Home sweet home? National jurisdiction for cartel damages claim proceedings in the EU - Episode 3

On 29 July 2019, the Court of Justice of the European Union (“CJEU”) confirmed in Tibor-Trans/DAF Trucks (C-451/18) [1] that indirect customers can claim damages for damage suffered from cartel-related excessive pricing. However, claimants can sue infringers only in EU Member States within the geographic market affected by the anti-competitive conduct. For establishing jurisdiction, it is no longer relevant where the claimant suffered the damage. Is this the end of the “home-field advantage” for damaged parties in cartel damages cases?

Background

The dispute evolved from the so-called “truck cartel”. In 2016, the European Commission levied a EUR 2.93 bn record fine on several truck manufacturers for price collusion. Netherlands-based DAF Trucks was among the companies fined. In the cartel period, Tibor-Trans had purchased trucks from independent dealers in Hungary.

In July 2017, Tibor-Trans brought an action for cartel damages claims against DAF Trucks before a court in Hungary. It claimed jurisdiction of the Hungarian court based on Article 7(2) of Regulation (EU) No 1215/2012 [2], according to which a person domiciled in a member state of the European Union may, in matters relating to tort, delict or quasi-delict, be sued in another Member State in the courts for the place where the harmful event occurred. Although the collusive conduct took place in Germany, Tibor-Trans argued that the harmful event occurred in Hungary where it paid excessive prices resulting from the anti-competitive conduct. The Hungarian court asked the CJEU to clarify whether an indirect customer can sue a cartelist for damages before the courts of the Member States in which it had paid the excessive prices based on Article 7(2) of Regulation (EU) No 1215/2012.

Key takeaways

Indirect Customers
The CJEU confirmed that indirect customers benefit from the provisions in Article 7(2) of Regulation (EU) No 1215/2012 if they paid cartel-related excessive prices to their direct contract partners. Such damage is the immediate consequence of the infringement against EU competition law and thus constitutes direct damage, which provides a basis for jurisdiction.
Legal action only in the “affected market”?
According to the CJEU, in case of an illicit action, the court of the place where the harmful event occurred is generally the most appropriate for deciding the case, in particular due to the proximity and ease of taking evidence (CJEU, C-228/11 – Melzer, para. 27 [3]). The place where the damage occurred is the place where the alleged damage actually manifests (CJEU, C-352/13 – CDC Hydrogen Peroxide, para. 52 [4]; C-189/08 – Zuid-Chemie, para. 27 [5]):

In CDC Hydrogen Peroxide (C-352/13), the CJEU held the seat of the injured party to be relevant and the court did not refer to a specific market. This was a clear statement in favor of the claimant’s home-field advantage. Subsequently, in flyLAL (C-27/17) [6], the CJEU departed from this approach. For determining jurisdiction, the CJEU no longer referred to the seat of the injured party but to the market in which the claimant had suffered damage. It remained unclear whether this new approach was a paradigm shift or case-specific (unlike CDC Hydrogen Peroxide, flyLAL did not concern a cartel conduct under Article 101 TFEU [7] but market foreclosure under Article 102 TFEU).

Most recently, in Tibor-Trans/DAF Trucks (C-451/18), the CJEU has taken this approach even a step further. The CJEU found that a claimant could only sue a cartelist for damages in another Member State than the one of domicile if this Member State was located within the geographic market affected by the cartel. According to the CJEU, this restrictive approach is necessary to hold up conformity with the effects doctrine established in Article 6(3)(a) of the Rome II-Regulation [8] and to ensure predictability for the defendant. According to the CJEU, a cartelist must only expect to be sued in jurisdictions, which were affected by its anti-competitive conduct. Consequently, it is no longer relevant where the claimant suffered the damage.

In Tibor-Trans/DAF Trucks (C-451/18) this approach had no impact on the jurisdiction of the Hungarian court because the anti-competitive conduct related to the EEA and thus also to Hungary, where the claimant suffered damage. However, particularly in cases of national of regional cartels, claimants could be denied jurisdiction in their home country based on this new approach. In view of the large number of cartel damages claims currently pending before European courts, it is only a matter of time until the CJEU will get the opportunity to comment on the divergence between the affected market and the place where the damage occurred.
Joint and Several Liability
Finally, the CJEU confirmed that the principles of joint and several liability also apply in relation to indirect customers. Tibor-Trans could therefore sue DAF Trucks although it had not purchased any DAF trucks but only trucks from other manufacturers that participated in the cartel. It is up to DAF Trucks to take recourse against its fellow cartelists.