Commission’s exclusive competence to apply Art 101(3) TFEU. There is, in other words, a necessary distinction between direct effect as such, which Art 101(3) TFEU was always capable of having, and competence, which under the previous system of enforcement was exclusively enjoyed by the Commission (as to this distinction, cp L Idot, ‘La place de l’arbitrage’ (n 25)). Therefore, it is the competence question that is critical here and it is because of this that it is necessary to analyse and interpret the relevant provisions of Regulation 1/2003.

198  Assimakis P Komninos involved in such questions, so utterly connected with economic public policy and so prone to complex economic deliberations. However, if courts have now been accepted as full enforcers of Articles 101 and 102 TFEU, it would be contradictory to treat arbitrators in a different way. Indeed, what can be held against courts, basically that they usually lack the expertise that would allow them to address the complex economic issues involved, may be one of the strengths of arbitration. Parties may – and usually do – select as arbitrators persons with a high level of expertise, thus minimising any risks owed to the judge’s possibly limited knowledge of a highly technical field.34 At the same time, the increased flexibility of the arbitral procedure, in comparison to that of State justice, is well-suited to antitrust, whose substance might sometimes be at odds with the straitjacket of a national code of civil procedure. This is particularly true of national rules of evidence, which can be a considerable hurdle for an antitrust case in national courts, as opposed to arbitral tribunals, which may avail themselves of much more extensive powers of discovery.35 Indeed, there is anecdotal evidence that arbitrators, even before the introduction of the legal exception system, have on some occasions felt quite at ease to hear arguments and base their awards on considerations pertaining to Article 101(3) TFEU, thus applying this provision ‘by the back door’.36 In sum, arbitrators, exactly as State courts, enjoy now the power to apply Articles 101 and 102 TFEU in full.

III.  The Application of EU Competition Law by International Arbitration Tribunals A.  EU Competition Law as Applicable Law in Trans-border Disputes in General Before addressing the specific question of the arbitrators’ power or duty to apply EU competition law in an international arbitration, we make below some summary observations on the relationship between EU competition law and private international law. For a more

34   See also C Liebscher, ‘L’arbitrage est-il une alternative viable?’ in L Idot and C Prieto (eds), Les entreprises face au nouveau droit des pratiques anticoncurrentielles: Le Règlement 1/2003 modifie-t-il les stratégies contentieuses? (Brussels, Bruylant, 2006) 165–67. 35   See J Temple Lang, ‘Panel Discussion: International Arbitration’ in B Hawk (ed), International Antitrust Law and Policy 1994, Annual Proceedings of the Fordham Corporate Law Institute (New York, Kluwer, 1995) 421 ff. A certain weakness of arbitration exists as to third-party evidence. The latter can be usually obtained through the intervention of State courts. 36   See E Fox, ‘Panel Discussion: EC Competition System: Proposals for Reform’ in B Hawk (ed), International Antitrust Law and Policy 1998, Annual Proceedings of the Fordham Corporate Law Institute (New York, Juris, 1999) 228; Bowsher, ‘Arbitration and Competition’ (n 25) 427. It is not clear whether in these cases the arbitral award was explicitly based on a positive application of Art 101(3) TFEU. Were this the case, such awards would have been vulnerable to annulment or non-recognition/non-enforcement for having dealt with inarbitrable matters. See, however, Dolmans and Grierson, ‘Arbitration and the Modernization of EC Antitrust Law’ (n 25) 42, according to whom, no problem would have arisen if Art 101(3) TFEU had been applied correctly or even if an exemption had been denied incorrectly, since the Commission’s monopoly to apply Art 101(3) TFEU under the old system was not itself a rule of public policy. The authors may be right as to public policy but the problem of inarbitrability would have remained.

Arbitration  199 complete picture, reference is made to more specific chapters in this book that treat this question in detail.37 There are two specific mechanisms in private international law which lead to the application of substantive EU competition law to certain conduct. Under the first mechanism, Articles 101 and 102 TFEU are considered to contain an indirect unilateral conflicts rule which defines the cases that fall within their scope.38 The rule is unilateral, because EU law itself demands its application if there is a sufficiently close connection with the territory of the EU.39 This is a characteristic not only of EU competition law, but also of a wide range of EU directives.40 It is also indirect because the relevant provisions do not spell this out expressly; rather, the conclusion is reached by interpreting those specific norms.41 The criterion for the application of the EU competition rules is whether a certain agreement, practice or behaviour prevents, restricts or distorts competition within the internal market in a causal, foreseeable and substantial way.42 Such an effect constitutes a sufficiently ‘close link’ with the EU Member States to justify the application of the EU competition rules. Such rules may exceptionally be universal or bilateral as well as unilateral. In the former case, the national conflicts rule refers to the applicability not only of domestic competition law, but also of the competition laws of third countries. For example, Article 137 Swiss Act on Private International Law lays down that when anti-competitive conduct affects or refers to a specific foreign market, the competition rules of that jurisdiction should be applicable to that conduct with regard to related tortious claims.43 There is, however, a second mechanism whereby the Treaty competition rules will be applicable: in the international context, antitrust norms pertain to the public policy of the   See the contribution of M Fallon and S Francq.   See inter alia R Schaub, ‘Grundlagen und Entwicklungstendenzen des europäischen Kollisionsrechts’ (2005) 60 Juristenzeitung 328, 329–30. 39   On these unilateral rules (einseitige Kollisionsregel) in the context of EU law, see inter alia U Magnus and P Mankowski, ‘The Green Paper on a Future Rome I Regulation: On the Road to a Renewed European Private International Law of Contracts’ (2004) 103 Zeitschrift für vergleichende Rechtswissenschaft 131, 133. 40   See, eg, Council Directive 86/653 of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents [1986] OJ L382/17. 41   See in that respect Magnus and Mankowski, ‘The Green Paper on a Future Rome I Regulation’ (n 39) 139–42, who emphasise the difference between the indirect unilateral conflict-of-law rules of pre-1993 directives and the direct unilateral conflict of laws rules of post-1993 directives. The judgment of the ECJ in Case C-381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I-9305 should be seen in the former framework. See further C von Bar and P Mankowski, Internationales Privatrecht, Allgemeine Lehren, vol I (Munich, CH Beck, 2003) 271. 42   In Case T-102/96 Gencor Ltd v Commission [1999] ECR II-753, the General Court gave a clear definition of the concept of ‘effect on competition within the Union’ and identified three cumulative criteria to carry out the assessment. It stated that: ‘Application of a [merger] regulation is justified under the public international law when it is foreseeable that a proposed concentration will have an immediate and substantial effect in the [Union] . . . It is therefore necessary to verify whether the three criteria of immediate, substantial and foreseeable effect are satisfied in this case’ (paras 90, 92). See also Joined Cases 89/85, 104/85, 114/85, 116/85-117/85 and 125/85 to 129/85 A Ahlström Osakeyhtiö and others v Commission (Woodpulp I) [1988] ECR 5193. 43   See further MA Renold, Les conflits de lois en droit antitrust, Contribution à l’étude de l’application internationale du droit économique (Zurich, Schulthess, 1991) 193 ff; D Esseiva, ‘L’application du droit européen des cartels par le juge civil sur la base de l’article 137 LDIP’ (1996) Aktuelle Juristische Praxis/Pratique Juridique Actuelle 694, 696 ff. For a critique of the universal bilateral method, see L Idot, ‘Les conflits de lois en droit de la concurrence’ (1995) 122 Journal du droit international – Clunet (JDI Clunet) 321, 325–27; I Schwartz and J Basedow, ‘Restrictions on Competition’ in K Lipstein (ed), International Encyclopedia of Comparative Law, Private International Law, vol III, ch 35 (Tübingen, Mohr Siebeck, 1995) 118 ff; M Hellner, ‘Private International Enforcement of Competition Law: The Application of Foreign Competition Law’ (2002) 4 Yearbook of Private International Law (YPIL) 257, 293. See also European Parliament and Council Regulation 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) [2007] OJ L199/40 Art 6(3). Whether this provision is a universal conflicts rule that extends also to substantive competition law (aside from tort law) is open to debate. See in this book the contribution of S Francq and W Wurmnest. 37 38

200  Assimakis P Komninos forum and are considered to fall under the category of mandatory norms (lois de police, lois d’application immédiate, Eingriffsnormen)44 in the sense that they are applicable notwithstanding the lex causae and irrespective of whether the parties have chosen a certain applicable law.45 Mandatory rules usually aim to protect the general political, social, economic, or cultural interests of a specific country.46 Rules protecting free competition are generally accepted to constitute such mandatory norms, irrespective of their EU or national provenance.47

B.  The Specific Case of Arbitration The application of EU competition law by arbitrators raises a number of very specific questions because of the distinct features of arbitration. Arbitration is a dispute resolution mechanism and arbitrators themselves are private judges whose task is to resolve a dispute that the parties have placed before them. They are not State organs and are not entrusted with the safeguarding of any public interest or public policy as such. Indeed, unlike State courts, international commercial arbitration has no forum and no lex fori, since its seat cannot be properly considered a forum.48 This means that arbitrators are not bound by any particular conflict-of-laws or private international law rules49 and, at the same time, are not bound by any mandatory norms (lois d’application immédiate) of any forum. For them, all such norms are essentially tantamount to mandatory norms of a third country.

44   See, eg, Schröter, Kommentar (n 15) 99; von Bar and Mankowski, Internationales Privatrecht (n 41) 256; see in this book the contribution of M Fallon and S Francq. See also para 50 of AG Darmon’s Opinion in Woodpulp I (n 42). 45   See Art 9 European Parliament and Council Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) [2008] OJ L177/6, and Art 16 Rome II Regulation, both referring to ‘overriding mandatory provisions’. See further in this book the contribution of S Francq and W Wurmnest. Note that the public policy exception in the context of conflict of laws, to be found in Arts 21 and 26 Rome I and Rome II Conventions, respectively, is a methodologically different instrument of negative rather than positive function, than mandatory norms are, though the two concepts broadly refer to the same interests that are deemed fundamental. In other words, the public policy exception merely safeguards that a certain provision of the specified law does not lead to consequences contrary to the public policy (ordre public) of the forum. It does not, however, lead to the positive application of the forum’s mandatory norms. This result is attained only through the compulsory application of these rules through their being considered as internationally mandatory norms (lois d’application immédiate). 46   See von Bar and Mankowski (n 41) 262 ff. See also Joined Cases C-369/96 and C-376/96 Criminal Proceedings against Jean-Claude Arblade and others [1999] ECR I-8453 para 30, where the ECJ refers to the notion of inter­ nationally mandatory norms in the following terms: ‘Concerning the classification of the provisions at issue as public-order legislation under Belgian law, that term must be understood as applying to national provisions compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State’. 47   See von Bar and Mankowski (n 41) 256; L Idot, ‘Le droit de la concurrence’ in A Fuchs, H Muir Watt and E Pataut (eds), Les conflits de lois et le système juridique communautaire (Paris, Dalloz, 2004) 278. See also the Giuliano-Lagarde Report on the Convention on the Law Applicable to Contractual Obligations [1980] OJ C282/1, 28. 48   See inter alia Idot, ‘Arbitration’ (n 25) 313. 49   See Renold, Les conflits de loi (n 43) 102; P Nygh, Autonomy in International Contracts (Oxford, OUP, 1999) 42–44, 226 ff; P Karrer, ‘Article 187’ in V Berti et al (eds), International Arbitration in Switzerland, An Introduction to and a Commentary on Articles 176-194 of the Swiss Private International Law Statute (Basle, Helbing & Lichtenhahn, 2000) 501; F Vismara, Le norme applicabili al merito della controversia nell’arbitrato internazionale (Milan, Giuffrè, 2001) 173 ff.

Arbitration  201 At the same time, arbitrators do not function in a vacuum. They cannot act as vehicles of illegality, since, in the eyes of EU competition law, they are ‘undertakings’ themselves. This means that if they were to act as facilitators of cartels and if the arbitration process were a sham, essentially being an internal mechanism to a cartel, they would themselves be liable to fines for breach of Article 101 TFEU.50 More importantly, their arbitral award would not be enforceable in the European Union, since it would be contrary to public policy in the EU Member States, and the national courts in the EU, further to the Eco Swiss ruling of the European Court of Justice, would be under a duty to set aside such awards or to refuse to recognise or enforce them. Thus, for the time being, it suffices to make the following distinctions, when speaking about the application of EU competition by an international arbitral tribunal: 1. In a situation where the arbitrators consider that the law applicable (lex causae) to the specific legal relationship in question and thus to the merits of the dispute is the national law of an EU Member State, there is no issue as to the applicability of EU competition law by the arbitrators,51 since these provisions are an integral part of the Member States’ laws. Naturally, the fact that the EU competition rules are applicable does not mean that Articles 101 and 102 TFEU will actually apply and regulate certain conduct. This will depend on whether the conduct in question lies within their material scope. For example, when the restriction of competition does not affect the internal market or it does not have an effect on interstate trade, there is no violation of Articles 101 and 102 TFEU, although the latter may be applicable in the private international law sense.52 2. The issue arises only when the lex causae is the law of a third country, for example Swiss law, or when the arbitrators are deciding on the basis of lex mercatoria or of the UNIDROIT or Principles of European Contract Law (PECL) Principles or without any reference to legal principles, as amiables compositeurs or ex aequo et bono. In such a case, the arbitral tribunal is not under a legal duty to apply EU competition law. However, this does not mean that the arbitrators cannot apply EU competition law, if they so wish. They may do so, on a number of premises. First, the arbitrators, in defining the applicable law to the merits of the dispute, may rely on a system of conflict of laws that exceptionally possesses a universal bilateral conflicts rule applicable to competition law, such as Article 137 Swiss Act on Private International Law, which has introduced a general and universal connecting link for competition law-related torts. Second, the arbitrators may rely on a system of conflict of laws that allows for foreign mandatory norms to be taken into account under certain conditions. Thus, for example, Article 19 Swiss Act on Private International Law allows Swiss courts to ‘take into account’ foreign mandatory norms if the interests of one party advocate this, and if there is a close connection between the facts of the case and the specific legal system to which the mandatory norms belong. Similarly, Article 9(3) Rome I Regulation provides   See further n 122 below and the accompanying text.   For an example from the arbitral practice, see the judgment of 28 April 1992 of the Swiss Federal Tribunal in G SA v V SpA 118 II ATF 193; [1996] ECC 1, where it was stressed that an arbitral tribunal based in Geneva applying Belgian law had to apply Art 101 TFEU. 52   See, eg, ICC 12127/2003 (2008) XXXIII YCA 82 where the tribunal held that a licence agreement related to two US patents, which was exclusively performed in the territory of the US and Canada, could not in any manner restrict competition in Europe. 50 51

202  Assimakis P Komninos that effect may be given to mandatory norms of third countries where the obligations arising out of the contract have to be or have been performed, in so far as those provisions render the perform­ance of the contract unlawful. Finally and more importantly, the arbitrators may decide to apply EU competition law, without necessarily relying on a specific conflicts rule, because they consider this appropriate, taking into account the enforceability of their award. In other words, when the arbitrators see that ignoring EU competition law would prejudice the award’s chances of recognition and enforcement in the EU Member States, they take a practical approach and decide to apply the Treaty competition provisions, sometimes even ex officio, notwithstanding the parties’ selection of law or seat of arbitration. We will return to this question below, when we analyse the control of arbitral awards by courts on public policy grounds.

IV.  The Institutional Position of Arbitration in its Relationship with the European Commission A.  Arbitration Is Not Covered by the Cooperation Duties of Regulation 1/2003 The basic premises of the system of EU competition law enforcement are to be found in Council Regulation 1/2003.53 That Regulation lays down not only the mechanisms for public enforcement by the Commission but also deals with the decentralised application of the Treaty competition rules by national (competition) authorities and courts. With regard to national courts, the Regulation does not stop at confirming their full competence to apply EU competition law, but also creates an institutional framework, which provides for specific powers and duties, aiming at ensuring consistency in the decentralised enforcement of EU competition law. Such powers and duties also echo – and are in a sense leges speciales of – Article 4(3) TEU, which remains the lex generalis.54 Arbitration, on the other hand, is not subject to Article 4(3) TEU.55 Indeed, the duty of cooperation in Article 4(3) TEU is limited only to EU institutions and to official authorities and organs of the Member States. Arbitrators do not fall under this provision, since, although enjoying jurisdictional and quasi-judicial powers, they still remain a creation of private autonomy. This means that most of the cooperation and coordination mechanisms 53   Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1. 54   See Commission, ‘Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty and amending Regulations (EEC) No 1017/68, (EEC) No 2988/74, (EEC) No 4056/86 and (EEC) No 3975/87’ COM (2000) 582 final, [2000] OJ C365E/284, 27 September 2000, Explanatory Memorandum, which notes that Art 15 codifies ‘the existing obligation of the Commission, based on Article [4(3)] of the [EU] Treaty, to cooperate with national courts’. See also Case C-429/07 Inspecteur van de Belastingdienst v X BV [2009] ECR I-4833 para 21. 55   That arbitration is not formally speaking subject to Art 4(3) TEU is a generally accepted proposition. See, eg, W Van Gerven, ‘L’arbitrage dans le droit européen’ (1995) 72 Revue de Droit International et de Droit Comparé (RDIDC) 67, 73; Komninos (n 6) 228; Idot (n 25) 318; Shelkoplyas, The Application of EC Law (n 5) 423.

Arbitration  203 between national courts and the Commission provided for in Regulation 1/2003 are not transposable to arbitration.56 Thus, neither Article 4(3) TEU nor Article 15(1) Regulation 1/2003 can provide for a legal basis for formalised cooperation between the Commission and arbitrators in the sense of the former being bound to offer assistance on a specific competition-related issue to the latter. Similarly, Article 15(2) Regulation 1/2003, which provides that Member States are under a duty to forward to the Commission copies of ‘written judgments’ of ‘national courts’, does not certainly apply directly to arbitral awards and tribunals. It might have been tempting to argue that the imposition of this administrative duty on Member States, rather than on courts, might mean that the former also have to forward to the Commission copies of arbitral awards applying Articles 101 and 102 TFEU. Such an argument, however, fails in view of the letter of the text, but also in view of its rationale, which is to make the Commission aware of possible cases of national litigation, where the former can intervene at a later stage as amicus curiae. Besides, States do not – indeed should not – have mechanisms in place to monitor arbitral awards. In addition, this would certainly run counter to the most fundamental principles of arbitration: privity, independence and confidentiality.57 Naturally, arbitration may be indirectly affected by Article 15(2) Regulation 1/2003, in case a Member State court has reviewed an arbitral award, or has given judgment concerning its recognition or enforcement, or has even intervened in support of the arbitration proceedings, for example by ordering a provisional measure.58 All these court judgments will have to be forwarded to the Commission by the Member State in question, if EU competition law has been applied by the court itself, which is more likely to have happened when the court reviews the arbitral award.59 As for the power of the Commission (or of national competition authorities) to submit written or oral observations ex officio to national courts pursuant to Article 15(3) Regulation 1/2003, again such an amicus curiae mechanism is neither applicable nor transposable to arbitration.60 Any attempt to extend such measures to arbitration proceedings should be avoided not only as being unnecessary and disproportionately restrictive, but also because it would be detrimental to the nature of arbitration and to the principles of privity,

56   See in this sense Liebscher, ‘Arbitration’ (n 25) 92; Radicati di Brozolo, ‘Antitrust’ (n 25) 33–34; L Idot, ‘Les entreprises face à la suppression de l’autorisation préalable’ in A Mourre (ed), Le nouveau droit communautaire de la concurrence, Les droits de la défense face aux pouvoirs de la Commission européenne (Brussels, Bruylant, 2004) 145; Hilbig, Das gemeinschaftsrechtliche (n 25) 166; Thalhammer, ‘Die Rolle der Schiedsgerichte’ (n 25) 69; Boutard-Labarde et al, L’application en France (n 25) 771; against: Abdelgawad‚ L’arbitrage international’ (n 25) 266. 57   See van Houtte, ‘Distribution Arbitration’ (n 25) 106. 58   This is so, if the wider meaning of ‘judgment’ is followed, which also covers courts’ decisions that are final in nature, yet they may be interim or partial. See, in this regard, AP Komninos, EC Private Antitrust Enforcement, Decentralised Application of EC Competition Law by National Courts (Oxford, Hart Publishing, 2008) 104. 59   Indeed, in the recent MDI case, which represents the first case where a national court in the European Union refused to enforce a foreign arbitral award on public policy grounds, because of an EU competition law violation, the judgment of the Court of Appeal of The Hague was transmitted to the Commission under Art 15(2). See Court of Appeal of the Hague, 24 March 2005, Cases 04/694 and 04/695 Marketing Displays International Inc v VR Van Raalte Reclame BV (2006) 2 Stockholm International Arbitration Review (SIAR) 207, reported in the Commission’s website that brings together the national judgments transmitted to it under Art 15(2) Regulation 1/2003, http://ec.europa.eu/competition/antitrust/national_courts/court_2005_046_nl.pdf. 60   See Idot, ‘Les entreprises face à la suppression de l’autorisation préalable’ (n 56) 145; Idot, ‘La place de l’arbitrage’ (n 33) 2683; Boutard-Labarde et al (n 25) 773.

204  Assimakis P Komninos independence and confidentiality.61 If competition authorities were to demand to become privy to arbitration involving competition issues, many parties might opt to transfer their arbitrations to venues outside the EU, especially if one of the parties is not an EU national.62 The question remains whether the intervention of a competition authority would be possible, if the arbitration agreement itself provided for such a possibility or if the arbitrators were to give permission to this and both parties gave their consent.63 In such an exceptional case, the flexibility of arbitration would advocate in favour of a positive answer. However, there are good policy reasons that plead against placing too much emphasis on the consent of the parties. In practice, it will be quite difficult for a party to the arbitration proceedings to resist the Commission’s or another competition authority’s intervention without raising its suspicions and thus without attracting its ‘attention’. A party may in some cases volens nolens acquiesce in such an intervention. To condition such a mechanism solely on the parties’ consent would not be appropriate. Therefore, arbitrators should seek or allow such intervention only in those cases where either the arbitration agreement explicitly refers to this possibility or the two parties genuinely agree and urge the arbitrators to ask the Commission to intervene in order to shed light on to some important competition law question.64 If the above rather exceptional conditions are met, in most cases, it will be preferable to allow the European Commission to interfere only through the submission of arguments in writing, without however giving it the power to participate in the arbitration hearings or to have access to the file of the case and to documents produced during the proceedings. This solution has been followed in the context of NAFTA arbitration, which is certainly very different from a purely private commercial arbitration, but could be considered by analogy.

B.  General Exclusion of Arbitration from the Courts Cooperation Notice The absence of any reference to arbitration in Regulation 1/2003 may not be surprising. However, one would have welcomed at least a reference to arbitration in the accompanying soft law measures of modernisation, in particular in the Notice on cooperation between the Commission and national courts.65 Regrettably,66 not only is the Notice silent, but actually 61  On the principle of confidentiality and its limits from a comparative law perspective, see J Misra and R Jordans, ‘Confidentiality in International Arbitration: An Introspection of the Public Interest Exception’ (2006) 23 JIA 39. The principle of confidentiality may recede and, thus, allow for amicus curiae briefs by third parties only in cases of public-private, ie investment, arbitration. See further L Mistelis, ‘Confidentiality and Third Party Participation: UPS v Canada and Methanex Corporation v United States’ (2005) 21 Arbitration International (Arb Int’l) 211, 221 ff. 62   See JDM Lew, ‘EEC Law Restriction on Arbitration’ (1981-82) 47 Arbitration, The Journal of the Chartered Institute ofArbitrators 117, 119. 63   In such a case, there would be no violation of the fundamental principle of confidentiality. See C Müller, ‘La confidentialité en arbitrage commercial international: Un trompe-l’œil?’ (2005) 23 Swiss Arbitration Association Bulletin (Bull ASA) 216, 223. 64   See C Nisser and G Blanke, ‘Reflections on the Role of the European Commission as amicus curiae in International Arbitration Proceedings’ (2006) 27 ECLR 174, 179, 181; against: Abdelgawad (n 25) 269, who thinks that the arbitral tribunal should be entitled to decide itself to permit the Commission’s intervention without the parties’ consent, because of the public policy nature of EU competition law, which trumps private autonomy. However, this extreme position runs counter to the most fundamental notions of arbitration. 65   Commission Notice on the cooperation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC [2004] OJ C101/54. 66   See L Idot, Droit communautaire de la concurrence, Le nouveau système communautaire de mise en œuvre des articles 81 et 82 CE (Brussels, Bruylant, 2004) 81.

Arbitration  205 excludes by implication arbitration tribunals, by adopting, in our view entirely unreasonably and unnecessarily, a definition of ‘court’ that follows the ‘court or tribunal’ criterion of Article 267 TFEU, as interpreted by the Court of Justice.67 As a result of a consistent line of case-law, arbitrators do not fall under this criterion and cannot therefore make preliminary references to Luxembourg.68 It is not clear whether the language used in paragraph 1 Cooperation Notice intended implicitly to exclude arbitration, though there is some evidence that this may well have been the intention.69 In any event, it is reasonable to believe that the Commission intended to exclude arbitration only from the specific procedural framework of the new Cooperation Notice, which contains self-imposed deadlines for the Commission’s assistance. The Commission probably wanted to entertain requests from arbitrators on an ad hoc and fully discretionary basis, rather than being bound to engage in a dialogue with arbitrators as it is bound to do so with courts.70 In any event, the soft law nature of the Cooperation Notice means that its mechanisms can be used by analogy also by arbitrators.71 Thus, on an informal basis, arbitrators should be able to seek cooperation, whenever a legal or factual problem arises in regard to a question of enforcement of EU competition law. Indeed, in the past, the Commission has been quite open in providing assistance to arbitrators applying EU competition law. It has on occasions treated arbitral tribunals in the same way as national courts under the old Cooperation Notice.72 In one reported case, it received and responded to an application for legal information by a body defined as ‘Tribunal Arbitral de Barcelona’, an ad hoc arbitration tribunal.73 The information sought referred to an alleged dominant position of a public undertaking that controlled the bidding and executing of certain infrastructure projects in a Spanish region. It is interesting that the arbitration tribunal wanted to know whether the undertaking in question occupied a dominant position ‘in the sense of the Court of Justice’s case law’.74 The case, thus, demonstrates how the Commission can remedy in some instances the inability of arbitrators to seise the Court of Justice with a preliminary reference.   Cooperation Notice (n 65) para 1.   Nordsee (n 29) para 13; Eco Swiss (n 16) para 34; Denuit (n 31) para 13. For indirect possibilities to seise the ECJ through the intervention of national courts, see Komninos, ‘Assistance to Arbitral Tribunals’ (n 32) 363 ff. 69  See E Paulis, ‘Panel Discussion: Administrative Antitrust Authorities: Adjudicative and Investigatory Functions’ in B Hawk (ed), International Antitrust Law and Policy 2002, Annual Proceedings of the Fordham Corporate Law Institute (New York, Juris, 2003) 459, who explains that the Commission was probably ‘frightened’ to grant full access to arbitrators for the same reasons as maybe the ECJ was. The exclusion of arbitration from the mechanisms of the cooperation Notice has been criticised by many stakeholders in their comments on the Commission’s modernisation package. See, eg, the comments by L Idot, the Joint Working Party of the Bars and Law Societies of the UK on Competition Law, and the law firm Clifford Chance (available at http://ec.europa.eu/ competition/consultations/2003_modernization_package). 70   See Paulis, ‘Panel Discussion’ (n 69) 459–60. 71   See Komninos (n 6) 228; W Wils, ‘Community Report’ in D Cahill (ed), The Modernisation of EU Competition Law Enforcement in the European Union, FIDE 2004 National Reports (Cambridge, Cambridge University Press (CUP), 2004) 698; P Heitzmann and J Grierson, ‘The French Approach to Arbitrating EC Competition Law in the Light of the Paris Court of Appeal’s Decision in SNF v Cytec Industries’ in T Zuberbühler and C Oetiker (eds), Practical Aspects of Arbitrating EC Competition Law (Zurich, Schulthess, 2007) 200, fn 37. 72   See Temple Lang, ‘Panel Discussion’ (n 35) 418; L De Gryse, ‘Quelques propos sur l’arbitrage en matière des brevets d’invention’ in Jura vigilantibus, Antoine Braun, les droits intellectuels, le barreau (Brussels, Larcier, 1994) 114; L Simont, ‘Arbitrage et droit de la concurrence: Quelques réflexions d’un arbitre’ (1998) RDAI/IBLJ 547, 550; Eilmansberger, ‘Die Bedeutung der Art 81 und 82 EG’ (n 25) 12. 73   See V Joris, ‘Communication relative à la coopération entre la Commission et les juridictions nationales pour l’application des articles 85 et 86: Cas d’application jusqu’à présent’ (1998) 4 EC Competition Policy Newsletter 47, 48. 74  ibid. 67 68

206  Assimakis P Komninos Due to the arbitrators’ increasing application of Article 101(3) TFEU, which admittedly entails more elaborate competition-related economic and legal questions, and to the competition authorities’ more favourable approach towards arbitration, the Commission is expected to cooperate more often with arbitral tribunals in appropriate cases. As for the kind of assistance that arbitrators could request, this would not be substantially different from that which the courts may request.75 It covers: – factual information, for example questions on the identity of the undertakings concerned; or – information on whether a certain case is pending before the Commission; or – whether the latter has reached a decision or a reasoned opinion in this matter. It may also refer to: – a legal issue of EU competition law; as well as to – economic data, such as statistics, market characteristics, and economic analyses.76 Whether the request of such information or assistance by the Commission is desirable, is, of course, only for the arbitrators to decide. It is a question of the law governing the arbitration procedure (lex arbitri) and of the arbitration clause itself, whether an arbitrator may use such a facility sua sponte. This is a sensitive issue, because the privity of the arbitral process recedes, and arbitrators will have to show extreme diligence. Indeed, according to one view, arbitral tribunals should abstain from seising the Commission, since the parties have submitted their dispute to them alone and the applicability of Article 101 TFEU is still a question of law, which they alone should deal with.77 Most likely, they could take such an initiative, if one of the parties has filed a complaint with the Commission, thus having brought the matter already to its attention, provided both parties consent; or if the terms of reference of the arbitration allow it.78 In any case, specific consultations with, and hearing of, all parties seem to be necessary.79 Indirectly, an arbitrator could enjoin the parties to supply him with certain legal or economic information or data, while stressing to them that this information could be easily requested from the Commission, if they consented to that.80

C.  A Notice on Cooperation with Arbitrators? Though not necessary, it might still be desirable for the Commission to publish a Notice or perhaps make a public announcement on cooperation with arbitration tribunals.81 Such a   See, eg, Cooperation Notice (n 65) paras 21 ff.   See also P Peyrot, ‘Expert Determination of Competition Issues’ in T Zuberbühler and C Oetiker (eds), Practical Aspects of Arbitrating EC Competition Law (Zurich, Schulthess, 2007) 109. 77   See L Goffin, ‘L’arbitrage et le droit européen’ (1990) 67 RDIDC 315, 333. 78   See Simont, ‘Arbitrage et droit de la concurrence’ (n 72) 550 ff, according to whom the arbitrators, who are contractually bound with the parties, could be personally liable, if they exposed them to proceedings (before the Commission) that could lead to fines. See also H Lesguillons, ‘La solitude pondérée de l’arbitre face au droit de la concurrence’ (2003) 123 Gazette du Palais (GP) No 148-149, 17, 20; Van Houtte (n 25) 106, who stresses the arbitrators’ duty of confidentiality vis-a-vis the parties. 79   See M Blessing, ‘Introduction to Arbitration: Swiss and International Perspectives’ in V Berti et al (eds), International Arbitration in Switzerland, An Introduction to and a Commentary on Articles 176-194 of the Swiss Private International Law Statute (Basle, Helbing & Lichtenhahn, 2000) 235; G Blanke and R Nazzini, ‘Arbitration and ADR of Global Competition Disputes: Taking Stock (Part III)’ (2008) 1 GCLR 133, 137. 80   See Simont (n 72) 550. 81   See Komninos (n 6) 229. 75 76

Arbitration  207 Notice could provide for a more structured dialogue between the Commission and arbitrators, while increasing the transparency of the whole system of cooperation. It would also raise the competition law awareness of arbitrators and of the parties to an arbitration, without encroaching on the flexibility and privity of the arbitral process. In any case, the Commission would not be legally bound to provide assistance to arbitral tribunals, although it is evident that it is in its interest to do so.82 This is a direct consequence of the non-applicability of Article 4(3) TEU to arbitrators. Since the latter are not under any EU law duty, as against the EU institutions, similarly the Commission should not be so bound. A Notice would essentially be a list of best practices and procedures available to arbitrators for seising the Commission. It should be based more on discretion than on obligation and the Commission should be ready to give rather than take, precisely because offering assistance to arbitrators willing to apply the competition rules would enhance the overall effectiveness of such rules.

V.  Conflicts of Resolution between Arbitration and Competition Authorities A.  Arbitration and Article 16 Regulation 1/2003 Since arbitration tribunals, just as national courts, enjoy parallel competences in the application of the Treaty competition rules with the Commission (and other national competition authorities), conflicts of resolution are not excluded. However, the existence of such conflicts between arbitration and the Commission do not give rise to the same concerns and issues as those arising with national courts. Article 16 Regulation 1/2003, a verbatim transposition of the Masterfoods ruling of the ECJ,83 provides that when national courts apply Articles 101 and 102 TFEU and the Commission has already taken a decision on the same conduct in question, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated and may therefore have to suspend proceedings awaiting the Commission’s decision. On the other hand, arbitration tribunals, as already explained, are not organs of the EU Member States and are not bound by Article 4(3) TEU. They are a creation of private autonomy and their aim is not to safeguard any particular public interest of national or supranational nature but rather to resolve a private dispute.84 These considerations have to be seriously kept in mind while speaking about conflicts and their resolution in the present context.

82   See K Lenaerts and M Pittie, ‘Conclusions générales’ in R Briner et al (eds), L’arbitrage et le droit européen, Actes du colloque international du CEPANI du 25 avril 1997 (Brussels, Bruylant, 1997) 218. 83   Case C-344/98 Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I-11369. 84   See also Shelkoplyas (n 5) 71–73; Y Derains, ‘L’arbitre, la Commission et la Cour: questions de procédure’ (2003) 123 GP No 148-149, 45; Van Houtte (n 25) 98; against: Abdelgawad (n 25) 272–73.

208  Assimakis P Komninos Thus, by no means should the initiation of proceedings by the Commission entail the suspension of the arbitral proceedings.85 The primary duty of the arbitrators vis-a-vis the parties is to resolve their dispute and render swiftly an award.86 A stay of proceedings is something that arbitrators should have recourse to only rarely, when there is a very serious and novel competition law issue in the hands of the Commission or of a national competition authority, the resolution of which is forthcoming and is expected to have an impact on the arbitration proceedings. In all such cases, the arbitrators should first hear the parties and aim at ensuring their consent.87 Then, when the Commission proceeds and finds that a particular arrangement is contrary to the Treaty competition provisions, arbitrators cannot be formally bound by Article 16 Regulation 1/2003 to avoid a conflicting decision with the Commission.88 This rule is again a lex specialis of the more general provision of Article 4(3) TEU and arbitrators are immune from any duties emanating from that provision. However, notwithstanding the absence of a legal duty to that extent, the arbitral tribunal will have to be cautious, particularly when the case entails some kind of serious anti-competitive behaviour and thus there is a real risk that the award be reviewed by a State court on public policy (ordre public) grounds.89 It is certainly best-advised to give proper attention to the Commission’s decision and in appropriate circumstances to consider it as persuasive.90 Thus, if the Commission has taken a decision finding an infringement of Article 101 TFEU in the case of hard core anti-competitive behaviour (eg a cartel), in reality the Commission decision imposes de facto a duty of vigilance upon the arbitral tribunal. The latter remains theoretically empowered to depart from the findings of the Commission and find that there has been no cartel infringement based on the same facts. The arbitral award would still enjoy res judicata as between the parties,91 but, at the same time, it would be highly vulnerable to an annulment action, which the losing party would certainly not fail to exploit. Such an award would essentially amount to a truncated award. Of course, even in the case of a Commission or a national competition authority decision finding a cartel infringement, the above does not mean that the arbitrators should be totally bound by all findings in the Commission’s decision. Indeed, there is no reason to 85   Opinion by M Blessing, expressed during the discussions at the IAI conference on ‘Les réformes du droit communautaire de la concurrence et l’arbitrage international: un nouveau rôle pour les arbitres?’ on 4 October 2002 in Paris. 86   See, in a similar sense, JDM Lew, LA Mistelis and S Kröll, Comparative International Commercial Arbitration (The Hague, Kluwer, 2003) 487; Nazzini, ‘International Arbitration’ (n 25) 158. 87   Arbitrators have been hesitant in the past to stay proceedings. See, eg, ICC 7146/1992, cited by CQC Truong, Les différends liés à la rupture des contrats internationaux de distribution dans les sentences arbitrales CCI (Paris, Litec, 2002) 109–12. 88   See also Dolmans and Grierson (n 25) 51; Nazzini (n 25) 161, leaving open the possibility that arbitration tribunals may have to consider an infringement decision by a public authority as ‘conclusive’ on the basis of the doctrine of ‘abuse of process’; Thalhammer (n 25) 69; Hilbig (n 25) 169; Idot (n 33) 2686, speaking of a ‘moral’ though not a legal authority; Boutard-Labarde et al (n 25) 770. 89   See further VI.C below. 90   Indeed, in practice, arbitrators normally pay deference to Commission decisions. See, eg, ICC 8626/1996 (1999) 126 JDI Clunet 1073; Van Houtte (n 25) 101–02; Van Houtte ‘The Application by Arbitrators of Articles 81 & 82’ (n 12) 73; Boutard-Labarde et al (n 25) 770, fn 27, with references to an ad hoc arbitral award rendered in Geneva on 30 June 1994 (also cited by W Abdelgawad, Arbitrage et droit de la concurrence, Contribution à l’étude des rapports entre ordre spontané et ordre organisé, (Paris, LGDJ, 2001) 307; Abdelgawad (n 25) 272 fn 43). See also Derains, ‘L’arbitre, la Commission et la Cour’ (n 84) 47. Reference is made also to ICC 7146/1992 (n 87) 109–12: ‘le Tribunal Arbitral tiendra naturellement compte de la manière dont les règles communautaires sont interprétées et appliquées par les institutions communautaires, notamment par la Commission et la Cour de Justice’ (emphasis added). 91   See J Dalhuisen, ‘The Arbitrability of Competition Issues’ (1995) 11 Arb Int’l 151, 161.

Arbitration  209 deny them the possibility to depart from certain findings, if they evaluate the evidence differently or if they have additional evidence in their hands. Thus, even in such extreme cases, an arbitrator could find a different duration of the cartel or a different degree of participation in the cartel by a specific company. Such an award will not in reality contradict the Commission in its most fundamental findings. It is difficult to see how an award would be contrary to public policy, especially if adequately reasoned, if it found that there has been in principle a cartel infringement, but arrived at some findings that may contradict some secondary findings of the Commission decision. At most, the award will have committed an error, but review of arbitral awards’ errors would amount to révision au fond and should therefore be excluded.92 If the case involves some behaviour that does not amount to a hard core violation of competition law, the arbitrators may have more liberty to depart from the Commission’s findings,93 since an arbitral award that contradicts such a Commission decision would run less of a risk at the enforcement stage. In general, public policy comes into play only with regard to a serious violation of substantive competition law and not with regard to the existence of a conflicting award, which is more a ‘procedural’ question.94 Indeed, the Court of Justice’s Eco Swiss ruling, which declared the public policy nature of the Treaty competition rules, was based on the concern to ensure that no anti-competitive effects occur on the market. It was not the Court’s concern whether a decision by the Commission binds an arbitration tribunal. The fact that an arbitration tribunal has the power, if it wishes, to depart from the findings of a Commission decision does not mean that the tribunal will necessarily violate the competition rules or that its award will inevitably violate public policy. There has been a view that an arbitration tribunal should never depart from a decision of the Commission because a national court in a setting aside or in a recognition/enforcement action would be bound by Article 16 Regulation 1/2003 to set aside or refuse to recognise/enforce that award.95 If this view implies that Article 16 can be an autonomous legal basis for review of arbitral awards independently of the review on public policy grounds, then it goes too far. There are compelling reasons to resist such an over-expansive reading of Article 16(1) Regulation 1/2003. First, it would lead to an unacceptable sacrifice of the principles of legal certainty and finality of arbitral awards.96 Second, it would not be in accordance with the principle of free movement of arbitral awards in the Union97 and with more general long-standing principles of international law that allow only exceptionally for the non-enforcement or non-recognition of a foreign arbitral award. Certainly, such an approach would be in direct conflict with the 1958 New York Convention98 and other international conventions. 92   See in the same direction, Radicati di Brozolo, ‘Antitrust: A Paradigm’ (n 56) 29. See, more generally on the question of review of arbitral awards on public policy grounds, Radicati di Brozolo, ‘Arbitrage commercial international’ (n 12) 345 ff, 409–37. 93   See Van Houtte (n 25) 107. 94   See Komninos, EC Private Antitrust Enforcement (n 58) 134–35; against: R Nazzini, Concurrent Proceedings in Competition Law, Procedure, Evidence and Remedies (Oxford, OUP, 2004) 353. 95   See Nazzini (n 25) 162; Nazzini, Concurrent Proceedings (n 94) 352–53. Compare also G Blanke, ‘The Case for Supranational Arbitration: Ideas and Prospects’ (2008) 19 EBLR 17, 33. 96   It is noteworthy that the ECJ in Eco Swiss (n 16) placed particular emphasis on those principles (see para 35 on finality and para 46 on legal certainty). 97   See VI.C below. 98   United Nations New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, entry into force on 7 June 1959, published in (1959) 330 United Nations Treaty Series (UNTS) 38 No 4739.

210  Assimakis P Komninos Finally, it must be noted that there are divergent approaches as to the real meaning of ‘conflict’, to which Article 16 Regulation 1/2003 refers. Thus, according to one view, a real conflict between a Commission decision and a national court judgment would happen only if the national court were to prevent compliance by the addressee of a Commission decision with the operative part of that decision. The 2008 FIDE Community report expresses this rationale in the following terms: [T]he Commission’s reasoning leading it to a particular decision, including its interpretation of Article [101] or Article [102] and its findings of fact, are clearly not ‘binding’ as such. The addition to the [Union] legal order that Commission decisions represent is not a particular interpretation of Article [101] or Article [102], or its findings of fact. It is in the operative part of the decision that specific provisions are found, creating legal effects: the obligation to pay a fine, the duty to conform to an order to cease certain behaviour or to take certain positive action. This is the part of the decision that becomes part of [Union] law and is vested with supremacy as long as the decision stands.99

It is therefore unclear, under the above reading, why a national judgment rejecting a setting aside action or recognising and enforcing an arbitral award would give rise to a conflict with the operative part of a Commission’s decision which imposes a fine and includes an injunction.

B.  Arbitration and National Laws Conferring a Binding Effect on NCAs’ Decisions A word should be said about those national laws that have specific provisions on the effect on civil proceedings of infringement decisions taken by antitrust authorities. A comparative analysis of national laws confirms that, in most legal systems, private enforcement remains independent of public enforcement.100 Although a pre-existing decision by an administrative authority may be used by the courts and the litigants to establish and prove certain facts, in particular in case of follow-on civil actions, such a decision does not normally acquire the status of binding authority, though it can certainly be persuasive authority. The principle of independence is also not affected by the possible deference paid on occasion by civil courts to competition authorities’ decisions. Such an attitude simply reflects the principle of economy in legal proceedings, which may make it inappropriate to repeat parts of the procedure before a civil generalist court, if a specialist authority or court has already dealt with the same facts. There are, however, some exceptions: some recently-amended national competition laws aim at facilitating follow-on civil actions for damages by conferring a binding effect on final infringement decisions of public antitrust authorities. Thus, section 58A UK Competition Act 1998, as subsequently amended, confers a binding effect on decisions of the Office of Fair Trading (OFT) and the Competition Appeal Tribunal (CAT) on appeal from the OFT. This provision clearly specifies that it ‘applies to proceedings before the 99  See E Gippini-Fournier, ‘Institutional Report: The Modernisation of European Competition Law: First Experiences with Regulation 1/2003’ in HF Koeck and MM Karollus (eds), The Modernisation of European Competition Law, Initial Experiences with Regulation 1/2003 (Baden-Baden, Nomos, 2008) 471. See also AP Komninos, ‘Effect of Commission Decisions on Private Antitrust Litigation: Setting the Story Straight’ (2007) 44 Common Market Law Review (CMLRev) 1387, 1397 ff. 100   See Komninos (n 58) 15 ff.

Arbitration  211 court in which damages or any other sum of money is claimed in respect of an infringement’.101 Section 47A extends the binding effect of infringement findings to decisions of the European Commission but is applicable to follow-on claims for damages only brought before the CAT. Similarly, section 33(4) German Competition Act goes even further in conferring binding effect on all Commission, Bundeskartellamt and even other Member States’ national competition authorities’ decisions.102 Whether such provisions are applicable to arbitration is open to discussion. International arbitration tribunals will be bound by such provisions only if the latter make part of the applicable law, the lex causae. To the extent the applicable law contains such specific provisions on the binding effect of administrative decisions, the arbitrators should consider themselves bound.103 However, even in that case, it will be a matter of true construction of the specific statute. Thus, if it appears that the national provision in question is intended to apply to follow-on civil proceedings brought only before specific specialist courts, this being the case of section 47A UK Competition Act 1998, as subsequently amended, then arbitration proceedings will fall outside the scope of the provision. If, on the other hand, the national provision appears general enough to cover any civil proceeding brought before the ordinary courts, this will be a good indication that its scope includes arbitration.104 In any event, the question of binding effect is not of great practical significance because the above national provisions refer only to follow-on civil claims for damages, which are not very often submitted to arbitration.105

C.  Direct Intervention by the Commission as an Exceptional Corrective Mechanism There are exceptional cases where a public antitrust authority can directly intervene in an arbitration and where the arbitrators themselves are directly subject to the authority’s powers. A relevant precedent is the Organic peroxides case,106 where the European Commission did not shy away from fining a cartel facilitator which had acted as a secretary to the parties and facilitated the implementation of the agreement. In the extreme case where an arbitration tribunal is internal to the cartel and has the function to ensure compliance and to discipline cartel members that ‘cheat’ on the cartel’s decisions, there is no valid reason why 101  This is clearer if one reads para 87 of the Explanatory Notes to the Enterprise Act 2002, available at www.legislation.gov.uk/ukpga/2002/40/notes/division/4/2/3/1: ‘Section 20: Findings of infringements. Subsection (1) inserts a new section 58A in CA 1998. The new section provides that certain decisions of the OFT or the CAT regarding an infringement of competition law are to bind the courts for the purpose of a subsequent claim for damages’ (emphasis added). 102   Similar provisions exist in Czech and Hungarian laws. 103   See M Kurkela et al, ‘Certain Procedural Issues in Arbitrating Competition Cases’ (2007) 24 JIA 189, 194; Nazzini, ‘A Principled Approach to Arbitration’ (n 33) 109. 104   This is the case of s 33(4) German Competition Act and probably of s 58A UK Competition Act 1998, as subsequently amended. 105   Needless to repeat that an arbitration tribunal’s failure to be bound by an infringement decision of a public authority, will only amount to a misapplication of the specific applicable law and, as such, will not suffice to qualify as a violation of public policy (see mutatis mutandis above). 106   Commission Decision (EC) 2005/349 of 10 December 2003 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Organic peroxides) [2005] OJ L110/44 para 84. See, on appeal, Case T-99/04 AC-Treuhand AG v Commission [2008] ECR II-1501. Recently, the Commission imposed once more a fine against AC-Treuhand in another cartel facilitation case (see Commission Press Release IP/09/1695 of 11 November 2009).

212  Assimakis P Komninos these ‘arbitrators’ should not be subject to the full powers of the Commission, as well as to penalties. Arbitrators, like other professionals such as lawyers,107 are undertakings and would act here as an ancillary vehicle that supports, reinforces and facilitates the anti-­ competitive conduct. The Commission also has many indirect ways to interfere with arbitration proceedings or awards which it considers to be detrimental to EU competition law. It has resorted to such indirect routes on one occasion in the past, in the Preflex v Lipski case.108 The facts were that an arbitral award had required that the defendant continue to pay licence fees pursuant to a patent licensing agreement after the expiry of the patents. The Commission held that this agreement as interpreted by the arbitral award, which in fact had even been subsequently approved by a national court,109 was incompatible with the Treaty competition rules. It did not, of course, set aside the arbitral award or – obviously – the national court’s judgment, since this is not possible under EU law. It did, however, communicate its objections to the parties and in essence rejected the construction given by the arbitral tribunal to the problematic contractual clause.110 As a result, the parties complied with the Commission’s views and reached a settlement, thus putting an end to the dispute. Such a Commission practice can have far-reaching consequences in like situations. Essentially, it could mean that each party to an agreement can, at least indirectly, bring an arbitral award before the Commission, by filing a complaint with it, hoping that the Commission will in effect enjoin the parties from enforcing the agreement, if the latter, as construed by the award, is found to be incompatible with EU antitrust rules. The result is that the res judicata effect of the arbitral award in question will only be nominal. Such a remote possibility can be a powerful deterrent and corrective mechanism in appropriate cases, where the enforcement of the arbitral award by the parties can be expected to have serious anti-competitive effects on the market. However, a Commission intervention to enjoin the parties from enforcing a final arbitral award, especially after a national court has sanctioned an arbitral award, should be a rare course, to be taken only if there is at stake a strong EU public interest necessitating intervention, and not just the individual interest of the losing party of the arbitration.111 The Commission should not, therefore, allow itself to be considered as an ‘appeal tribunal’ in such arbitrations but should leave this to the initiative of the losing party and to the courts to remedy pursuant to the applicable civil procedures.

107   Case C-35/99 Criminal Proceedings against Manuele Arduino [2002] ECR I-1529 paras 37–38 (by implication); Case C-309/99 JCJ Wouters and others v Algemene Raad van de Nederlandse Orde van Advocaten [2002] ECR I-1577 paras 48–49. 108   See Commission, Xth Report on Competition Policy – 1980 (Brussels, Publications Office of the EU, 1981) para 126, pp 87–88. 109   Tribunal de première instance (Civ Bruxelles) 15 October 1975, Preflex SA v Lipski (1976) 91 Journal des Tribunaux 493. The Brussels court of first instance rejected an action to have the award set aside, because, after dealing with the EU competition issue, it concluded that no infringement had taken place. 110   See further on that case, de Mello, ‘Arbitrage et droit communautaire’ (1982) Rev Arb 349, 373–74; L Idot, ‘Judicial Control and Enforcement of the Arbitral Award: Rapport introductif ’ in Institute of International Business Law and Practice, Competition and Arbitration Law (Paris, ICC Publishing, 1993) 280–81; M Bos, ‘Panel Discussion: International Arbitration’ in B Hawk (ed), International Antitrust Law and Policy 1994, Annual Proceedings of the Fordham Corporate Law Institute (New York, Kluwer, 1995) 425. 111   See Temple Lang (n 35) 426.

Arbitration  213

VI.  The Ultimate Safeguard: the Public Policy Control of Arbitral Awards A.  Eco Swiss Quite apart from any other preventive or corrective mechanism for the effective application of the Treaty competition provisions by arbitrators, review by State courts constitutes the ultimate and most efficient safeguard. The ordre public nature of the EU competition provisions and the duty of EU Member State courts to review and set aside arbitral awards that violate those fundamental provisions were forcefully pronounced in Eco Swiss.112 The Court of Justice recognised the legitimate interest of Member States that the judicial review of arbitral awards be limited. However, in view of the fundamental importance of Article 101 TFEU and having regard to the necessity of a uniform and effective application of EU competition law, something which under Article 4(3) TEU only national courts can safeguard, the Court went on to stress that such national courts were under a duty to set aside awards that violate the competition rules.113 Of particular importance, according to the Court’s reasoning, was the inability of arbitrators to address Article 267 TFEU preliminary references on matters of EU law to the Court of Justice as a result of Nordsee.114 It was up to national courts to send such references to Luxembourg, while exercising their review powers over arbitral awards. Obstructive national procedural rules, such as the rule that a party may not raise for the first time issues at a setting aside proceeding, should not, therefore, be followed. For the Court of Justice, the EU competition rules express an EU public policy, which is integrated in each national notion of ordre public. To reach that conclusion the Court relied on the old Article 3(1)(g) EC and stressed the competition provisions’ primacy in the Treaty, since ‘Article [101] constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the [Union] and, in particular, for the functioning of the internal market’.115 The requirement that arbitral awards be submitted to a ‘communitarised’ notion of public policy deserves approval. Any different solution would give rise to an unprecedented forum shopping inside the Union, where parties would opt for the jurisdiction that would interfere less with arbitral proceedings and awards.

112   Eco Swiss (n 16). For commentaries of that case see inter alia L Idot (1999) Rev Arb 639; Radicati di Brozolo (n 22) 665 ff; AP Komninos (2000) 37 CMLRev 459; H Weyer, ‘Gemeinschaftsrechtliche Vorgaben für das nationale Zivilverfahren: Verpflichtung der nationalen Zivilgerichte zur Anwendung der Art 81, 82 EGV’ (2000) 35 Europarecht 145; S Poillot-Peruzzetto, ‘L’ordre public international en droit communautaire: À propos de l’arrêt de la Cour de justice des Communautés du 1er juin 1999 (Affaire Eco Swiss China Time Ltd)’ (2000) 127 JDI Clunet 299; C Liebscher, ‘European Public Policy: A Black Box?’ (2000) 17(3) JIA 73. 113   Eco Swiss (n 16) paras 35–37. 114   ibid para 40. 115  ibid para 36. Reference was also made to the automatic nullity of all anti-competitive agreements in Art 101(2) TFEU.

214  Assimakis P Komninos

B.  The Extent of the Public Policy Control While Eco Swiss clearly stated that the Treaty competition rules pertain to public policy, thus disagreeing with the referring national court, the Hoge Raad, which had essentially held that, in its view, competition rules should not be considered a public policy matter in the context of review of arbitral awards, left open the question as to the scope of the public policy exception. In other words, the Court held that national courts had an EU law duty to refuse to recognise or enforce awards that offend against the EU competition rules and, thus, public policy, but did not give a measure as to what exactly constitutes a violation of public policy. It is not clear whether for the Court of Justice any violation or misapplication or ignorance of EU competition law would amount to a public policy violation. In any event, apart from what the Court of Justice thought about this matter, which is at the end of the day only an ad hoc issue that national courts are better equipped to deal with, a reply as to what constitutes a public policy violation must take into account various exigencies. Effectiveness of EU law is one, efficiency of competition law enforcement and deterrence is another, but there are also other conflicting interests and principles. Thus, the principle of finality of arbitral awards, the importance of arbitration for commerce within the EU and other factors must all be taken into account. There is, in fact, a split in post-Eco Swiss theory and national jurisprudence between a minimalist and a maximalist approach.116 According to the minimalist approach, while the EU competition rules pertain to public policy, in practice it will be in extreme cases that an arbitral award will have to be annulled or refused recognition or enforcement. This would be when the arbitrators have put in effect hard core horizontal restrictions of competition that are repugnantly anti-­competitive or when the arbitrators have completely ignored EU competition law although it was argued sufficiently clearly by the parties, thus rendering an award that upholds a manifestly anti-competitive practice. In all other cases there should be no public policy violation, especially if the arbitrators took into account the competition law question yet decided it erroneously. Reviewing arbitral awards for errors, according to this line of argument, would amount to révision au fond. A review of the jurisprudence shows that the minimalist approach finds favour with the national courts in the EU. In the celebrated Thalès case, the Paris Court of Appeal, a court particularly experienced both in competition law and arbitration,117 accepted that, while EU competition law is a matter of public policy, the violation of public policy in an international arbitration case must be ‘flagrant, effective and concrete’ in order to lead to the setting aside of an arbitral award.118 In this case, an arbitral award awarded damages to Euromissile on the basis of a licensing agreement, which stipulated that Euromissile would hold for 20 years the exclusive right to produce and sell a missile in Europe. A dispute arose when Thalès decided to proceed itself with production of the missile, through a subsidiary. Euromissile brought the dispute before an ICC arbitration tribunal, which rendered a 116   The minimalist and maximalist approaches are excellently presented by Radicati di Brozolo (n 56) 23 ff. See also L Radicati di Brozolo, ‘Court Review of Competition Law Awards in Setting Aside and Enforcements Proceedings’ in G Blanke and P Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners (Alphen aan den Rijn, Kluwer, 2011) 755–84. 117   The Paris Court of Appeal is the competent court to hear appeals against the Autorité de la concurrence and at the same time it hears numerous setting aside actions against arbitral awards rendered in Paris, seat of the ICC and international arbitration site. 118   CA Paris 18 November 2004, Thalès v Euromissile (2005) Rev Arb 750.

Arbitration  215 partial award in 2000 and a final one in 2002. The arbitrators awarded €108 million to Euromissile and Thalès applied to the Paris Court of Appeal to set the award aside, because the licensing agreement was allegedly incompatible with the EU competition rules and thus null and void. In particular, Thalès’ competition argument was based on the allegedly excessive duration of the exclusivity arrangement and on the market-sharing elements therein. The competition law question had not been raised by any of the parties (or the arbitrators themselves) during the arbitration proceedings, and it was only at the review stage that Thalès relied upon it to make the public policy argument. The parties had expert legal advice throughout the arbitration proceedings and the arbitrators were experienced, yet the competition issue never arose. The Court of Appeal noted this rather inconsistent behaviour of the plaintiff (venire contra factum proprium) and was not impressed by the EU competition law point. Although it did accept that the competition law arguments were not totally frivolous, it held that they required a detailed examination of the substance, for which the court and the setting aside procedure were ill-suited; otherwise, this would mean reviewing the merits of the case (révision au fond), which French law, like most modern arbitration laws, do not allow for. It is evident from the judgment that the court considered the competition law argument not totally frivolous but, at the same time, not ‘eye-catching’ enough to substantiate a violation of public policy. The infringement of the competition rules had to be ‘manifest’ for the setting aside action to be successful. This approach was followed by the Paris Court of Appeal in Cytec.119 In that case, the arbitral tribunal had rendered two awards. In the first final award, the tribunal found that the main contract was in breach of Article 101(1) TFEU and declared it null and void. However, in the second award, the tribunal awarded damages based on the situation in which the parties would have found themselves had the illegal agreement not been signed. The French court declared the second award, which was rendered in Belgium, as enforceable and refused to re-examine the merits of the dispute. The appellate judgment was then confirmed by the French Supreme Court, which repeated the Thalès standard of review.120 The same approach was also recently followed by the Higher Regional Court of Thüringen in Germany.121 The case referred to a joint venture for an R&D project concerning the development of a new technology. When a dispute arose and resulted in an arbitral award, one of the parties argued that the tribunal had erroneously considered the relevant contracts to be in compliance with Article 101 TFEU. A licensing contract between the parties contained a territorial restriction as well as a field-of-use restriction. The respective party was not allowed to use the licensed technology in Asia. In addition, the use of the licensed technology was restricted with respect to products distributed not just outside but also within the EU. On those grounds the party argued that these clauses amounted to a restriction of competition and the award should not be enforceable in Germany. The German court, however, rejected this argument. The court did acknowledge that EU competition law should be deemed to form part of public policy in Germany and referred to Eco Swiss but did not find the arbitral award to be inconsistent with Article 101 TFEU. However, the court argued that the territorial restriction only affected the trade outside the   CA Paris 23 March 2006, SNF SAS v Cytec Industrie BV (2007) XXXII YCA 282.   Cass Civ (France) 4 June 2008, SNF SAS v Cytec Industries BV (2008) 135 JDI Clunet 1107, with a comment by A Mourre (2008) 135 JDI Clunet 1109. See also CA Paris 15 March 2007, Tamkar v RC Group (2007) 127 GP No 194-198, 42. 121   OLG Thüringer (Germany) 8 August 2007, 4 Sch 3/06 – Schott (2008) 58 Wirtschaft und Wettbewerb 353. 119 120

216  Assimakis P Komninos EU and therefore did not fall within the scope of Article 101 TFEU. With respect to the field-of-use restriction, the court held that for the product affected by the field-of-use restriction, no market in the EU existed to date. Secondly, the court was of the view that the field-of-use restriction only prevented the affected party from selling products in the EU as far as they were produced on the basis of the licensed technology. The party therefore was considered to be free to distribute products in the EU based on other technologies. The court also pointed out that restrictions of this kind could be exempt under Article 101(3) TFEU. In any event, the court held that the public policy control exercised by German courts over arbitral awards could not go as far as revisiting the merits of the case (révision au fond). In Greece, another recent judgment followed a more reserved approach as far as review of awards is concerned.122 The Greek Supreme Court (Areios Pagos) faithfully followed the ECJ jurisprudence and held that the basic provisions of EU and Greek competition law pertain to Greek public policy and any arbitral award that would run counter to the latter cannot be enforced in Greece. However, the Supreme Court confirmed the appellate court’s judgment, which had declared a foreign arbitral award enforceable, notwithstanding the arguments raised by the losing party that the award violated Article 101 TFEU.123 The Greek court held that the arbitral tribunal did apply the EU competition provisions but merely rejected the arguments based on these provisions on their merits. Since the arbitrator applied these provisions, there should be no case of public policy violation. In Italy, too, while the courts accept that Articles 101 and 102 TFEU pertain to public policy, they have in two recent judgments ordered enforcement of awards which had decided a competition law dispute and which were alleged to be incorrect decisions on this issue, purportedly in breach of public policy. In both cases the courts were satisfied that the arbitrators had sufficiently taken into account the principles of competition law in their reasoning, without needing to proceed to an in-depth review.124 Finally, in Sweden, an appellate court refused to set aside an award for violation of the EU State Aid rules, holding that an infringement of competition law can be considered a violation of public policy ‘only in obvious cases’.125 The maximalist approach, on the other hand, relies on the rather general language of Eco Swiss and places more emphasis on the EU principle of effectiveness. According to this line of argument, most violations of EU competition law, whose goal is always the protection of the public interest, should qualify as a public policy violation. Only very slight errors should be excusable and the arbitrators should be cautious when EU law is at stake, perhaps more so than in other comparable situations of national mandatory rules.

122   Court of Appeal of Thessaloniki (Greece) judgment 1207/2007, confirmed on appeal by Areios Pagos, judgment 1665/2009. 123   The argument advanced by the losing party in the arbitration was that the main contract led to price discrimination. 124   Florence Court of Appeal, 21 March 2006, Soc Nuovo Pignone v Schlumberger SA, with a comment by M Treccani (2008) 54 Rivista di diritto civile 71; Milan Court of Appeal, 5 July 2006, Terra Armata Srl v Tensacciai SpA (2007) 25 Bull ASA 618. In the latter case, the losing party tried also to have the award set aside in Switzerland but failed. The Swiss Supreme Court refused to consider that EU competition law forms part of its notion of public policy, which it views very narrowly. See Tribunal Fédéral (Switzerland) 8 March 2006, Tensacciai v Terra Armata (2006) Rev Arb 763. See further B Volders and V Rétornaz, ‘Challenging an Arbitral Award for Infringement of Competition Law: The Terra Armata Decision of the Swiss Federal Tribunal of 8 March 2006’ (2006) 8 YPIL 307. In addition, a complaint filed with the Italian Competition Authority was not successful. 125   Svea Court of Appeal (Sweden) 4 May 2005, Republic of Latvia v Latvijas Gaze, Case T 6730-03.

Arbitration  217 The maximalist approach has not found favour with national courts in the EU. There are at least two national judgments representing this current, one of which has been recently reversed. MDI represents the first judgment rendered by an EU Member State court, in the Netherlands, whereby an arbitral award was not recognised and enforced on public policy grounds because of the award’s violation of EU competition law. The case concerned an exclusive licensing agreement providing for a grant-back clause with respect to improvements made on technologies licensed. The contract also contained an American Arbitration Association clause and a choice of the law of the State of Michigan and of the United States. Further to a dispute as to the licensee’s obligations to pay royalties to the licensor, arbitration proceedings were initiated in the US. The winning party (the licensor) petitioned a Dutch lower court to enforce the relevant US arbitral awards pursuant to Article 1075 Dutch Code of Civil Procedure and to the New York Convention but the Dutch court refused to order the enforcement of the awards inter alia on public policy grounds, because in its view the exclusive agreement upheld by the awards was contrary to Article 101(1) TFEU due to its market-sharing elements.126 The main contract was further found ineligible to fall under the then applicable block exemption Regulation 240/1996 on technology transfers,127 because of the grant-back clause which the Regulation did not allow. There was also no possibility of individual exemption because the agreement was never notified to the Commission. On appeal, the Court of Appeal of the Hague referred to Eco Swiss and considered that the main contract was prima facie anti-competitive, because it awarded an exclusive licence to manufacture and sell products in the countries of the Benelux. It also noted that the awards found the licensee in breach of contract because the latter was offering products protected by the licensor’s patents outside its exclusivity territory. The Court then referred to the block exemption regulations applicable at the relevant time and noted that they all disapproved of grant-back clauses. These were, in the Court’s words, ‘intolerable restrictions’. In these circumstances, the Dutch court considered that the enforcement of the three US arbitral awards should be denied pursuant to Article V(2)(b) New York Convention.128 A similar approach was taken in Belgium in Cytec, where a first instance court set aside an award rendered in Brussels for violation of EU competition law. In that case, the arbitral tribunal had rendered two awards. In the first final award, the tribunal found that the main contract was in breach of Article 101(1) TFEU and declared it null and void. However, in the second award, the tribunal awarded damages based on the situation in which the parties would have found themselves had the illegal agreement not been signed. The Belgian first instance court, although only dealing with the second award which had established liability in damages, clearly disagreed with the approach taken by the Paris Court of Appeal in Thalès and held that the violation of EU competition law does not have to be flagrant for there to be a public policy violation.129

126   Pres Rechtbank The Hague, 27 May 2004, Marketing Displays International Inc v VR Van Raalte Reclame BV, KG/RK 2002-979 and 2002-1617 (2006) 2 SIAR 201. 127   Commission Regulation 240/96 of 31 January 1996 on the application of Article 85(3) of the Treaty to certain categories of technology transfer agreements [1996] OJ L31/2. 128   New York Convention (n 98). 129   Tribunal de première instance Bruxelles (Civ Bruxelles) 8 March 2007, SNF SAS v Cytec Industrie BV (2007) 127 GP No 112-114, 53.

218  Assimakis P Komninos On appeal,130 however, the Brussels Court of Appeal stressed that it did not have the power to revisit the merits of the dispute and substitute the arbitral tribunal’s opinion with its own or examine legal errors possibly made by the arbitral tribunal. The court did not dispute that Articles 101 and 102 TFEU pertained to public policy but, at the same time, acknowledged that the arbitral tribunal had, in its first award, declared the illegality of the agreement while merely settling the question of damages in the second award. Because of the prohibition of révision au fond, Belgian courts could not revisit other aspects of the case, including the award of damages. It is interesting to note here that, notwithstanding the Belgian annulment judgment at first instance, the same award was, as explained above, declared enforceable in France.131 After the Brussels Court of Appeal’s judgment, it can now be said that Belgian courts follow the so-called minimalist school, too.

C.  A Proposed Balanced Approach for Review of Arbitral Awards In our view, the minimalist approach or a variant thereof would be preferable for a number of reasons. It is noteworthy that the Court of Justice proceeded to the pronouncement as to the public policy nature of the Treaty competition rules by choosing to refer to the 1958 United Nations New York Convention on the recognition and enforcement of foreign arbitral awards, which in Article V(2)(b) includes a public policy for non-recognition and non-enforcement of foreign awards.132 The Court did not have to do this, since it was not requested about this question by the referring court and indeed the New York Convention was not applicable to the case at issue, because the award had been rendered domestically and was subject to a setting aside and not to an exequatur procedure in a foreign country. This means that the Court did not intend to add a self-standing ground for review of arbitral awards in the international context (possibly based on Article 4(3) TEU) but rather preferred to integrate the notion of EU public policy in the respective national notions. The Court thought that this was a sufficient safeguard for the effectiveness of EU law.133 This approach is also in line with another recent ruling of the Court of Justice that rejected an over-expansive reading of Article 4(3) TEU and, citing Eco Swiss, held that ‘[Union] law does not require a national court to disapply domestic rules of procedure conferring finality on a decision, even if to do so would enable it to remedy an infringement of [Union] law by the decision at issue’.134 At the same time, the Court must certainly have been conscious of the very restrictive reading of public policy (ordre public international) when reviewing international arbitral awards. If the Court did not accept such national judicial attitudes of self-restraint, it could have easily made this evident. It is noteworthy that the fact that municipal courts have invariably adopted a liberal approach towards arbitrability of competition law disputes does not and should not make 130   Cour d’appel de Bruxelles 22 June 2009, SNF SAS v Cytec Industrie BV (2009) Rev Arb 574, with a comment by A Mourre (2009) Rev Arb 594. 131   A complaint to the European Commission was similarly unsuccessful. 132   Eco Swiss (n 16) paras 38–39. 133   See also generally O Van der Haegen, ‘European Public Policy in Commercial Arbitration: Bridge over Troubled Water?’ (2009) 16 Maastricht Journal of European and Comparative Law 449, 474–75. 134   Case C-234/04 Rosmarie Kapferer v Schlank & Schick GmbH [2006] ECR I-2585 para 21.

Arbitration  219 the review of arbitral awards easier, on public policy grounds.135 That would in effect undermine arbitrability through the back door. Indeed, while the US Supreme Court, in the landmark Mitsubishi Case, did say that ‘in the event the choice-of-forum and choice-of-law clauses operate . . . in tandem as a prospective waiver of a party’s right to pursue statutory remedies for antitrust violations, [it] would have little hesitation in condemning the agreement as against public policy’,136 the US courts, however, have not relied on this dictum to show hostility to arbitration.137 Indeed, the US Supreme Court in Mitsubishi itself made it clear that its admission of the arbitrability of the antitrust disputes was due to the strong federal policy favouring international arbitration and was not conditioned by any change of the standard of review of awards on public policy grounds.138 Besides, the Court of Justice has on many occasions interpreted the concept of public policy in the context of the old 1968 Brussels Convention on jurisdiction and enforcement of judgments.139 It has always followed a very restrictive interpretation because it has considered free movement of judgments as an important principle for the European integration. The Court of Justice has held, in particular that the purpose of Article 293(d) EC, on the basis of which the Member States concluded the Brussels Convention, is: [T]o facilitate the working of the [internal] market through the adoption of rules of jurisdiction for disputes relating thereto and through the elimination, as far as is possible, of difficulties concerning the recognition and enforcement of judgments in the territory of the Contracting States . . . In fact it is not disputed that the Brussels Convention helps to ensure the smooth working of the internal market.140

With regard to the specific question of the public policy exception,141 the Court of Justice has consistently stressed in a series of cases that the public policy exception is meant to operate only in ‘exceptional cases’.142 In a judgment rendered after Eco Swiss, the Court of Justice had to examine whether a French judgment that had allegedly violated the free movement provisions of the Treaty and Article 102 TFEU could be resisted in Italy and thus be refused recognition on public policy grounds.143 That the free movement provisions of the Treaty and Article 102 TFEU pertain to the public policy notion of Article 27(1) Brussels Convention was explicitly stressed by Advocate General Alber in his Opinion144 and implicitly accepted by 135   For this view, see inter alia B Hanotiau and O Caprasse, ‘Arbitrability, Due Process, and Public Policy under Article V of the New York Convention: Belgian and French Perspectives’ (2008) 25 JIA 721. 136   Mitsubishi (n 19) 637 fn 19. 137   See, eg, Richards v Lloyd’s of London 135 F 3d 1289 (9th Cir) (en banc), cert denied, 119 S Ct 365, 142 L Ed 2d 301 (1998): ‘we do not believe dictum in a footnote regarding antitrust law outweighs the extended discussion and holding in Scherk on the validity of clauses specifying the forum and applicable law’ (p 1295). See also Simula Inc v Autoliv Inc 175 F 3d 716 (9th Cir 1999). 138   See especially Mourre, ‘Arbitrability of Antitrust Law’ (n 19) 29. 139   1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, consolidated version [1998] OJ C27/1. 140   Case C-281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ and others [2005] ECR I-1383 para 33. 141   Art 27(1) Brussels Convention provides that ‘a judgment shall not be recognised if such recognition is contrary to public policy in the State in which recognition is sought’. See now Art 34(1) Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I) [2001] OJ L12/1. 142   Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645 para 21; Case C-78/95 Bernardus Hendrikman and Maria Feyen v Magenta Druck & Verlag GmbH [1996] ECR I-4943 para 23; Case C-7/98 Dieter Krombach v André Bamberski [2000] ECR I-1935 para 21; Case C-394/07 Marco Gambazzi v DaimlerChrysler Canada Inc and CIBC Mellon Trust Company [2009] ECR I-2563 para 27. 143   Case C-38/98 Régie Nationale des Usines Renault SA v Maxicar SpA [2000] ECR I-2973. 144   See paras 66–67 and 86 of AG Alber’s Opinion.

220  Assimakis P Komninos the Court.145 The Court, however, made it clear that a public policy violation was to operate in very exceptional circumstances and that an alleged violation of fundamental provisions of EU law did not suffice as such.146 The ‘communitarisation’ of the Brussels Convention through the adoption of Regulation 44/2001 has further reduced the scope of the public policy exception by adding an import­ant qualification to the text of the current Article 34(1) of that Regulation: the recognition of the foreign judgment must be ‘manifestly’ contrary to the public policy of the forum. This is indicative of the exceptional character o