International Antitrust Litigation: Conflict of Laws and Coordination 9781849460392

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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 of this provision, which has apparently led to the nonrecognition/non-enforcement of judgments only in a handful of occasions in the past.147 On the basis of the above an important argument can be made that surely the function of the public policy exception in the context of arbitration must not be different from its function in the context of the enforcement of judgments. Indeed, the necessity of recognition and enforcement of arbitral awards was mentioned side-by-side in the old Article 293 EC with the necessity of recognition and enforcement of judgments. Exactly like free movement of judgments, free movement of arbitral awards within the EU furthers European integration and is extremely beneficial to the four freedoms. It should therefore be accorded the same degree of deference. On the basis of the above, a public policy violation and a corresponding duty of national courts to set aside or refuse to enforce an arbitral award should only arise when the competition law issue has been totally neglected by the arbitrators with the manifest aim to evade the competition rules or in case of a prima facie illegality or conflict with such rules. Thus, complete disregard of EU competition law and failure to address the competition law point on the part of the arbitrators, especially when the competition law infringement is rather obvious and serious, may offend against public policy.148 It may also constitute a presumption of the parties’ (and the arbitrators’) intention to evade the law. However, in such cases, one must be careful not to reward conduct by parties who choose not to raise the competition law issue during the arbitration proceedings and prefer to wait and see whether they lose or win, in order to challenge the award. Then, not every incompatibility between the arbitral award and the competition rules should qualify as a public policy violation. The competition law violation must be very serious, in order for an arbitral award to be refused recognition or enforcement on public policy grounds.149 A restriction of competition in a horizontal agreement is likely to be more detrimental for competition than a restriction in a vertical agreement.150 A cartel would certainly qualify as a repugnant infringement of the competition rules.151 Another similar distinction can be made between per se rules of prohibition and rule of reason competition law violations. It should be only per se violations that should attract attention by State courts when reviewing an arbitral award.152   Renault (n 143) paras 31–32.   ibid paras 26–32. 147  For a German example, see Bundesgerichtshof (BGH), 16 September 1993 (1993) 46 Neue Juristische Wochenschrift (NJW) 3269; for a French one, see Cass Civ (France) 16 March 1999, Pordea v Sté Times Newspapers Ltd (1999) 126 JDI Clunet 773; for an English one, see W Maronier v B Larmer (CA) (2002) International Litigation Procedure (ILPr) 39. 148   See Radicati di Brozolo (n 22) 690. 149   ibid 688–91. 150   See C Liebscher, The Healthy Award, Challenge in International Commercial Arbitration (The Hague, Kluwer, 2003) 44. 151   See further ibid 44–47. 152  See ibid 47. 145 146

Arbitration  221 The simply erroneous application of EU competition law by arbitrators would not qualify as a violation of ordre public,153 otherwise the most fundamental principle of the finality of arbitral awards (prohibition of the review on the merits – révision au fond) would be put at stake.154 Errors of law or fact are not considered a setting-aside ground, at least in the international arbitration context,155 and are not a privilege of the arbitrators. State courts also make errors and there is no reason to treat arbitral tribunals different from State courts. Only in very exceptional cases of gross errors made by the arbitrators, should such review of the merits of the award result in non-recognition.156 In sum, it seems that in all cases where the arbitrators did genuinely apply the EU competition rules, having fully considered the arguments of the parties and having provided a substantial reasoning in their award, review of the award should not be possible, even if the award erred in that application.157 Finally, it must always be realised that in the context of enforcement of foreign arbitral awards, where the scope of the public policy exception is quite narrow, it is only the effects of the recognition of an award in the territory of the forum of enforcement that matter and not the offending award’s mere existence. Only if those effects are intolerable and would run counter to the most fundamental principles of law and morality in that jurisdiction, should there be a public policy violation.158

D. Conclusion The possibility of an arbitral award’s being set aside or being refused recognition and enforcement in case of violation of ordre public is an appropriate ultimum refugium for ensuring a balanced relationship between arbitration and competition law enforcement. The mere deterrent effect of this possibility is such that it ensures in the best way that due respect will be paid to those norms. It also fits well with the nature of arbitration and it does not endanger its flexibility and informality. Arbitrators are still (post-Eco Swiss) the ‘masters of the arbitral proceedings’. The difference is that they have the responsibility or the burden to exercise this discretion in an appropriate way, so as to render an enforceable award. Indeed, a fundamental concern of the arbitrators is to render an award that will be enforceable.159 In international commercial arbitration regard should also be given to Article 41 ICC Rules of Arbitration of 2012,160 according to which ‘the arbitral tribunal . . . 153   See Y Derains, ‘Specific Issues Arising in the Enforcement of EC Antitrust Rules by Arbitration Courts’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford, Hart Publishing, 2003) 338. 154   See B Hanotiau, ‘L’arbitrage et le droit européen de la concurrence’ in Y Briner et al (eds), L’arbitrage et le droit européen, Actes du colloque international du CEPANI du 25 avril 1997 (Brussels, Bruylant, 1997) 57–58; L Idot, ‘France’ in D Cahill (ed), The Modernisation of EU Competition Law Enforcement in the European Union, FIDE 2004 National Reports (Cambridge, CUP, 2004) 182. 155   See J Gaitis, ‘International and Domestic Arbitration Procedure: The Need for a Rule Providing a Limited Opportunity for Arbitral Reconsideration of Reasoned Awards’ (2004) 15 American Review of International Arbitration 9, 65–66. 156   See Komninos (n 32) 371; Radicati di Brozolo (n 56) 28–32, particularly 29. 157   See Radicati di Brozolo (n 56) 28–29; Idot, ‘France’ (n 154) 182, who goes as far as accepting that even an arbitral award that is manifestly contrary to EU competition law would probably not constitute a violation of public policy, as long as the EU competition issue has been raised and debated during the arbitration. 158   See Liebscher, ‘European Public Policy’ (n 112) 83–84. 159   See L Idot, ‘Arbitrage et droit communautaire’ (1996) RDAI/IBLJ 561, 570. 160   See www.iccwbo.org/uploadedFiles/Court/Arbitration/other/2012_Arbitration and ADR Rules ENGLISH. pdf.

222  Assimakis P Komninos shall make every effort to make sure that the award is enforceable at law’.161 The efficiency of arbitration as an institution would be compromised, if arbitrators were to render awards that would be liable to non-enforcement or annulment, because of their incompatibility with mandatory legal provisions, whose infringement surely constitutes a public policy violation. As a former Secretary-General of the ICC Court of Arbitration stresses, referring to that problem in international commercial arbitration: [A]n international arbitrator is bound as regards the ‘Societas Mercatorum’ to ensure that arbitration does not become an instrument for fraud upon the legitimate interests of the State. If he neglects that duty, international arbitration will disappear, at the expense of the development of international trade.162

Therefore, it is recognised that ‘in reality, the attitude and action of an arbitrator faced with an [EU] antitrust issue should be influenced by pragmatism rather than principle’.163 Particularly in cases where an infringement of EU competition law appears gross and certain and where an EU Member State is a likely forum for the enforcement of the award, the arbitrators are expected to apply the competition provisions of the Treaty, even if the parties have not raised such issues, and, as judges of the contract, they can draw the relevant consequences as a result of this illegality and nullity of the anti-competitive arrangement.164 The same holds true even if the parties have opted for a non-EU Member State law as lex causae and regardless of the arbitral tribunal’s EU or extra-EU seat.165

161   See the opinion of a former Secretary-General of the ICC International Court of Arbitration, E Schwartz, ‘The Domain of Arbitration and Issues of Arbitrability: The View from the ICC’ (1994) 9 International Centre for Settlement of Investment Disputes Review 17, 23, according to whom this article entails that arbitrators may, if necessary, invoke of their own motion mandatory rules of law that may have an impact on the validity of the transaction that is the subject of arbitration. 162   See Y Derains, ‘Report’ in Institute of International Business Law and Practice, Competition and Arbitration Law (Paris, ICC Publishing, 1993) 267. See also the Report Adopted by the Working Party on Arbitration and Competition and Approved by the Executive Board of the ICC on 4 April 1984 in (1984) 21 Revue suisse du droit international de la concurrence 37, which stresses that ‘the arbitrators must avoid any decision incompatible with public policy if they wish to ensure the effectiveness of the arbitration. If they consider that they have jurisdiction, they should apply the rules of public policy. And it must be stressed that even when they are “amiable compositeurs” they have to respect the rules of public policy’ (p 38). 163   See J Lew, ‘Determination of Arbitrators’ Jurisdiction and the Public Policy Limitations on that Jurisdiction’ in J Lew (ed), Contemporary Problems in International Arbitration (London, Martinus Nijhoff Publishers, 1986) 80. 164   See JM Grossen, ‘Arbitrage et droit de la concurrence’ in C Reymond and E Bucher (eds), Recueil de travaux suisses sur l’arbitrage international (Zurich, Schultess, 1984) 42. 165   See, eg, the ICC arbitral award in Case ICC 8626/1996 (n 90), which was decided pre-Eco Swiss. An arbitral tribunal sitting in Switzerland, notwithstanding the parties’ selection of New York law, proceeded to apply Art 101 TFEU and the then block exemption Regulation on know-how licensing agreements (Regulation 556/89) and considered illegal a non-competition clause in the main contract. The tribunal recognised that this might not have been the case under New York law, but nevertheless opted to apply the EU competition provisions to that specific issue in view of the effect that the anti-competitive clause had on EU Member States. The tribunal made particular reference to the then Art 26 ICC Rules of Conciliation and Arbitration of 1988 (now Art 41 ICC Rules of Arbitration of 2012).

I.4 Beyond the EU

10 Jurisdiction and Choice of Law in International Antitrust Law – A US Perspective HANNAH L BUXBAUM* AND RALF MICHAELS**

I. Introduction A.  The Value of a US Perspective This essay provides a US perspective on conflict-of-laws1 issues in the area of antitrust law, focusing on jurisdiction and choice of law.2 Such a perspective should be of interest to Europeans for a variety of reasons. First, modern substantive antitrust law has a longer history in the United States than in Europe, and much of contemporary European law was developed with the US experience in mind (which is not to say that the model was always followed). Second, the United States has long experience with the conflict-of-laws questions concerning antitrust law; here again, Europe has learned from the US experience (especially with the effects doctrine) without necessarily copying it. Third, the United States and Europe are the world’s most important antitrust enforcers, so combined they play a predominant role in global antitrust governance. A further reason, however, may be the most important one. The European interest in private international law rules for antitrust comes at a time when both of those fields are in flux in Europe. Europe is currently experiencing a conflict-of-laws revolution, moving from a traditional focus on two-party relations grounded firmly in private law toward a more regulatory understanding.3 At the same time, antitrust law in the European Union is being changed in fundamental ways, with the move to decentralised enforcement in the *  Professor at the Indiana University Maurer School of Law. **  Professor at the Duke University School of Law. 1   In this chapter, we use the terms conflict of laws and private international law interchangeably. 2   Recognition and enforcement of judgments, the third pillar of private international law, is covered in this book by C Kessedjian. 3   See, for this shift more generally, R Michaels, ‘The New European Choice-of-Law Revolution’ (2008) 82 Tulane Law Review 1607 (English version of ‘Die neue europäische IPR-Revolution: Regulierung, Europäisierung, Mediatisierung’ 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) 151 ff); see also H Muir Watt, ‘Reshaping Private International Law in a Changing World’ (Guest editorial, 2008) available at http://conflictoflaws.net/2008/ guest-editorial-muir-watt-on-reshaping-private-international-law-in-a-changing-world/.

226  Hannah L Buxbaum and Ralf Michaels Member States and to increased private enforcement. In two particular respects, the US experience speaks to these shifts in orientation. First, antitrust law is predominantly regulatory law. This is true even for private damages claims, as one of the major purposes of such claims remains regulatory.4 This characteristic fits uncomfortably with private international law as it has been traditionally understood in Europe – focused only on private interests.5 As European private international law adapts to a more regulatory function, the US perspective can provide some guidance. True, conflict of laws in the United States is also subject to what has been called a ‘public law taboo’, whereby foreign public law cannot normally be applied by a US court.6 However, the distinction between private and public law is far less important in the United States than in Europe,7 and it matters less in the conflict of laws, too. Thus, in antitrust, the question whether domestic law should be applied or not is answered in explicit acknowledgment of the regulatory interests embodied in that law. Similarly, foreign regulatory interests are acknowledged as a relevant criterion in addressing the conflict of laws, even if the response to overwhelming foreign interest is typically dismissal of a claim rather than application of the foreign law.8 Second, insofar as antitrust law affects markets, international antitrust litigation often affects a great number of plaintiffs – such as consumers and distributors – and, at least in the case of anti-competitive agreements such as cartels, a multitude of defendants. This does not fit well with the two-party relation that characterises European conflict-of-laws thinking and doctrine, both in jurisdiction9 and in choice of law. The two-party focus is especially inadequate with regard to any attempts to concentrate litigation: by pooling plaintiffs and/or defendants, and by making sure that the same law applies to all aspects of the litigation. Here again, US law may provide valuable lessons, particularly on the basis of the US experience with class actions. At the risk of over-generalising, it can be said that US law puts into effect, quite consistently, a market-focused conception of antitrust law. This market-focused conception extends to questions of private international law, which is characterised by quite universal application of an effects doctrine. The conception supports a framework that appears successful in addressing diverse national markets as long as they remain separable – but that fails in addressing the most difficult challenge that international antitrust law faces today, namely global markets. 4   See, for the United States, HL Buxbaum, ‘Private Enforcement of Competition Law in the United States: Of Optimal Deterrence and Social Costs’ in J Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan de Rijn, Kluwer, 2007) 41 ff. In Europe, regulation is viewed as secondary vis-a-vis compensation in the ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008, 3. See also European Parliament resolution of 26 March 2009 on the White Paper on damages actions, P6_TA(2009)0187 No 4 (‘collective redress . . . is an important deterrent’); Opinion of the European Economic and Social Committee on the White paper on damages actions for breach of the EC antitrust rules [2009] OJ C228/40, 40 No 1.2 (‘an improvement of the rules for private enforcement will in future have benefits in terms of deterring potential breaches’). 5   J Basedow, ‘Jurisdiction and Choice of Law in the Private Enforcement of EC Antitrust Law’ in Basedow, Private Enforcement of EC Competition Law (Alphen aan de Rijn, Kluwer, 2007) 229, 236–37. 6   AF Lowenfeld, International Litigation and the Quest for Reasonableness (Oxford, Clarendon Press, 1996) 4–5; WS Dodge, ‘Breaking the Public Law Taboo’ (2002) 43 Harvard International Law Journal (Harvard ILJ) 161. 7  R Michaels and N Jansen, ‘Private Law Beyond the State? Europeanization, Globalization, Privatization’ (2006) 54 American Journal of Comparative Law 843. 8   See III.A.iv below. 9   H Muir Watt, ‘Brussels I and Aggregate Litigation or the Case for Redesigning the Common Judicial Area in Order to Respond to Changing Dynamics, Functions and Structures in Contemporary Adjudication and Litigation’ (2010) Praxis des Internationalen Privat- und Prozessrechts 111.

US Perspective  227

B.  Doctrinal Matters While the US perspective can be a valuable one, the comparative insights that can be drawn from it are limited, at least prima facie, by certain doctrinal matters. In the United States, most conflict-of-laws issues concerning antitrust law are discussed not as choice-of-law problems, as they are in the Rome II Regulation, but instead as matters of jurisdiction – in particular, subject-matter jurisdiction (or, according to others, legislative jurisdiction). This essay is not the right place to demonstrate at length why this approach is really a (somewhat concealed) choice-of-law approach. However, an introduction into the basic structures of US law in this regard appears necessary. Federal antitrust law is applied (almost) exclusively by federal courts. These are courts of limited subject-matter jurisdiction (personal jurisdiction is a different matter entirely). Two bases of their jurisdiction are especially important for international antitrust law. The first is federal question jurisdiction. Pursuant to 28 USC section 1331, ‘district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States’. This means that federal courts have jurisdiction over antitrust claims whenever, and to the extent that, US antitrust law applies to those claims. Because the territorial limits of the scope of US antitrust law also determine the federal courts’ jurisdiction on this basis, the questions of subject-matter jurisdiction and choice of law are easily conflated in the US system. On one view, a conclusion that US antitrust law does not apply is interpreted as the failure to state a claim, meaning that the facts alleged by the plaintiff do not support a claim under US antitrust law (because, under a conflict-of-laws analysis, US antitrust law would not be applicable).10 This view avoids mingling questions of choice of law with those of jurisdiction. The majority view, however, treats these questions under the rubric of subjectmatter jurisdiction.11 Under this approach, the limits to the territorial scope of US antitrust laws automatically define the limits of judicial jurisdiction. This means that the choice-oflaw question must be answered already at the jurisdictional stage, and the fact that questions of applicable law are treated as a matter of procedure in this sense creates certain doctrinal problems. It is important to note that federal courts enjoy alternative bases for subject-matter jurisdiction; thus, the application of foreign antitrust law will not necessarily be ruled out on jurisdictional grounds. One important basis is diversity jurisdiction. Federal courts have original jurisdiction over claims when diversity of citizenship exists – in other words, if plaintiffs and defendants are from different States or nations. Usually, complete diversity is required: none of the plaintiffs may have the same domicile as one of the defendants. The Class Action Fairness Act of 2005 relaxed this requirement for class actions above a certain claim threshold, however.12 In such cases minimal diversity is sufficient, which requires only that one plaintiff and one defendant are from different States or countries.13 Another alternative basis is supplemental jurisdiction. Pursuant to 28 USC section 1367, federal 10   United Phosphorus Ltd v Angus Chemical Co 322 F 3d 942, 958 (7th Cir 2003) (J Wood, dissenting); see also Animal Sci. Prods v China Minmetals Corp, 2011 US App LEXIS 17046 (3d Cir). On the various meanings of jurisdiction, see also HM Wasserman, ‘Jurisdiction and Merits’ (2005) 80 Washington Law Review 643. 11   See eg, In re Static Random Access Memory Antitrust Litig, 2010 US Dist 1411968 (ND Cal) 12   28 USC s 1332(d)(2), introduced by the Class Action Fairness Act, vests the federal district courts with original jurisdiction over certain class-action claims that exceed $5,000,000. 13  ibid.

228  Hannah L Buxbaum and Ralf Michaels courts have the authority to hear additional claims substantially related to a claim over which they have original jurisdiction, even if they would not have subject-matter jurisdiction to hear those additional claims independently.

II.  Personal Jurisdiction Functionally, the jurisdictional issues addressed by the Brussels I Regulation are dealt with in two different contexts within the US system: first, the law relating to personal jurisdiction (both statutory law and constitutional law); and second, the doctrine of forum non conveniens, which permits courts to decline jurisdiction when a more appropriate forum is available elsewhere.

A.  Personal Jurisdiction The jurisdiction of a US federal court over a particular defendant rests on two separate elements: statutory authority to exercise jurisdiction, and a determination that the exercise of jurisdiction will not violate the defendant’s constitutional right to due process.14 In federal antitrust claims, the statutory authority resides in the venue provisions of the antitrust laws.15 With regard to the due process limitation, antitrust litigation often raises no special problems. This is so, in particular, in cases in which general jurisdiction can be established, based on the defendant (or its alter ego) doing business in the United States.16 In cases resting on specific jurisdiction, however, certain aspects are worth highlighting.

i. Targeting The most important jurisdictional basis in the Brussels I scheme is Article 5(3), which assigns jurisdiction to the courts of the place of the injury. Under US law, the place of injury does not, in and of itself, confer jurisdiction, and Article 5(3), without limitations, would violate the Constitution.17 However, an important basis for specific jurisdiction over antitrust actions emerges from US Supreme Court case-law originally developed in the defamation context18 but since expanded more broadly to other intentional torts. If a defendant has targeted the forum in question with intentionally tortious conduct, a court in that forum may exercise specific jurisdiction over that defendant in a resulting claim. 14   For comparison of this two-stage process with European law, see A Nuyts, ‘Due Process and Fair Trial: Jurisdiction in the United States and in Europe Compared’ in A Nuyts and N Watté (eds), International Civil Litigation in Europe and Relations with Third States (Brussels, Bruylant, 2005) 157; R Michaels, ‘Two Paradigms of Jurisdiction’ (2007) 27 Michigan Journal of International Law 1003, 1017–22. 15   15 USC s 22 provides that: ‘Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found’. 16   Note that in cases brought under federal statutes, the due process analysis considers national contacts in the aggregate, rather than contacts with individual States. 17  RJ Weintraub, ‘Negotiating the Long-Arm Provisions of the Judgments Convention’ (1998) 61 Albany Law Review 1269, 1271–73; R Brand, ‘Due Process, Jurisdiction and a Hague Convention’ (1999) 60 University of Pittsburgh Law Review 661, 695. 18   Keeton v Hustler Magazine 465 US 770 (1984); Calder v Jones 465 US 773 (1984).

US Perspective  229 This basis, which constitutes a sort of effects doctrine for matters of personal jurisdiction, can be translated to the antitrust context. Unlike in Article 1 Brussels I Regulation, therefore, mere effects (or injury) within the United States are not sufficient for the assertion of jurisdiction; the defendant must also have specifically targeted the US market. The difficulty arises in determining whether anti-competitive conduct is in fact specific­ ally aimed at a particular jurisdiction.19 The Court of Appeals for the Second Circuit found this requirement to have been met in a case in which a representative of the defendant was shown to have attended a meeting in Seoul, Korea, the minutes of which provided direct evidence of price fixing specifically in the US market. Where such clear evidence is lacking, plaintiffs face difficulties. For example, the Ninth Circuit rejected a claim that a contract aimed at the US market, pointing out that the United States was not named in the contract.20 It is noteworthy that the standard is different in different States. Thus, in one recent case involving a Belgian defendant, the DC Circuit held that a worldwide price-fixing agreement failed to reach the degree of specificity required by the long-arm statutes of eight States, but did meet the standard required by the laws of California and Illinois.21 This basis of jurisdiction works well where conduct is indeed aimed at a specific market, or where evidence makes it clear that a particular market was among the intended markets. However, global price fixing is often not aimed at a particular market but instead at the world at large, leading to the ironic result that personal jurisdiction becomes harder to establish the more global the price fixing is.22 Courts have noted the irony that emerges if ‘a party can avoid liability by multiplying its wrongdoing’,23 but a real solution to the problem is not, it appears, in sight.

ii. Conspiracy One core interest in antitrust litigation is the ability to concentrate all members of a cartel in a single lawsuit. In the Brussels I regime, this is achieved with Article 6(1). In US law, the most important jurisdictional basis for this purpose is provided by the conspiracy doctrine.24 According to this theory, which is accepted in some but not all States, jurisdiction can be exercised over all members of a conspiracy under four conditions: 1. the defendant and one or more persons conspired to do something; 2. that they could reasonably expect to lead to consequences in a particular forum; 3. one co-conspirator commits overt acts in furtherance of the conspiracy; and 4. those acts are of a type which, if committed by a non-resident, would subject the nonresident to personal jurisdiction under the long-arm statute of the forum State.25

19   L Dougherty, ‘Note: Does a Cartel Aim Expressly? Trusting Calder Personal Jurisdiction When Antitrust Goes Global’ (2008) 60 Florida Law Review 915, 932–36. 20   McGlinchy v Shell Chemical Co 845 F 2d 802, 817 (9th Cir 1988). 21   Re Vitamins Antitrust Litigation US Dist LEXIS 25073 (D DC 2001); discussed in Dougherty, ‘Note’ (n 18) 937–41. 22  See Northwest Aluminum Co v Hydro Aluminum Deutschland GmbH No 02-398-JE, 2003 WL 23571744, 4–5 (D Or 2003); cf Re Bulk [Extruded] Graphite Prods Antitrust Litigation No 02-6030 (WHW), 2007 WL 2212713, 9 (D NJ 2007). 23   Cole v Tobacco Inst 47 F Supp 2d 812, 815 (ED Tex 1999). 24  eg, United Phosphorus Ltd v Angus Chemical Co 43 F Supp 2d 904, 912 (ND Ill 1999). 25   Cawley v Bloch 544 F Supp 133, 135 (D Md 1982).

230  Hannah L Buxbaum and Ralf Michaels This doctrine creates a mechanism roughly comparable to Article 6(1) Brussels I Regulation, but with an important difference:26 it is based on specific jurisdiction over one of the defendants based on that defendant’s acts, not on the domicile of one of the parties. Article 6(1)’s emphasis on domicile makes that jurisdictional basis especially inadequate for antitrust matters (for which reason it might be remodelled along the lines of Article 6(3)(b) Rome II Regulation). On the one hand, Article 6(1) is not available if all members of a cartel are domiciled outside the European Union, although such cases may be particularly import­ ant. On the other hand, Article 6(1) enables plaintiffs to find a dummy defendant in a Member State in order to assert jurisdiction over everyone else. The Provimi litigation in the UK illustrates this danger particularly clearly, as Michael Wilderspin’s contribution suggests.27 In fact, the approach taken in Article 6(1) Brussels I would likely be incompatible with the due process clause, because it would not afford adequate protection to the defendant not domiciled in the forum. By contrast, conspiracy jurisdiction is considered constitutional as long as the act on which jurisdiction is based is attributable to the conspiracy members.28 Moreover, it is more likely to concentrate litigation in the natural forum.

B.  Forum non Conveniens Even if a court has jurisdiction, it may decide not to assert that jurisdiction if it concludes that it is an inappropriate forum and that an adequate alternative forum is available elsewhere. Forum non conveniens is based, in US law, on a combination of public and private factors: public interest in regulation, and private interests in convenience. In a global economy, where anti-competitive conduct has effects on various domestic markets, the availability of forum non conveniens is therefore a particularly important element of procedure. This doctrine is especially relevant in the context of multinational class actions, because the presumption in favour of a plaintiff ’s choice of forum is weaker when the plaintiff is foreign.29 Thus, a court might feel that the claims of foreign plaintiffs within a class are subject to dismissal on the basis of this doctrine, whether those claims are brought alone or in connection with the claims of US plaintiffs. The use of forum non conveniens to dismiss claims brought under US antitrust law is a relatively recent development. In 1948, the US Supreme Court decided, in National City Lines I, that the venue provision of the Clayton Act, which expanded the number of judicial venues open to plaintiffs, precluded the application of forum non conveniens to antitrust claims.30 That holding was legislatively overruled for domestic cases in 1948, when 28 USC section 1404(a) was adopted to enable the transfer of a case from one district court to another.31 This left open the question whether forum non conveniens should be available for international antitrust cases, where direct transfer to the other court is impossible. Caselaw on this question reveals three different approaches. The Fifth Circuit has held that National City Lines I is good law for international cases, making forum non conveniens 26   See W Dodge, ‘Antitrust and the Draft Hague Judgments Convention’ (2001) 32 Law & Policy in International Business 363, 371–72. 27   See in this book the contribution of M Wilderspin. 28   Re Vitamins (n 20) 41 fn 8; see also A Althouse, ‘The Use of Conspiracy Theory to Establish Personal Jurisdiction: A Due Process Analysis’ (1983) 52 Fordham Law Review (Fordham L Rev) 234. 29   Piper Aircraft Co v Reyno 454 US 235, 255 (1981). 30   US v National City Lines Inc 334 US 573 (1948) (National City Lines I). 31   US v National City Lines Inc 337 US 78, 80 (1949) (National City Lines II).

US Perspective  231 unavailable; that position has also received some support in the literature.32 The District Court for the District of Columbia, while admitting the theoretical possibility of forum non conveniens dismissal, has suggested that the public interest in antitrust enforcement, reflected in the availability of treble damages, trumps private interests in litigating elsewhere – especially in view of the differences in antitrust laws across legal systems.33 On this view, forum non conveniens dismissal is effectively unavailable. Finally, a Second Circuit decision from 1998 represents the first case in which an appellate court dismissed a plaintiff ’s antitrust claims in favour of a foreign forum.34 That court noted that the relevant provisions of EU antitrust law were ‘roughly analogous’ to the provisions of the US Sherman Act,35 and that the plaintiff would therefore be able to assert a private right of action in England. On that basis, it concluded that the English forum was adequate.36 That decision has so far stood relatively alone, at least in the antitrust context, but it might nonetheless signal a broader trend. Many of the earlier cases had precluded forum non conveniens dismissal on the basis that US antitrust policies and remedies were unique, and that any such dismissal would therefore function as a decision in favour of the defendants. This has changed now that antitrust enforcement, including through private remedies, is more broadly available worldwide. The recent Empagran decision of the US Supreme Court, though not directed explicitly at questions of forum non conveniens, can be read to condone a presumption that consumers are normally expected to sue in their home courts.37 In addition, claims brought under foreign, rather than US, antitrust law are routinely dismissed on grounds of forum non conveniens.38

III.  Applicable Law A.  Actions for Monetary Damages i.  Damages Claims as Part of Applicable Antitrust Law In the European context, much discussion is devoted to the distinction between the applicable antitrust law and the law applicable to a claim for damages.39 This distinction plays no 32   Industrial Investment Development Corp v Mitsui & Co 671 F 2d 876, 890–91 (5th Cir 1982), reversed on other grounds, 460 US 1007 (1983); JC Bates, ‘Home is Where the Hurt is: Forum non conveniens and Antitrust’ (2000) University of Chicago Legal Forum 281, 295–326. 33   El Cid Ltd v New Jersey Zinc Co 444 F Supp 845, 846 (SD NY 1977); Laker Airways Ltd v Pan American World Airways, 568 F Supp 811, 817–18 (D DC 1983); National Hockey League Players’ Association v Plymouth Whalers Hockey Club 166 F Supp 2d 1155 (ED Mich 2001). 34   Capital Currency Exchange NV v National Westminster Bank PLC 155 F 3d 603 (2d Cir 1998). 35   ibid 610. 36   cf National Hockey League Players’ Association (n 32) (recognising the availability of forum non conveniens in antitrust cases but holding that Ontario, Canada was an inadequate alternative forum). 37   F Hoffmann-LaRoche v Empagran SA 542 US 155 (2004). Forum non conveniens was raised during oral argument; cf discussion in SL Diamond, ‘Empagran, the FTAIA and Extraterritorial Effects: Guidance to Courts Facing Questions of Antitrust Jurisdiction Still Lacking’ (2006) 31 Brooklyn Journal of International Law 805, 848–55; see also JT Schmidt, ‘Keeping US Courts Open to Foreign Antitrust Plaintiffs: A Hybrid Approach to the Effective Deterrence of International Cartels’ (2006) 31 Yale Journal of International Law (YJIL) 211, 253–56. 38  See, eg, Re Air Cargo Shipping Services Antitrust Litigation 2008 WL 5958061, 24–30 (ED NY 2008); Re Urethane Antitrust Litigation 2010 WL 398094, 7 (D Kan 2010); see also further discussion in III.A.iv below. 39   See Basedow, ‘Jurisdiction and Choice of Law’ (n 5) 237 ff; see also in this book the contribution of S Francq and W Wurmnest, part IV.B.

232  Hannah L Buxbaum and Ralf Michaels role under US law. Here, the right of action for compensation for harm flowing from a violation of the antitrust laws is itself granted by the antitrust laws. This means that the same conflict-of-laws considerations relevant to the applicability of US antitrust law also determine whether the damages claim exists. This is true of claims that arise both within and outside contractual relationships; therefore, the difficult characterisation issues that present themselves in Europe (where contractual and non-contractual claims are governed by two entirely different instruments, namely the Rome I and Rome II Regulations) do not occur. At the root of this parallel treatment is the public, regulatory function of the claim. The claim for damages is granted predominantly for regulatory purposes – to enable the private plaintiff to enforce antitrust law as a private attorney general.40 While the US Supreme Court has suggested that the territorial scope of the antitrust laws might be narrower in private claims than when the government brings suit,41 the legal basis for such a distinction is not clear. Even where, as in the European context, the delictual claim is perceived as separate from substantive antitrust law,42 it is not clear why it should be governed by a different set of rules unless absolutely necessary. Of course, separate determination of the applicable law is necessary where the law applicable to the substance of the antitrust violation does not itself confer a delictual or quasi-delictual right of action, as is the case with EU law.43 Apart from that situation, however, the US experience suggests that Article 6(3)(a) should be interpreted in alliance with the rules determining the applicability of substantive antitrust law.

ii.  Effects Doctrine According to Article 6(3)(a) Brussels I Regulation, the law applicable to a damages claim is determined by the affected market. While this provision is reminiscent of the Wood Pulp jurisprudence of the Court of Justice, its language, surprisingly, more closely resembles the effects doctrine that was established in the United States in 1945 and has been adopted in many jurisdictions since.44 Under the original formulation of the US effects doctrine, US antitrust law would apply to anti-competitive conduct that had effects on US markets as long as those effects were intended.45 This extremely unilateral approach was later softened in the face of protests from other countries. First, with respect to the strictly unilateral aspect of the doctrine, not any effects will do (as the Alcoa case of 1945 had already suggested). Rather, what is required, in the words of the Foreign Trade Antitrust Improvement Act (FTAIA) of 1982, which attempted to codify the effects doctrine, are effects that are ‘direct, substantial, and reasonably foreseeable’.46   See n 4.   Empagran (n 36) 170–71; PB Stephan III, ‘Empagran: Empire Building or Judicial Modesty?’ available at http://ssrn.com/abstract=1559879. 42   See the contribution of S Francq and W Wurmnest. 43   Basedow (n 5) 237–39. The White Paper on damages actions does not envisage a full set of European rules on compensation. 44   See I Schwartz and J Basedow, ‘Restriction of Competition’ in K Lipstein (ed), International Encyclopedia of Comparative Law, vol III (Tübingen/The Hague, Mohr Siebeck/ Martinus Nijhoff Publishers, 1995) ch 35. 45   US v Aluminum Co of America 148 F 2d 416 (2d Cir 1945). 46   15 USC s 6a provides as follows: 40 41

‘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 –

US Perspective  233 Second, the regulatory interests of other nations matter too, though it is not clear to what extent. In the 1970s, the Ninth Circuit, in Timberlane, restricted the applicability of US law on the basis of international comity. Under this approach, US law would be applicable only if the regulatory interest of the United States and the effects on the US market were sufficiently strong (though not necessarily stronger) vis-a-vis those of other countries; the case also listed a number of criteria to be used in determining that balance.47 Not all courts agreed that the applicability of US law should be limited in this way, however. The role of comity in the analysis became even less clear when a majority of the US Supreme Court, in the 1993 Hartford Fire decision, held that comity should not even be considered unless different potentially applicable laws gave rise to incompatible requirements.48 To use the example of that case, this meant that US antitrust law could apply to forbid certain collusive conduct by English reinsurers aimed at the US market, even though the collusion was legal under English law and regardless of any regulatory interest the UK might have had in allowing the conduct in question. Justice Scalia’s dissent in Hartford Fire had emphasised the importance of comity considerations vis-a-vis foreign regulatory interests49 – and in the US Supreme Court’s 2004 Empagran decision, the majority seemed to embrace his argument. That case re-established the importance of international comity,50 while at the same time rejecting as too complex the type of case-by-case analysis favoured in Timberlane. As a result, the exact conditions under which US antitrust law may be applied on the basis of effects remain unclear.

iii.  Concentration of Applicable Law Particular difficulties arise when effects occur both inside and outside the forum State, especially in the case of a global cartel. The traditional European solution to such cases is the ‘mosaic principle’, according to which different laws would apply to claims arising from injury in different places. This solution is unavailable to US courts, however, to the extent that foreign regulatory law is inapplicable. As a result, only injuries suffered in the United States could be the subject of claims before US courts – similar to the solution adopted by the ECJ in Shevill.51 In fact, the solution would be even less satisfactory; while Shevill at least would allow full recovery at the defendant’s domicile, that outcome is not possible under US law.

(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’. 47   Namely ‘the degree of conflict with foreign law or policy, the nationality or allegiance of the parties and the locations or principal places of business of corporations, the extent to which enforcement by either State can be expected to achieve compliance, the relative significance of effects on the United States as compared with those elsewhere, the extent to which there is explicit purpose to harm or affect American commerce, the foreseeability of such effect, and the relative importance to the violations charged of conduct within the United States as compared with conduct abroad’, Timberlane Lumber Co v Bank of America NT and SA 549 F 2d 597, 614 (9th Cir 1976). 48   Hartford Fire Ins v California 509 US 764, 797–99 (1993). 49   ibid 817–21. 50   Albeit on facts that did not, in the Court’s reading, implicate any effects on US markets, thus distinguishing the case from Hartford Fire Ins v California (n 47). 51   Case C-68/93 Fiona Shevill and others v Presse Alliance SA [1995] ECR I-415; cf Basedow (n 5) 250.

234  Hannah L Buxbaum and Ralf Michaels These questions were at stake in a series of cases addressing global cartels, one of which, Empagran, was decided by the US Supreme Court.52 Empagran dealt with a global vitamins cartel that had fixed prices both within the United States and abroad. Plaintiffs had purchased vitamin products in foreign markets, but argued that the cartel’s effects within the United States justified the application of US antitrust law to their claims. Three strands of this argument may be identified. The first argument, derived from an earlier US Supreme Court decision,53 is that the United States has a direct regulatory interest in applying its law to these claims. If US law does not apply, the argument goes, such cartels would be insufficiently deterred: they would face treble damages only with regard to injuries suffered in the United States, and could offset those losses with gains in other markets. As a result, US consumers and US courts would continue to suffer the results of ongoing cartel activity. The US Supreme Court in Empagran rejected this argument without much discussion, at least on the assumption that the injuries suffered by the plaintiffs were independent of the effects in the United States. The second argument was that the cartel’s effects within the United States had caused the plaintiff ’s injuries, despite the fact that they had transacted on foreign markets. The US Supreme Court did not address this argument, simply assuming that the injuries outside the United States were completely independent from those within the United States, but remanded this issue to the lower court. In the resulting case, the DC Circuit Court of Appeals addressed directly the plaintiffs’ ‘arbitrage’ argument: Because the appellees’ product (vitamins) was fungible and globally marketed, they were able to sustain super-competitive prices abroad only by maintaining super-competitive prices in the United States as well. Otherwise, overseas purchasers would have purchased bulk vitamins at lower prices either directly from US sellers or from arbitrageurs selling vitamins imported from the United States, thereby preventing the appellees from selling abroad at the inflated prices. Thus, the super-competitive pricing in the United States ‘gives rise to’ the foreign super-competitive prices from which the appellants claim injury.54

The court rejected this argument. It held that the foreign purchasers needed to establish not merely but-for causation, but ‘a direct causal relationship’ between anti-competitive effects in the United States and the harm suffered in foreign transactions.55 Where the connection between US prices and that harm was only indirect – as the court in that case concluded – US jurisdiction could not be established. Subsequent cases heard in a number of additional courts – including the Eighth and Ninth Circuit Courts of Appeals – have followed the DC Circuit’s reasoning in Empagran II.56 Adopting the restrictive view of causation, these courts have concluded that it is the foreign effects of global anti-competitive behaviour (increased prices abroad), not the domestic effects of such behaviour (increased US prices), that are the proximate cause of foreign purchasers’ harm.57 Therefore, such claims do not fall within the scope of US anti  Empagran (n 36).   Pfizer Inc v Government of India 434 US 308 (1978). 54   Empagran SA v F Hoffmann-LaRoche Ltd 417 F 3d 1267, 1270 (DC Cir 2005) (footnote omitted). 55  ibid. 56   See, eg, Re Dynamic Random Access Memory (DRAM) Antitrust Litigation 546 F 3d 981 (9th Cir 2008); Re Monosodium Glutamate Antitrust Litigation 477 F 3d 535 (8th Cir 2007); Emerson Electric Co v Le Carbone Lorraine SA 500 F Supp 2d 437 (D NJ 2007) and Conopco, Inc v Arhema, Inc (In re Hydrogen Peroxide Antitrust Litig), 702 F Supp 2d 548 (ED Pa 2010); but see Motorola, Inc v AU Optronics Corp (In re TFT-LCD (Flat Panel) Antitrust Litig), 2011 US Dist LEXIS 42692 (ND Cal). 57   Re Monosodium Glutamate (n 55) 541. 52 53

US Perspective  235 trust law. This line of cases has led one commentator to conclude that the ‘ability of foreign plaintiffs to bring claims in the US courts [for] most versions of the globally indivisible market theory’ is becoming severely limited.58 A final argument, one less prominent in the discussion, concerns procedural efficiency: litigation concerning the entire cartel should be concentrated in one court, ideally with the application of just one law. In public enforcement of antitrust law, such arguments have led to the implementation of ‘positive comity’: in a cartel affecting both the United States and the European Union, agencies in both countries will agree which of them should engage in enforcement procedures, taking into account both institutions’ regulatory interests.59 A similar position has been suggested, in the influential District Court for the Southern District of New York, for the law applicable to multistate torts (though the relevant decision was not upheld). In the antitrust context, such an argument has not been successful after the Empagran decision. Concentration of the law applicable in such cases is, arguably, a goal of Article 6(3)(b) Rome II Regulation, which provides for the application of the lex fori to all claims arising from a cross-border cartel. That provision, it can be assumed, was influenced by the Empagran decision as well as by European litigation arising from the vitamin cartel. It is noteworthy that the interest in effective private enforcement, which was voiced especially by the EU Commission in support of the provision,60 is now realised more fully in Europe than in the United States. The only surprising restriction, from a US perspective, is that Article 6(3)(b) Rome II Regulation allows only for the choice of the law of the defendant’s domicile,61 which means that defendants from EU Member States are, ironically, disadvantaged vis-a-vis defendants from third States.

iv.  Application of Foreign Law As noted above, US courts have no original federal question jurisdiction over claims based on the violation of foreign antitrust law. However, in a small handful of cases, while not engaging in traditional multilateral choice-of-law analysis, US courts have considered whether to apply foreign antitrust law to particular claims. These claims were presented on the basis of supplemental jurisdiction, pursuant to which a court may exercise jurisdiction over claims that are ‘so related to claims [subject to the court’s] original jurisdiction that they form part of the same case or controversy’. In other words, where the conduct in question had also given rise to claims under US antitrust law, foreign claimants may seek to have the US court adjudicate their claims as well.62 One limitation to this tactic is that the court must have a ‘hook’ for such claims, in the form of claims that are subject to its original jurisdiction. The Empagran litigation demonstrates the difficulty that may result from this requirement. In that case, the plaintiff class on remand included only foreign purchasers, as the US claimants had by that point settled their claims. When the foreign plaintiffs asserted claims under EU law, on the ground of supplemental jurisdiction, the court declined, noting the absence of jurisdiction over a ‘main’ cause of action under US law.63 Thus, the Sherman Act did not apply because the   SW Waller, Antitrust & American Business Abroad, vol I, 3rd edn (St Paul, West Group, 1997) para 9:7B.   See B Zanettin, Cooperation between Antitrust Agencies at the International Level (Oxford, Hart Publishing, 2002) 183 ff; ABA Section of Antitrust Law, International Antitrust Cooperation Handbook (2004) 44–45. 60   See in this book the contribution of S Francq and W Wurmnest. 61   See the contribution of S Francq and W Wurmnest, part VI. 62   28 USC s 1367(a). 63   Empagran SA v F Hoffman-La Roche Ltd 453 F Supp 2d 1, 12–13 (D DC 2006). 58 59

236  Hannah L Buxbaum and Ralf Michaels injuries in question were not within its scope of application, and foreign antitrust law could not be applied by the court because there was no basis for jurisdiction over the plaintiffs’ claims. Other limitations are posed by the various procedural tools that courts can use to dismiss claims brought in this way. One mechanism is provided by the standard for supplemental jurisdiction itself, which is discretionary. Section 1367(a)(c) provides that courts may decline the exercise of supplemental jurisdiction where: 1. the claim raises a novel or complex issue of State law; 2. the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; 3. the district court has dismissed all claims over which it has original jurisdiction; or 4. in exceptional circumstances, there are other compelling reasons for declining jurisdiction. This provision gives courts substantial latitude to dismiss claims based on foreign regulatory law.64 One recent decision, Re Urethane,65 explores the range of factors that courts consider in the exercise of this discretion. Addressing the possibility of supplemental jurisdiction over claims brought under European antitrust law, the court emphasised the novel, complex and ‘unsettled’ nature of that law; the likelihood that the European law claims, which would require the consideration of multiple Member States’ laws, would predominate over the US law claims; the interest in comity and international cooperation; and the fact that the claims would be more conveniently litigated in a European forum. On the basis of all those factors, it declined to exercise supplemental jurisdiction over the foreignlaw claims. Moreover, the courts have at their disposal all of the other procedural doctrines customarily used to decline jurisdiction over claims more closely connected to other jurisdictions. Another recent decision, Re Air Cargo Shipping Services,66 contains an extensive analysis that illustrates the reluctance of US courts to apply foreign antitrust law. In that case, the court dismissed claims brought under EU antitrust law on the basis of forum non conveniens. Two arguments for dismissal are particularly relevant to our analysis. First, the court invokes a long-standing (though disputed) jurisprudence according to which the choice of a forum deserves less deference if made by a foreigner than if made by a US domiciliary (or, put differently, the choice deserves more deference when made for the plaintiff ’s own home courts).67 Second, it invokes the difficulty of the choice-of-law analysis and the multitude of potentially applicable foreign laws as a reason for forum non conveniens dismissal: [T]he court will likely need to decide which national member state’s laws should apply to each set of claims arising out of the shipping routes. It appears certain that the court will need to choose and apply the laws of over thirty foreign jurisdictions. The complexity inherent in the determination and application of foreign law weighs in favor of dismissal.68

The court felt that European courts were better equipped to deal with these claims also as a matter of comity, because they could defer matters to the European Court of Justice  Similarly Information Resources Inc v Dun & Bradstreet Corp 127 F Supp 2d 411 (SD NY 2000).   Re Urethane (n 37). 66   Re Air Cargo Shipping Services (n 37) 24 ff. 67   ibid 25 (citing Piper Aircraft Co v Reyno (n 28) 235). 68   ibid 30. 64 65

US Perspective  237 and because Europe had an interest in developing its own antitrust law – especially in the area of private antitrust enforcement. There is no invocation of a public law taboo per se, but the court does identify a difference between foreign contract, tort, and property law, which it considers easy to apply, and foreign antitrust law, which it does not.69 Thus, while considering many of the same factors that the Re Urethane court analysed, it did so within the framework of forum non conveniens rather than supplemental jurisdiction. This seems to be the procedurally sounder approach in class actions where minimal diversity is present.70 In such cases, the court would have original jurisdiction over the foreign claims on the basis of diversity, and therefore would not require an independent basis in the form of supplemental jurisdiction. At least one opinion does apply foreign antitrust law,71 although it does not create a strong precedent. The case involved allegations under both EU antitrust law and the Greek civil code. The court discusses, summarily, the content of the relevant provisions, and then dismisses the plaintiff ’s complaint for ‘failure to state a claim’ – meaning, essentially, that the plaintiff ’s own factual allegations do not substantiate the legal claim.72 It is difficult to ascertain on the basis of this summary application of Greek antitrust law whether the court had concluded that the Greek law did indeed apply to the claims. The court may simply have decided that the viability of the claim was either prior to questions of applicable law, or easier to answer. Moreover, the opinion contains no specific choice-of-law discussion (a similarity, incidentally, with the other supplemental jurisdiction cases). Nonetheless, as far as it goes this is a decision that addresses foreign antitrust law as a possible basis for a claim, and it seems remarkable that the court never mentions a public law taboo (again, a similarity with the supplemental jurisdiction cases).

B.  Contract Validity Many antitrust disputes originate in a contractual relationship, such as a distribution arrangement or licensing agreement. In that setting, anti-competitive conduct that violates the antitrust laws may simultaneously be a breach of contract; alternatively, and more frequently, allegations of antitrust violations may be asserted as a defence to a claim for breach of contract. Claims for damages based on violations of US antitrust laws are largely covered by section 4 Clayton Act, even when they arise out of a contractual relationship.73 Thus, the most important choice-of-law issue remaining in the area of contract relates to validity. A conflict-of-laws situation will result if the contract is governed by a different law from that governing the antitrust violation invoked as a defence to the contract’s enforceability. This is often the case, as applicable contract law is determined by rules different from those used to determine applicable antitrust law.74

  ibid 33–34.   See the text accompanying n 12. 71   Multi-Juice SA v Snapple Beverage Corp 2003 WL 1961636 (SD NY 2003). 72   ibid 5. 73   II.A.i above. 74   If the law governing the contract is determined by the place of performance, this place will sometimes coincide with the place of effects: see, eg, Wyatt Energy Inc v Motiva Enterprises LLC 936 A 2d 280, 287 (Conn App 2007). 69 70

238  Hannah L Buxbaum and Ralf Michaels

i.  Party Autonomy Parties cannot choose applicable antitrust law, nor can the choice of a law to govern the contract render inapplicable an antitrust law that would otherwise apply. By use of arbitration agreements, however, parties may diminish the likelihood that different laws will govern the contract, on the one hand, and an antitrust-based challenge to its validity, on the other. Historically, US courts held validity challenges based on antitrust law apart from contract-based claims, on the basis that they were not amenable to party choice of forum or law. As the public policy in favour of arbitration gained strength, however, this attitude began to change. In the watershed Mitsubishi case,75 the Supreme Court held that statutory antitrust claims were arbitrable; subsequent cases have interpreted submissions to arbitrate very broadly, to cover not just contract claims but all claims arising out of the contractual relationship,76 and to allow for arbitration even of domestic, not just international, antitrust claims.77 While arbitrators may apply provisions of mandatory law (such as antitrust law), they are not obliged to do so against the parties’ will.78 As a result, insofar as US courts are willing to enforce arbitration agreements even if the arbitrator is likely to apply another (or no) antitrust law,79 some conflicts between US law and foreign law may be avoided. Apart from this special situation, an antitrust-based challenge to the validity of a contract will often arise under a different law than that governing the contract itself.

ii.  Federal Antitrust Law and State Contract Law The most frequent situation for such a conflict of laws in the US system concerns the relationship between federal law and State law. In Europe, Article 101(2) TFEU (formerly Article 81(2) EC) explicitly invalidates contracts that violate EU antitrust law, regardless of the applicable contract law, due to the supremacy of EU law. In the United States, section 1 Sherman Act merely declares such contracts to be ‘illegal’ without spelling out precisely the consequences for the contract.80 Not long after the Sherman Act was enacted, the US Supreme Court decided that its violation could create a defence against actions for the enforcement of contract,81 though this doctrine, as an equitable one, is subject to limitations. This typically creates a dépeçage situation: given that there is no general federal contract law, contracts are normally governed by State law, whereas the defence is based on federal law. On the one hand, State law cannot trump federal law, suggesting that the

  Mitsubishi v Soler Chrysler-Plymouth 473 US 614 (1985).   See, eg, High Strength Steel Inc v Svenskt Stal Aktiebolag 1985 WL 2546 (ND Ill 1985). 77   Kotam Electronics Inc v JBL Consumer Products Inc 93 F 3d 724 (11th Cir 1996); Re Cotton Yarn Antitrust Litigation 505 F 3d 274, 282 (4th Cir 2007). 78   See AS Rau, ‘The Arbitrator and ‘Mandatory Rules of Law’ (2007) 18 American Review of International Arbitration 51. 79   See also Simula Inc v Autoliv Inc 175 F 3d 716 (9th Cir 1999). That case involved parties to a development and licensing agreement. The plaintiff alleged that the agreement unlawfully restrained trade under US law; the defendant moved to compel foreign arbitration under the agreement’s dispute resolution clause. Unlike in Mitsubishi, the court in this case, which granted the motion to compel arbitration, explicitly addressed – and accepted – the possibility that foreign antitrust law, not US law, would be applied in the arbitration. cf HL Buxbaum, ‘The Private Attorney General in a Global Age: Public Interests in Private International Litigation’ (2001) 26 YJIL 219, 243–44; SK Mehra, ‘Deterrence: The Private Remedy and International Antitrust’ (2002) 40 Columbia Journal of Transnational Law 275, 314–15. 80   15 USC s 1 provides in part that ‘Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal’. 81   E Bement & Sons v National Harrow Co 186 US 70, 88 (1902). 75 76

US Perspective  239 consequences of a violation of the Sherman Act must be a matter of federal law.82 On the other hand, the US Supreme Court has also stated that, since the rights and duties of contract parties in general are governed by State law, the federal courts ‘should not be quick to create a policy of non-enforcement of contracts beyond that which is clearly the requirement of the Sherman Act’.83 This issue will not necessarily be tested in federal courts: because the action brought is based in contract, the exclusive federal-question jurisdiction of the federal courts is not triggered. As a consequence, such claims can be brought before State courts. Further, even if they are brought before (or transferred to) federal courts on the basis of diversity of citizenship, the federal courts will be obliged to apply State law.

iii.  US Antitrust Law and Foreign Contract Law Presumably, the result of such a conflict is the same when the law governing the contract is not that of a US State but instead that of a foreign country. A contract otherwise governed by foreign law could be subject to a defence based on a violation of US antitrust law. Even following the principle from the federal-State context that the consequence of such a violation is a matter of contract, and must therefore be subject to the law governing the contract, it seems quite clear that such law would not be applied to enforce the contract if it did not allow for the proper consideration of US antitrust law.

iv.  Foreign Antitrust Law and State Contract Law The same type of conflict should appear where the conflict is between domestic contract law and the antitrust law of a foreign nation. The situation in which a contract is challenged on the basis of a violation of foreign antitrust law has not, it appears, yielded case-law. On the one hand, illegality under foreign law can be a defence to contract under US conflict of laws.84 On the other hand, such a defence could trigger the public law exception (the public law taboo).85 The defence would fall squarely under the original justification of the penal and the revenue rule, namely that private rights (here, of contract enforcement) should not be undermined by foreign public law. The public law taboo does not hold fully, however. US courts have refused to enforce contracts otherwise governed by domestic law that violated European86 or Chinese licensing requirements.87 An especially interesting decision in this context is Kashfi v PhibroSalomon Inc.88 In that case, a contract governed by New York law was denied enforcement because it intended the violation of an Iranian penal statute criminalising influence on governmental officials.89 No mention is made of the penal rule; instead, the court points

82   Sola Electric Co v Jefferson Electric Co 317 US 173, 176 (1942): ‘When a federal statute condemns an act as unlawful the extent and nature of the legal consequences of the condemnation, though left by the statute to judicial determination, are nevertheless federal questions, the answers to which are to be derived from the statute and the federal policy which it has adopted. To the federal statute and policy, conflicting state law and policy must yield’. 83   Kelly v Kosuga 1358 US 516, 518 (1959). 84   Rest 2d Conflict of Laws s 202 cmt (c). 85   WS Dodge, ‘Breaking the Public Law Taboo’ (2002) 43 Harvard ILJ 161, 185–87. 86   Dornberger v Metropolitan Life Ins Co 961 F Supp 506, 533 (SD NY 1997). 87   Lehman Bros Commercial Corp v Minmetals International Non-Ferrous Metals Trading Co 179 F Supp 2d 118, 138–39 (SD NY 2001). 88   Kashfi v Phibro-Salomon Inc 628 F Supp 2d 727 (SD NY 1986). 89   ibid 737.

240  Hannah L Buxbaum and Ralf Michaels out that the contract also contravenes the public policy of the United States.90 Applied to the antitrust context, this would suggest that a contract aimed at the violation of foreign antitrust law would be illegal, at least where, pari passu, it would also violate US antitrust law. Nevertheless, there is no clear precedent on this issue.

IV.  Conflict-of-Laws Issues in Class Action Certification International antitrust cases in US courts frequently involve class actions, as that form of representative litigation is used by multiple plaintiffs to concentrate their claims in US fora. In such cases, the particular procedural mechanisms of class action practice in the United States intersect with various conflict-of-laws issues. As the sections below describe, conflicts questions play a role in determining whether a class can be certified at all.

A.  Jurisdiction Over Non-Resident Class Members In two-party relations, personal jurisdiction is usually an issue only with respect to the defendant. Minimum contacts between the plaintiff and the forum are irrelevant91 (though they can play a role for forum non conveniens analysis): ‘fairness’ to the plaintiff results not from such contacts, but because the plaintiff chose voluntarily to initiate litigation in the forum. In class actions, by contrast, not all plaintiffs are similarly situated. The outcome of a class action (whether dismissal, settlement or judgment) is binding not only on the plaintiff who serves as class representative, but on all members of the plaintiff class – the socalled ‘absent’ plaintiffs. It will therefore preclude the ability of those absent plaintiffs to assert their claims subsequently in some other forum.92 For its disposition to have such effect, the forum court must have personal jurisdiction over all such plaintiffs. This raises the question of how jurisdiction may be established over non-resident class members, who, unlike the class representative, have not impliedly consented to jurisdiction in the forum by filing suit there. A 1985 decision by the Supreme Court analysed the requirements for establishing personal jurisdiction over such non-resident class members.93 It began by distinguishing the litigation burdens placed on non-resident plaintiffs from those placed on non-resident defendants. It noted that absent plaintiffs are ‘not haled anywhere’, do not face potential liability for fees94 or for discovery costs, and will not, if unsuccessful, be forced to pay damages or comply with some other remedy.95 On this basis, it concluded that a forum State could assert personal jurisdiction over an absent plaintiff even if that plaintiff lacked the   ibid 739.   Keeton v Hustler Magazine (n 17) 779. 92  See R Wasserman, ‘Transnational Class Actions and Interjurisdictional Preclusion’ (2010) University of Pittsburgh Legal Studies Research Paper Series, Working Paper No 2010-04, available at http://ssrn.com/ abstract=1554472 (discussing the claim-preclusive effect of both class action judgments and class action settlements under US law). 93   Phillips Petroleum Co v Shutts 472 US 797 (1985). 94   This is the consequence of another peculiarity of US practice: the combination of the contingency fee with the ‘common fund’ doctrine, under which attorneys’ fees may be paid out of an eventual class action recovery. 95   Phillips Petroleum (n 92) 808–09. 90 91

US Perspective  241 minimum contacts with the State that would be required of a non-resident defendant.96 Instead, the forum needed to provide only ‘minimal procedural due process protection’ – a requirement that was satisfied if absent plaintiffs received (i) adequate notice of the dispute and (ii) in actions for monetary damages, the opportunity to opt out of the class.97 Compared with jurisdictional law in other legal systems, particularly those more committed to the individual rights-based model of civil litigation,98 this appears quite permissive. The required notice of the dispute may be simply constructive: although individual notice must be given to any class members who can with reasonable effort be identified, all others receive general notification designed to reach all potential class members – for instance, through publication in appropriate news media.99 Combined with the opt-out approach – under which potential class members must affirmatively exclude themselves from the litigation if they do not wish to be bound by its outcome – this means that the claim of an individual class member might be extinguished without that member’s know­ ledge of, let alone participation in, the litigation. In the US system, this approach is viewed as an appropriate way to maximise the class action’s utility in bringing to litigation claims that would not be brought individually, as well as its deterrent function. As implemented in class actions involving claimants from systems that have made other choices regarding group litigation, however, it raises concerns regarding the sufficiency of the due process protections.100

B.  Applicable Law When a plaintiff files an action seeking damages on behalf of a proposed class that includes foreign members, it will generally face an initial motion to dismiss the foreign claims. As noted above, US courts often conflate the questions of their own jurisdiction, on the one hand, and the scope of US antitrust law, on the other. Thus, these motions to dismiss are generally brought under Rule 12(b)(1) for lack of subject-matter jurisdiction,101 though often in connection with Rule 12(b)(6) motions for failure to assert a legally sufficient claim.102 However labelled, the courts will at this stage confront the question of applicable law. However, the choice-of-law issue may also arise in connection with the procedure for class certification, as several of the elements necessary to obtain that certification103 raise   ibid 811.   ibid 812. The Phillips Petroleum case arose in the context of a State class action; however, the due process analysis it includes has been interpreted as applicable in the context of class actions within the federal courts as well. See CA Wright, A Miller and MK Kane (eds), Federal Practice and Procedure: Civil 3d (St Paul, West Group, 2005) para 1789.1. 98   See in this book the contribution of DP Tzakas, discussing the principle of party disposition. 99   Eisen v Carlisle & Jacquelin 417 US 156 (1974). 100   See DL Bassett, ‘US Class Actions Go Global’ (2003) 72 Fordham L Rev 41 (arguing that in class actions seeking monetary damages, foreign absent plaintiffs should be required to opt in to the litigation). 101   See, eg, Re Graphite Electrodes Antitrust Litigation 2007 WL 137684 (ED Pa 2007). 102   See, eg, Re Rubber Chemicals Antitrust Litigation 504 F Supp 2d 777 (ND Cal 2007). 103   Federal Rule of Civil Procedure 23 sets out the basis requirements of a class action. A plaintiff may sue as the representative party of a larger class if: ‘(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class’. Most antitrust litigation proceeds under subpart (b)(3) of the Rule, which requires further that the common questions of law or fact must predominate over any other questions affecting individual members of the class, and that a class action is found to be superior to any other method of adjudicating the controversy in question. 96 97

242  Hannah L Buxbaum and Ralf Michaels concerns related to applicable law. Class action procedure – which is of course not special to the antitrust context – is therefore another site for conflict-of-laws analysis. One salient element in this regard is commonality. To obtain class certification under Rule 23(b)(3), a plaintiff must establish that there are questions of law or fact common to the class, and that those questions predominate over any other questions affecting individual class members. In international antitrust litigation, the claims of both US and foreign class members may all derive from the same conduct, thus presenting common issues of fact. However, absent a provision like Article 6(3)(b) Rome II Regulation, those claims will frequently be governed by different laws; therefore, a court might find that the common issues do not predominate. The operation of this requirement has been tested quite extensively in the domestic context, where plaintiffs often seek to aggregate claims arising under disparate State laws.104 The conclusion that common questions do not predominate is particularly likely where the substantive laws in questions differ substantially, as remains the case in the antitrust context.105 A second relevant element, this one relating to the role of the representative, is typicality. If the class plaintiff is a US purchaser, and proposed class members include foreign purchasers, the court might conclude that the claims of the representative are atypical of those of the rest of the class because they rest on different legal arguments.106 On this basis, litigation initiated by a US plaintiff as representative might be limited to a class of US purchasers.107 Courts also consider, under the rubric of superiority, issues of simple judicial manageability. Foreign claimants present manageability problems because it is hard to provide them with adequate notification and to keep them apprised of the litigation.108 The intersection between the question of applicable law and the question of class certification raises some interesting questions concerning the sequencing of considerations. In ‘mixed class’ cases, including both US and foreign claims, defendants frequently move initially to dismiss the foreign claims for failure to state a claim under US antitrust law. If such a motion is granted, the foreign plaintiffs might continue to seek adjudication of their claims under foreign antitrust law, but would face significant hurdles: first, if they relied on supplemental jurisdiction,109 the court might decline to exercise such jurisdiction based on the complexity of the foreign law questions presented.110 Second, regardless of the source of the court’s jurisdiction, doctrines of forum non conveniens or comity might counsel the court to dismiss the claims – or the court might decline, on the basis of the public law taboo, to apply foreign antitrust law. Alternatively, however, a court could consider the 104   In consumer protection cases, for instance, classes are sometimes proposed that include plaintiffs from multiple States whose claims are governed by different substantive laws. Courts have held that if the State laws in question differ substantially from each other, the cases do not present common issues sufficient to justify class treatment. See Wright, Miller and Kane, Federal Practice and Procedure (n 96) para 1782 (‘The potential applicability of multiple State laws in actions seeking relief on behalf of a nationwide class may . . . implicate the predominance requirement, leading to the denial of class certification’). 105  See Empagran (n 36) 167 (recognising differences among national antitrust laws). 106   This element is discussed frequently in the securities context, where US law creates a presumption of reliance (through the fraud-on-the-market theory) that is not available to claims under foreign law. See Smith v Dominion Bridge Corp 1998 WL 98998 (ED Pa 1998) (finding that the plaintiff had failed to establish typicality for this reason) see also, In re TFT-LCD Antitrust Litig, 267 FRD 291, 2010 US Dist LEXIS 38122 (ND Cal) (finding the possibility of a FTAIA jurisdictional defense for foreign plaintiffs does not bar class certification). 107   While courts could establish sub-classes to address such conflicts, they typically decline to do so on grounds of manageability. 108   Re DaimlerChrysler AG Securities Litigation 216 FRD 291 (D Del 2003). 109   That is, if there were no original diversity jurisdiction over their claims. 110   See discussion at n 64–65.

US Perspective  243 question of class certification first. In that case, the court’s focus might shift to the efficiencies of concentrating all claims based on the defendants’ conduct in a single forum.111 Thus, although the certification requirements discussed above might yet militate against certi­ fication of a class including foreign claims, the likelihood of the court’s adjudicating those claims along with US claims may be higher. There is no fixed order in which courts must consider these questions,112 but in antitrust cases to date, courts have generally screened foreign claims on initial motions to dismiss113 rather than beginning with the certification question.

C.  Recognition of Foreign Judgments: The Question of Preclusion As noted above, US courts may obtain personal jurisdiction over non-resident class members by providing them with constructive notice and an opportunity to opt out. With respect to plaintiffs from other US States, a court is therefore assured that its disposition of the claims will be accorded preclusive effect – the constitutional guarantee that full faith and credit will be granted to the order of a court in a sister State means that such plaintiffs will not be able to relitigate in another US forum. With respect to foreign plaintiffs, however, no such assurance is possible; there is no guarantee that the courts in those plaintiffs’ home countries will similarly grant preclusive effect. This situation creates an obstacle for foreign plaintiffs seeking to establish another element required for class certification: superiority. Class certification is available only if the court concludes that a class action is superior to other methods of adjudication. But preclusive effect is critical to the viability of the group litigation mechanism; the class action defendant must be able to enter into a settlement, or proceed to judgment, with the assurance that members of the plaintiff class will not later be able to relitigate the claims in another forum. While countries differ in their approach to class action procedure, many object to the opt-out characteristic of the US system and might on that basis refuse to grant a US order preclusive effect.114 For that reason, a court considering certification of a multinational class might conclude that representative litigation was not superior to other methods of adjudication, at least with respect to the foreign claimants. In the area of securities litigation, US courts have taken this concern quite seriously, analysing the laws of putative class members’ home jurisdictions and

111   As part of the ‘superiority’ element of the certification analysis, Rule 23(b)(3)(C) invites the court to consider ‘the desirability or undesirability of concentrating the litigation of the claims in the particular forum’, which might lead to increased emphasis on global efficiency. 112   In the analogous area of standing, courts differ on the proper order of inquiry. cp Re Chocolate Confectionary Antitrust Litigation 602 F Supp 2d 538, 579–80 (MD Pa 2009) (‘the plaintiffs’ capacity to represent individuals from other states depends on obtaining class certification, and the standing issue would not exist but for their assertion of [differing] state law antitrust claims . . . Therefore, . . . [the] class certification issues are “logically antecedent” to the standing concerns, and the court will defer ruling on the latter until class certification proceedings’) and Re Potash Antitrust Litigation 667 F Supp 2d 907, 921–22 (ND Ill 2009) (rejecting such a general rule and holding that standing issues may be adjudicated prior to determining whether class certification requirements have been met). 113  See Re Hydrogen Peroxide Antitrust Litigation 552 F 3d 305 (3d Cir 2008). 114   For analysis, see A Pinna, ‘Recognition and Res Judicata of US Class Action Judgments in European Legal Systems’ (2008) 1 Erasmus Law Review 31; RA Nagareda, ‘Aggregate Litigation Across the Atlantic and the Future of American Exceptionalism’ (2009) 62 Vanderbilt Law Review 1 (analysing the relationship between scope of preclusion and scope of aggregation in the development of modern class actions); Wasserman, ‘Transnational Class Actions’ (n 91).

244  Hannah L Buxbaum and Ralf Michaels making certification decisions accordingly.115 This trend suggests that the concentration of claims in US courts will remain limited as long as significant differences remain across legal systems in their procedural approach to group litigation.

V. Conclusion In our view, the US experience provides several specific lessons and one general lesson for Europe. 1. A consistent focus on the affected market for questions of jurisdiction and applicable law is possible and yields consistent and acceptable results. It is problematic, however, where more than one market is affected. 2. Personal jurisdiction based on the place of the effects alone, as in Article 5(3) Brussels I Regulation, is problematic. A limitation based on intentional targeting seems desirable, though its exact contours, especially in the case of global cartels, are hard to define. 3. Where multiple defendants are involved, as in the case of a cartel, the domicile of one among them does not provide a sufficient basis for jurisdiction over the others. Therefore, Article 6(1) Brussels I Regulation requires at least the type of restrictive interpretation that Michael Wilderspin suggests in this volume. The US example suggests the possibility of going further by concentrating claims against multiple defendants in the most affected market, regardless of whether it is the domicile of any one of the defendants. 4. The law applicable to damages claims should follow, if at all possible, the law applicable to the antitrust violation itself. 5. The application of one law for damages arising in several countries, as envisaged in Article 6(3)(b) Rome II Regulation, is an interesting response to a problem that remains unresolved under US law. 6. A mechanism for aggregating claims from multiple jurisdictions implicates significant conflict-of-laws issues. The successful introduction of such a mechanism in Europe may require a base level of similarity in the procedural laws of the Member States.

115  See Re Alstom SA Securities Litigation 253 FRD 266 (SD NY 2008) (analysing the likelihood that its disposition of the case would be granted preclusive effect in France, England, the Netherlands and Canada); Vivendi Universal SA Securities Litigation 242 FRD 76, 95–105 (SD NY 2007) (Austria, England, France, Germany and the Netherlands).

11 Recognition and Enforcement of Foreign Judgments CATHERINE KESSEDJIAN*

I. Introduction The law of recognition and enforcement of foreign judgments around the world has been in a state of amazing stability since the 1970s. One needs only to look at the 1970 Hague Convention and at the recognition and enforcement chapter of the 2005 Hague Convention on Choice of Court, to find out that the rules are very similar if not identical. In the United States, recent case-law shows that the famous grand old case of Hilton v Guyot is still good law and often cited as the source of federal law on the topic.1 Yet, some States of the United States have adopted legislation on the topic, more or less departing from the model law, but the rules are fairly settled. In Europe, the Brussels Convention of 1968 and its sister Lugano Convention of 1988 have proved remarkably successful. The Regulation 44/2001 which has replaced the Brussels Convention has followed the same path. The fact that it is under revision at present is not a sign of its ill-functioning but simply a concrete application of the institutional instability of the law in the European Union where any rule must be reassessed every so often to ‘adapt’ to the supposed new realities of the time. If one concludes this bird’s-eye view, tour d’horizon, of the law in the field by looking at national laws, it becomes clear that the law has evolved since the mid-twentieth century only to allow more recognition and enforcement. Here the law of France is a good testimony of this trend. In recent years the Cour de Cassation has decided several cases which have eliminated obstacles to the recognition and enforcement in France of foreign judgments coming from third countries.2 Therefore the trend has been to ‘liberalise’ the recognition and enforcement.3 *  Professor; Deputy Director – European College of Paris. 1   Hilton v Guyot 159 US 113 (1895). 2   In the European jargon, the expression ‘third countries’ denotes countries which are not members of the European Union. It is the only area in which French law can still develop independently of European law because Regulation 44/2001 does not apply at present to third countries’ judgments. It remains to be seen whether the revision of the Regulation will expand its scope of application by covering also those judgments. For this aspect of the discussion, see below. 3   See II.B below.

246  Catherine Kessedjian It is against this background that the question of recognition and enforcement of foreign judgments deciding on a private enforcement of competition matters must be studied. In the first part of this paper we will ask ourselves whether there is one ‘model’ that ought to be followed. In the second part we will look at two specific questions which arise only in the context of competition enforcement.

II.  Which Model to Choose? To the best of our knowledge, private enforcement of competition law has not yet given rise to decisions which needed to be enforced in a different country than the one in which the decision has been rendered. Consequently, the developments which follow are based on decisions rendered in other fields. Around the world, two main ‘models’ are pertinent: the one applied in the United States and the one adopted in the European Union.4 They have developed in different directions and the comparison clearly shows that the European Union model may be more attractive.

A.  The United States Surprisingly enough, the law of the United States remains premised by the old decision of Hilton v Guyot5 rendered by the Supreme Court in 1895. Recent case-law still cites Hilton as good law,6 coupled with the old concept of comity of nations as the foundation for the granting of recognition or enforcement to a foreign country judgment.7 For an outsider, however, this may be misleading as it may mean that the law of recognition and enforcement of foreign judgments in the United States belongs to federal law when it does not. In fact, it is accepted that the Full Faith and Credit Clause of the United States Constitution8 does not apply to judgments coming from foreign countries, but only to sister-States’ judgments.9 This reasoning was at first a consequence of a case rendered by the New York Court of Appeals in 1926,10 whereby the court rejected ‘the teaching of the Supreme Court that recognition of a foreign judgment was a matter of international and therefore national law’.11 Little by little most State courts followed the New York Court of Appeals and this line of reasoning was reinforced by the Supreme Court itself with Erie v 4   A more thorough analysis should have covered also other regional models such as the OHADA, the ASEAN and the system of the Americas. However, a detailed study of the three remaining systems shows that they are not displaying distinctive features which depart dramatically from either the United States or the European Union. This is why we have chosen to cover only these two systems. 5   Hilton v Guyot 159 US 113 (1895). 6  eg, Vedatech KK and others v Crystal decisions Inc US Dist (ND Cal, 28 April 2009) Lexis 40012. 7   See eg, US Fed App Court 16 July 2001 International Nutrition Company v Horphag Research Ltd and others 257 F 3d 1324. 8   Art IV US Constitution provides: ‘Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records and proceedings shall be proved, and the effect thereof ’. 9   The clause does apply also to sister-States’ laws, but this is outside the scope of this short paper. 10   Johnston v Compagnie générale translatantique 242 NY 381, 152 NE 121 (1926). 11   American Law Institute (ALI), Recognition and Enforcement of Foreign Judgments (Philadelphia, ALI, 2005) 2. Profs A Lowenfeld and L Silberman were the Reporters of the project.

Enforcement of Foreign Judgments  247 Tompkins12 which decided that federal courts, in diversity actions, should follow State practice in cases involving foreign judgments.13 There have been some attempts to ‘federalise’ the law of the recognition and enforcement of foreign judgments. Indeed, a few years ago, the American Law Institute adopted a proposal for a federal law in the field.14 The project started as a proposed federal statute to implement the future Hague Convention which was, at the time, in preparation at the Hague Conference on Private International Law. However, when that project was abandoned, the American Law Institute decided to switch gears and propose nonetheless a federal statute under the understanding that the topic was more suited for federal law than State law. That initiative was not taken up by Congress, however, probably out of a sense that this was not of utmost importance for the well-functioning of the United States federation. A few years later, the issue was revived when the United States decided to sign the 2005 Hague Convention on Choice of Court Agreements15 which contains a chapter on recognition and enforcement of foreign judgments. The federal government is presently preparing the necessary implement legislation so that the convention could be ratified. In the meantime, the National Conference of Commissioners on Uniform State laws (NCCUSL) is also preparing a model law for adoption by the States on the same topic,16 hence making it more complicated for the federation to act in the field. This is not the first time the National Conference of Commissioners has acted in the area of recognition and enforcement of foreign judgments. Indeed, already in 1962, the NCCUSL adopted the Uniform Foreign Money Judgments Recognition Act which is the basis of State law in some 30 States of the United States.17 A new act was adopted on 10 February 2006 with a slightly amended title: ‘Uniform Foreign-Country Money Judgments Recognition Act’. It is officially dated from 2005. This new act has already been adopted in 14 States, all of which but one had already adopted the 1962 Act. In addition a bill to adopt the 2005 Act was introduced in the Massachusetts Parliament in 2010. Our first conclusion, drawn from the above explanation, is that the unsettled quarrel between the federation and the federated States about who has the power to legislate or decide on the recognition and enforcement of foreign judgments is a source of uncertainty and complication which makes the US system ill-fitted to work as a ‘model’ for further enhancement of the subject matter. Until this constitutional battle is resolved internally,18 the US model will remain unattractive as to the source and the form of the law.   Erie Railroad Co v Tompkins 304 US 64 (1938).   On all these issues, see C Kessedjian, La reconnaissance et l’exécution des jugements en droit international privé aux États-Unis (Paris, Economica, 1987). 14  ALI, Recognition and enforcement of foreign judgments: Analysis and Proposed Federal Statute (Philadelphia, ALI, 2006). Profs A Lowenfeld and L Silberman were the Reporters of the project. 15   See the text of that Convention on the website of the Hague Conference on Private International Law, www. hcch.net. 16   At the time we write this paper, the documents remain confidential as some controversy has arisen among the stakeholders as to the proper course of events and the content of the texts discussed. 17   The Act dates back to 1962. 18   In the introduction to the American Law Institute proposed statute, the Reporters said the following: ‘The present project rejects the view of the New York Court of Appeals, and takes as its point of departure the view that recognition and enforcement of foreign judgments is and ought to be a matter of national concern’, ie that it should be a matter for federal law instead of State law. They add: ‘There is no constitutional problem with the proposed statute. Whether regarded as inherent in the sovereignty of the nation, or as derived from the national power over foreign relations shared by Congress and the Executive, or as derived from the power to regulate commerce with foreign nations . . . legislation to govern recognition and enforcement of foreign judgments fits comfortably into the powers of Congress’. 12 13

248  Catherine Kessedjian Having looked at the source of law, it is necessary to say a few words about the content of the systems themselves. It is difficult to propose a fair recounting of all the rules applied in the different States. However, because of the existence of the Uniform Act and a few prominent decisions, it is possible to summarise the main reasoning used by courts in the United States when confronted with the recognition and enforcement of a foreign country judgment. First, the concept of ‘judgments’ which are to be recognised or enforced in the United States is a broad one, as all money judgments (approximately what the Europeans would consider as being covered by ‘civil and commercial matters’) are accepted under the most common rules. Some States also accept to enforce foreign tax judgments or fines or penalties, but they are a minority.19 Indeed, the 2005 Uniform Act referred to above, prevents such judgments from falling within the scope of the Act.20 Usually, the proceedings for enforcement are subject to a limitation period which varies from State to State, most commonly 10 years. The limitation period is not borrowed from the law of the country of origin. This results in the strange situation that a judgment which can still be fully enforced in the country of origin may be barred from being enforced because the local time-bar has run. In some countries, it is possible to ‘revive’ the judgment so that a new time limit starts running. However, this procedure is unknown in a number of countries so that it may be easy for the judgment debtor to relocate its assets to the State in which the time limit has elapsed and, consequently, insulate himself from all enforcement proceedings. Generally speaking, the judgment is granted the same preclusive effect by a court in the United States that it would enjoy under the laws of the country of origin. However, some States have adopted rules whereby the local public policy could prevent the application of foreign law on this matter. The judgment debtor can raise a fairly long list of obstacles against the recognition or enforcement of said judgment, such as: (i) the foreign system does not provide impartial tribunals or procedures compatible with fundamental principles of fairness or due process of law; (ii) the judgment was rendered in circumstances that raise substantial doubts about the integrity of the court of origin with respect to the judgment at stake; (iii) the basis of jurisdiction used by the country of origin is unacceptable for the requested court; (iv) the judgment was rendered without notice to the defendant in sufficient time to enable that defendant to organise its defence; (v) the judgment was obtained by fraud; (vi) the judgment was rendered by a court which did not have personal jurisdiction over the defendant; (vii) the foreign court did not have jurisdiction over the subject matter of the dispute; (viii) the foreign court was a seriously inconvenient forum; (ix) the proceedings in the foreign court were contrary to a choice-of-court agreement between the parties; (x) the judgment or the cause of action on which the judgment is based is repugnant to the public policy of the requested State; (xi) the judgment conflicts with another final and conclusive judgment; (xii) the judgment results from proceedings commenced after equivalent proceedings have been commenced in the United States, as long as these proceedings were not stayed or dismissed; (13) the judgment is rendered by a court located in a country where comparable judgments of courts in the United States would not be recognised or enforced (reciprocity requirement).21 19   The American Law Institute proposed statute allows such judgments to be recognised and enforced, although it makes it optional for courts. 20   See s 3(b). 21   The list has been borrowed from two different lists: that of the 2005 Uniform Foreign-Country Judgments Act and that of the American Law Institute. However, the reciprocity requirement is absent from the Uniform Act while it has been the object of several heated debates and close votes during annual meetings of the ALI.

Enforcement of Foreign Judgments  249 As it becomes clear when reading this long list, the judgment debtor has many opportun­ ities to drag the proceedings for recognition and enforcement for a long time in sharp contrast with the European system and most European Member States’ common law rules applicable to third-country judgments as will be seen below. In addition, the requested judge must explore many different aspects of the foreign judgment and the foreign proceedings, leading to extensive investigations to be conducted by the parties, so that the recognition and enforcement of foreign country judgments are relatively expensive proceedings. In conclusion to this very brief overview of the systems existing in the United States, it can be said that the recognition and enforcement of foreign country judgments is still in a state of complexity because of the uncertainty as to whether State or federal law applies. Morover, we certainly find that the long list of obstacles mentioned above, although none of them individually, may give too much leeway to the judgment debtor. Finally, the reciprocity requirement is very difficult to conduct because of uncertainty as to how the verification must be accomplished, the comparison between systems being so difficult to ascertain. Again it will result in extra time and costs, since it may very well be necessary to call in foreign law experts to explain the State of the law of the country of origin. Let’s now turn to the system in the European Union.

B.  The European Union The Founding Fathers of the then European Economic Community had the foresight of considering that an integrated common market would call for a common regime of recognition and enforcement of foreign judgments. In fact, it is well known that Jean Monnet had experience in the United States and knew about the Full Faith and Credit Clause of the US Constitution mentioned above. Hence, in Article 220 Treaty of Rome of 1957 (unchanged until its elimination by the Treaty on the Functioning of the European Union) the recognition and enforcement of foreign judgments was mentioned as one of the topics to be the object of intergovernmental negotiation alongside arbitral awards and other matters such as the recognition of companies and tax matters. Nothing was done for arbitration since there were ongoing negotiations at the time within the framework of the United Nations about what would later become the New York Convention of 1958. Its success in the years to follow and to date has rendered moot the necessity of preparing a specific text for the region, although an attempt was made, outside the European Community strictly speaking, with the Geneva Convention of 1961 which has turned out not to be successful. As far as judgments were concerned, the Brussels Convention came into being in 1968 and entered into force in 1973 after all six original Members of the Community ratified the text and the Protocol giving jurisdiction to the European Court in Luxembourg to interpret the provisions through preliminary rulings requested by Member States courts. Thus, contrary to what was done in the United States, instead of relying on a broad and vague concept, such as comity, the European Member States chose to codify the area into a Convention. This is not surprising considering that all six original Member States were of the civil law tradition. The text proved to be remarkably successful and, apart from a few provisions on jurisdiction, did not give rise to major controversies in practice. The case-law of the European

250  Catherine Kessedjian Court of Justice clarified the most difficult issues.22 It was not until 1998 that it was felt the Convention could benefit from a revision. The exercise of revising the Brussels Convention started as an intergovernmental process. However, as the negotiations were almost nearing the end, the Treaty of Amsterdam entered into force, reorganising the competences of the then Community. The matter of recognition and enforcement of judgments, together with other issues of private international law, were from that time on part of what was known as ‘the first pillar’. The immediate consequence was that the Member States could no longer negotiate a convention but were now bound to adopt a regulation or a directive (as the case may be), ie a Community Act. This is why, at the end of 2000, Regulation 44/2001 was adopted, replacing the Brussels Convention. Two main features make the intra-European system very distinctive from the existing laws in the Member States: (1) foreign judgments are to be given res judicata effect through recognition on an automatic basis unless the judgment debtor contests the matter; (2) the obstacles the judgment debtor could raise against the judgment are extremely limited. The policy choice made by the Member States was clearly in favour of what would be known later on as ‘the free movement of judgments’, adding a new freedom of movement to the four originally organised by the Treaty of Rome. As the European Community – and later the Union – expanded, the system became more and more liberal. The first stage of the exequatur procedure became a mere formality and the control was left to the second stage only, hence recognising the need for a system which gave the judgment creditor greater chances to have his rights recognised and enforced through a rapid process. At the same time, other regulations were adopted in specific areas. In these recent texts, the exequatur procedure was entirely abolished. The policy behind such a drastic change was again the integration of the European territory into one area where Justice, Freedom and Security were achieved via common means. Hence, a judgment handed down in one of the Member States was to be considered as if it were an internal judgment of the other Members where that judgment was to be recognised or enforced. Often, this policy is portrayed as being based on ‘mutual trust’ which must exist between the Member States. Having said that however, the European system left untouched the laws of the Member States as far as the recognition and enforcement of judgments coming from third States was concerned. As a consequence, the system in the European Union to date resembles, as far as the source of law is concerned, that of the United States. It is true that the current revision of Regulation 44/200123 proposes that the Regulation be ‘internationalised’, ie that it applies also to disputes arising with foreign-country residents/citizens.24 If that is done, it would achieve for the European Union what the American Law Institute wanted to achieve for the United States in proposing a federal statute. It is too early at this stage to say whether this will happen. If it does, the content in any case will be more liberal than the US systems described above because it will be deeply influenced by the very liberal, pro-free-­movement22   For a detailed and comprehensive analysis of the ECJ’s case-law, see H Gaudemet-Tallon, Compétence et exécution des jugements en Europe, 4th edn (Paris, Librairie générale de droit et de jurisprudence, 2010). 23   It is difficult to give a precise idea of the calendar to be followed for the revision of Brussels I. However, at the time this paper is finalised it has been announced that the revision takes priority in the agenda of the Commission, so that a proposed revised Regulation could be published before the end of 2010. If that is so, then the revised Regulation should be finally adopted before the end of the first semester of 2011. 24  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.

Enforcement of Foreign Judgments  251 of-judgments system organised for intra-European relations. Of course, if the option to internationalise the Regulation is adopted, there will be two sets of rules in the text: one for intra-European judgments and another one for foreign-country judgments, the second being slightly stricter than the first.25 Until Regulation 44/2001 has been internationalised, foreign country judgments are to be recognised or enforced according to each Member States laws. They do vary quite significantly. The Nordic States (like Sweden, Denmark and the Netherlands) require that in order to give effect to third-country judgments, a treaty be signed with the country from which the judgment originates. In the absence of such treaty, a new action must be started in the requested country. This may seem to be very inconvenient at first sight. However, the new action depends heavily on the foreign judgment brought as decisive evidence in the new action. The difference is more one of form, ie procedure, than of substance. In other countries, the reciprocity requirement still exists in the books, although it has not been applied in practice for a long time. Finally, in another group of countries, the system is very liberal. France is one example of such a liberal system. Over the years, the Cour de Cassation has abolished some of the obstacles to recognition and enforcement as defined in the Munzer case,26 which forms the source of law in the area. Consequently, a French judge asked to give effect to a third-­ country judgment will look at the jurisdiction of the court of origin,27 the absence of fraud28 and the conformity with French public policy, both in terms of procedure and substance.29 To conclude the first part of this paper, it can be said that, in competition matters, a codification of the rules for the recognition and enforcement of foreign judgments is even more necessary in order to provide legal certainty and predictability. In a world where the regulation of markets heavily depends on competition rules, the recognition and enforcement worldwide of civil judgments would contribute efficiently to achieving the goals of competition policy. Rules existing today in the field are sufficient to match the needs of competition policy. However, there are two specific issues which much be addressed separ­ ately. That is what we are going to study in the remaining part of this paper.

III.  Specific Issues in Competition Law Two questions are specific to the competition area: (i) punitive damages, which may be ordered in a number of legal regimes; (ii) the imposition of administrative penalties ordered by competition authorities, independently of the civil damages ordered by courts. An additional question is not exactly specific to competition matters but may be often encountered in that area. It concerns the fact that the foreign judgment may have been 25   For some proposed rules to apply to third-country judgments, see the proposed rules adopted by the Groupe européen de droit international privé/European Group for Private International Law (GEDIP/EGPIL) at its Copenhagen meeting in September 2010. 26   Cour de Cassation (1st Civil Law Chamber) 7 January 1964 (1964) Revue critique de droit international privé (RCDIP) 344 note H Batiffol; (1964) Journal du Droit International – Clunet 302 note B Goldman. 27   Through the very liberal lenses of the Simitch case (Cour de Cassation (1st Civil Law Chamber) 6 February 1985 (1985) RCDIP 369) with the chronique of P Francescakis p 243. 28   Although this is considered as a separate obstacle, the case-law is missing and it is generally understood that the presence of fraud is extremely difficult to prove, hence almost never applied. 29   The violation of French public policy by a third-country judgment is very seldom.

252  Catherine Kessedjian rendered in the framework of a collective action (class action) proceedings. We will study successively these three issues.

A.  Punitive Damages30 It is not for us to suggest any changes in any existing body of law around the world which provides for punitive damages, or their equivalent, as a deterrence tool against infringements of competition law. Our discussion will only focus on the role of the requested court (ie the court which is asked to recognise or enforce the judgment ordering the infringer to pay punitive damages). The question can be summarised as follows: can the requested court decide not to recognise that portion of the judgment or decide to recognise it but lower the amount of damages that has been ordered by the court of origin? There are several ways to answer this question. Under French non-conventional/non-EU law, the requested judge has the power to recognise only a portion of the foreign judgment, as long as it is possible to separate the nonrecognised portion from the recognised one, ie that the two portions are separable without endangering the coherence of the foreign judgment. When it comes to damages, this is quite easy to do, as long as the foreign judgment indicates clearly the different steps of the calculation method, either in the dispositif itself (the operative part of the decision) or in the reasoning. Although the Cour de Cassation has had the opportunity to decide on the recognition and enforcement of a decision coming from the United States and including punitive damages, it did accept the judgment without a discussion of that aspect of the foreign judgment.31 Under European law, this is not as easy to decide since the Brussels Convention and its replacement Regulation 44/2001, together with the Lugano Convention (both in its original version and the amended version), provide nothing on the issue. The most authorised interpreters of those documents have convincingly said that the silence of the texts must be interpreted as an implicit authorisation of such a process, as long as one portion of the foreign judgment only would be irreconcilable or contrary to public policy. This does make sense since it conforms to the general goal of free movement of judgments within the European Union. It is better to recognise or enforce only part of a judgment instead of refusing it altogether. When it comes to judgments coming from foreign countries, the law of the European States is still national law and, while some States have not had problems enforcing punitive damages on their territory, some States have considered that punitive damages may be contrary to their public policy. This is the case in Germany. On 4 June 1992, the German Federal Court of Justice (BGH) decided that the punitive damages awarded by the foreign court may not, as a rule, be held enforceable in Germany, if the amount is ‘not inconsiderable’.32 The 30   A very useful symposium was held in March 2004 in Pittsburgh on Punitive Damages in US Courts and Their Reception Abroad. The proceedings of the symposium are published in (2004–05) 24 Journal of Law and Commerce. Three papers are particularly noteworthy for this discussion: V Behr, ‘Myth and reality of punitive damages in Germany’ 197; S Jablonski, ‘Enforcing US punitive damages in Foreign Courts: A recent case in the Supreme Court of Spain’ 225; L Ostoni, ‘Italian reflection on punitive damages in a US judgment’ 245. 31   Cour de Cassation (1st Civil Law Chamber) 20 February 2007, Cornelissen (2007) RCDIP 420 note B Ancel and H Muir Watt. 32   An English translation of large excerpts of the German decision has been published in (1993) 32 International Legal Materials 1320.

Enforcement of Foreign Judgments  253 decision is not entirely of interest to us as the US judgment dealt with a case of sexual abuse having occurred in California and the defendant, who had dual US and German nationality, had fled to Germany after the decision was handed down in the US. However, the reasoning of the German Federal Court is of interest. The court recalled the philosophical basis for ordering punitive damages: In cases where the risk of having to pay compensation is not, in itself, sufficient to ensure an adequate change in behaviour, the offender and the general public should be deterred from indulging, in the future, in any conduct which may be detrimental to society.33

Having said that, the Court agreed with the appellate court that such punitive damages are not to be mistaken with criminal penalties, but do stay in the realm of civil law.34 The court then turned to the fact that the granting of punitive damages means that the plaintiff to a civil action is transformed into a ‘private public prosecutor’35 which is incompatible with the German tradition in which the State has the monopoly on punishment. It then proceeded to analyse whether the punitive damages could have a compensatory function. Since it did not, the Court concluded that enforcing that part of the US judgment would be contrary to German public policy. In doing so, the Court carefully analysed the foreign decision to try to decipher the motives for the granting of such damages. The difficulty came from the fact that the US court had granted a lump sum. This is why the Court recognised that, often, the foreign judgment is not specific enough on this issue. But because the German judge cannot ‘take the place of the foreign judge’,36 in case of doubt, enforcement will be refused. It is not without interest to mention that the finding of the German Supreme Court has been generally accepted since a recent case showed that a Wisconsin corporation which had sued a German company in the US and obtained punitive damages, did not even attempt to enforce that part of the judgment in Germany.37 However, Volker Behr considers that the more recent evolution of German law shows that the 1992 decision of the German Federal Supreme Court may not be good law anymore at least insofar as it said that punitive damages are not enforceable in Germany ‘in general’.38 The author concludes that at least some punitive damages could be enforced if they have been awarded ‘in a reasonable amount’. This matter haunted the negotiations in the Hague Conference on Private International Law for some time. The origin of the difficulty came from the negotiation of a bilateral Treaty between the United States and the United Kingdom, two countries separated by the same language as the saying goes, which could not come to fruition because UK insurance companies were concerned they would have to cover punitive damages and other ‘extravagant’ orders rendered in the United States against UK-based corporations. The inclusion of a special provision in the draft Treaty allowing the requested judge not to enforce that portion of US judgment was not sufficient to appease those concerned and the Treaty never saw light. The discussion followed the same stream when the negotiation reached the Hague on the proposed worldwide convention on jurisdiction and foreign judgments. There too, the same concerns were aired. There too, a special provision was incorporated into the draft   ibid 1337.   ibid 1338. 35   ibid 1339 and again 1344. 36   ibid 1342. 37   BGHZ 141, 286, cited by Behr, ‘Punitive damages in Germany’ (n 29) 205. 38   Behr (n 29) 207 ff. 33 34

254  Catherine Kessedjian convention. There too, the provision was considered as not sufficient and contributed to the general dissatisfaction with the draft. A reminiscence of that discussion can be found in the 2005 Hague Convention on Choice of Court Agreements where Article 11, entitled soberly ‘Damages’ provides as follows: (1) Recognition or enforcement of a judgment may be refused if, and to the extent that, the judgment awards damages, including exemplary or punitive damages, that do not compensate a party for actual loss or harm suffered. (2) The court addressed shall take into account whether and to what extent the damages awarded by the court of origin serve to cover costs and expenses to the proceedings.

This provision is fairly clear but needs to be clarified particularly as far as its second paragraph is concerned. That paragraph refers indirectly to the system of contingency fees as known, notably, in the United States. That system results typically in the inflation of damages to cover the ‘investment’ made in the case by the plaintiffs’ lawyers who have, under that system, financed a case that may not have been launched in the first place for lack of financial means on the part of the plaintiffs. Of course, this is mostly the case in product liability cases. But it is not entirely impossible that this could also be the case for competition matters when the plaintiffs are small and medium size corporations with limited financial means. Therefore, this type of provision is pertinent also in the field at issue here. The above discussion leads us to propose that the requested court be granted the power to refuse enforcement of the punitive damages portion of the foreign judgment, or to reduce the amount to be enforced, as long as it finds, considering all the circumstances of the case, both in the country of origin and the requested country, that the amount ordered is unreasonable. This should be provided by a special provision in the text, so that the public policy exception is not used in this context. It is indeed a better policy not to inflate the uses of the public policy exception. It is also preferable to give clear guidelines to the requested judge, which the public policy exception does not provide since it is too open-ended.

B.  Administrative Penalties in Addition to Civil Damages This is a peculiarity of competition law. Private enforcement, in the form of civil damages actions by persons or legal entities harmed by the violation of competition law, often comes, at least in the EU, in addition to public enforcement. Consequently, it is not improbable that the same company, having infringed competition law, would be the subject of both types of actions: one characterised as ‘administrative’ carried out by competition authorities and one characterised as ‘civil’ carried out by courts. This would result in the same company being fined by the competition authorities and having to pay damages (sometimes also punitive) to harmed clients or competitors. The question is: to what extent the requested court should or could take into consideration the fact that the competition violator has already been fined? The question is legitimate in two respects. First, it is well-known that the fines ordered by competition authorities, particularly in Europe, are becoming very high. It is true that these fines are measured against the long-term violation of competition law and the turnover which has been made by the violator. But it is also true, and this is the second reason, that there is a general principle of law, at least in Europe, against double jeopardy. This is a long-

Enforcement of Foreign Judgments  255 standing principle in European law, both under the law of the Council of Europe39 and that of the European Union. Even though this rule has been created for criminal offences, it is generally understood as applying equally to administrative and civil procedures. Hence its applicability in the competition area. Therefore, if in the same case, the same company is ordered to pay fines and is also ordered to pay damages for private enforcement, the requested judge should probably take into consideration the overall amount of penalties paid before it accepts the recognition and enforcement of the damages ordered by the judge of origin. In doing so, the requested judge should take into consideration all the circumstances of the case. Particularly, it would be important for the judge to give due consideration to the actual damages suffered by private parties on the market and to make sure that any refusal to enforce partially the foreign judgment does not deprive the injured private persons of legitimate damages. Indeed, the violation of competition rules does have a double effect: one is the disruption of the well functioning of the market which is sanctioned by fines; the second is the injury to private actors on the market (customers or competitors) which is compensated by damages.

C.  Judgment Handed Down After a Collective Action This is not a competition-related issue, strictly speaking. However, competition violations often do give rise to a collective action so as to enable the private persons injured, who may not have the means to act individually, to obtain proper compensation for the harm suffered. The difficulty at the recognition and enforcement level stems from one sort of collective redress, the so-called ‘opt-out class action’. The opt-out proceedings are peculiar because the plaintiffs who are part of the certified class do not need to appear in court or to let their involvement known one way or the other. They are bound in any case. They are called the ‘absent plaintiff ’ or ‘absent class member’ in the US terminology. If they do not want to be bound, they need to inform the court through the ‘opt-out’ mechanism. The difficulty is that, sometimes, the ‘absent plaintiffs’ are not informed that proceedings are on-going and they need to act if they do not want to be bound by the outcome of the proceedings. The US Supreme Court, confronted with a question concerning the ‘absent plaintiff ’, has used the same concept of ‘due process’ as the one used to define the powers of a court against a defendant.40 The Court imposed a duty to inform the ‘absent plaintiffs’ so that they may exercise their rights of opting out in due course. This is a crucial aspect for the protection of fundamental rights of the plaintiffs who are going to be bound once the settlement is accepted by the court or a judgment is entered. This is also crucial for the requested court to accept to give effect to that settlement or judgment outside the country of origin. If the information is conducted properly, then there is no reason why the judgment should not be recognised or enforced outside the country of origin.

39   The Seventh Protocol to the 1950 Human Rights Convention, Art 4, provides: ‘No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State’. 40   Phillips Petroleum Co v Shutts 472 US 797 (1985). In general on transnational group actions, see the International Law Association (ILA) Report and Resolution adopted at the Rio Conference in 2008, available on the ILA website, www.ila-hq.org.

256  Catherine Kessedjian

IV. Conclusion In conclusion, if the European Union were to adopt new rules on civil remedy for competition matters, the recognition and enforcement part of the system would have to follow different rules depending on whether the judgment to be enforced comes from another Member State, or from a third country. In the first case, the rules presently known in Europe under Regulation 44/2001 are satisfactory for competition matters. We may add a specific rule allowing the requested judge to lower the amount of damages if the judgment debtor has also been fined by competition authorities. If the judgment comes from a third country, then the rules must be slightly different and less liberal than for the intra-European system. Of course, the rule to address the enforcement of a damages judgment in presence of a fine will also have to be present in the system organised for third-country judgments. In addition, a specific rule must be drafted to address the punitive damages which may be ordered by the foreign court. Finally, the future rules must address the issue of the recognition and enforcement of foreign judgments handed down in the context of a collective redress mechanism. If it is an opt-in system, there is no difficulty, since all plaintiffs are duly participating in the proceedings under a specific mandate. If, on the contrary, the foreign judgment is handed down in the context of an opt-out mechanism, the requested judge will have to verify that the ‘absent plaintiff ’ has been duly informed of his rights to opt-out so that he will not be bound by the judgment in case no proper information has been issued.

Part II International Antitrust Litigation – Coordination Issues II.1 Coordination between Competition Authorities and Courts

12 Access to Evidence and Files of Competition Authorities LAURENCE IDOT*

I. Introduction As with the application of any rule of law, in competition law, evidence and access to evid­ ence are central questions whatever the component in question. More than in ex ante control,1 based on a notification where the parties will voluntarily communicate various information, it is particularly significant in the law concerning anti-competitive practices (or antitrust in the EU sense) due to the quasi-repressive and ex post nature of control. That said, and even if limited to anti-competitive practices, the issue arises under differ­ ing terms depending on whether the matter is one of public enforcement or private enforce­ ment. In a public enforcement context, access to the file is mainly of concern to the prosecuted undertakings. It is connected with the more general issue of rights of the defence, since it is a question of determining the extent to which these undertakings can have access to the file that the prosecuting authority has constituted, in order to be able to assess how well grounded the complaints that have been notified to them are and to prepare their defence. In all competition laws, there are precise rules. In EU law, for example, the Commission published a new communication in 2005, integrating the case-law of the Court of First Instance and the European Court of Justice (ECJ), on access to the file.2 Additionally, if the origin of the case was a complaint, the question of access to the authority’s file may also arise for the complainants. However, as they cannot in general rely on rights of the defence,3 *  Professor at the University of Paris II-Panthéon Assas, Collège européen de Paris; member of the French Competition Authority. 1   Ex ante controls refer to merger control and, in European Union law, the control of State Aids. 2   Commission Notice on the rules for access to the Commission’s file [2005] OJ C325/7. Concerning the gen­ eral issue of access to the file, see N Coutrelis and V Giacobbo, ‘La pratique de l’accès au dossier en droit commu­ nautaire de la concurrence: entre droits de la défense et confidentialité’ (2006) 2 Concurrences 66; L Idot, ‘L’accès au dossier dans la procédure de mise en œuvre des articles 81 et 82 CE. Questions en suspens’ in Le droit à la mesure de l’homme. Mélanges en l’honneur de Philippe Léger (Paris, Pédone, 2006) 199. 3   This is the case in particular in European law (L Idot, ‘Le respect des droits de la défense’ in F Sudre (ed), Réalité et perspectives des droits fondamentaux (Brussels, Bruylant, 2000) 213). There are however exceptions, such as in French law where the undertaking filing a complaint with the Competition Authority may rely on the principe du contradictoire, the adversarial principle according to which each party has the right to respond.

260  Laurence Idot they most often benefit from only limited access, although certain rights are recognised in their favour. In an international perspective, the question of access to the file in a ‘public enforcement’ context mainly challenges the system of exchanges of information among the various com­ petition authorities. In the EU context, the problem has been resolved by Regulation 1/20034 and the establishment of the European Competition Network, within which exchanges of information are essentially unfettered.5 On an international level, bilateral cooperation agreements,6 or even soft law texts with a multilateral scope, also allow for exchanges of information and acknowledge rights of access to the files or to evidence held by the partners.7 In a ‘private enforcement’ context, the issue of access to evidence is all the more fundamen­ tal, since the burden of proof lies with the party making the claim, ie the plaintiff in an action for damages. For victims of an anti-competitive practice, in whatever capacity they may be acting (competitors, suppliers, customers, consumers), access to evidence is a requirement for the success of any action for damages. The specific difficulties in this area are known and have been identified by the Commission in studies undertaken in recent years:8 not only is this field ‘fact intensive’ by nature, but there is also a dissymmetry of information between the victim and the person causing the harm.9 As positive law cur­ rently stands, antitrust laws do not contain rules on the subject. Within the European Union, in the absence of provisions in Regulation 1/2003, and sub­ ject to the potential interplay of EC instruments adopted in another context, applying the principle of procedural autonomy, the question has been left to the discretion of the 27 national laws, with all of the divergences which can arise. It is not therefore surprising that the Commission has placed this subject at the centre of its concerns both in the Green Paper10 and later in the White Paper of 2008.11 Similarly, it is logical that the proposal for draft legislation following on from the 2008 consultations,12 hereinafter referred to as the ‘pre-draft Directive’, has dedicated substantial developments to it.13 Whatever the future of this pre-draft which, to date, has only circulated informally, it has a certain interest on a theoretical level which justifies it being mentioned. 4   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. Many studies have been devoted to this text, which is dealt with in all current books on EU competition law. 5   Art 12 Regulation 1/2003; see also Commission Notice on cooperation within the Network of Competition Authorities [2004] OJ C101/43. 6   See especially the agreements entered into with the United States, Canada, Japan, Korea and Brazil. For a list of agreements in force, see the DG Competition’s website, International section. 7   For a very complete study of these agreements in a strictly legal perspective, F Cavedon, ‘Les aspects inter­ nationaux de la politique communautaire de concurrence’ (DPhil thesis, Lille II University, 2003). 8   See the Green Paper (n 10) and the White Paper (n 11). 9   See especially the Explanatory Memorandum on the pre-draft Directive, particularly paras 66–69. 10   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. 11   Commission, ‘White Paper on Damages actions for breach of the EC antitrust rules’ COM (2008) 165 final; 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. 12   Commission, ‘Proposal for a Council Directive on rules governing damages actions for infringements of Articles 81 and 82 of the Treaty’, not yet published. The text of the proposal is accompanied by an Explanatory Memorandum. 13   See c 3 ‘Access to evidence’ and the Explanatory Memorandum on the pre-draft Directive paras 65 ff.

Access to Files and Evidence  261 The question is all the more acute in relations with third States, as the problem is not at all considered in the existing cooperation agreements which only deal with ‘public enforce­ ment’. Although there is no doubt that as things stand, one is obliged to resort to classic pro­ cedural principles and rules, a particularity which is specific to competition law must nonetheless be integrated. Indeed, two situations have to be distinguished. In the first hypothesis, the claimant in an action for damages has brought proceedings directly against the persons accused of committing the anti-competitive practices. That corresponds to what is referred to as a ‘stand-alone action’. Precisely because of the difficul­ ties in producing evidence, this situation is rare and the victim very often prefers to wait for the competition authority to decide on the existence of the infringement first. This there­ fore becomes a ‘follow-on action’. This twin procedural possibility has the consequence that the question of evidence does not only apply to disclosure inter partes. If the private action has been preceded by public action, or if public action is ongoing in parallel with the private action, the victim quite clearly has an interest in gaining access to the file of the competition authority which has decided the case and which will certainly have more in it than his own. An additional difficulty should be mentioned, arising as a consequence of the development of competition law, and which concerns the nature of evidence. For a long time, competi­ tion law above all used documentary evidence, or even sorts of expert assessments carried out on the ground such as price surveys. The development of the fight against hard core cartels and, at the same time, the development of leniency programmes, has somewhat changed the game.14 Oral declarations play a significant role in this particular case, and can even be a determining factor. To start with, the European authorities sought to preserve the effectiveness of their leniency programmes by accepting a paperless procedure.15 This being in an international perspective, it is not certain that this profoundly alters the situation, since there will always be a material trace of the declaration. The problems that are encoun­ tered may be considered to be of the same order as for access to documentary evidence. In time, however, the situation could change. New difficulties as to the evidentiary value to be attributed to such oral declarations are just starting to surface before the competition authorities. They must, in principle, be resolved by the lex fori. Without touching on the problem of evidentiary value, this chapter will therefore limit itself to the question of access to evidence. Drawing out the broad lines, one can begin with the principle that the evidence that the victim wishes to access may be held by the author of the anti-competitive practice, the defendant, this term being construed broadly,16 or in the hands of the competition authority. In this set of relations, there may be four persons involved, in a sort of two-sided situa­ tion: on the one side, the victim, ie the claimant, and the ordinary court before which the 14   Among the numerous studies, see in particular, in a comparative perspective with a substantial bibliography, J-C Roda, La clémence en droit de la concurrence: Étude comparative des droits américain et européen (Marseille, Presses Universitaires d’Aix-Marseille, 2008). 15  Roda, La clémence en droit de la concurrence (n 14) paras 523 ff. See also L Idot, ‘Les procédures de clémence en droit de la concurrence’ in JM Jude (ed), La clémence et le droit (Paris, Economica,n 2011) paras 57 ff. 16   The perpetrator of the anti-competitive practice is an undertaking. In the event of oral declarations then the people involved will be the directors and executives, and perhaps the employees, of that undertaking.

262  Laurence Idot action has been brought; on the other side, the author of the infringement, or perhaps a third party,17 and possibly a competition authority or a public authority.18



State A

State B

Relations between the different persons involved

If the evidence is located in a State other than that of the court to which the case has been referred, then the international dimension has to be added and private international law mechanisms have to be introduced. At first sight, two relationships do not give rise to any specific difficulty in international law: first, the relationship between the victim and the competent court and, secondly, the possible relationship between the author of the infringement and the competition author­ ity. Each of these two relationships, applying the usual principles, will be governed by the lex fori. On the other hand, when the authority holding the documents is located in another State, or where the evidence held by the undertaking is located in a territory other than that of the court before which it is summonsed, difficulties will arise as to the tools and mecha­ nisms which can be used to obtain access to evidence. In order to move forward in this mostly virgin territory, at least as far as competition law is concerned, it is necessary to move forward carefully, distinguishing those elements that we have within the European Union (II) before reasoning in a truly international perspective (III).

17   Some evidence may also be in the hands of third parties. The tools used enter within the notions of disclo­ sure inter partes, and no specific framework is given (see Art 7(2) pre-draft Directive and Explanatory Memorandum on the pre-draft Directive no 121–26). We will not make any distinction on this basis in the follow­ ing developments, since in international law the difficulties are of the same nature. 18   In the Explanatory Memorandum on the pre-draft Directive, the Commission limits itself to noting that there are special rules for access to information held by the public authorities, which must prevail as special rules (no 127).

Access to Files and Evidence  263

II.  Access to Evidence in the Context of the European Union At this stage, the aim is to identify the means which would allow a victim of an anti-­ competitive practice, a claimant in an action before an ordinary court which, incidentally, would have jurisdiction under Regulation 44/2001,19 to have access to items of evidence held either by the defendant or by a competition authority in a Member State other than the court’s own State (A). Supposing that such a ‘right of access’ exists, then conversely it has to be determined whether the holder of evidence may rely on any legitimate grounds to prevent the dis­ closure of that evidence. In the framework of public enforcement, we know that there are many such grounds, including legal privilege, business secrets, professional secrecy, and so on (B).

A.  Acknowledgement of a Right of Access The situation does not present itself in exactly the same way depending on whether one is reasoning in terms of access to evidence held by the other party, in other words disclosure inter partes (i), or in terms of access to the competition authorities’ files (ii).

i. Disclosure Inter Partes a.  Situation in Positive Law (De Lege Lata) 1.  On the Internal Level, a Diversity of Laws In the absence of specific rules in EU law, even where the applicable competition law is that of the European Union, ie Articles 101 and 102 TFEU, the question of access to evidence held by the adversary is a procedural question, which is a matter for the national law of the court to which the case has been referred, ie the lex fori. The application of the lex fori is simply subject to the inherent limits of the principle of procedural autonomy, as developed by the ECJ. It must comply with the principles of equivalence, which in general does not pose any problem, and effectiveness.20 This has the practical consequence that potentially 27 different national legal systems could apply. The studies undertaken by the Commission in competition law21 have confirmed what all specialists of comparative civil procedure had identified long ago: the existence of rela­ tively significant differences among the legal systems of the Member States. 19   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. On this question, see Vilà Costa, Basedow, Wilderspin, chapters 2, 3 and 4 in this volume. 20   For an application of the principle of institutional and procedural autonomy to actions for damages in com­ petition law, see the ECJ judgements in Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297, and Joined Cases C-295/04 to C-298/04 Vincenzo Manfredi and others v Lloyd Adriatico Assicurazioni SpA and others [2006] ECR I-6619. On this point, see the Explanatory Memorandum on the pre-draft Directive paras 76–83. 21   See on this point, the so-called Ashurst Report (31 August 2004), available on the website of the DG competi­ tion, http://ec.europa.eu/competition/antitrust/actionsdamages/comparative_report_clean_en.pdf.

264  Laurence Idot Painting this picture with an extremely broad brush, it is possible to differentiate the continental legal systems, in which the burden of proof lies with the claimant and where the judge has a relatively passive role, and English law. In the latter there are more effective ‘discovery’ procedures which turn out to be particularly attractive for claimants. It is true, however, that some nuances have to be made. For example, even in a continen­ tal system such as French law,22 the judge has certain means for intervening, to the extent that it has been possible to speak of a ‘right to evidence’ in the general context of the civil law. Nevertheless, we clearly find ourselves in a mosaic of solutions. In practice, the end result is a risk of forum shopping. Indeed, the claimant will probably seek to use the potentialities opened up by Regulation 44/2001 in order to bring proceed­ ings before a court which will then apply the most favourable law, in particular as to the means of access to evidence and perhaps as to the scope of compensation. The famous Provimi case,23 which took place before the English courts, remains fresh in the minds of all. It has not remained an isolated case as we can see similar litigation starting to develop in the UK. 2.  On the Intra-EU Level, the Limits of Existing Instruments In any event, even though the competent ordinary court’s powers to oblige the defendant to produce evidence in its possession are not negligible, difficulties arise as soon as the situa­ tion has some extraneous side to it. This is the case even where a foreign defendant is prop­ erly brought before the court to which the dispute has been referred, if the evidence is located in the territory of another Member State. This matter remains dominated by the principle of territoriality. To get around this princi­ ple, four major means of obtaining evidence abroad have been identified.24 In the absence of a specific instrument for international cooperation,25 a court does not, in principle, have direct access to an item of evidence located in another Member State. The search for proof is subordinated to the parties; either they voluntarily accept to produce evidence, or one of them attempts to obtain a court order to produce evidence from the courts of the State in which the evidence is to be found. That said, it may be tempting for the court with jurisdic­ tion to hear the merits to make use of its prerogatives, even if the evidence is located in another State, and issue an order with extraterritorial effects. The problem is not specific to actions based on the infringement of competition rules. The problem exists in all matters. Nor is it specific to intra-EU relations, but takes on a particular dimension within the EU due to the existence of the Area of Freedom, Security and Justice. One therefore has to wonder about the possible use of existing instruments, of 22   See Art 11 French Civil Procedure Code; see also Art 145 Civil Procedure Code. For the application of these rules in competition matters, see P Rincazaux, ‘L’accès aux preuves dans le procès civil’ (2009) 2 Concurrences, édi­ tion 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. 23   This case is detailed by M Wilderspin, see his contribution in this book. See also L Idot, ‘Plaidoyer pour une réflexion sur l’articulation entre les procédures de clémence et les actions privées’ (2005) 3 Concurrences 25. 24  A Nuyts, ‘Le règlement communautaire sur l’obtention des preuves: Un instrument exclusif?’ (JanuaryMarch 2007) 96 (1) Revue critique de droit international privé (RCDIP) 53, particularly paras 2–6. See also Y Le Berre and E Pataut, ‘La recherche de preuves au soutien de procédures étrangères de fond’ (2004) 1 Revue de Droit des Affaires Internationales/International Business Law Journal 53. 25   These are in particular the classic mechanisms of international mutual legal assistance, such as the use of letters rogatory.

Access to Files and Evidence  265 which there are a priori two: Regulation 44/2001 on jurisdiction and the enforcement of judgments,26 and Regulation 1206/2001 on the taking of evidence.27 Since these two instruments have the common point of being applicable ‘in civil and com­ mercial matters’, one needs first to ask whether they may cover actions based on the infringement of Articles 101 and 102 TFEU. If the action is brought, not before a competi­ tion authority but before an ordinary court, with the end purpose of examining the validity of a legal document or compensation for harm caused, the answer is assuredly in the affirmative:28 this does indeed enter within civil and commercial matters. Any difficulties that may be encountered are therefore unconnected to the question of the scope of these Regulations, but concern the content of the mechanisms in place. (i)  Regulation 44/2001 Regulation 44/2001 contains a provision, Article 31 on provisional and protective meas­ ures, which at a first glance is of particular interest for resolving a difficulty in access to evidence in an international context. The possibility of using this provision to obtain access to evidence located in another Member State, however, supposes that the investigative measures enter within the category of ‘provisional or protective measures’. Part of the answer has been given by the ECJ in the Saint Paul Dairy judgment of 28 April 2005.29 In this case, in a dispute between two Belgian companies, one of them brought proceed­ ings before the Dutch courts on the basis of Article 186 Dutch Civil Procedure Code in order to obtain the hearing of a witness residing in the Netherlands. The ECJ considered that the Dutch court did not have jurisdiction under the Brussels Convention, which was applicable at that time. The merits of the case were within the jurisdiction of a Belgian court and Article 24 of the Convention on provisional measures was inapplicable, as the request for the hearing of a witness did not correspond to the qualification of provisional or protective measure. A superficial reading could lead one to conclude that Article 31 Regulation 44/2001 is therefore of no interest in resolving a problem of access to evidence located in another State in competition law. However, the scope of this judgment has been hotly debated in academic writings.30 For some, who proceed with a very broad reading of the judgment, all investigative measures, whatever their nature, would be excluded from the category of provisional and 26   For an exhaustive and up-to-date study, see H Gaudemet-Tallon, Compétence et exécution des jugements en Europe, 4th edn (Paris, Librairie générale de droit et de jurisprudence (LGDJ), 2010). 27   Council Regulation 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil and commercial matters [2001] OJ L174/1. On this Regulation, see A Nuyts and N Watté (ed), Civil Litigation in the European Judicial Area and Third States (Brussels, Bruylant, 2005) (mainly C Besso, 365 ff; P de Vareilles-Sommières, 381 ff); C Bruneau, ‘L’obtention des preuves en matière civile et commerciale au sein de l’Union Européenne: Règlement (CE) No 1206/2001 du Conseil du 29 mai 2001’ (2001) I Juris-classeur périodique 1770; ML Niboyet and D Lebeau, ‘Regards croisés du processualiste et de l’internationaliste sur le règlement (CE) du 28 mai 2001’, Gazette du Palais 19–20 February 2003. 28   L Idot, ‘Le cas du droit de la concurrence’ in S Peruzzetto (ed), La matière civile et commerciale, socle d’un droit international privé européen (Paris, Dalloz, 2009) 171–88. 29   Case C-104/03 Saint Paul Dairy Industries NV v Unibel Exser BVBA [2005] ECR I-3481, note E Pataut (October-November 2005) 94 (4) RCDIP 742. 30   For a presentation of the various arguments, see H Gaudemet-Tallon, Compétence et exécution des jugements (n 26) para 308-I.

266  Laurence Idot protective measures. As a consequence, the method by which one of the parties directly addresses himself to the local court to have it order the production of evidence would always be struck down. In other words, it would be necessary to petition the court with jurisdiction on the merits, which would then use the only available EU instrument to obtain evidence in another Member State, Regulation 1206/2001. This extreme thesis is undoubtedly wrong, because two distinctions have to be made. The first relates to the question of jurisdiction. If the request for an investigative measure is brought before the court which also has jurisdiction for the substantive issues, that court will always be competent to examine the matter. The problem is more delicate if the request is made to a court which does not have jurisdiction for the substantive issues. How does Article 31 Regulation 44/2001 interact with Regulation 1206/2001? The second pertains to the nature of the investigative measure. In the case in question, it was a measure in futurum, hence the question whether the Court intended to exclude all investigative measures or if distinctions should be made according to the nature of the measures and, as with the case in question, measures in futurum should be excluded. For Arnaud Nuyts, one can always petition the local court, if this is necessary to preserve the effectiveness of the proceedings on the merits. The Court’s approach was too restrictive, even though one of the grounds given in favour of the solution related to the existence of Regulation 1206/2001. Whatever the case may be, it is possible to state that as positive law stands, Regulation 44/2001 hardly concerns itself with the question of obtaining evidence located in a Member State other than the one in which the competent court is located. In the context of revising this text, it would be helpful if the notion of ‘provisional or protective measure’ were fur­ ther specified, and similarly how it relates to Regulation 1206/2001. (ii)  Regulation 1206/2001 There is no doubt that Regulation 1206/2001 is applicable for obtaining evidence. The Regulation provides for two methods for the taking of evidence: the taking of evidence by the requested court following a request transmitted directly from the requesting court to the requested court,31 and the direct taking of evidence by the requesting court.32 Both methods share some technical aspects (use of a Form A,33 use of the official language of the requested court,34 transmission by the swiftest possible means which the requested Member State has indicated it can accept,35 sending of receipt to the requesting court using Form B within seven days of receiving the request).36 Under the first method, the courts will communicate directly between themselves. The requesting court will directly submit the request for the taking of evidence to the requested court, which should execute the request without delay, at the latest within 90 days of receiv­ ing it. In general, the requested court executes the request in accordance with its own law. This first procedure is therefore based, as with classic mutual legal assistance via letters rogatory, on collaboration between the two courts and its effectiveness depends on the full cooperation of the authorities in the State where the evidence is located.   Regulation 1206/2001, s 3 Arts 10–16.   ibid s 4 Art 17. 33   ibid Art 4. 34   ibid Art 5. 35   ibid Art 6. 36   ibid s 3 Art 7. 31 32

Access to Files and Evidence  267 The second method is established as an alternative which allows the court of a Member State to take evidence directly in another Member State. Use of this method, presented as being the Regulation’s main innovation, is subject to two conditions: the court must pre­ sent a request to the central body of the other State, which will state whether it defers to this request and under which conditions the act is to be executed; in addition, direct execution is only possible if it can take place on a voluntary basis and without it being necessary to use coercive methods. Basically, this remains a matter of classic mutual legal assistance. The Commission has carried out a study37 to evaluate this Regulation, from which it drew the following conclusions in 2007. In general, in purely technical terms: The application of the Regulation has generally improved, simplified and accelerated the coopera­ tion between the courts on the taking of evidence in civil or commercial matters. The Regulation has achieved its two main objectives, namely firstly to simplify cooperation between Member States and secondly to accelerate the performance of the taking of evid­ence, to a relatively satisfac­ tory extent.38

It deduced that modifications of the Regulation are not required, but its functioning should be improved. That said, despite the existence of a practical guide: [T]he Regulation is not enough known yet among legal practitioners. This leads to unnecessary delays and problems. Therefore, the work accomplished in the context of the European Judicial Network in Civil and Commercial Matters should be better exploited in the Member States, and in particular it should be ensured that the practice guide is disseminated widely among legal practi­ tioners by any means.39

In the perspective of this study, one will note that on the one hand, on a theoretical level, the Commission did not examine the question of whether Regulation 1206/2001 was now the sole method of obtaining evidence located in another Member State, and on the other hand, no use in the field of competition law was mentioned. It is therefore high time to go further . . . b.  The Proposed Solutions (De Lege Ferenda) 1.  The Commission’s Proposals Aware of the crucial aspect of access to evidence, the Commission examined this problem following the consultations arising with the Green Paper and the White Paper. In the predraft Directive, it dedicated a large chapter to the question of access to evidence, from the perspective of disclosure inter partes.40 The idea was to take inspiration from the mecha­ nism concerning access to evidence inserted in Directive 2004/48 on the enforcement of intellectual property rights (IP Directive).41 37   Study on the application of Council Regulation 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matter, March 2007, FINAL_REPORT_1206_A_09032007. 38   Report from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 5 December 2007 on the application of the Council Regulation 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters COM (2007) 769 final. 39   Practice Guide for the Application of the Regulation on the Taking of Evidence, available on the website of the DG Justice, Freedom and Security, http://ec.europa.eu/civiljustice/evidence/evidence_ec_guide_en.pdf. 40   c 3 Arts 7–9; Explanatory Memorandum on the pre-draft Directive ch 3 paras 84–132. 41   Council Directive 2004/48 of 29 April 2004 on the enforcement of intellectual property rights [2004] OJ L195/16. For a commentary by the Commission in the perspective of transposition into competition law, see the Explanatory Memorandum on the pre-draft Directive paras 84–86.

268  Laurence Idot The Commission therefore proposes to ensure a minimum level of disclosure inter partes across the EU, relying on the central function of the court competent to deal with the dam­ ages claim. The civil procedure systems of Members Sates should allow, as a minimum level of disclosure in antitrust damages cases, targeted disclosure measures under three series of conditions.42 First, the claimant has presented reasonably available facts and evidence showing plausible grounds to suspect that it suffered harm through infringement of Article 101 or 102 TFEU.43 Second, the claimant has shown that evidence lying in the control of the other party is relevant to substantiate its claim, has specified sufficiently precise categories of information or means of evidence to be disclosed, and has shown that he is unable, applying all efforts that can reasonably be expected, to assert the specific facts or to produce the means of evi­ dence for which disclosure is envisaged.44 Third, the court will check whether the order is proportionate, taking into account the value of the claim for damages, the likelihood of infringement, the scope and cost of disclo­ sure, the fact that the evidence may contain confidential information.45 Independently of the fact that this text is only a pre-draft and that its fate is uncertain, more so than its content,46 the method calls for a few brief observations. The technique used, meaning that of a Directive, is quite classic in EU law to organise the approximation of differing national laws. That said, two remarks have to be made. First of all, approximation runs the risk of being limited if the possibility is allowed, as is the case in the pre-draft Directive,47 for national laws to provide for broader means of access to evid­ ence, in other words if the Anglo-American discovery systems are maintained. The Directive therefore does not in any way eliminate the ‘conflict of laws’. Secondly, it does not any better settle the fact that the court examining the substance of the case has, as international law currently stands, powers to make orders limited to its own territory. Once again, the international dimension of the question, even in an intra-EU context, is not taken into account. 2.  The Need to Go Further What improvements could be made? A first solution, which does not give rise to technical difficulties, would consist in intro­ ducing a special provision in the future directive concerning intra-EU disputes, recalling the existence of all of the applicable EC regulations, including the existence of Regulation 1206/2001 for the question of obtaining evidence. That, it would seem, is the minimal solution. That said, two series of major difficulties have still to be considered. The first set of difficulties is not specific to competition law. This concerns the rules appli­ cable both to the court of the country where the evidence is located and to the court with jurisdiction for the substantive matters.   Arts 7–9 pre-draft Directive; Explanatory Memorandum on the pre-draft Directive paras 93 ff.   Explanatory Memorandum on the pre-draft Directive paras 100–02.   ibid 103–06. 45   ibid 107–09. 46   In addition to the comparison with the Directive on intellectual property rights, mention might also be made of the Unidroit Principles of Transnational Civil Procedure. 47   Art 7(6) pre-draft Directive. 42 43 44

Access to Files and Evidence  269 For the former, the aim is to allow the victim of the anti-competitive practice to call upon that court to adjudicate on the basis of Article 31 Regulation 44/2001. This implies returning to the definition of provisional measure, in the context of the revision of Regulation 44/2001, in order to eliminate any difficulties in interpretation following the St Paul Dairy case48 and clearly stating that measures to obtain evidence are covered. This solution has a clear practical interest, because a decision made on the basis of Article 31 will then, within the limits laid down in the Denilauler case,49 benefit from the simplified sys­ tems for recognition and enforcement as set forth in the Regulation50 and may then freely circulate within the European Union. For the latter, the court with jurisdiction to hear the merits, it is necessary to allow for the possibility, within the European Judicial Area, to order investigative measures which do in fact have an extraterritorial effect, this solution being accepted already in several national legal systems51 and not only in English law. Two difficulties must be dealt with. In general international law, there is the general issue of the lawfulness of such a court order,52 but it seems that this obstacle could be lifted in the intra-EU context where the basic principle is that of sincere cooperation. At the EU level, it has to be clearly accepted that Regulation 1206/2001 is not of exclusive application.53 If these obstacles are ironed out and if the prin­ ciple of such an order is accepted, the next issue is the practical problem of its enforcement. The competent court can provide for sanctions in its internal legal system in order to ensure compliance with the order, such as contempt of court in English law, but it is still necessary for the measure to be enforced. There again, we return to the issue of interaction with Regulation 44/2001, as such measures should be able to benefit from the simplified system. The second difficulty is specific to competition law. In any event, these solutions only con­ cern disclosure inter partes. However, it is often the issue of access to the competition authority’s file which is primordial! The pre-draft Directive only very indirectly, in one line,54 touches on this fundamental point for ‘follow-on actions’ which, it bears repeating, are the most frequently encountered, above all in cartels cases.

48   Saint Paul Dairy (n 29). See also H Muir-Watt, ‘Extra-territorialité des mesures conservatoires in personam (à propos de l’arrêt de la Court of Appeal, Crédit Suisse Fides Trust v Cuoghi)’ (1998-1) 87 RCDIP 27; N MeyerFabre, ‘L’obtention des preuves à l’étranger’ (2002–2004) Travaux du comité français de droit international privé 180, particularly 215 ff. 49   Case 125/79 Bernard Denilauler v SNC Couchet Frères [1980] ECR 1553, note A Huet (1980) Journal du Droit International – Clunet 939; E Mezger (1980) RCDIP 801; see also H Gaudemet-Tallon (n 26) para 367. 50   c III Arts 32 ff Regulation 44/2001. 51   See especially the examples provided by Nuyts, ‘Le règlement communautaire’ (n 24). 52   Even without invoking the principle of sincere cooperation, contemporary academic writings in private international law settle the difficulty by using the notion of judicial order in personam. In matters of obtaining evidence, a distinction must therefore be made, as it is in particular in German academic writings, between the judicial gathering of evidence in foreign lands, which enters within the means of international mutual legal assist­ ance, and the judicial order in personam which aims for the transfer of evidence located abroad and which, in principle, enters into the lex fori. See in this sense, N Meyer-Fabre, ‘L’obtention des preuves à l’étranger’ (n 48) 198 ff, particularly 212. 53   See in this sense, Nuyts (n 24). 54   See the Explanatory Memorandum on the pre-draft Directive fn 36, which refers to the ‘res judicata’ author­ ity of a decision of a competition authority; see also para 127 in which it alludes to information held by the public authorities, which obeys special rules.

270  Laurence Idot

ii.  Access to the Competition Authorities’ Files a.  Situation in Positive Law (De Lege Lata) As positive law currently stands, we above all have elements in EU law, but the situation is fairly similar in national law. Two distinct problems, of unequal importance, arise: can a party use items from the authority’s file in its possession? Can a party access the Commission’s file? 1.  Use by One of the Parties of Items from the Authority’s File (i)  In EU Law One of the parties to proceedings before the ordinary courts may hold documents which also appear in the Commission’s file, because it has been involved in the administrative proceedings as complainant. The question then arises as to whether the party can produce these items from the Commission’s file in private law proceedings. In principle, the answer is no, since the Commission specifies that no use can be made of such information in the context of judicial proceedings. However, in the Postbank case,55 the Commission had released the undertakings from this restriction and they produced the documents, in particular the statement of objections. An appeal was later brought against the Commission’s letter before the Court of First Instance. Authorisation to use the documents before the ordinary courts was motivated by the fact that the Commission was bound by no obligation to prohibit the transmission of the documents to the national judicial authorities. On this point, the Commission’s position was upheld, with the CFI invoking the principle of sincere cooperation in order to justify the absence of such a prohibition. While the principle of allowing use has been accepted, there remains the issue of implementing the transmission considering the various confidentiality obligations. (ii)  In National Law Even if EU law is applicable to the substantive aspects of the case, the situation gets more complicated if the anti-competitive practice has been the subject of proceedings before a National Competition Authority (NCA). Indeed, certain legal systems prohibit the parties from referring to information obtained during these proceedings and may even prohibit the disclosure of information a criminal offence. This is the case in French law.56 2.  Access to Items in the File As for access to items in the file in the narrow sense of the word, the current situation is not satisfactory and it may be observed that one reasons either on the basis of texts which are specific to competition law, or on the basis of general legal provisions. (i)  The Unsuitability of the Cooperation Mechanisms Specific to Competition Law The reference made in the Postbank judgment to the obligation of sincere cooperation and the first Notice on cooperation between the Commission and the national courts of 199357 immediately brings to mind the cooperation mechanisms of Article 15 Regulation 1/2003,   Case T-353/94 Postbank NV v Commission of the European Communities [1996] ECR II-921.   Art L463-6 French Commercial Code. 57   Commission Notice on cooperation between national courts and the Commission in applying Articles 85 and 86 of the EEC Treaty [1993] OJ C39/6. 55 56

Access to Files and Evidence  271 which were developed and clarified by a new Notice on 27 April 2004.58 One might think that this text could attenuate the difficulties encountered by victims in access to evidence, at least with Article 15(1) which organises either a request for opinion, or a request for infor­ mation.59 That is not the case. Although they make it possible to obtain access to certain items of information, these mechanisms grant no right of access to the file stricto sensu. In addition, they are available to the ordinary courts and not to the parties, although the parties may incite the courts to use them. Finally, they were envisaged to cover the possibility or autonomous or parallel proceedings, more than consecutive proceedings. Incidentally, since 1 May 2004, although there have been some requests for opinions pursuant to this text, no request for informa­ tion has been made on the basis of Article 15(1).60 An equivalent observation may be made for opinion proceedings which exist in certain national laws and enable the ordinary courts to obtain an expert opinion from the compe­ tition authority.61 However useful they may be, they do not resolve the question of access to the file stricto sensu. (ii)  The Unsuitability of General Provisions of Law In EU law, this is doubtlessly the reason why, faced with this difficulty, certain undertakings have had the idea of using the general provisions on public access to EU documents, set forth in Regulation 1049/2001.62 The use of this general procedure took place for the first time for actions for damages following a decision against the cartel referred to as the ‘Lombard Club’ in the Austrian banking sector. The Commission having rejected the request for access to the file based on this text, the victims brought an appeal that the CFI upheld in a judgment of 13 April 2005.63 While accepting that the claimants in the action for damages could base themselves on this text, the Court considered that the Commission could not rely on the subject matter in a general and abstract manner in order to refuse access. The CFI essentially criticised the Commission for not having examined, on a case-by-case basis for each document, whether the item could be covered by one of the four exceptions to the right of access as provided for by the Regulation. This use of a legal instrument which was not designed for this type of procedure evi­ dently gives rise to enormous difficulties,64 if only from a material point of view, and it is 58   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 (Cooperation Notice) [2004] OJ C101/54. 59   The obligation to transmit judgments to the Commission as provided for in Art 15(2) is unrelated to our problem, while Art 15(3), organising an amicus curiae procedure, is available to competition authorities and not to the parties, justified by the concern of maintaining coherency in interpreting EU law. 60   L Idot, ‘La coopération entre la Commission européenne et les juridictions nationales en droit de la concur­ rence’ (2010) Revue des Affaires Européennes. 61   See, eg, in French law, the request for opinion on Art L462-3 Commercial Code; see also Art L463-6 (n 56). 62   Regulation 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents [2003] OJ L145. 63   Case T-2/03 Verein für Konsumenteninformation v Commission of the European Communities [2005] ECR II-1121. These solutions have been confirmed in merger control (Case T-237/05 Odile Jacob [2010]; Case T-11/07 Agrofert [2010]) but adapted in State Aids control (Case C-139/07 P Commission of the European Communities v Technische Glaswerke Illmenau [2010]). 64   For a critical approach of this solution, L Idot, ‘L’accès au dossier dans la procédure de mise en œuvre des articles 81 et 82 CE: Questions en suspens’, particularly paras 41 ff; more recently, ‘Le règlement n°1049/2001 doitil s’appliquer aux procédures concurrence ?’ (October 2010) Europe study 11.

272  Laurence Idot understandable that the Commission seeks to have it specified that it does not apply to individual procedures.65 The situation appears to be hardly better in domestic law. While the courts do have certain powers in all legal systems, even the continental ones, it would appear that their use against administrative authorities, which are not parties to the proceedings, gives rise to serious difficulties. For instance, in France, it is not certain that the courts are entitled to ask for access to the French Competition Authority’s file by using the general text of Article 11 Civil Procedure Code. The issue was raised in the Dyneff case.66 According to the company’s lawyer,67 the judge refused to use this text because some general and procedural conditions were not met. Furthermore, the equivalent of Regulation 1049/2001 on access to administrative doc­ uments, the law n° 78-753 of 17 July 1978 was modified in May 2011 to exclude all ‘ docu­ ments élaborés ou détenus par l’Autorité de la concurrence dans le cadre de l’exercice de ses pouvoirs d’enquête, d’instruction et de décision ’. Consequently, all right of access is denied and the French Competition Authority has a wide discretion to determine whether or not access to the document may be given. All of the cases referred to above concerned relations which did not pose any problems in international law. The situation becomes particularly complex if one adds an international dimension. Imagine that an English court, called upon to hear the merits of an action for damages, following a decision by the French Competition Authority concerning an infringement of Article 101 TFEU, issues an order on the victims’ request to grant access to the authority’s file. The order clearly has extraterritorial effect, but as opposed to the previ­ ous case of disclosure inter partes, its order risks being ineffective if the authority does not wilfully collaborate. b.  Proposed Solutions (De Lege Ferenda) There again, two paths may be envisaged: modify the application of existing instruments concerning private international law, or provide for a solution in the future instrument specific to competition law. A first possible way forward would be to take this specific situation into account in existing instruments of private international law. That would, however, require the substantial revi­ sion of existing texts, whether one were to decide to act on Regulation 1206/2001 and/or Regulation 44/2001. Independently of the practical aspects, which are not negligible, the question arises as to whether it would be opportune to proceed in this manner. It is possible to doubt this for two main raisons. These texts were designed to deal with relations between one court and another, in the context of procedures which may be described as private. Moreover, while one could insert special provisions pertaining to administrative authorities, it would be difficult to limit this to competition authorities only. The problem could also arise in matters concerning the   Explanatory Memorandum on the pre-draft Directive para 104 and fn 50.   French Competition Authority, Decisions 03-D-41 and 08-D-27. There were parallel proceedings before the ordinary courts. 67   See Rincazaux, ‘L’accès aux preuves’ (n 22). 65 66

Access to Files and Evidence  273 financial markets or in relations with sector-specific regulatory authorities. However, each field requires special solutions concerning cases where recognition is refused. It would doubtlessly be preferable to approach the difficulty in a text which is specific to competition law, and which would not exclude reference to instruments of private inter­ national law wherever possible. As it stands, the pre-draft Directive does not touch on the specific issue of access to the files of the various competition authorities which are members of the Network, except to allude to the inadequacy of Regulation 1049/2001,68 a conclusion which can only be shared. In relations with the authorities, the constructive proposal concerns recognition of the res judicata nature of what a Network member authority has decided,69 meaning a generalisation of Article 16 Regulation 1/2003, a meas­ ure which has already been adopted in German law.70 The main obstacles to adopting such a solution are of a political nature. If they are overcome, and if such a measure can be contemplated, one might ask whether it would not be possible to extend the solution and also recognise requests for access to the file made by the ordinary courts to which an action for damages has been referred, irrespective of the national or intra-EU nature of the situa­ tion. In actual fact, considering the substance of the matter, the solution is less shocking than recognising res judicata, since there are fewer consequences. The main disadvantages arise in practical terms. Access to the documents and files of competition authorities can never be complete, and account has to be taken of the numerous existing limits to rights of access.

B.  The Limits to the Right of Access In contrast with other areas, in competition law there is a whole series of restrictions on the communication of information. Insofar as there is a certain degree of confusion in this area, it is not without interest to identify the existing limits, before attempting to propose solutions which take the international dimension of the situation into account.

i.  Identification of the Limits Accepted in Competition Laws These limits consist both of rights or privileges granted to undertakings, or conversely restrictions that competition authorities are bound by concerning the possibility of dis­ closing information. a.  The Rights and Privileges Granted to Undertakings Involved in Administrative Proceedings Certain rights and privileges are not specific to competition law, although they take on a particular significance in this field. One may think of ‘legal professional privilege’ which allows an undertaking not to grant access to correspondence with its lawyer. In EU law, the

  Explanatory Memorandum on the pre-draft Directive para 104.   c V Art 12 pre-draft Directive. 70   See on these different points in this book the contribution of J Basedow, ‘Recognition of Foreign Decisions within the European Competition Network’. 68 69

274  Laurence Idot ECJ decided on this as of 1982, with the AM & S judgment,71 but the question bounced back in the middle of the 2000s with the Akzo case, which rekindled the debate.72 Independently of the fact that the EU solution is still disputed, because it does not cover documents issued by enrolled in-house lawyers, and even less those corporate jurisconsults who are not members of a Bar,73 in spite of the clear position of the ECJ confirmed in the decision of September 2010,74 the additional difficulties arise from the fact that, in the framework of the decentralisation put in place by Regulation 1/2003, investigations are often undertaken at the national level, either on behalf of the Commission, or on behalf of the NCA which will later apply Articles 101 and 102 TFEU.75 The EU solution therefore is of limited range and one runs up against a great variety of national rules, not only as to the scope of ‘legal privilege’,76 but also as to its means of pro­ tection, in particular in the context of seizures of computers and digital media.77 Other rights and privileges have been progressively recognised, particularly in ‘competition procedures’. There is now, in all European legal systems, a special legal framework for the protection of business secrets.78 It is very difficult to give a general and abstract definition of what business secrets are, although they may more easily be conceived as being sensitive data, the disclosure of which to third parties would be a problem for the holder. Considering this lack of precision, in law business secrets are data which, as such, have been granted protec­ tion by the competition authority dealing with of the case. At this stage, one may note once again a great variety of procedural rules: differences between the framework for protection provided in EU law79 and the rules provided in national laws,80 and differences among the national laws (and the evolution of these national rules over time).81 In addition to business secrecy, some information provided by undertakings may benefit from the status of confidential information.82 For a long time, following on from the Adams   Case 155/79 AM & S Europe Limited v Commission of the European Communities [1982] ECR 1575.   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; Joined Cases T-125/03 R and T-253/03 R Akzo [2004] ECR II-4771; Case C-7/04 P (R) Akzo [2004] ECR I-8739. 73   See most recently, Case C-550/07 P Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission [2010]. 74   Akzo (n 73). 75   Art 22 Regulation 1/2003; see also the assistance of national agents to Commission’s agents, Arts 20(5) and (6). 76   For a summary of the situation, see the Opinion of AG Kokott (n 73) particularly paras 101 ff. 77   For the differences applicable to seizures of computers and digital media, see in particular N Jalabert-Doury and al, ‘Best Practices for digital evidence searches’ (2009) 4 Concurrences 65 ff. 78   In EC law, the ECJ considered that the protection of business secrets was a general principle (Case 53/85 Akzo Chemie BV and Akzo Chemie UK Ltd v Commission [1986] ECR 1965, confirmed in Case C-36/92 P SEP v Commission [1994] ECR I-1911). 79   See on this point, Art 27(2) Regulation 1/2003; Art 15(2) and Art 16 Commission Regulation 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty [2004] OJ C101. 80   See eg, for the difference between EU law and French law before the reform of November 2004, L Idot, ‘Quelques observations sur la confidentialité en droit de la concurrence: À propos du secret professionnel et des secrets d’affaires’ in Aspects contemporains du droit de la distribution et de la concurrence (Paris, Montchrestien, 1996) 109–26. 81   This is the case in particular in French law (Art L464-3 Commercial Code; Arts R-463-13–R-463-15-1, last version, decree, 10 February 2009) where the legal framework was profoundly amended in 2004 (ord 4 November 2004), then once again in 2008 (ord 13 November 2008). 82   See the category of ‘other confidential information’ in the legal instruments cited above. 71 72

Access to Files and Evidence  275 case,83 the consideration was only to protect certain information communicated by the complainants. The essential difficulties now concern the fate of information passed on by leniency applicants.84 The effectiveness of the leniency procedures, which the competition authorities consider to be of great value, depends in part on the confidentiality that is recognised for these declarations. b.  The Restrictions on the Authorities’ Right to Disclose All competition authorities are bound by an obligation to respect professional secrecy, which prevents institutions and their agents from disclosing information obtained in the context of proceedings. The rules that bind the Commission are the best known. For the application of Articles 101 and 102 TFEU, the general obligation of the former Article 287 EC, now Article 339 TFEU, is taken up in Article 28 Regulation 1/2003. Since the adoption of this Regulation, this same obligation is also binding on the NCAs, members of the European Competition Network85 for the application of Articles 101 and 102 TFEU, but in any event the NCAs are also bound by professional secrecy pursuant to their own national laws.86 The consequences are substantial. Such an obligation, as a general principle, is an obstacle to the exchange of information among authorities.87 For this reason, one of the great break­ throughs of Regulation 1/2003 was to do away with this restriction in relations among members of the European Competition Network. All information may circulate freely within the Network since all of the authorities, due to Article 28 Regulation, are bound by the same obligation of secrecy. In national law, and in particular in French law, there is a similar idea for relations between the French authority and the authorities of third States. Under Article L462-9-I Commercial Code, exchanges are possible where the authority of the third State is bound by professional secrecy under the same conditions as the French authority. Although it deals with the problem of exchanges of information among authorities, Regulation 1/2003 does not settle the problem of the authorities communicating informa­ tion to the ordinary courts. In relations with the Commission, the principles in this area are still those arising out of the Postbank judgment in 1996,88 the content of which was taken up in the Notice on cooperation between the Commission and national courts of 27 April 2004.89 The Commission may transmit information covered by professional secrecy to the ordinary courts, subject to two limits. The first limit is a conditional one. For information protected by business secrecy and for other confidential information, the Commission will only respond to requests from national courts if they are able to provide the same guarantees. This means a contrario that   Case 53/84 Stanley George Adams v Commission of the European Communities [1985] ECR 3539.   See especially, for a reminder, the Explanatory Memorandum on the pre-draft Directive para 118. 85   Art 28(2) Regulation 1/2003. 86   See, eg, in French law, Art L463-6 Commercial Code. 87   See in EU competition law, before Regulation 1/2003, the famous Spanish banks case (Case C-67/91 Dirección General de Defensa de la Competencia v Asociación Española de Banca Privada and others [1992] ECR I-4785). 88   Case T-353/94 Postbank v Commission (n 55). 89   Cooperation Notice no 24, 25. 83 84

276  Laurence Idot if the national courts are not in a position to guarantee this protection, the Commission may refuse, despite the principle of sincere cooperation, to transmit the documents. As far as we are aware, the problem has never arisen in France, but it is hard to see how a French court could respect such a restriction, since in French civil procedure there is no ‘business secret’ category.90 The second limit is even more substantial. As of 2004, the Commission stated that it would not transmit information to the national courts which had been provided voluntar­ ily by a leniency applicant, except with the latter’s consent.91 To these European rules must be added, in a European Union context, those solutions aris­ ing out of the 27 national laws which will apply in relations between the national authori­ ties and national courts. For these sensitive questions, a study should be undertaken in comparative law. It would most certainly arrive at the observation that the solutions are variable, both as to the possibility of being released from the obligation of professional secrecy and as to the conditions which accompany that release. A reference has been made to the ECJ for a preliminary ruling on how the vertical aspect should be regulated: is the national solution compatible with EU law if the national author­ ity applies Article 101 TFEU? The question has been asked by a German court, where the Bundeskartellamt refused to grant the plaintiffs in an action for damages access to the declarations made by the leniency applicants.92 The decision of the Court was adopted on 14 June 2011 but it is not helpful since the ECJ did not examine horizontal relations between national laws. Furthermore, as far as the vertical relation between EU law and national law is concerned, the ECJ asked the national court to use a balancing test.

ii.  The Introduction of the International Dimension The divergences in solutions may naturally give rise to problems. One need only imagine where a court in State A asks a party, residing in State B, to transmit a document protected by legal professional privilege in State B but not in State A. Another hypothesis might be where the court in State A requests access to a document in the file held by the competition authority in State B, if that document is protected by business secrecy even though, before the court in State A, there are no rules organising the protection of business secrets, such as in French law. The court in State A may also request access to a leniency applicant’s declara­ tions to the Authority of State B. Imagine if, in the case currently referred to the ECJ, the action for damages had been brought before the Belgian or French courts. In these two examples, the law of State B has a higher level of protection than the law of State A and opposes the transmission of the information. It is indeed possible to imagine 90   As opposed to the EU procedure, where a system of protection can be organised before the CFI (now General Court), in French law the possible protection of business secrets in a procedure before the Authority will disap­ pear before any court, including in an appeal against the Authority’s decision before the Paris Court of Appeals. 91   Cooperation Notice no 26 in fine. 92   Case C-360/09 Pfleiderer AG v Bundeskartellamt, lodged on 9 September 2009. Question referred: ‘Are the provisions of Community competition law – in particular Articles 11 and 12 of Regulation No 1/2003 and the second paragraph of Article 10 EC, in conjunction with Article 3(1)(g) EC – to be interpreted as meaning that parties adversely affected by a cartel may not, for the purpose of bringing civil-law claims, be given access to leni­ ency applications or to information and documents voluntarily provided in that connection by applicants for leniency which the national competition authority of a Member State has received, pursuant to a national leniency programme, within the framework of proceedings for the imposition of fines which are (also) intended to enforce Article 81 EC?’ (OJ C297, 5 December 2009).

Access to Files and Evidence  277 this being the other way around (law of State A and the court being more protective than the law of State B where the information is located) but that situation does not appear to raise any difficulty insofar as the court in State A will limit itself. In other words, the practical problem arises above all where the law of the State where the information is to be found (law of the requested party or of the requested authority) is more protective than the law of the requesting court. a.  The Pre-Draft Solutions Evidently, in the pre-draft Directive, the DG Competition is not unaware of the existence of these limits. Two sets of rules have been provided for. Account is first of all taken of the confidential nature of the information, particularly information held by third parties. The solution consists in asking the requesting court to moderate the use of its power to issue orders according to the interests at stake.93 In a way, a ‘balancing test’ is to be used, in line with the reasoning of the ECJ in the Promusicae case94 for a conflict between intellectual property rights and fundamental rights. In addition, exceptions to communication are expressly provided in Article 8 pre-draft Directive. Other than the case where parallel proceedings are brought by the competition authority,95 the communication cannot concern declarations made in the context of leni­ ency procedures. Nor can it infringe legal privileges and other rights recognised under the law of the European Union. These proposals call for some preliminary remarks. With respect to their content, the two proposed systems are very different. In the first case, the decision is left to the court but it is asked to organise the communication of the requested documents in order to enable communication while preserving the confidential nature of the information.96 In the second case, actual limits are laid down and defined by EU law, either directly (‘corporate statements and settlement submissions’), or indirectly (‘legal privileges and other rights that exist under the law of the European Union’). With respect to their scope, the gaps remain the same. Once again, the pre-draft Directive does not consider the specific question of access to the competition authorities’ files and does not take the international dimension of the situation into account. In an international law perspective, the solution adopted by the pre-draft Directive con­ sists, in reality, in harmonising the solutions. It is clearly stated which documents cannot be accessed by the requesting court. This is the method used for documents provided in the framework of the leniency pro­ grammes. No court order for their communication is possible. Although it is debatable whether such a solution is opportune, despite there being a consensus within the European Competition Network to preserve the effectiveness of their leniency programmes,97 this solution at least has the advantage of being clear.   Art 7(3)(d) pre-draft Directive.   Case C-275/06 Productores de Música de España (Promusicae) v Telefónica de España SAU [2008] ECR I-271. For an in-depth study, see P Oliver, ‘The Protection of Privacy in the Economic Sphere before the European Court of Justice’ (2009) 46 Common Market Law Review 1443–83. 95   Art 8(2) pre-draft Directive; see also Explanatory Memorandum on the pre-draft Directive para 119. 96   Explanatory Memorandum on the pre-draft Directive para 117. Conciliation could, for example, take the form of communication only to the court experts. 97   See especially our study, Idot, ‘Les procédures de clémence’ (n 15). 93 94

278  Laurence Idot The problem is whether it is politically acceptable and technically possible to go further in harmonisation. The solution put forward in Article 8(3), which refers to privileges and rights recognised by the law of the European Union, moves in this direction but it is not certain that it is viable. Let us take the example of ‘legal professional privilege’. Can one consider that such a limit on transmission is covered by the exception ‘all legal privileges that exist under the law of the European Union’? There is indeed protection, recognised in EU law, but its scope is less broad than what is granted in some national laws. If the Commission wishes alignment along the lines of the EU solution, that deserves to be expressly specified and it is not cer­ tain that the Member States with more protective solutions would agree to align with the lowest common denominator. Other than the political problem, the current version of the text also raises a technical problem. Let us take another example of a right recognised by the ECJ, such as the confi­ dentiality of business secrets. The approximation of national laws would not make much sense: on the one hand because this right is not necessarily recognised in civil proceedings before the ordinary courts, and on the other hand because before the competition authori­ ties, this right above all requires the implementation of a procedure. One cannot say what the business secrets are until protection (moreover limited in time) has been granted after being put through a specific procedure. b.  The Suggested Improvements In the intra-EU context, still dominated by plurality of applicable laws, the approximation of law is necessarily limited. Going back to the envisaged practical hypotheses, two possible cases may be distinguished. In the sole situation envisaged by the Commission, a judicial order is addressed to a party (perpetrator of the anti-competitive practice, co-perpetrator, or even a third party) who then invokes the confidentiality of the information, but the law of the requesting court grants no protection (eg no protection of business secrets in French law; less stringent rules concerning legal professional privilege). There is no doubt that it would be for the request­ ing court to assess whether this refusal is founded and draw the relevant consequences both with respect to the person to whom the order is made (possible penalty) and with respect to the requesting party (significance of the requested item of evidence in assessing whether the claim is well-founded). The question is whether the proper grounding of the refusal is to be assessed with respect to the law of the requesting court, the law of the place where the documents are located, necessarily more protective, or even with respect to those solutions set out in EU law. If it can be put into effect, for legal professional privilege for example, the third solution is undoubtedly the best. The difficulty remains with the fact that it is not always practicable, particularly for business secrets. There is a significant risk of this situation arising where the judicial order is addressed to a competition authority which is a member of the Network. Independently of whether it has granted protection to certain documents as business secrets, the authority is bound by pro­ fessional secrecy pursuant to Article 28(2) Regulation 1/2003. The generalisation of the Postbank solution amounts to a de facto prohibition of access to the file in all of those

Access to Files and Evidence  279 Member States, undoubtedly the majority, where the protection of business secrets is not organised by the ordinary civil procedure rules. This is therefore not satisfactory. It would doubtlessly be preferable to organise a sort of simplified procedure for recogni­ tion for this particular type of order. In an instrument specific to competition law, one could include a provision specifying that a competition authority which is a member of the European Competition Network would be obliged to give effect to an order to communi­ cate issued by a Member State’s court, without being entitled to rely on the obligation of professional secrecy, but within those limits imposed by the law of State B. In other words, to determine whether it must execute the court order or not, the authority would have to verify whether the protection granted for business secrets is still justified (even if only due to the passing of time), and possibly declassify it. Conversely, if the authority considers, pursuant to its law, that protection is still justified, this would be legitimate grounds to refuse to recognise the court order. Such a solution appears to be compatible both with the principle of sincere cooperation which must exist within the European Union and with the rights of undertakings recog­ nised by EU law. The situation becomes greatly more complicated where the difficulties which arise are no longer in intra-EU relations, but in relations with third countries.

III.  Access to Evidence in a Truly International Context Viewed from an international law viewpoint, many of the points raised with respect to intra-EU relations remain valid, but the situation is significantly more complicated for obvious reasons. A first aspect is specific to competition law. In Europe, the distinction between public enforcement and private enforcement is fundamental because it is based on another distinc­ tion, between the role of the specialised authorities and that of the ordinary courts.98 This difference, however, may be blurred in third States where the ordinary courts intervene in two ways. The American example is the most topical one. Confronted with an international situation, and in order to verify their international jurisdiction, the American courts reason similarly whether confronted with a case brought by the Department of Justice or in a tri­ ple-damages action. They consider their substantive jurisdiction under the Sherman Act and, potentially, their personal jurisdiction,99 exactly as an administrative authority in Europe would do. On the other hand, in Europe, an ordinary court must first verify its international jurisdiction having regard to the solutions of private international law before, in a second stage, considering the applicable law for the substantive issues, which may be a foreign law. This divergence in competition law actions is finally a mere reflection of a fundamental difference in the conception of private international law. The European conception, deeply marked by Savigny’s influence in the nineteenth century, is not universally recognised. Even 98   The author has had the opportunity to insist on these differences in her thesis on ‘Le contrôle des pratiques restrictives dans les échanges internationaux’ (DPhil thesis, Paris II University, 1981). Later developments, particu­ larly with the entry into force of Regulation 1/2003, only confirmed the conclusions which were drawn at that time. 99   Of course, this does not exclude change. See on this point, the interesting explanation of American case-law proposed in this book by HL Buxbaum and R Michaels.

280  Laurence Idot though the theory of conflicts of laws has evolved considerably in Europe over the last few decades, the distinction between the court’s international jurisdiction and the designation of the applicable law, with the corollary of being able to apply a law other than the law of the forum, remains fundamental.100 In addition to these general reasons, there are technical difficulties pertaining to the appli­ cable sources. Not only do EU provisions concerning judicial cooperation in civil matters not apply in relations with third countries, at least at the present date,101 but in addition there are specific texts, often first adopted as a reaction to the extraterritorial application of US antitrust law in the 1960s and 70s, which may interfere. First in mind are the blocking statutes which multiplied in the 1980s.102 Long ignored, they are back in the news although, admittedly, in a context which is most commonly unrelated to competition law.103 With the US practice being the subject of a detailed report elsewhere,104 the aim here is to draw up a summary of the situation in an international law perspective, highlighting cer­ tain paths which may be explored.

A.  The Current Situation Maurice Stucke’s study shows that in the United States, difficulties have appeared in two different contexts. Classically, as in Europe, in proceedings brought in the United States, the question of access to evidence located in a third country may arise. In transatlantic rela­ tions, however, the particularity is that US law allows the parties to an overseas antitrust lawsuit to have access to evidence located in the US.

i.  Access for a Claimant in a Private Action to Evidence Located Abroad The situation is not specific to competition law. As in any international private litigation, access to evidence located in a foreign country may be based on two broad methods: inter­ national cooperation, or the unilateral application of the law of the forum.105 Taking the example of relations with the United States, the most relevant for our subject matter, an 100   Among recent publications in private international law, reference should particularly be made to H MuirWatt and D Bureau, Droit international privé (Paris, Presses Universitaires de France, 2007), particularly vol I paras 336 ff, and the substantial bibliography cited therein. 101   This is the case for Regulation 1206/2001 (n 38), but the question is currently being debated for Regulation 44/2001. 102  There is a substantial body of literature on the blocking statutes. See in particular J-G Castel, ‘The Extraterritorial Application of Antitrust Laws’ (1983) Recueil des Cours de l’Académie de Droit International (RCADI) 13 ff; OECD, Competition Law Enforcement: International Cooperation in the Collection of Information (Paris, OECD, 1984). For an examination of the French laws (Law No 80-536 of 16 July 1980 concerning the com­ munication of documents and information of an economic, commercial or technical nature to foreign natural or legal persons) and the British ones (Protection of Trading Interests Act 1980), and their impact on competition law, see in particular Idot, Le contrôle des pratiques restrictives (n 98) vol I, particularly paras 466 ff; E FriedelSouchu, Extraterritorialité du droit de la concurrence aux Etats-Unis et dans la Communauté européenne (Paris, LGDJ, 1994) 240 ff. For a recent study, see American Bar Association (ABA) (Section of Antitrust Law), Obtaining Discovery Abroad, 2nd edn (Chicago, ABA, 2005). 103   See, eg, for the French law, Cour de Cassation (Criminal law Chamber) 12 December 2007, appeal No 07-83228. 104   See in this book the contribution of M Stucke. 105   On the various methods, see A Nuyts (n 24); Y Le Berre and E Pataut, ‘La recherche de preuves’ (n 24).

Access to Files and Evidence  281 overview can be quickly drawn. International cooperation has proven its limits, while we have seen the development of unilateral application. a.  The Limits of International Cooperation Without going back over all of the techniques available in international law106 and in par­ ticular letters rogatory,107 we will take the example of the Hague Convention on the taking of evidence abroad in civil or commercial matters of 18 March 1970, which entered into force in October 1972 and has been ratified by more than 40 countries, including the United States. The initial aim was to overcome differences in conception between the civil law countries and common law countries concerning the collecting of evidence.108 Two techniques have been put in place. The Convention provides for the taking of evi­ dence (i) by means of letters of request,109 and (ii) by diplomatic or consular agents and commissioners.110 It also contains a particular provision, Article 23, which makes it possible not to respond to pre-trial discovery111 if the Contracting State makes such a reserve. This reserve, which has been massively used, has greatly contributed to making the Convention lose much of its interest for the United States. In competition law, the application of this convention was contemplated from the end of the 1970s, in the Uranium Cartel case. The American authorities based themselves on the Convention in order to obtain evidence located in the United Kingdom, while in relations with Canada, not a party to the Convention, they had used ‘classic’ letters rogatory. In both cases, this was a failure. In the United Kingdom, the House of Lords considerably reduced the scope of the American requests and the case finally led to the adoption of the blocking statute of 1980, while in Canada, the Supreme Court refused the letters rogatory.112 Nevertheless the situation later changed outside the field of competition law, when in the famous Aérospatiale case of 1987, the Supreme Court judged that use of the procedures put in place by the Commission was merely a possibility and not an exclusive means for ordin­ ary legal proceedings.113 All in all, international cooperation has turned out to be a failure, at least in transatlantic relations, and the American courts have preferred to apply their provisions of domestic law unilaterally, as they did before the ratification of the Hague Convention.

106   See in particular O Capatina, ‘L’entraide judiciaire internationale en matière civile et commerciale’ (1983) RCADI 305 ff. 107   For the use of letters rogatory in US/UK/Canada relations, see the Canadian Patents case concerning televi­ sion in the middle of the 1950s, Idot (n 98) vol I para 446. 108   See in particular B Ancel, ‘Le transfert international des informations nécessaires à l’administration de la preuve’ in L’internationalisation du droit: Mélanges en l’honneur de Y Loussouarn (Paris, Dalloz, 1994) 1; L Collins, ‘The Hague evidence convention and discovery: A serious misunderstanding’, in Essays in International Litigation (Oxford, Clarendon Press, 1994) 289 ff. 109   Arts 2–14 Convention on the taking of evidence abroad in civil or commercial matters (the Hague, 18 March 1970) (7 October 1972). 110   ibid Art 15–22. 111   Concerning this reserve, see in particular N Meyer-Fabre (n 48) 199, particularly 205. 112   Concerning this case, see in particular Idot (n 98) paras 454–56. 113   Société Nationale Industrielle Aérospatiale v US District Court for the Southern District of Iowa 482 US 522 (1987). See in particular P Matthews, ‘The Role of the Hague convention for gathering evidence abroad’ (1987) Stanford Journal of International Law 309.

282  Laurence Idot b.  The Development of Unilateral Application There are many examples and this is not the place to repeat them.114 In the cases brought in the United States, the main means available to the parties in order to obtain evidence abroad is the Walsh Act, 28 USC 1783, which presupposes that the Court has personal juris­ diction with respect to the foreign person. The subpoena has seen its territorial scope extended, via the notion of group of companies, which has enabled the American courts to demand the production of documents held either by the foreign subsidiaries of American parent companies,115 or by the US subsidiaries of foreign parent companies.116 One of the big cases in the 1980s, the Uranium Cartel,117 illustrates the two facets of this extension and confirms the lack of reference to the Hague Convention.118 The blocking laws adopted by States of the undertakings concerned by these discovery pro­ cedures made no dent on this movement, but they required the American courts to provide reasoning for their use of this text. In a context close to that of competition law, the Supreme Court chose its position in 1958 in the famous Interhandel case,119 taking the middle road. The existence of a blocking statute did not undermine the American court’s power to order the production of the document, but it was for the court in question to verify, before penal­ ising a failure to make that production, whether the addressee of the order had in good faith done all in its power to carry it out. Later, in antitrust cases, the courts hesitated, with some referring to the Supreme Court’s judgment and others preferring to base themselves on section 40 Second Restatement and call on principles of international comity, leading them to proceed with a balancing of the competing interests.120 It was this last principle which was finally consecrated in the Third Restatement of 1987.121 More than 20 years later, the method of reasoning has not significantly developed. The American courts, as in the past, use the powers that their civil procedural rules offer, and settle difficulties on a case-by-case basis, now verifying the five criteria set out in section 442 Third Restatement. Most commonly, the excuse based on the existence of a blocking statute is rejected, as has been shown again recently in a case concerning Air France.122 The only real change lies in the fact that it is more the development of leniency programmes and the will of competition authorities to preserve these tools, rather than blocking stat­ 114   See in this book the contribution of M Stucke. For a French presentation of the various means available to the parties in US law, see also Friedel-Souchu, Extraterritorialité du droit de la concurrence (n 102) 168 ff. 115   See eg, as of 1947, Re Grand Jury Subpoenas Duces Tecum Addressed to Canadian International Paper Co 72 F Supp 1013 (SD NY 1947). 116   See, eg, Re Electric & Musical Industries Ltd 155 F Supp 892 (SD NY 1957). 117   Re Uranium Antitrust Litigation 480 F Supp 1138, CCH 1980-1 TC 63124 (ND Ill 1979). 118   See also Idot (n 98) vol I paras 457 ff. 119   Société internationale pour participations industrielles et commerciales SA v Rogers 357 US 197 (1958). 120   See for this case-law, Idot (n 98) vol I paras 484 ff; L Cohen-Tanugi, ‘Les juridictions américaines face aux lois étrangères interdisant la communication de renseignements économiques’ (1983) 72 RCDIP 213. 121   Para 442. See also Friedel-Souchu (n 102) 335 ff. 122   In ongoing litigation regarding an alleged conspiracy to fix cargo rates for international air shipments, Air France fails to convince the US District Court for the Eastern District of New York that five boxes of documents – already furnished to a grand jury – are shielded from discovery under France’s ‘blocking statute’ (Re Air Cargo Shipping Services Antitrust Litigation 1:06-md-01775 (ED NY 29 March 2010). For a recent study, see P Grosdidier, ‘The French blocking statute, the Hague Evidence Convention, and the case law: lessons for French parties responding to American discovery’, www.haynesboone.com/French_Blocking_Statute.

Access to Files and Evidence  283 utes, which cause problems. The recent Rubber Chemicals case, as developed by Maurice Stucke,123 is most interesting in this respect, illustrating how after the Commission decided against a cartel disclosed in a leniency request, the question of access to the leniency appli­ cant’s declarations arose in an action for damages in the United States. The claimant in the triple-damages action was finally refused access to the leniency declarations,124 after the court proceeded with balancing the competing interests in accordance with the criteria of paragraph 442 Third Restatement. All in all, the two stages in the reasoning recall a distinction which is often used in a differ­ ent context in EU law, between the existence of a right and its exercise. The existence of a right to order production is subject solely to fulfilling the conditions set out in the applica­ ble provisions, which in this case is Title 28 USC section 1783. If the conditions for the applicability of the provision have been met, then the court must verify in a second stage of reasoning whether it is legitimate to exercise it, calling upon a codified principle of comity. If this balancing test leads to preference being given to those interests which are against production, then the court must waive the exercise of its power. While this method is far from the more rigid solutions in European international con­ ventions, it is still part of international law. The difficulties arise, above all, in the second situation.

ii.  The Use in Foreign Proceedings of Documents Located in the United States More than Title 28 USC section 1783, which the American courts have, at the end of the day, used with moderation, it is section 1782 on assistance to foreign courts or parties before such courts which poses difficulties. This is essentially due to the asymmetry of the applicable rules in actions for damages, which may lead the victim of an anti-competitive practice to take the lawsuit to or seek the missing evidence in the United States. The debate was brought back to the fore by the American side of the famous Intel case, which gave rise to the Supreme Court’s judgment of June 2004.125 Without going back over the entire case, it may simply be recalled that AMD, the instigator of a complaint for abuse of a dominant position against Intel which was examined by the Commission and finally led to a prohibition decision in 2009, brought proceedings before an American court to have Intel ordered to produce documents transmitted to another American court in the context of a private action between Intel and Intergraph. At first instance, the federal dis­ trict court refused to apply section 1782 on the grounds that the Commission was not a foreign court within the meaning of this provision, but the Court of Appeals for the Ninth Circuit reversed the lower court’s decision. The Supreme Court, for its part, once again distinguished the two phases in the reasoning. First of all, the court must verify whether the conditions for the application of the provi­ sion were met. If the court has jurisdiction with respect to the addressee of the order, it must examine the standing of the requesting party, the procedure for which the request is   See in this book the contribution of M Stucke.   Re Rubber Chemicals Antitrust Litigation 486 F Supp 2d 1078 (ND Cal 2007). 125   Intel Corp v Advanced Micro Devices Inc 542 US 241 (2004). For an analysis in French, see also F Souty, ‘La Cour suprême des Etats-Unis et les pratiques anticoncurrentielles mondiales: Réflexions sur les arrêts Empagran et Intel v AMD’ (21 September 2004) 189 Les Petites Affiches. 123 124

284  Laurence Idot made, the time of the request, and the information that may be requested. In the case at issue, the main difficulty lay in the fact that the foreign procedure for which discovery was requested was not an ordinary procedure before a civil court, but an action before the Commission in a public enforcement context. The Supreme Court construed section 1782 broadly, first considering that a plaintiff in EU competition law was a party in the proce­ dural sense of the term and also that the Commission was a judicial body within the mean­ ing of that provision. As for the transmissible documents, this point was left at the discretion of the American court, with section 1782 reserving only those cases of legal privileges. Supposing that these conditions were met, section 1782 leaves the American courts with great latitude in the exercise of this power, and the Supreme Court contented itself with identifying four series of factors to be taken into account to determine whether or not it was appropriate to issue the court order. Two of these series of factors, those concerning the nature of the judicial body and its receptiveness, and the concern not to act as a means to get around applicable rules, undeniably form part of the notion of comity. As has been observed, nearly six years after this judgment, the fears expressed by the Commission concerning the risks associated with the use of this provision,126 which would have made it possible to bypass the EU rules, imposed excessive burdens on its departments and undermined the leniency programmes, have not materialised.127 The other problems arising, concerning an arbitration body being deemed a court or evidence being located abroad, may indeed be of interest for competition law but in a secondary manner. However, the solution is not entirely satisfactory. Although the notion of comity makes it possible to mitigate conflicts, the dangers of casuistic use remain. In addition, from a theor­ etical point of view, the failure to take the particularity of public enforcement into account is not satisfactory. Other means can however be explored.

B.  The Possible Means As always in this field, it is necessary to attempt to act in the two concerned branches, com­ petition law and international law.

i.  Experience Gained from International Cooperation in Competition Matters This is not the place to recapitulate all of the instruments which organise cooperation on the international level among competition authorities, whether soft law texts which put 126   Independently of the Commission’s intervention before the Supreme Court, it is worth noting the conclusion of the OECD Competition Committee in the 3rd report on hard core cartels (2005): ‘Discovery procedures in pri­ vate litigation before US courts emerged as one area that has received particular attention. The concern has been that the use of discovery procedures in private antitrust litigation before US courts to obtain access to documents that the defendants had submitted in non-US investigations of the same cartel could impede anti-cartel efforts outside the United States. In particular, the European Commission has intervened before US courts based on the concern that allowing discovery of leniency applications could substantially undermine its leniency programme. Canada intervened on similar grounds and opposed or tried to limit discovery of documents related to cartel inves­ tigations and prosecutions in its jurisdiction (In re Vitamins Antitrust Legislation, Misc No 99-197 (TFH) MDL No 1285 (DDC Dec 18, 2002), 2002 US Dist LEXIS 25815). The outcomes of these cases have been mixed, and not all courts have accepted the views of foreign governments and enforcement authorities seeking to protect the integrity of their enforcement programmes. (Compare In re Methionine, Case No C-99-3491 CRB (ND Cal July 29, 2002) (motion to compel discovery of leniency statements denied) with In re Vitamins Antitrust Legislation, Misc No 99-197 (TFH) MDL No 1285 (DDC Dec 18, 2002) (leniency submission held to be discoverable)’. 127   See in this book the contribution of M Stucke.

Access to Files and Evidence  285 multilateral cooperation in place, and in particular the Organisation for Economic Co-operation and Development (OECD) Resolution of 1995,128 or international agreements which reinforce this cooperation on a bilateral level. One need only refer to the numerous works published by the OECD on this question and in particular the last Report on the implementation of the 1998 Recommendation concerning hard core cartels.129 Although it has been five years, this report perfectly highlights the interests and limits of cooperation. While pointing out the considerable progress made in this area in recent years, the OECD notes that cooperation is fettered by the confidentiality of information. To overcome the obstacle arising due to the obligation of professional secrecy, it is necessary to formalise cooperation, but even there the status of confidential information continues to pose prob­ lems. If the undertakings which asked to benefit from protection for business secrets waive that protection, the difficulty can be solved. Waivers of confidentiality are frequent in mat­ ters of merger control, where the undertakings have an interest in cooperating in order to gain authorisation as quickly as possible, but the same does not apply in antitrust matters, even though this is starting to appear on the part of leniency applicants, in cases of simul­ taneous applications before several authorities. Observing that the system which applies in competition law is particularly harsh, the OECD Competition Committee has put the Best Practices into place.130 These Best Practices are intended to apply to exchanges between competition authorities, subject to the application of regional arrangements which are more favourable for exchanges. They are based on the following principles. Consultation is recommended prior to any request, particularly to assess whether the requested jurisdiction will be able to preserve the confidentiality of information contained in the request and the confidentiality of the exchanged information, but the decision to provide the information or to provide only part of it remains at the discretion of the requested authority. Special rules are also provided for the protection of legal professional privilege and self-incrimination, which lead to the law of the requesting authority being applied. In other words, it is for the requested authority to assess, pursuant to its law, whether or not to grant the request by the requesting authority. In two particular cases, the potentially more protective law of the requesting authority must apply. It is specified that these Best Practices do not apply in the context of ‘private litigation’. The extension of these cooperation agreements to private lawsuits does indeed appear to be legally impossible for a number of reasons, not least on a constitutional level. Nevertheless, nothing prevents these questions from being discussed in the usual debat­ ing grounds for competition law, which are the OECD Competition Committee and the International Competition Network. The fight against hard core cartels is one of the pre­ ferred areas of study. However, this area leads the experts to consider the interrelations between public enforcement and private enforcement. The subject of access to evidence in the context of private litigation may be associated with this general theme without 128   OECD Council, Revised recommendation of the Council Concerning Co-operation between Member countries on Anticompetitive Practices affecting International Trade, C(95)130/FINAL. 129  OECD, Hard Core Cartels: Third report on the implementation of the 1998 Council Recommendation (2005). 130   Available at www.oecd.org/competition (2005).

286  Laurence Idot difficulty. Nonetheless, in order to discuss this properly, the circle of experts should not be limited only to competition specialists, economists and American lawyers, as is currently the case, but be extended, at least on this theme, to European specialists of private inter­ national law.

ii.  The Lessons to Be Learned from International Cooperation in Matters of Mutual Legal Assistance There is a field in which judicial cooperation has considerably progressed in recent years, in particular following the terrorist attacks of 11 September 2001, and that is in criminal law. The United States is therefore bound by numerous bilateral mutual assistance treaties (referred to as MLATs). Independently of the bilateral agreements concluded with most of the EU Member States, in order to reinforce the fight against terrorism, the EU Council, by a decision of 6 June 2003, signed agreements between the European Union and the United States on extradition and mutual legal assistance in criminal matters.131 These agreements were finally approved by the European Union by a decision of 23 October 2009.132 Fifty-six of these MLATs, including those with the European Union, entered into force on 1 February 2010. According to a press release from the Department of Justice: The agreement on mutual legal assistance enhances and modernizes law enforcement and judicial cooperation by, among other things: allowing prompt identification of financial account informa­ tion in criminal investigations; permitting the acquisition of evidence, including testimony, by means of video conferencing; and authorizing the participation of US criminal investigators and prosecutors in joint investigative teams in the EU.133

Insofar as in certain countries, competition rules can give rise to criminal penalties, in par­ ticular in the United States, the possible application of these agreements’ mechanisms for competition law has been mentioned.134 This would however appear to be out of the ques­ tion for the European Union, even though Article 8 of the agreement between the European Union and the United States provides for mutual legal assistance in favour of administra­ tive authorities, since the Explanatory Note on Article 8 specifies that the subject matter of the agreement, for the European Union, is limited to police and judicial cooperation in criminal matters as defined in Title VI Treaty on European Union (now Articles 82 and fol­ lowing TFEU). In any event, the provisions on confidentiality, and particularly Article 9 on the protection of personal data and other data, hardly appear suited to the matter since in the event of a problem, consultation is envisaged. Finally, this proves, if proof is needed, that it is necessary to remain within the field of judi­ cial cooperation in civil matters, which follows a different logic. The Hague Conference remains, a priori, the most appropriate forum on the international level, but the field of 131   Council Decision (EC) 2003/516 of 6 June 2003 concerning the signature of the Agreements between the European Union and the United States of America on extradition and mutual legal assistance in criminal matters [2003] OJ L181/25. 132   Council Decision (CFSP) 2009/820 of 23 October 2009 on the conclusion on behalf of the European Union of the Agreement on extradition between the European Union and the United States of America and the Agreement on mutual legal assistance between the European Union and the United States of America [2009] OJ L291/40. 133  www.justice.gov/opa/pr/2010/February/10-opa-108.html. 134   Souty, ‘Réflexions sur les arrêts Empagran et Intel v AMD’ (n 125) in fine.

Access to Files and Evidence  287 antitrust law was erroneously excluded in the latest discussions,135 which furthermore partly failed. It is time to rekindle discussion on this point without limiting it to questions  –  fundamental as they may be – of the proper forum and applicable law. In this context, the solutions at the European Union level should first be clarified. It would then be possible in a second phase to consider exporting the European model, as has started to happen for the substantive rules of competition which often turn out to be better suited to emerging countries than American antitrust law.

135   L Radicati di Brozolo, ‘Antitrust Claims: Why Exclude Them from The Hague Jurisdiction and Judgments Convention?’ (2004) 4 Global Jurist Advances Issue 2 Art 2.

13 Exchange of Information and Opinions between European Competition Authorities and Courts – From a Swedish Perspective ROBERT MOLDÉN*

I. Introduction A.  Introduction to the EU – Framework of Regulation 1/2003 In her book, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law, Silke Brammer gives the following introduction which is also very well suited to serve as an introduction to the present chapter: In 2004, European competition law underwent the most radical reform since its conception. The changes that this reform involved were so significant that it has been described as a ‘legal and cultural revolution’. The centerpiece of the reform, commonly referred to as ‘modernisation’, is Regulation No 1/2003 on the implementation of Articles [101] and [102 TFEU], which entered into force on 1 May 2004. Regulation 1/2003 has brought about a fundamental reorganisation of the division of responsibilities between the European Commission, the national competition authorities (NCAs) and the courts of the Member States of the European Union. It is said to entail a decentralisation of the enforcement of EC competition law. Regulation 1/2003 has in fact established a system of full parallel competences in which the Commission, the NCAs and the courts of the Member States share the responsibility to enforce the EC competition rules. Shared competences and ‘decentralised’ application of EC competition law through a multitude of enforcers (instead of one central body – the Commission) makes it necessary that the numerous enforcement bodies collaborate and coordinate their action in order to avoid conflicts and to ensure the efficient and consistent application of the law.1

*  Head of the Competition Law Practice Group at the Swedish law firm Gärde Wesslau and Doctoral Candidate in competition and public procurement law at the University of Lund; former Senior Case Officer at the Swedish Competition Authority (SCA) and former Associated Judge at the Administrative Court of Appeal in Gothenburg; e-mail: [email protected] . I am grateful for valuable comments and advice from the other authors of this book, in particular to Prof Stéphanie Francq. Moreover, I am grateful for valuable comments and advice from Dr Rainer Becker, Eddy de Smijter, Dr Fabian Theurer and Advokat Richard Jacobsson. 1   S Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (Oxford, Hart Publishing, 2009) 1 (footnotes omitted). An earlier version of the book was accepted as a doctoral dissertation at the KULeuven in April 2008.

290  Robert Moldén Another important development is the Commission’s ambition to foster private enforcement of EU competition law which so far, as opposed to the situation in the US, has played a rather modest role in the EU.2 In its White Paper on Damages actions for breach of the EC antitrust rules the Commission states the following: Despite the requirement to establish an effective legal framework turning exercising the right to damages into a realistic possibility, and although there have recently been some signs of improvement in certain Member States, to date in practice victims of EC antitrust infringements only rarely obtain reparation of the harm suffered. The amount of compensation that these victims are forgoing is in the range of several billion euros a year.3

By moving from a system of a rather centralised application of EU competition law by a single authority – the Commission – to a system of parallel application of EU competition law by national competition authorities and national courts, the scope for conflicts of laws and jurisdictional issues have significantly increased within the ambit of private enforcement of EU competition law. Most chapters of the present book focus on these issues, which are within the classical domains of private international law. However, even though national courts and competition authorities are still free, in principle, to apply national procedural law, Regulation 1/2003 imposes strict limitations as to applying national competition law in cases where trade between Member States may be affected. Where national competition authorities and courts apply national competition law to agreements and concerted practices which may affect trade between Member States, they shall also apply Article 101 TFEU. Where the national competition authorities or courts apply national competition law to any abuse prohibited also by Article 102 TFEU, they shall also apply Article 102 TFEU. The application of national competition law may not lead to the prohibition of agreements or concerted practices which may affect trade between Member States but which do not restrict competition within the meaning of Article 101(1) TFEU, or which fulfil the conditions for exemption under Article 101(3) TFEU.4 In order to prevent the decentralisation of the application of EU competition law from leading to a significant loss of coherence in uniform application of substantive EU competition law, Regulation 1/2003 introduced a number of new coordination measures, which are the subject of this chapter. Since May 2004, the Commission is entitled, acting on its own initiative, to submit written amicus curiae observations on the application of EU competition law to national courts where the coherent application of EU competition law so requires. National competition authorities are entitled to submit such written amicus curiae observations irrespective of whether the coherent application of EU competition law so requires.5 National courts on their side are entitled to ask the Commission to transmit to them information in its pos­ session or its opinion on questions concerning the application of the Community competi-

2  For an overview over recent developments in Swedish competition law as to private enforcement, see HH Lidgard, ‘Konkurrensrättsligt skadestånd’ (2009) 94 Svensk Juristtidning 32. See also H Andersson and E Legnerfält, ‘Effective private enforcement: The Swedish experience, a lesson for the EU?’ (2009) Concurrences 156. 3   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008, 2. 4   See Art 3 Regulation 1/2003. 5   Art 15(3) Regulation 1/2003, see III below.

Exchange of Information and Opinions  291 tion rules.6 In order to enable the Commission to monitor national court proceedings where EU competition law is applied, Member States are obliged to forward to the Commission a copy of any written judgment of national courts applying EU competition law.7 These new powers do not affect the pre-existing right of national courts to make references for a preliminary ruling on the interpretation of EU competition law to the Court of Justice under Article 267 TFEU. This chapter is titled ‘Exchange of Information and Opinions between European Competition Authorities and Courts – From a Swedish Perspective’. The chapter will thus present the different coordination measures envisaged in Regulation 1/2003 and Article 267 TFEU to foster the coherent application of EU competition law. The chapter will then try to analyse how well these measures have been working in practice by looking at concrete examples of their application. Moreover, part VII.B contains an overview over the legislative history of the coordination measures now embodied in Article 15 Regulation 1/2003. The ultimate objective of this chapter is to come up with some concrete proposals on how to improve the effectiveness of the system. These proposals – which concern both potential amendments to Regulation 1/2003 as well as potential amendments of national competition law – are summarised in the Policy Proposals. Ideally, this chapter would look at how the system is applied in all the 27 Member States. However, for practical reasons, I have decided to focus on the one Member State whose legal system I am most familiar with, that is Sweden. This delimitation enables me to make a comprehensive study of all cases where the coordination system embodied in Regulation 1/2003 and Article 267 TFEU has been applied in practice in Sweden, which has been a Member State of the European Union since 1995. However, before looking at how the coordination system embodied in Regulation 1/2003 and Article 267 TFEU has been applied in Sweden, it will be helpful first to briefly introduce the Swedish system of competition law enforcement, which is the object of the following subsection.

B.  Introduction to Swedish Competition Law Procedure – The New Swedish Competition Act of 20088 The new Swedish Competition Act of 20089 contains provisions prohibiting anti-­ competitive agreements and abuse of a dominant position which constitute copies of Articles 101 and 102 TFEU. According to the travaux préparatoires behind the preceding Competition Act,10 the fact that the substantive provisions of the Swedish Competition Act are in line with those of EU competition law means that the Commission practice and jurisprudence of the Court of Justice can serve as guidance when interpreting the Swedish Competition Act.11   Art 15(1) Regulation 1/2003, see IV and V below.   Art 15(2) Regulation 1/2003, see VI below. 8  The text of this subsection is taken from subsection 1.1 of my Swedish National Report for the LIDC Bordeaux Congress 2010 on ‘Which, if any, agreements, practices or information exchanges about prices should be prohibited in vertical relationships?’. 9   Swedish Competition Act of 2008, Konkurrenslagen (2008:579). 10   Swedish Competition Act of 1993, Konkurrenslagen (1993:20). 11   See Proposition 1992/93:56, 21. 6 7

292  Robert Moldén The Swedish Supreme Court has recently, in a case concerning the existence of a domin­ ant position,12 concluded that the substantive provisions of Swedish competition law are in line with the corresponding provisions of EU competition law to such a degree that it in fact does not matter whether Swedish or EU competition law is applied, in practice the analysis to be effected is the same. Public enforcement of Swedish competition law is entrusted to the Swedish Competition Authority (SCA)13 and its approximately 130 employees. There are five operational departments. Competition law departments 1–3 handle competition law cases in the private sector, competition law department 4 handles competition law cases in the public sector. In September 2007, the activities of the former Public Procurement Authority14 were transferred to a new-founded Department of Public Procurement at the SCA. In the majority of cases handled by the SCA, the procedure is very similar to that of the Commission’s DG Competition and to that of most of other national competition authorities in the EU. The SCA is entitled to take both final and interim injunction decisions on its own,15 ordering an ongoing violation of Swedish or EU competition law to be terminated; such decisions can be combined with a penalty to be paid in case the antitrust offender would not comply with the injunction decision.16 Moreover, the SCA is entitled to take decisions making voluntary commitments mandatory, under threat of penalty payments.17 The Authority is also entitled to issue fine orders.18 These decisions by the SCA can be appealed to the Swedish Market Court.19 An appeal against the judgment of the Swedish Market Court to the Swedish Supreme Court is not permitted, the Swedish Market Court is thus first and last court instance in the majority of cases when Swedish competition law is enforced by the SCA. However, a peculiarity of Swedish procedural competition law consists in the fact that the SCA may not take any decision on its own to impose fines for breaches of Swedish or EU competition law. Moreover, the SCA is not entitled to take any decisions on its own prohibiting a merger. In these cases, the SCA has to sue the undertakings involved before the District Court of Stockholm. It is thus the District Court of Stockholm which, if the SCA wins its case, imposes fines or prohibits a merger in first instance. Also in these cases, there is only one more instance, as the judgments of the Stockholm District Court can be appealed to the Swedish Market Court, without any appeal to the Swedish Supreme Court being possible. The current procedural system has recently been criticised by jur dr Eva Edwardsson of Uppsala University, who in a report commissioned by the SCA suggests that the Swedish procedural peculiarities in this respect should be abolished and be brought in line with the EU procedural system; under such a reformed system proposed by Eva Edwardsson, the 12   Judgment of the Swedish Supreme Court of 19 February 2008 in Case T 2808-05 Danska staten genom BornholmsTrafikken v Ystad Hamn Logistik Aktiebolag (Ystad Harbour); this case is presented below (IV.B). A similar statement has been made by the Swedish Market Court in its judgment in Case A 4/06, MD 2007:26 of 15 November 2007 Övertorneå kommun and others v Ekfors Kraft AB and others, see IV.B below. 13  Konkurrensverket. 14   Nämnden för offentlig upphandling (NOU). 15   c 3 Arts 1 and 3 Swedish Competition Act. 16   c 3 Art 1 read together with c 6 Art 1 Swedish Competition Act. 17   c 3 Art 4 read together with c 6 Art 1 Swedish Competition Act. 18   c 3 Art 17 Swedish Competition Act; if the undertaking to which the fine order is addressed does not consent to the order within the time specified, the Swedish Competition Authority may initiate court proceedings concerning fines instead. 19   Marknadsdomstolen, www.marknadsdomstolen.se; see c 7 Art 1 Swedish Competition Act.

Exchange of Information and Opinions  293 SCA would also take decisions on fines and merger prohibitions on its own, these decisions could then be appealed to a number of administrative courts.20 When it comes to private enforcement, objections of nullity of anti-competitive agreements can be raised at civil litigation proceedings before one of the 48 Swedish district courts where the defendant is domiciled. Private actions for damages because of infringement of Swedish or EU competition law may also be raised before one of these 48 district courts. Moreover, the Stockholm District Court is always competent to handle such claims.21 Claims for damages can either be handled in a separate proceeding or jointly processed with an ongoing public enforcement claim for fines before the Stockholm District Court.22 Judgments of district courts can be appealed to one of the courts of appeal whose judgments in turn can be appealed to the Swedish Supreme Court. Another peculiarity of Swedish competition procedural law is that private injunction applications to cease any ongoing infringement of Swedish or EU competition law may not be brought directly to court. First, a complaint has to be made to the SCA. If the SCA decides to pick up the case, the Authority would take an injunction decision, which then could be appealed to the Swedish Market Court; in these proceedings, the complainant does not enjoy any standing as a party. If, however, the SCA decides not to pursue the case, the complainant obtains a so-called subsidiary right of action and they can directly lodge its case with the Swedish Market Court which may then, as first and last instance, take an injunction decision.23 In summary, in all cases concerning the public enforcement of Swedish and EU competition law, the SCA deals only with two courts: the Stockholm District Court, which has a department specialised in competition law cases; and the Swedish Market Court, which is either the first and only or the second and last instance in these cases. When it comes to private enforcement of Swedish and EU competition law in Sweden, there is only one court involved in first and last instance, the Swedish Market Court, provided the case concerns a claim for an injunction decision to cease ongoing infringements of competition law. However, claims of nullity or claims for damages can be made not only before the Stockholm District Court, which is the only Swedish district courts employing judges specialised in competition law, but also before the other 47 district courts which mostly lack any expert knowledge in competition law.

II.  The Right of National Courts to Request a Preliminary Ruling from the Court of Justice in Competition Law Cases A.  General Observations on Preliminary Rulings by the Court of Justice As mentioned above, the new coordination measures introduced by Article 15 Regulation 1/2003, which are the main subject of this chapter, do not affect the right and/or duty of 20   E Edwardsson, Domstolsprövning av marknadsrelaterad lagstiftning (report commissioned by the Swedish Competition Authority, 2009, available at www.kkv.se). 21   c 3 Art 26 Swedish Competition Act. 22   c 8 Art 7 Swedish Competition Act. 23   c 3 Art 2 Swedish Competition Act.

294  Robert Moldén national courts under Article 267 TFEU to make a reference for a preliminary ruling on the interpretation of Treaty provisions such as Articles 101 and 102 TFEU. As to preliminary rulings, only the following few remarks will be made. From the perspective of the national judge a major advantage of preliminary rulings consists in obtaining authoritative – and binding – guidance on how to interpret EU competition law. The major drawback consists in the considerable prolongation of the overall court procedure as it takes considerable time for the Court of Justice to produce a preliminary ruling. This is still the case today, even if the Court of Justice has successfully managed to reduce considerably the average time used for preparing a preliminary ruling to approximately 15–16 months.24

B.  Swedish Courts’ Requests for a Preliminary Ruling from the European Court of Justice in Competition Law Cases During the first 14 years of Sweden’s EU membership, from 1995 to 2009, Swedish courts made references for a preliminary ruling to the Court of Justice in 67 cases, ie on average five cases per year.25 In the area of public procurement and EU State Aid law not a single reference for a preliminary ruling has been made by a Swedish court so far. In the area of competition law, Swedish courts have made references for a preliminary ruling in two cases, which will be presented below.26

i. The STIM Case This was the very first time the Swedish Market Court made a reference for a preliminary ruling to the Court of Justice in a competition law case. The case is an example of private enforcement of EU competition law in Sweden. In October 2004, two commercial broadcasting companies, Kanal 5 and TV 4, brought an application for an injunction before the SCA, on the grounds that STIM abused its dominant position. STIM is a collecting society which enjoys a de facto monopoly in Sweden on the market for making copyright-­protected music available for television broadcasting. By decision of 28 April 2005, the SCA dismissed the application on the ground that insufficient grounds existed to justify the opening of an investigation. Kanal 5 and TV 4 then used their subsidiary right of action and brought an action before the Swedish Market Court, which decided to stay the proceedings and to make a reference for a preliminary ruling to the Court of Justice. In its judgment of 11 December 2008, the Court of Justice, ruled as follows: Article 102 TFEU must be interpreted as meaning that a copyright management organisation with a dominant position on a substantial part of the common market does not abuse that position where, with respect to remuneration paid for the television broadcast of musical works protected by copyright, it applies to commercial television channels a remuneration model according to which the amount of the royalties corresponds partly to the revenue of those channels, provided that that part is proportionate overall to the quantity of musical works protected by copyright actually broadcast or likely to be broadcast, unless another method enables the use of those works and the audience to be identified more precisely without however resulting in a disproportionate   See U Bernitz, ‘Europarättens genomslag i svensk rätt – var står vi idag?’ (2009) Juridisk Tidskrift 477, 493.   ibid 492. 26   See U Bernitz, Förhandsavgöranden av EU-domstolen – Svenska domstolars hållning och praxis (report commissioned by SIEPS, 2010). 24 25

Exchange of Information and Opinions  295 increase in the costs incurred for the management of contracts and the supervision of the use of those works. Article 102 TFEU must be interpreted as meaning that, by calculating the royalties with respect to remuneration paid for the broadcast of musical works protected by copyright in a different manner according to whether the companies concerned are commercial companies or public service undertakings, a copyright management organisation is likely to exploit in an abusive manner its dominant position within the meaning of that article if it applies with respect to those companies dissimilar conditions to equivalent services and if it places them as a result at a competitive disadvantage, unless such a practice may be objectively justified.27

It would of course have been very interesting to see how this preliminary ruling is implemented by the Swedish Market Court, in particular as this is the only preliminary ruling in a Swedish competition law case given by the Court of Justice so far. However, this will not be possible. In March 2010, STIM reached out of court settlements with both Kanal 5 and TV 4,28 which means that the Swedish Market Court no longer has to deliver any judgment in this case.

ii. The TeliaSonera ADSL Case This was the second time a Swedish court made a reference for a preliminary ruling in a competition law case. As opposed to the above-mentioned STIM case, this is an example of public enforcement of Swedish and EU competition law. As set out in I.B above, the SCA is not entitled to make any decision on fines on its own, but must sue a defendant before the Stockholm District Court. On 21 December 2004, the SCA sued TeliaSonera before the Stockholm District Court, claiming fines of 144 million SEK for alleged abuse of a dominant position. According to the SCA, TeliaSonera abused its dominant position by applying price squeezes on the ADSL data communications market. On 30 January 2009, ie more than four years after the claim was lodged, the Stockholm District Court made a reference for a preliminary ruling to the Court of Justice, asking in total 10 questions on how to interpret the EU competition law on price squeezes.29 Oral pleadings took place on 18 March 2010 and the judgment of the Court of Justice is expected to be delivered during autumn 2010. Hence, no Swedish court has yet had the occasion to implement a preliminary ruling from the Court of Justice in a competition law case. This means that it is not yet possible to evaluate how well preliminary rulings are implemented by Swedish courts in competition law cases.

27   Case C-52/07 Kanal 5 Ltd and TV 4 AB v Föreningen Svenska Tonsättares Internationella Musikbyrå (STIM) upa, judgment of 11 December 2008. 28   See press release by STIM, 26 March 2010, available at www.stim.se, and press release by TV 4, 19 March 2010, available at www.tv4.se. 29   The reference for a preliminary ruling of 31 pages was written by judge Ingeborg Simonsson, who holds a PhD in EU competition law. The case number at the Stockholm District Court is T 31862-04.

296  Robert Moldén

III.  The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts in Competition Law Cases A.  General Points on Amicus Curiae Observations in Competition Law Cases The right of NCAs and the Commission to submit amicus curiae observations is embodied in Article 15(3) of Regulation 1/2003, which reads as follows: Competition authorities of the Member States, acting on their own initiative, may submit written observations to the national courts of their Member State on issues relating to the application of Article [101] or Article [102 TFEU]. With the permission of the court in question, they may also submit oral observations to the national courts of their Member State. Where the coherent application of Article [101] or Article [102 TFEU] so requires, the Commission, acting on its own initiative, may submit written observations to courts of the Member States. With the permission of the court in question, it may also make oral observations. For the purpose of the preparation of their observations only, the competition authorities of the Member States and the Commission may request the relevant court of the Member State to transmit or ensure the transmission to them of any documents necessary for the assessment of the case.

Article 15(3) Regulation 1/2003 is complemented by provisions in the Commission Notice on the cooperation between the Commission and national courts, which provides the following information as to the procedural framework in which amicus curiae observations are to be submitted by the Commission: 34.  Since the regulation does not provide for a procedural framework within which the observations are to be submitted, Member States’ procedural rules and practices determine the relevant procedural framework. Where a Member State has not yet established the relevant procedural framework, the national court has to determine which procedural rules are appropriate for the submission of observations in the case pending before it. 35.  The procedural framework should respect the principles set out in point 10 of this notice. That implies amongst others that the procedural framework for the submission of observations on issues relating to the application of Articles [101] and [102 TFEU] (a) has to be compatible with the general principles of Community law, in particular the fundamental rights of the parties involved in the case; (b) cannot make the submission of such observations excessively difficult or practically impossible (the principle of effectiveness); and (c) cannot make the submission of such observations more difficult than the submission of observations in court proceedings where equivalent national law is applied (the principle of equivalence).30

By leaving the procedural details of the Commission’s intervention to be determined by national rules on civil procedure, Regulation 1/2003 thus opens the way for considerable 30   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 (Cooperation Notice) [2004] OJ C101/54, paras 34–35 (footnote omitted).

Exchange of Information and Opinions  297 legal uncertainty. As pointed out by Silke Brammer, ‘It is therefore unclear whether the Commission, when acting as amicus curiae, must be considered an intervening party sensu stricto, an expert witness or a sort of advocate general, or whether it will have a legal status of its own’.31 The classification of the Commission’s assistance may have important proced­ ural consequences. Between May 2004 and December 2009, the Commission has only submitted amicus curiae observations on three occasions where the Commission considered that there was an imminent threat to the coherent application of the EU competition. None of these three amicus curiae observations were addressed to Swedish courts.32 The first two amicus curiae filings, in the Garage Gremeau case and the case on tax deductibility of Commission Competition fines in the Netherlands are very well summarised in the Commission Staff Working Paper accompanying the Report from the Commission on Competition Policy of July 2009.33

i. The Garage Gremeau Case In 2006, the Commission for the first time made use of Article 15(3) by presenting written observations to the Paris Court of Appeal in the Garage Gremeau case concerning the interpretation of the concept of quantitative selective distribution in Regulation 1400/2002 (the ‘Motor Vehicle Block Exemption Regulation’).34 The question of whether a car distribution system is selective and if so, whether the selection criteria are quantitative or qualitative in nature, has important legal and practical implications. Subject to compliance with other conditions, distribution agreements of car suppliers with a market share not exceeding 30 per cent benefit from the block exemption under Regulation 1400/2002. This threshold rises to 40 per cent for quantitative selective distribution agreements, while qualitative selective distribution agreements benefit from the block exemption irrespective of the market share of the supplier. Articles 1(1)(f)–(h) of the Motor Vehicle Block Exemption Regulation define selective distribution as being qualitative where the supplier selects distributors according to uniformly applicable and non-discriminatory criteria that are only qualitative in nature, are required by the nature of the goods (for example, to preserve its quality and ensure its proper use) and do not directly limit the number of authorised distributors. By contrast, in a quantitative selective distribution system, the supplier uses selection criteria that directly limit the number of authorised distributors. The case at issue was brought by Garage Gremeau against DaimlerChrysler France which had terminated all of its existing distribution contracts with a view to restructuring its distribution system on the basis of quantitative selection, in light of Regulation 1400/2002. It refused to conclude a new distribution agreement with its former agreed distributor Garage Gremeau on the basis that it would exceed the number of distributors foreseen as it had appointed another distributor for the area in question. Garage Gremeau requested by way of remedy that it should be admitted to DaimlerChrysler’s network. This was refused  Brammer, Co-operation between National Competition Agencies (n 1) 46.   See Commission, ‘Report on the functioning of Regulation 1/2003’ (Commission Report) (Communication) COM (2009) 206 final, 29 April 2009, para 35. 33   Commission, ‘Staff Working Paper accompanying the Report on the functioning of Regulation 1/2003’ (Staff Working Paper) SEC (2009) 574 final paras 284–90. 34   Commission Regulation 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicles sector [2002] OJ L203/30. 31 32

298  Robert Moldén at first instance and on appeal. The Cour de Cassation subsequently affirmed the appeal court’s finding that DaimlerChrysler’s criterion of nominating a certain number of authorised distributors for different sales territories was objective and precise, but held that the lower court should have examined both the objectivity of its other selection criteria and how these were implemented, in particular because the new authorised distributor in Burgundy did not fulfil these at the time of its appointment. These judgments generated considerable interest in the sector, including in other Member States. The Commission intervened to clarify that quantitative selective distribution systems do not have to fulfil the same requirements as those applicable for qualitative selective distribution systems, meaning that it is not necessary to assess the objectivity of the selection criteria other than those for determining the number of distributors. If that were the case, the categories of quantitative and qualitative selective distribution would be conflated, contrary to Regulation 1400/2002. With regard to any assessment of the implementation of the selection criteria, the Commission observed that there does not appear to be any basis in Regulation 1400/2002 for preventing a supplier from foreseeing a transitional period for fulfilling its requirements if it considers that a given candidate has the financial and technical potential. Otherwise, this would tend to limit access to existing authorised distributors who have already made the necessary investments, foreclosing more competitive new­ comers. This case is currently subject to a stay of proceedings. Stakeholders have noted that the Commission’s intervention was very useful in that it could be invoked in similar proceedings before other national courts.

ii.  The Case on Tax Deductibility of Commission Fines in the Netherlands The Commission also decided to make observations pursuant to Article 15(3) Regulation 1/2003 in a case in the Netherlands concerning the tax deductibility of Commission competition fines. In the initial judgment of 22 May 2006 on this issue, the Dutch Rechtbank van Haarlem (Court of First Instance in Haarlem, notably in tax matters) ruled that fines imposed by the Commission for infringement of the EC competition rules are partially deductible from income tax. The court found that although Dutch law provides that administrative fines cannot be deducted from income tax, fines imposed by the Commission cannot be understood according to the national definition of ‘fine’ as, unlike fines imposed under Dutch law, they consist of punitive elements and elements intended to skim off illegal gains. This judgment was appealed to the Gerechtshof te Amsterdam (Belastingkamer) (Court of Appeal of Amsterdam, tax chamber). The Commission moved to intervene as amicus curiae to highlight that Community fines for breach of the EU competition rules are not intended to skim off illegal gains and that the principle of equivalence would be breached if fines imposed under EU competition law could be deducted in contrast to fines under national law. Moreover, it would go against the principle of effectiveness, as the impact of Commission decisions would necessarily be reduced if companies fined for the violation of Articles 101 and 102 TFEU could (at least partially) deduct the amount from national income tax. In an intermediary judgment of 12 September 2007, the Gerechtshof te Amsterdam decided to ask for a preliminary ruling to the European Court of Justice under Article 267 TFEU regarding the possibility for the Commission to intervene on the basis of Article 15(3) in such national (tax) litigation.

Exchange of Information and Opinions  299 On 11 June 2009, the Court of Justice ruled that Article 15(3) Regulation 1/2003 must be interpreted as meaning that it permits the Commission of the European Communities to submit on its own initiative written observations to a national court of a Member State in proceedings relating to the deductibility from taxable profits of the amount of a fine or a part thereof imposed by the Commission for infringement of Articles [101] or [102 TFEU].35

Following this judgment of the Court of Justice, the Commission submitted its amicus curiae observations before the Gerechtshof te Amsterdam. In its judgment of 11 March 2010, the Gerechtshof te Amsterdam set aside the judgment of the Rechtbank van Haarlem. It held that fines imposed by the Commission are not deductible from taxes and thus followed the line suggested by the Commission in its amicus curiae observations.36

iii. The Pierre Fabre Dermo-Cosmétique Case In 2009, the Commission submitted written amicus curiae observations in the Pierre Fabre Dermo-Cosmétique case before the Paris Court of Appeal.37 The Commission’s observations relate to a restriction of online sales in selective distribution. They are summarised in the Commission Staff Working Paper accompanying the Report from the Commission on Competition Policy 2009 of June 2010, paragraph 509, as follows: The Commission observed that a general prohibition of on-line sales imposed by the supplier on its selected distributors is an infringement by object under Article [101](1) [TFEU], which is not block-exempted under Regulation 2790/1999. Moreover, the Commission observed that the notion of ‘objective justification’, mentioned in point 51 of the Guidelines on Vertical Restraints, should be interpreted strictly and shall not replace the analysis of efficiencies under Article [101] (3) [TFEU]. In general, only exceptional circumstances, external to the parties, may be considered as an objective justification for restrictions by object. If however the supplier proves that the conditions of Article [101](3) [TFEU] are fulfilled, the agreement may be individually exempted under that Article. On 29 October [2009], the Paris Court of Appeal referred to the ECJ a question for preliminary ruling under Article [267 TFEU].38

In its Report on the functioning of Regulation 1/2003 from April 2009, the Commission states that stakeholders have called on the Commission to have greater recourse to the instrument of amicus curiae observations and that the Commission intends to reflect upon how this practice should further develop.39 In my view, there are probably good reasons for the Commission to use the instrument of amicus curiae observations more frequently, merely three amicus curiae observations in five and a half years is indeed a quite low figure.

  Case C-429/07 Inspecteur van de Belastingdienst v X BV, judgment of 11 June 2009.   See European Commission, ‘Observations as Amicus Curiae – New Developments’ ECN Brief 2/2010 available at www.ec.europa.eu/competition/ecn/index_en.html. 37   Paris Court of Appeal, Case No RG 2008/23812 Pierre Fabre Dermo-Cosmétique. 38   Case C-439/09 Pierre Fabre Dermo-Cosmétique. The referred question is whether a general and absolute prohibition to sell contract goods to end users via the Internet, imposed on authorised distributors within the framework of a selective distribution network, constitutes an infringement of Art 101(1) TFEU, which is not exempted under Regulation 2790/1999, however could possibly benefit from an individual exemption under Art 101(3) TFEU. 39   Para 35 Commission Report. 35 36

300  Robert Moldén It is therefore interesting to note that the Commission, in the first half of 2010, has announced that it intends to submit amicus curiae observations in two new cases, before the Irish High Court40 and before the Supreme Court of the Slovak Republic.41 However, in view of the limited practical experience gained so far as to national courts’ implementation of amicus curiae observations by the Commission, it is still difficult to make any empirically based proposal as to whether it would be necessary to amend Article 15 Regulation 1/2003 in order to obtain a higher degree of legal certainty by specifying what formal role and standing the Commission should have in national proceedings.

B.  Amicus Curiae Observations Issued by the SCA to Swedish Courts in Competition Law Cases i. The Soda-Club Case On 25 March 2010, the SCA sent written amicus curiae observations to the Svea Court of Appeal in Stockholm in the Soda-Club case.42 This is the first time that the SCA made use of its right under Article 15(3) Regulation 1/2003 to submit amicus curiae observations in competition law cases handled by Swedish courts. The background is as follows. Soda-Club and Vikingsoda are competing companies active, inter alia, in the business of refilling cartridges used for the production of soda water with carbon dioxide. Vikingsoda does not only refill its own cartridges but also cartridges of Soda-Club. In doing so, Vikingsoda adds its trademark Vikingsoda to the Soda-Club cartridges which bear the trademark SODA-CLUB. On 5 February 2010, the Stockholm District Court took an interim injunction decision prohibiting Vikingsoda, inter alia, from adding its trademark on cartridges bearing the SODA-CLUB trademark, as this would constitute an infringement of Soda-Club’s rights to its trademark. Vikingsoda appealed the interim injunction decision to the Svea Court of Appeal which granted leave to appeal. In its amicus curiae observations to the Svea Court of Appeal, the SCA points out that its preliminary investigations indicate that Soda-Club’s exercise of its intellectual property rights may constitute an abuse of a dominant position. The Soda-Club case is still pending. 40   See European Commission, ‘Observations as Amicus Curiae – New Developments’ ECN Brief 2/2010. The case concerns a certain rationalisation scheme in the Irish beef industry organised by the Beef Industry Development Society (BIDS). Upon a preliminary ruling by the Court of Justice of 20 November 2008 in Case C-209/07, the Irish Supreme Court found in a judgment of 3 November 2009 that the scheme infringed Art 101(1) TFEU and remitted the case back to the High Court to decide on whether the conditions of Art 101(3) are satisfied; it is in this remitted case that the Commission has decided to submit amicus curiae observations. 41   See press release of the Antimonopoly office of the Slovak Republic of 4 May 2010, available at www.antimon.gov.sk/135/3892/the-european-commission-intends-to-express-its-standpoint-in-the-mater-of-abuse-ofdominant-position.axd as well as the press release of 7 December 2007, available at www.antimon.gov.sk/427/2868/ the-antimonopoly-office-of-sr-will-submit-an-appeal-against-judgement-of-the-county-court-in-bratislava.axd. The case concerns the appropriate level of fines to be imposed on a rail-cargo firm found of having abused a dominant position. In a judgment of 6 December 2007, the County Court in Bratislava, while upholding the Antimonopoly office’s finding of abuse of a dominant position, had reduced the amount of the fines imposed by 88%. The Antimonopoly Office considered that the imposition of such a low sanction – 9 million SKK – instead of 75 million SKK, for a serious breach of competition rules meant that the sanction would not have sufficient preventive effects. It therefore appealed to the Supreme Court of the Slovak Republic, which on 4 May 2010 decided to suspend the case until the Commission submits its amicus curiae observations. 42   The case number at the Svea Court of Appeal is Ö 1561-10, the case number at the Swedish Competition Authority is 632/2009.

Exchange of Information and Opinions  301

IV.  The Right of National Courts to Request Opinions from the Commission in Competition Law Cases A.  General Points on Requests of Opinions from the Commission by National Courts in Competition Law Cases The right of national courts to request opinions43 from the Commission is embodied in Article 15(1) Regulation 1/2003, which reads as follows: In proceedings for the application of Article [101] or Article [102 TFEU], courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the Community competition rules (emphasis added).

Article 15(1) Regulation 1/2003 is supplemented by the Cooperation Notice, which provides the following information: In order to enable the Commission to provide the national court with a useful opinion, it may request the national court for further information. In order to ensure the efficiency of the cooperation with national courts, the Commission will endeavour to provide the national court with the requested opinion within four months from the date it receives the request. Where the Commission has requested the national court for further information in order to enable it to formulate its opinion, that period starts to run from the moment that it receives the additional information. When giving its opinion, the Commission will limit itself to providing the national court with the factual information or the economic or legal clarification asked for, without considering the merits of the case pending before the national court. Moreover, unlike the authoritative interpretation of Community law by the Community courts, the opinion of the Commission does not legally bind the national court.44

Between May 2004 and 31 March 2009, the Commission issued opinions on 18 occasions on requests from national courts on questions concerning the application of what are now Articles 101 and 102 TFEU.45 Nine of these eighteen opinions were issued to courts in Spain, five to courts in Belgium, two to courts in Sweden and one each to courts in Lithuania and the Netherlands.46 The Commission opinions are summarised in the Commission Staff Working Paper accompanying the Report from the Commission on Competition Policy of July 2009 as follows: 278. The opinions issued to Spanish courts all concerned litigation between service station operators and wholesale suppliers of petroleum products. In most cases, the service station operators were seeking a declaration of nullity of the contract they have concluded with the wholesaler on the grounds that it infringed EC competition law. 43   The right of national courts to request information from the Commission is also embodied in Art 15(1) Regulation 1/2003. However, for practical reasons, the right to request information will be dealt with in a separate part, see V below. 44   Paras 28–29 Cooperation Notice. 45   Para 277 Staff Working Paper. 46   Some of the opinions are published on the Commission’s website www.ec.europa.eu/competition/court/ antitrust_requests.html.

302  Robert Moldén 279. The other opinions issued by the Commission relate to a wide variety of matters. The Commission has given opinions to Belgian courts on: exclusive purchasing agreements for beer and non-beer beverages; the application of Articles [101] and [102 TFEU] to exhibitions; the application of Article [102 TFEU] to favourable conditions and rebates granted by collecting societies; the conformity of the general conditions in a pilotage contract, including an exoneration of responsibility and an indemnity clause, with Article [102 TFEU]; and the applicability of Articles [101] and [102 TFEU] to the exclusion of one of the members of a standards setting organization ... 281. In an opinion given to a Dutch national court, the Commission provided guidance on whether quota allocations for mussel seeds in The Netherlands which set by an association of mussel farmers for its members, fell to be assessed under Articles [101] and [102 TFEU] or whether it came within the scope of Regulation 26/62 on the application of competition rules to agricultural products. Finally, the Commission provided an opinion to a Lithuanian court on whether it was compatible with Article [106](1) [TFEU], in conjunction with Article [102 TFEU], for a municipality to carry out a tender procedure for the award of an exclusive right to collect waste for 15 years. 282. Some stakeholders have highlighted what they perceive as reluctance on the part of some national judges to seek opinions from the Commission under Article 15(1). To try to address this issue, the Commission has published examples of opinions given to national courts on the Directorate General for Competition’s website so that national courts can get an idea of what an opinion can provide.(325) Guidance is also given on the Directorate General for Competition’s website detailing what requests for opinions should contain.47 (325) This is only done once the judgment in the court case concerned has been rendered and is subject to conformity with national procedural, at www.ec.europa.eu/competition/court/ requests.html.

B.  Requests for Opinions from the Commission by Swedish Courts in Competition Law Cases So far, only two requests for an opinion have been made by Swedish courts in competition law cases, one by the Swedish Supreme Court and one by the Swedish Market Court. These requests and corresponding opinions will briefly be presented below.

i. The Ystad Harbour Case On 18 October 2006, the Swedish Supreme Court made a request for an opinion under Article 15(1) Regulation 1/2003 for the very first time. In the private enforcement case at question, Bornholms Trafikken, which is owned by the Kingdom of Denmark and operates ferryboat traffic between Ystad and the Danish island of Bornholm, had claimed that the harbour of Ystad abused its dominant position by charging excessive prices to Bornholms Trafikken. In its request for an opinion, the Swedish Supreme Court asked the Commission for its opinion on ‘whether the provisions of port services in the port of Ystad to ferry operators offering ferry services for passengers and vehicles on the route Ystad-Rönne should be regarded as the relevant market for the application of Article 102 TFEU’.

  Paras 278–82 Staff Working Paper.

47

Exchange of Information and Opinions  303 In an opinion of eight pages, dated 16 February 2007, the Commission provided the Swedish Supreme Court with – in my view – a very useful overview over the method used by the Commission to define the relevant market.48 The issue of whether the harbour of Ystad had a dominant position was outside the scope of the opinion. On 19 February 2008, the Swedish Supreme Court found in an interim judgment that the harbour of Ystad has a dominant position in the provision of harbour services. In its judgment, the Swedish Supreme Court explicitly refers to the opinion of the Commission, stating the following: In its opinion, the Commission sets out the method and the process the Commission applies when defining the relevant market. The method, which is based on established EU case-law, should be applied in the present case (author’s translation).49

Hence, the Ystad Harbour case is in my view a very good example of how the coordination measures embodied in Article 15(1) Regulation 1/2003 can work well in practice.

ii. The Ekfors Case On 18 January 2007 the European Commission for the first time received a request for opinion under Article 15(1) Regulation 1/2003 from the Swedish Market Court. In its opinion of approximately 10 pages, the Commission sets out under which conditions municipalities providing street lighting can be considered an ‘undertaking’ under Articles 101 and 102 TFEU. The background to this private enforcement case is as follows. The municipalities of Övertorneå and Haparanda claimed that Ekfors, a provider of electricity supply services, had abused its dominant position when it cut off electricity services in order to compel the municipalities to accept excessive price increases. As a result, street lighting ceased to function in substantial areas of the two municipalities. In order to have a subsidiary right of action under Swedish law to bring its case to the Swedish Market Court, the municipalities had to qualify as undertakings in the sense designated by Articles 101 and 102 TFEU.50 In its judgment of 15 November 2007,51 the Swedish Market Court found that the municipalities of Övertorneå and Haparanda qualified as undertakings in the sense designated by Articles 101 and 102 TFEU.52 While the judgment mentions that the Swedish 48   For this reason it is unfortunate that the opinion of the Commission has not yet been published on the Commission’s website. In the letter accompanying its opinion, the Commission informed the Swedish Supreme Court that the Commission intended to publish the opinion. Therefore, the authentic Swedish language opinion was complemented by an English translation of the opinion. In its letter, the Commission also informed the Swedish Supreme Court that if it had any objections against such a publication, the Swedish Supreme Court should indicate this at the latest ‘when a copy of the judgment is forwarded to the Commission in accordance with Article 15(2) of Regulation 1/2003’. However, it appears that the judgment, more than two years after its delivery, still has not been forwarded to the Commission, which means that the Commission has not yet been able to publish either the judgment or the opinion on its website. It may therefore be expedient to note that the judgment of the Swedish Supreme Court can be downloaded from its website www.hogstadomstolen.se. Both the Swedish as well as the English version of the Commission’s opinion can be obtained free of charge by sending an e-mail to the Registry of the Swedish Supreme Court, the address is [email protected]. 49   Judgment of the Swedish Supreme Court of 19 February 2008 in Ystad Harbour (n 12) 10. The case is still pending as to whether the harbour of Ystad abused its dominant position. 50   The municipalities brought their case to the Swedish Market Court after the Swedish Competition Authority had decided not to intervene against Ekfors. 51   Judgment of the Swedish Market Court of 15 November 2007 in Case A 4/06, MD 2007:26 (the Ekfors case). 52   As to the merits of the case, the Swedish Market Court found that no abuse of a dominant position could have occurred as the decision of Ekfors to cut off electricity supply did not entail that ‘the conditions for competition had been impaired’, see judgment p 25, last paragraph.

304  Robert Moldén Market Court requested an opinion from the Commission under Article 15(1) Regulation 1/2003 as to interpretation of the notion of undertaking under EU competition law,53 the judgment does not explicitly mention to what extent the Swedish Market Court has followed the Commission’s opinion. However, in my view, it can be said that the judgment of the Swedish Market Court is well in line with the Commission’s opinion in this respect.54

C.  The Right of Swedish Courts to Request Opinions from the Swedish Competition Authority in Competition Law Cases Article 15(1) Regulation 1/2003 entitles national courts to request opinions from the Commission. However, national courts do not derive any right to request opinions from their national competition authorities from Regulation 1/2003; such a right can only be derived from national procedural law. Swedish courts regularly ex officio request opinions from the SCA in the area of public procurement law. Between September 2007, when the SCA became the competent authority in this area, and May 2010, Swedish courts requested opinions on the interpretation of Swedish and EU public procurement law in no less than 12 cases.55 The legal basis for this is the provision in Article 24 Swedish Act on Administrative Procedure,56 according to which an administrative court may request an opinion from a government authority holding expert knowledge in a given area of law. The right of Swedish civil courts to request expert opinions from government authorities – such as the SCA – is embodied in Chapter 40, Article 1 Swedish Code of Judicial Procedure.57 In public enforcement cases, civil courts may make such a request for an opinion ex officio.58 However, in civil litigation cases, civil courts may no longer make such a request ex officio but only on request by one of the parties.59 Before Regulation 1/2003 entered into force in May 2004, Swedish courts made several requests for opinions from the SCA in cases concerning the private enforcement of competition law.60 The last time a Swedish court requested an opinion from the SCA was in June 2002, in what is probably the biggest private enforcement case ever in Sweden, the SAS v Luftfartsverket case.   Judgment p 2.   Unfortunately, it appears that a copy of the judgment of the Swedish Market Court almost three years after its delivery has not yet been forwarded to the Commission as the judgment is not yet published on the Commission’s website. However, both the judgment and the Commission’s opinion (in Swedish language) can be downloaded from the website of the Swedish Market Court, www.marknadsdomstolen.se. 55   One request from the Supreme Administrative Court, six requests from the Administrative Court of Appeal in Stockholm, three requests from the Administrative Court of Appeal in Jönköping, one each from the Administrative Courts in Stockholm and Jönköping, respectively. The opinions can be downloaded from www.kkv.se. 56   Förvaltningsprocesslagen (1971:291). 57  Rättegångsbalken. 58   This follows from c 8 Art 2 Swedish Competition Act (Konkurrenslagen) read together with c 40 Art 1 and c 35 Art 6 Swedish Code of Judicial Procedure (Rättegångsbalken). 59   The right of civil courts to ex officio request opinions (and other forms of evidence) in disputes where outof-court settlements are permitted was repealed by the Act amending the Swedish Code of Judicial Procedure, published in September 2005 (Lag 2005:683 om ändring i rättegångsbalken). 60   See, eg, the opinion of the Swedish Competition Authority of 5 December 1995, Dnr 626/95, requested by the Solna District Court in Case T 1532/93, Nya färghuset i Ystad AB v D-Fastigheter AB. The legal dispute concerned the question whether a non-compete clause was contrary to the Swedish Competition Act and as such subject to nullity. The Swedish Competition Authority’s opinion of five pages concerned the definition of the relevant market. 53 54

Exchange of Information and Opinions  305

i. The SAS v Luftfartsverket Case On 27 April 2001, the Göta Court of Appeal ruled that Luftfartsverket, the Swedish authority in charge of civil aviation, had abused its dominant position by discriminating against SAS which had to pay higher fees than its competitors for using a specific terminal at the Stockholm Arlanda airport.61 The case did not involve any damages. However, the Göta Court of Appeal found that the abuse by Luftfartsverket entailed nullity, which meant that as a result of the judgment SAS was reimbursed for payments of fees and was liberated from future fees to an overall amount of more than €100 million. The judgment was appealed to the Swedish Supreme Court, which on 10 June 2002 decided to request an opinion from the SCA before taking a decision on whether to grant leave of appeal. After the SCA submitted its opinion on 3 October 2002,62 the Swedish Supreme Court decided on 12 November 2002 not to grant leave of appeal.63 It is striking that no Swedish court has made any request for an opinion on the interpretation of competition law from the SCA since June 2002. One reason may be that there seems to be a widespread general understanding that Swedish courts, after Regulation 1/2003 came into force, may no longer ask the SCA for any opinions on questions concerning the application of EU competition law. The reason for this – in my view erroneous – conclusion may lie in an e contrario interpretation of Article 15(1) Regulation 1/2003, according to which ‘courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the Community competition rules’ (emphasis added). However, according to Article 15(4) Regulation 1/2003, ‘This Article is without prejudice to wider powers to make observations before courts conferred on competition authorities of the Member States under the law of their Member State’. An e contrario interpretation of Article 15(1) Regulation 1/2003 would lead to the conclusion that Regulation 1/2003 as of May 2004 precludes national courts from requesting opinions on the interpretation of EU competition law. In my view, such an e contrario interpretation is not appropriate. Instead, Regulation 1/2003 should correctly be understood not to constitute any legal obstacle for Swedish courts’ right under Swedish law to request an opinion from the SCA on the interpretation of Swedish or EU competition law. The most straightforward way to remove this uncertainty would be to amend Article 15(1) Regulation 1/2003, giving national courts the explicit power based on EU law to request opinions from NCAs on the interpretation of EU competition law. As NCAs already have the power under Article 15(3) to submit amicus curiae observations to national courts it may make sense to give national courts the corresponding right to request opinions from NCAs. In this respect it is interesting to note that the two Swedish requests for an opinion from the Commission under Article 15(1) Regulation 1/2003 have been made by the Swedish 61   Judgment of the Göta Court of Appeal in Case T 33-00 Staten genom Luftfartsverket v Scandinavian Airlines System. 62   Case 544/2002 at the Swedish Competition Authority. The opinion consists of 10 pages. 63   Decision of the Swedish Supreme Court in Case T 2137-01. It is interesting to note that Luftfartsverket thereafter claimed that the Swedish Supreme Court by refusing to grant leave and to make a reference for a preliminary ruling from the Court of Justice in a situation where it was obliged to do so, had infringed EU law. Luftfartsverket therefore requested that proceeding in the case should be re-opened. In its decision of 9 December 2004 (Ö 189103), the Swedish Supreme Court ruled that it had not infringed EU law as there had been no obligation on the Swedish Supreme Court to make a reference for a preliminary ruling in this case. Luftfartsverket was represented by then advokat Stefan Lindskog who later was appointed as a judge to the Swedish Supreme Court.

306  Robert Moldén Supreme Court and by the Swedish Market Court.64 None of the 48 Swedish district courts where private enforcement cases can be brought has so far made any request for an opinion from the Commission. Private enforcement of EU competition law before these courts may, for example, consist in one party to a contract claiming nullity under Article 101(2) TFEU. For a district court judge lacking any prior experience in applying EU competition law it could constitute less of a psychological barrier to request guidance from the SCA as compared to the European Commission in Brussels. This is one of the reasons why I think that empowering national courts to request opinions from their NCA may be a useful tool in improving the effectiveness and feasibility of private enforcement of competition law. This issue will be explored more in detail in part VII, which is titled: ‘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’. This section includes an overview over the legislative history of the coordination measures now embodied in Article 15 Regulation 1/2003.

V.  The Right of National Courts to Request Information from the Commission in Competition Law Cases The right of national courts to request information65 from the Commission is embodied in Article 15(1) Regulation 1/2003, which reads as follows: In proceedings for the application of Article [101] or Article [102 TFEU], courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the Community competition rules (emphasis added).

As follows from the provisions in the Commission Notice on the cooperation between the Commission and national courts,66 the information to be provided by the Commission to national courts under Article 15(1) Regulation 1/2003 can be divided into two subgroups of information. The first sub-group concerns ‘information of a procedural nature to enable it to discover whether a certain case is pending before the Commission, whether the Commission has initiated a procedure or whether it has already taken a position’. The communication of such information of a procedural nature to national courts should, in the words of Valentine Korah, ‘not give rise to much trouble’67 and will therefore not be further analysed in this chapter. The second sub-group of information consists of documents which the Commission has in its possession. As indicated in the cited provisions of the Notice above the communication of such documents from the Commission to the national courts raises serious prob64   By the Swedish Supreme Court in the Ystad Harbour case, by the Swedish Market Court in the Ekfors case, see IV.B above. 65  The right of national courts to request opinions from the Commission is also embodied in Art 15(1) Regulation 1/2003. However, for practical reasons, the right to request opinions is dealt with in a separate section, see IV.A above. 66   Paras 21–26 Cooperation Notice. According to the Notice, the Commission will endeavour to provide the national court with the requested information within one month from the date it receives the request. 67   Valentine Korah, An Introductory Guide to EC Competition Law and Practice, 9th edn (Oxford, Hart Publishing, 2007) 257.

Exchange of Information and Opinions  307 lems as to the protection of professional secrecy. According to the Notice, the Commission may only transmit documents covered by professional secrecy to a national court if it can and will guarantee protection of confidential information and business secrets. To my knowledge, no Swedish court has so far made any request under Article 15(1) Regulation 1/2003 to get access to documents held by the Commission. Requests under Article 15(1) of the said Regulation have been confined to opinions from the Commission, see IV.B above. Access to the Commission’s – and NCAs’ – file and evidence is obviously of significant practical importance for private enforcement of EU competition law, in particular for follow-on actions. Access to the Commission’s and NCAs’ files entail significant legal issues related to diverging national rules on the protection of professional secrecy and is covered in the contribution to this volume by Professor Laurence Idot on this subject.

VI.  The Obligation of Member States to Forward National Judgments on EU Competition Law to the European Commission A.  General Points The obligation of Member States to forward national judgments on EU competition law to the Commission is embodied in Article 15(2) Regulation 1/2003, which reads as follows: Member States shall forward to the Commission a copy of any written judgment of national courts deciding on the application of Article [101] or Article [102 TFEU]. Such copy shall be forwarded without delay after the full written judgment is notified to the parties.

Article 15(2) is supplemented by the Cooperation Notice, whose relevant provision reads as follows: According to Article 15(2) of the regulation, Member States shall send to the Commission a copy of any written judgment of national courts applying Articles [101] or [102 TFEU] without delay after the full written judgment is notified to the parties. The transmission of national judgments on the application of Articles [101] or [102 TFEU] and the resulting information on proceedings before national courts primarily enable the Commission to become aware in a timely fashion of cases for which it might be appropriate to submit observations where one of the parties lodges an appeal against the judgment.68

The Staff Working Paper Accompanying the Report from the Commission on Competition Policy of July 2009 contains the following comments on Article 15(2) Regulation 1/2003: Article 15(2) of Regulation 1/2003 requires Member States to forward to the Commission a copy of any written judgment of national courts deciding on the application of Articles [101] or [102 TFEU]. These judgments must be sent ‘without delay after the full written judgment is notified to the parties’. The Commission publishes a database of the judgments it receives from the Member States pursuant to Article 15(2). This database, although welcomed as potentially being a valuable source of case practice, is criticised by several stakeholders on the grounds that it is far from complete. Some stakeholders have provided suggestions for improving the functioning of   Para 37 Cooperation Notice.

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308  Robert Moldén Article 15(2). For example, it has been proposed that the national competition authorities should be given the duty of assembling the relevant judgments in their respective territories and transmitting them to the Commission, as is currently done in several Member States. It is further proposed that this could be combined with a procedural duty on litigants to serve their initial pleadings on the Commission and/or national competition authority concerned, so that the latter could be alerted to the litigation at an early stage. Overall, options for ensuring a more efficient and effective way of providing access to national court judgments should be contemplated.69

The incompleteness of reported national judgments in EU competition law cases as highlighted in the Commission Staff Working Paper of April 2009 still persists more than one year later. For example, until 22 May 2010 the number of national court judgments published on the Commission’s website70 was the following for a sample of EU Member States: France: 40 judgments, Germany: 35 judgments, United Kingdom: 3 judgments, Italy: 1 judgment, Denmark: 1 judgment, Poland: 0 judgments. As for Sweden, there are 3 reported national judgments, 2 from the Swedish Market Court71 and 1 from the Swedish Supreme Court.72

B.  The Swedish Example: Non-Transparent Provisions In the first introductory chapter of the Swedish Competition Act, Article 3 contains the following general reference to the provisions of Regulation 1/2003: Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 101 and 102 TFEU and Council Regulation (EC) No 13972004 of 20 January 2004 on the control of concentrations between undertakings contain provisions that are relevant to the implementation of this Act.

Moreover, in Chapter 8 Swedish Competition Act which deals with Court procedures, Article 13 contains the following specific reference to Article 15 Regulation 1/2003: A statement which has been submitted by the Commission of the European Community or the Swedish Competition Authority, thereby applying Article 15 of Council Regulation (EC) No 1/2003, may be taken into account by the court without the plea of a party. The parties shall be provided the opportunity to comment on the statement.

In my view, there is a lack of transparency and user-friendliness in the Swedish Competition Act as to the provisions of Regulation 1/2003. Even though it is true that Regulation 1/2003 is directly applicable and – from a formal point of view – no implementation into Swedish law is necessary, I think that it would make sense to replicate the provisions of Article 15 Regulation 1/2003 into the Swedish Act in a more explicit way. In particular, it is unfortunate that the Swedish Competition Act does not contain any explicit reference to the duty contained in Article 15(2) to forward copies of judgments on EU competition law to the Commission. The general reference to Regulation 1/2003 in Chapter 1, Article 3 SCA is too general. Therefore, the provision of Article 15(2) on the duty of the Member State Sweden to forward copies of Swedish courts judgments needs to be specified into Swedish law in order to work better in practice.   Para 291 Staff Working Paper (footnotes omitted).  www.ec.europa.eu/competition/elojade/antitrust/nationalcourts. 71   Judgment of the Swedish Market Court in Case A 3/04, MD 2005:5 VVS-Installatörerna v Konkurrensverket of 9 February 2005; judgment of the Swedish Market Court in Case A 7/04, MD 2005:29 B2 Bredband Holding AB (publ) v Telia Sonera Aktiebolag (publ) and TeliaSonera Sverige Aktiebolag of 1 November 2005. 72   Judgment of the Swedish Supreme Court in Case T 2280-02 BMA v FV of 23 December 2004. 69 70

Exchange of Information and Opinions  309 If the Swedish legislator does not specify in the Swedish Competition Act which authority or court is responsible for forwarding the Swedish judgments, there is a significant risk that no one assumes this responsibility. Moreover, there is a transparency problem, as a national judge is more familiar with applying provisions embodied in national laws as opposed to provisions only embodied in EU regulations without being explicitly replicated in national laws, such as the Swedish Competition Act or the Swedish Code of Judicial Procedure.73 The example of the German Competition Act below illustrates my points and can serve as a model for amendments to the Swedish Competition Act as well as competition acts in other Member States which lack the corresponding level of transparency and user-friendliness.

C.  The German Example: Transparent Provisions In Germany, cooperation between German courts and the Commission is governed by Article 90a German Act against Restraints of Competition (ARC),74 which reads as follows: Cooperation of the Courts with the Commission of the European Community and the Cartel Authorities (1)  In all judicial proceedings where Article [101] or [102 TFEU] are applied the court shall, without undue delay after serving the decision on the parties, forward a duplicate of any decision to the Commission of the European Community via the Bundeskartellamt. The Bundeskartellamt may transmit to the Commission of the European Community the documents which it has obtained pursuant to § 90(1) sentence 2. (2)  In proceedings pursuant to paragraph 1 the Commission of the European Community may, acting on its own initiative, transmit written observations to the court. In case of a request pursuant to Art. 15(3) sentence 5 of Council Regulation (EC) No 1/2003 the court shall provide the Commission of the European Community with all documents necessary for the assessment of the case, including copies of all briefs and duplicates of all records, orders and decisions. § 4b (5) and (6) of the Federal Data Protection Act [Bundesdatenschutzgesetz] shall apply mutatis mutandis. The court shall provide the Bundeskartellamt and the parties with a copy of the written observations of the Commission of the European Community made pursuant to Art. 15(3) sentence 3 of Council 73   It should be pointed out that there is indeed a provision in Art 6 Swedish Competition Regulation of 2008 (Konkurrensförordning 2008:604) which reads as follows: ‘When a civil court or the Swedish Market Court gives a judgment or takes a final decision concerning the application of Articles 101 or 102 TFEU, a copy of the judgment or decision should be sent to the Swedish Competition Authority on the same day’ (author’s translation). The Swedish Competition Regulation of 2008 only contains seven paragraphs and does – with the exception of said Art 6 – not contain any provisions of significant practical importance for the application of EU competition law by Swedish courts. Its provisions are therefore likely to be overlooked by Swedish courts when applying EU competition law. Moreover, while the Competition Regulation of 2008 obliges Swedish courts to send copies of judgments applying Arts 101 and 102 TFEU to the Swedish Competition Authority, there is no explicit obligation on the Swedish Competition Authority to actually forward these judgments to the European Commission. The Swedish National Courts Administration publishes on its website (www.dvhandbok.domstol.se) a number of practical handbooks widely used at Swedish courts. In the Handbook on Delivery of Judgments and Decisions in Civil Courts of Appeal – Domstolsverkets handbook expediering hovrätt – there is a clear and explicit statement under Section B 81.4 that if a civil court of appeal delivers a judgment or decision applying Arts 101 or 102 TFEU, the court shall on the same day send a copy to the Swedish Competition Authority. However, in the corresponding Handbook on Delivery of Judgments and Decisions in civil courts of first instance – Domstolsverkets handbook expediering tingsrätt tvistemål – there is no such statement of the court’s duty to send a copy to the Swedish Competition Authority when applying Arts 101 or 102 TFEU. The handbook only states, under Section 60.1, that if a court delivers a judgment concerning damages under the Swedish Competition Act, a copy of the judgment should be sent to the Swedish Competition Authority. 74   Gesetz gegen Wettbewerbsbeschränkungen (GWB), downloaded from the Bundeskartellamt’s homepage, www.bundeskartellamt.de.

310  Robert Moldén Regulation (EC) No 1/2003. The Commission of the European Community may also submit oral observations in the hearing. (3)  In proceedings pursuant to paragraph 1 the court may ask the Commission of the European Community to transmit information in its possession or for its observations on questions concerning the application of Article [101] or Article [102 TFEU]. The court shall inform the parties about a request made pursuant to sentence 1, and shall provide them as well as the Bundeskartellamt with a copy of the reply of the Commission of the European Community. (4)  In the cases of paragraphs 2 and 3 the contacts between the court and the Commission of the European Community may also occur via the Bundeskartellamt.

Article 90a ARC thus replicates the provisions of Article 15 as to the possibility of the Commission to submit amicus curiae observations (paragraph 2) as well as German courts’ right to request information and opinions from the Commission (paragraph 3). In particular, the German provisions are explicit on how this Member State’s duty to forward copies of judgments from German courts to the Commission shall be handled in practice. According to Article 90a(1) ARC the German court in question is obliged to forward a copy of its judgment to the Bundeskartellamt, which then forwards it to the Commission. In my view, the provisions of Article 90a ARC may serve as an example of high transparency and user-friendliness concerning the rights and duties of national courts stemming from Article 15 Regulation 1/2003. In particular, I propose that similar provisions should be inserted in the Swedish Competition Act to increase transparency and make clear which authority is responsible for ensuring that copies of judgments by Swedish courts on EU competition law are forwarded to the Commission. Moreover, I propose that corresponding amendments should be made in competition law acts of other Member States which lack the transparency and user-friendliness of the German ARC.

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) As mentioned in the introduction to this chapter one of the main ideas behind the modernisation of EU competition law procedure was to achieve decentralised application of EU competition law by national courts and national competition authorities. The provisions of Article 15(3) Regulation 1/2003 entitling both NCAs as well as the Commission to submit amicus curiae observations on issues relating to EU competition law fit nicely into the decentralisation agenda. Moreover, it can be assumed from the wording of the provision that amicus curiae observations in the majority of cases will be submitted by NCAs as opposed to the Commission.75 75  Art 15(3) Regulation 1/2003 first mentions the NCAs and only then the Commission. Moreover, the Commission is only entitled to submit amicus curiae observations on the condition that the coherent application

Exchange of Information and Opinions  311 Against this background, it is somewhat puzzling that the corresponding right of NCAs to request information or opinions only apply in relation to the Commission as the centralised European competition authority. In a truly decentralised system it would be natural to expect that national courts also would be entitled to request information or opinions from their NCA. In order to analyse the reasons for this asymmetry, it is necessary to present an overview of the history of the legislative process leading to the enactment of Regulation 1/2003, which is done in the following subsection.

B.  An Overview of the Legislative History of the Coordination Measures Embodied in Article 15 Regulation 1/2003 The legislative process leading to the enactment of Regulation 1/2003 in December 2002 was launched by the Commission’s White Paper76 in April 1999. Upon a consultation process, the Commission published a Proposal for a new Regulation 1/2003 in September 2000.77 All three coordination measures later to be embodied in Article 15 Regulation 1/2003 and being the subject of this chapter were already presented in the White Paper.78 As will be set out below, two of the coordination measures were substantially altered during the legislative process (the duty to forward copies of judgments and the right to submit amicus curiae observations). In contrast, the third coordination measure (the right of national courts to request information or opinions) remained unchanged through the entire legislative process.

i.  The Obligation to Forward Copies of National Judgments on EU Competition Law to the Commission – Article 15(2) According to the White Paper it is first of all vital that the Commission should be aware of proceedings in which Articles 101 and 102 TFEU are invoked before the courts, so that the Commission is made aware of any problems of textual interpretation or lacunae in the legislative framework. The White Paper therefore proposed that the new regulation should require courts to supply such information, ie not only copies of judgments rendered but information on all new court proceedings once Article 101 or 102 TFEU are invoked. The Commission’s proposal for a new Regulation 1/2003 of September 2000 considerably narrowed down the duties of national courts in this respect. Instead of informing the Commission of all new court proceedings where Articles 101 or 102 TFEU are invoked, national courts were only to forward judgments applying these Articles to the Commission, within one month. The final version of Regulation 1/2003 further narrowed down the duties of national courts, as only written judgments were to be forwarded to the Commission. On the other hand, the time frame was tightened, from one month following of EU competition law so requires, whereas there is no such limitation on the NCA’s right to submit amicus curiae observations. 76   Commission, ‘White Paper on modernisation of the rules implementing Articles 85 and 86 of the EC Treaty’ (White Paper) COM (1999) 101 final, 28 April 1999. 77   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, 27 September 2000. 78   White Paper (n 76) para 107.

312  Robert Moldén the delivery of the judgment to ‘without delay after the full written judgment is notified to the parties’.

ii.  The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts – Article 15(3) The original White Paper proposed that the Commission should be allowed, subject to the leave of the court, to intervene in judicial proceedings that come to its attention as a result of national courts informing the Commission of new court proceedings where Articles 101 or 102 TFEU are invoked. The Commission’s proposal for a new Regulation 1/2003 in September 2000 also contained several amendments compared to the original proposals of the White Paper. Firstly, the Commission’s right to submit written or oral amicus curiae observations would no longer be subject to any leave of the court. Secondly, a possibility for NCAs to submit amicus curiae observations was introduced, either as a representative of the Commission or on their own initiative. Thirdly, the Commission’s right of submitting amicus curiae observations was made dependent on ‘reasons of the Community public interest’. Again, the final version of Regulation 1/2003 enacted in December 2002 contained a number of significant changes as compared to the Commission’s Proposal of September 2000. Firstly, the right of NCAs to submit amicus curiae observations was highlighted by a change of order, mentioning the NCAs’ right first and only then the Commission’s right to submit amicus curiae observations. Simultaneously, the possibility for the Commission to have itself represented by NCAs was suppressed. Secondly, the right of NCAs and the Commission to submit oral amicus curiae observations was made dependent on the permission of the national court, as opposed to written amicus curiae observations where such permission is not required. Thirdly, the condition for the Commission to be entitled to submit amicus curiae observations was changed from ‘reasons of the Community public interest’ to ‘where the coherent application of Article 101 or 102 TFEU so requires’.

iii.  The Right of National Courts to Request Information and Opinions from the Commission – Article 15(1) The original White Paper proposed that the new Regulation 1/2003 should incorporate the rules then set out in the 1993 Notice,79 which provided that in the course of proceedings before them national courts may address themselves to the Commission to ask for information of a procedural, legal or economic nature.80 The Commission’s Proposal for a new Regulation 1/2003 of September 2000 contained the very provision envisaged in the original White Paper, namely that ‘In proceedings for the application of Article 101 or 102 TFEU, courts of the Member States may ask the Commission for information in its possession or for its opinion on questions concerning the application of the Community competition rules’. In its Explanatory Memorandum accompanying the Proposal, the Commission explained that the proposed Regulation codifies the existing obligation of the Commission 79   Commission Notice on cooperation between national courts and the Commission in applying Articles 85 and 86 of the EEC Treaty [1993] OJ C39/6 paras 37–40. 80   The 1993 Notice in this respect followed the judgment of the ECJ in Case C-234/89 Delimitis v Henninger Brau AG [1991] ECR I-935 para 53, according to which national courts, based on the Commission’s obligation of loyal cooperation, are entitled to obtain factual or legal information from the Commission.

Exchange of Information and Opinions  313 to cooperate with national courts. The Explanatory Memorandum does not present any reasons for not entitling national courts also to request information or opinions from NCAs. The final version of Article 15(1) Regulation 1/2003 is in principle identical to the text of the Commission’s Proposal, ie Regulation 1/2003 only entitles national courts to request information or opinions from the Commission and not from NCAs. Recital 21 explains why Regulation 1/2003 should entitle national courts to be able to ask the Commission for information or for its opinion on points concerning the application of EU competition law. However, it is silent on the question why the right of national courts to obtain information or opinions should not be applicable in relation to NCAs.

C.  Analysis of the Legislative Process It follows from the overview of the legislative process that, at the outset, ie in the original White Paper of April 1999, there was symmetry between the Commission’s right to submit amicus curiae observations and the national courts’ right to request, inter alia, opinions from the Commission. NCAs were entirely kept outside the coordination mechanism. This symmetry was already lost during the first year and a half of the legislative process, as the Commission’s Proposal of September 2000 introduced a possibility also for NCAs to submit amicus curiae observations to national courts, without any corresponding right conferred on national courts to request opinions from NCAs. However, at this stage, the wording of the Proposal suggests that amicus curiae observations would mostly be submitted by the Commission, while amicus curiae observations submitted by NCAs on their own initiative would be less frequent. It was only at the final stage of the legislative procedure, in Regulation 1/2003, that the order was reversed and that amicus curiae filings by NCAs were first mentioned. At that stage, the provisions became clearly asymmetric. The novel and far-reaching right of NCAs to submit amicus curiae observations is not matched by any corresponding right of national courts to request opinions from their NCA. As set out in the beginning of this section, this is somewhat puzzling as such a right would fit in well in the overall agenda of increased decentralisation. As set out above, two of the coordination measures were substantially altered during the legislative process (the duty to forward copies of judgments and the right to submit amicus curiae observations). Both of these coordination measures were new and led to considerable public debate as well as intervention by Member States in the legislative process. However, in contrast, the third coordination measure (the right of national courts to request information or opinions from the Commission) remained unchanged throughout the entire legislative process. One possible explanation for this is that this measure was considered to be rather uncontroversial as it only entailed codifying existing case-law. The publicly available documents relating to the legislative process mentioned above do not contain any reasoning as to why national courts’ right to request information and opinions should not also apply in relation to NCAs. In an article on the White Paper on Modernisation published in 2000,81 Katherine Holmes argued that the Commission should consider to encourage national courts to seek   K Holmes, ‘The EC White Paper on Modernisation’ (2000) 23 (4) World Competition 51, 78.

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314  Robert Moldén the views of NCAs in court proceedings. However, it appears that the pros and cons of giving national courts a right under Article 15(1) to request information and opinions also from NCAs were not really debated during the legislative process behind Regulation 1/2003. In my view, there are good reasons for the Commission to now consider amending Article 15(1) Regulation 1/2003 in this respect, giving national courts the right to request information and opinions also from NCAs. Such an amendment may lead to a more efficient coordination scheme. In particular, I think that this right may be particularly useful in private enforcement cases before courts lacking such expert knowledge of EU competition law, which is held by judges active at the specialised courts of public enforcement. The subsequent intrusion into the procedural autonomy of the Member States may well be a price worth paying. Moreover, the degree of additional intrusion into the procedural autonomy of Member States is rather limited as compared to the quite far-reaching intrusion into the procedural autonomy of Member States already caused by the introduction of the right of the NCAs and the Commission to submit amicus curiae observations on their own initiative to national courts.

14 Discovery in a Global Economy MAURICE E STUCKE*

I. Introduction This chapter addresses two issues: to what extent can (i) antitrust litigants before foreign tribunals seek discovery within the United States and (ii) antitrust litigants in US federal courts obtain discovery abroad? The Hague Convention, of course, prescribes certain procedures by which a judicial authority in one country under the treaty may request evidence located in another member country.1 This chapter addresses two mechanisms that US federal courts frequently use to order discovery, namely, a federal statute, 28 United States Code section 1782, and the Federal Rules of Civil Procedure. Part II of this chapter addresses when litigants in foreign proceedings seek evidence from firms in the US under section 1782(a). Part III considers when private litigants in US proceedings seek discovery of evidence located abroad under the Federal Rules of Civil Procedure. Under both scenarios, the US courts eschew bright-line rules and instead engage in a twopart inquiry: first does the US court have statutory authority to order the requested dis­covery? Second, if it does, the US court then weighs several factors to determine whether it should exercise its authority to permit such discovery. Part IV of this chapter discusses several criticisms expressed about the United States’ liberal discovery mechanisms for foreign litigants.

II.  Litigants Abroad Who Seek Discovery in the US Rather than rely on the Hague Convention’s more formal procedures, foreign litigants can opt for section 1782 to obtain evidence from persons located in the United States.2 *  Associate Professor, the University of Tennessee College of Law; Senior Fellow, American Antitrust Institute. The author wishes to thank Daniel A Crane, Kenneth Davidson, Jay L Himes, Thomas J Horton, Mark A Lemley, Christopher Leslie, Christopher L Sagers, John L Sobieski Jr, Gregory M Stein, Henry Thaggert, Spencer Weber Waller, Wouter Wils, Diane Wood and the participants of the Research Seminar on International Litigation and Competition Law for their helpful comments. 1  Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, opened for signature, 18 March 1970 and entered into force between the United States and France on 6 October 1974, 23 UST 2555, TIAS No 7444 (codified at 28 USC s 1781); Société Nationale Industrielle Aérospatiale v US District Court for the Southern District of Iowa 482 US 522, 524 (1987). 2   WB Stahr, ‘Discovery under 28 USC § 1782 for Foreign and International Proceedings’ (1990) 30 Virginia Journal of International Law 597.

316  Maurice E Stucke Prompted by the growth in international commerce, Congress in 1964 completely revised section 1782, which now provides: Assistance to foreign and international tribunals and to litigants before such tribunals a)  The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure. A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.3

A.  When Does the US Court Have Statutory Authority to Order Discovery under Section 1782(a)? An ‘interested person’ files with the US district court an application for an order seeking discovery under section 1782(a).4 As a threshold matter, the applicant must show: 1. the person from whom discovery is sought resides or is found in the US judicial district5 where the application is made;6 2. the discovery is for use in a proceeding before a foreign or international tribunal; and 3. the application is made by a foreign or international tribunal or any interested person.7 Absent this showing, the US court lacks statutory authority to order discovery under section 1782(a). Once discovery is authorised under section 1782(a), the district court can

3   Section 1782(b) provides: ‘This chapter does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him’. 4   A foreign tribunal can request judicial assistance through the issuance of a letter rogatory. 5   There are 94 federal judicial districts, including at least one district in each State, the District of Columbia and Puerto Rico. See www.uscourts.gov/uscourts/images/CircuitMap.pdf. 6  See Re Yukos Hydrocarbons Investments Ltd Civ Act No 5:09-MC-0078, 2009 WL 5216951 (ND NY 30 December 2009) (person is ‘found’ within the judicial district for purposes of s 1782(a) when the person is physically present in the judicial district and is served with a subpoena); Re Godfrey 526 F Supp 2d 417, 422 (SD NY 2007) (corporation must either be incorporated, headquartered, or engaged in systematic and continuous activity in judicial district); Re Microsoft Corp 428 F Supp 2d 188, 193 (SD NY 2006) (Dutch partner of New York law firm who resides and works full-time in Brussels does not reside in the district where application under s 1782(a) was made); Re Oxus Gold PLC No Misc 06-82, 2006 WL 2927615 (D NJ 11 October 2006) 5 (finding insufficient evidence that person resided or was found in judicial district); Re Kolomoisky No M19-116, 2006 WL 2404332 (SD NY 18 August 2006) 3 (same). 7   Schmitz v Bernstein, Liebhard & Lifshitz LLP 376 F 3d 79, 83 (2d Cir 2004); Re Esses 101 F 3d 873, 875 (2d Cir 1996); Re Order for Labor Court of Brazil 466 F Supp 2d 1020, 1026 (ND Ill 2006).

Discovery in a Global Economy  317 prescribe the ‘practice and procedure’ for taking the testimony or statement or producing the document or other thing.8 The US Supreme Court in Intel Corp v Advanced Micro Devices Inc,9 resolved several disputes as to the statute’s interpretation.10 Advanced Micro Devices Inc (AMD) filed with the European Commission an antitrust complaint against Intel. In connection with its complaint, AMD sought under section 1782(a) discovery in the US from Intel.11 Specifically, AMD asked a US district court to order Intel to produce documents and testimony elicited in discovery in a private US antitrust case.12 The district court denied AMD’s application for a discovery order. The district court reasoned that the European Commission’s procedure was not a ‘proceeding’ within the meaning of section 1782, as the EC did not exercise an ‘adjudicative function’. After the US Court of Appeals for the Ninth Circuit reversed the district court, the Supreme Court granted certiorari. The Supreme Court in Intel addressed four questions: (i) who can seek discovery under section 1782; (ii) what foreign proceedings qualify under section 1782; (iii) when can the interested person seek discovery under section 1782; and (iv) what kind of discovery is available under section 1782?

i.  Who Can Seek Discovery Under Section 1782? Section 1782(a) affords discovery to a ‘foreign or international tribunal or . . . any interested person’. Does section 1782(a) then limit discovery to private litigants, a foreign sovereign, and the sovereign’s designated agents? The Supreme Court responded no. The category of ‘interested persons’ within section 1782(a) is broader than private litigants and includes complainants who trigger an investigation by the European Commission. Complainants before the European Commission possess, in the Court’s view, ‘significant procedural rights’: complainants may prompt the investigation, have the right to submit information for the consideration of the EC’s Directorate General for Competition,13 and may proceed to the Court of First Instance if the European Commission discontinues its

8   If the district court does not prescribe the practice and procedure, then s 1782(a) provides the Federal Rules of Civil Procedure as the default practices and procedures. The Federal Rules of Civil Procedure supplement the mechanisms for obtaining the discovery, and do not independently limit the discovery authorised under s 1782. Re Patricio Clerici 481 F 3d 1324, 1336 (11th Cir 2007) (holding that Fed R Civ P 69(a) does not bar discovery under s 1782); Weber v Finker 554 F 3d 1379, 1385-85 (11th Cir 2009); S Rep No 88-1580 (1964), reprinted in (1964) United States Code Congressional and Administrative News (USCCAN) 3789 (statute ‘permits, but does not command, following the foreign or international practice. If the court fails to prescribe the procedure, the appropriate provisions of the Federal Rules of Civil Procedure are to be followed, irrespective of whether the foreign or international proceeding or investigation is of a criminal, civil, administrative, or other nature’). 9   Intel Corp v Advanced Micro Devices Inc 542 US 241 (2004). 10   One irony is that the Supreme Court of late has been hostile to antitrust plaintiffs in US litigation. More than 16 years had passed until 2010 when the Supreme Court decided an antitrust case in plaintiff ’s favour. Over that stretch, defendants were 18–0. Over a longer timeframe, the Court has shifted from ruling in the antitrust plaintiff ’s to the defendant’s favour. M Stucke, ‘Does the Rule of Reason Violate the Rule of Law?’ (2009) 42 UC Davis Law Review 1375, 1458. 11   Advanced Micro Devices Inc v Intel Corp Civ Act No C-01-7033 MISC WAI, 2002 WL 1339088 (ND Cal 7 January 2002). 12   Intergraph Corp v Intel Corp CV-97-N-3023 NE. 13   The DG Competition investigates possible violations of the European competition law and makes proposals to the European Commission, which is empowered under the EC Treaty to take decisions, such as imposing fines. See Submission by the Directorate General for Competition of the European Commission to the US Antitrust Modernization Commission (6 April 2006) http://govinfo.library.unt.edu/amc/public_studies_fr28902/ international_pdf/060406_DGComp_Intl.pdf.

318  Maurice E Stucke investigation or dismisses the complaint.14 As such, although complainants lack formal ‘party’ or ‘litigation’ status in European Commission proceedings, complainants nonetheless have a reasonable interest in obtaining judicial assistance. Although complainants before the European Commission can seek discovery under section 1782(a), it remains unclear who else would qualify as an ‘interested person’. After Intel, one lower court declined to extend ‘interested person’ to an applicant who identified itself solely as a potential litigant and who failed to demonstrate its ability to litigate the antitrust claim.15

ii.  What Foreign Proceedings Qualify Under Section 1782(a)? Section 1782(a) applies to ‘proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation’. The parties in Intel agreed that the Court of First Instance and the European Court of Justice were foreign or international tribunals under section 1782(a). The disputed issue was whether the European Commission itself was a ‘tribunal’. The European Commission, as amicus, argued it was not a ‘tribunal’ under section 1782(a). If the US Supreme Court found the contrary, warned the European Commission, then the EC’s ‘“ability to carry out its governmental responsibilities” will be seriously threatened’.16 Despite the European Commission’s protestations, the US Supreme Court held that the European Commission was a ‘tribunal’ when it acted as a first-instance decision-maker.17 The Court examined the legislative history of section 1782. As a Senate Report explained, Congress deleted the term ‘judicial proceeding’ from the statute to authorise discovery in connection with administrative and quasi-judicial proceedings abroad.18 The Court in Intel did not delineate the contours of a ‘quasi-judicial’ proceeding, but found that the antitrust proceeding before the European Commission qualified as a ‘quasi-judicial’ proceeding. The European Commission, unlike the US Department of Justice (DOJ), has authority to determine liability and impose penalties, ‘dispositions that will remain final unless overturned by European courts’.19 Moreover, to use evidence before the Court of First Instance, the antitrust complainant must submit the evidence to the European Commission in its current, investigative stage.20 One issue that has divided the lower US courts is whether a private arbitration tribunal qualifies as a ‘tribunal’ under section 1782(a). Several lower courts have held that the Supreme Court’s construction of section 1782(a) generally and ‘tribunal’ specifically in Intel is sufficiently broad to encompass all arbitral tribunals.21 Other courts disagree, and   Intel (n 9) 256.   Re Intel Corp Microprocessor Antitrust Litigation MDL Docket No 05-1717-JJF, 2008 WL 4861544, 10 (D Del 7 November 2008) (finding French consumer association failed to demonstrate its legal ability to be a litigant outside of France). 16   Intel (n 9) 271 (J Breyer, dissenting) (quoting Brief for Commission of European Communities as Amicus Curiae 2). 17   ibid 246–47. 18   ibid 258 (quoting S Rep No 1580, pp 7–8). 19   ibid 255 fn 9. 20   ibid 257; see also Re Minatec Finance Sàrl Civ Act No 1:08-CV-269 (LEK/RFT), 2008 WL 3884374 (ND NY 18 August 2008) (German tax audit qualifies as proceeding within s 1782(a)). 21   See, eg, Comisión Ejecutiva, Hidroeléctrica Del Rio Lempa v Nejapa Power Co LLC No 08-135-GMS, 2008 WL 4809035 (D Del 14 October 2008) 1 (Court’s decision in Intel (and post-Intel decisions from other district courts) indicate that s 1782(a) does apply to private foreign arbitrations), appeal dismissed as moot, No 08-3518 (3d Cir 3 August 2009); Re Babcock Borsig AG 583 F Supp 2d 233, 238–40 (D Mass 2008) (finding the ICC a ‘first-instance 14 15

Discovery in a Global Economy  319 hold that discovery is unavailable under section 1782(a) for foreign arbitral tribunal proceedings.22 Under a third approach, some courts have held that the statutory term ‘tribunal’ excludes purely private arbitral tribunals, which represent private contractual alternatives to State-sponsored tribunals, but includes State-sponsored arbitral tribunals, such as those authorised by foreign governments to adjudicate disputes under their treaties or business ventures.23 Neither the Supreme Court nor Congress has resolved this dispute.

iii.  When Can an Interested Person Seek Discovery under Section 1782? Section 1782(a) simply provides that the requested discovery must be ‘for use’ in the foreign proceeding, which includes ‘criminal investigations conducted before formal accusation’. So to obtain discovery in the US, must the foreign proceeding progress beyond the investigative stage? The Supreme Court responded no. The foreign proceeding for which discovery is sought under section 1782(a) need not be pending or imminent, only in ‘reasonable contemplation’.24 Thus, section 1782(a) only requires that a ‘dispositive ruling by the Commission, reviewable by the European courts, be within reasonable contemplation’.25 The Supreme Court did not provide a temporal limit of ‘reasonable contemplation’. Indeed it would have been unrealistic for the Supreme Court to provide a specific time period for a dispositive ruling – as antitrust litigation under the rule-of-reason standard in the US courts can drag on for years, if not decades.26 After Intel, the lower courts have had few opportunities to clarify the meaning of ‘reasonable contemplation’.27 Most applicants easily satisfy this requirement as they are already litigants in a pending foreign proceeding. After Intel one court in interpreting ‘reasonable contemplation’ required ‘reliable indications of the likelihood that proceedings will be instituted within a reasonable time’.28 Thus an allegation that a potential litigant ‘may bring decisionmaker’ that conducts proceedings which lead to a dispositive ruling, so that the ICC is a ‘tribunal’ within s 1782); Re Hallmark Capital Corp 534 F Supp 2d 951, 956–57 (D Minn 2007) (rejecting an ‘inflexible rule that would categorically exclude all private arbitrations from the definition of “tribunal”’, and instead concluding that a private Israeli arbitral body was a ‘tribunal’ under s 1782); Re Roz Trading Ltd 469 F Supp 2d 1221, 1226–28 (ND Ga 2006) (finding the term ‘tribunal’ not ambiguous: ‘Where a body makes adjudicative decisions responsive to a complaint and reviewable in court, it falls within the widely accepted definition of “tribunal”, the reasoning of Intel, and the scope of [s] 1782(a), regardless of whether the body is governmental or private’). 22   See, eg, El Paso Corp v La Comisión Ejecutiva Hidroeléctrica Del Río Lempa No 08-20771, 2009 WL 2407189, 3 (5th Cir 6 August 2009) (expressing concern that awarding discovery under s 1782, which authorises broader discovery than what is authorised for domestic arbitration, would generate disputes as to whether arbitration is foreign or domestic and thwart arbitration’s principal advantage of speedily, economically and effectively resolving disputes); Re Operadora DB Mexico SA DE CV No 6:09-cv-383-Orl-22GJK, 2009 WL 2423138 (MD Fla 4 August 2009). 23   Ukrnafta v Carpatsky Petroleum Corp No 3:09 MC 265(JBA), 2009 WL 2877156, 4 (D Conn 27 August 2009) (accepting in dictum distinction in Oxus); Re Arbitration between Norfolk Southern Corp, Norfolk Southern Ry Co and General Sec Ins Co and Ace Bermuda Ltd 626 F Supp 2d 882, 885 (ND Ill 2009) (accepting distinction in Oxus); Oxus Gold (n 6) 6 (arbitration conducted under United Nations Commission on International Law for purpose of adjudicating disputes under countries’ bilateral investment treaty). 24   Intel (n 9) 259; Re Wilhelm 470 F Supp 2d 409, 411 (SD NY 2007) (gently requesting government prosecutors to update their applications for legal assistance under s 1782(a) to reflect Intel’s more lenient requirement of ‘reasonable contemplation’). 25   Intel (n 9) 259. 26   Stucke, ‘Rule of Reason’ (n 10) 1460–65. 27   Re Intel Corp Microprocessor Antitrust Litigation (n 15) 12. 28   ibid 11 (quoting Re Letter of Request from Crown Prosecution Service of United Kingdom 870 F 2d 686, 692 (DC Cir 1989)).

320  Maurice E Stucke suit in either one or two different forums, on behalf of a group of unidentified plaintiffs, for unknown claims, at some point in the future, if (and only if) there is an adverse decision by the EC’ against the defendant was not within ‘reasonable contemplation’.29

iv.  What Kind of Discovery Is Available under Section 1782(a)? Section 1782(a) requires that the requested discovery must be ‘for use’ in a foreign proceeding. Does the statute then limit the scope of permissible discovery to evidence discoverable under the law governing the foreign proceeding? Does section 1782(a) require that the requested discovery be actually admissible in the foreign proceeding? Before Intel, the US lower courts were divided over these issues.30 The Supreme Court in Intel held that other than information protected by a legally applicable privilege,31 the statute leaves the scope of discovery within the district court’s discretion.32 Thus the statute permits the district court to order discovery that is otherwise unavailable under foreign law, inadmissible in the foreign jurisdiction, or unavailable or inadmissible under US law in analogous circumstances.33 As a result, an antitrust complainant before the European Commission conceivably could obtain more discovery under section 1782(a) than it could as a plaintiff in the US under the liberal Federal Rules of Civil Procedure.34 Nor must the applicant under section 1782(a) first try to obtain the discovery in the foreign proceeding,35 or prove as a threshold matter that the requested discovery is admissible in the foreign proceeding.36 If the phrase ‘for use’ in the foreign proceeding does not require that the section 1782(a) discovery be discoverable or admissible in the foreign proceeding, what does it mean? One US district court after Intel construed it liberally to ‘discovery that is relevant to the claim or defense of any party, or for good cause, any matter relevant to the subject matter involved in the foreign action’.37 A couple of courts found the discovery ‘for use’ when the applicant   ibid 15.   Intel (n 9) 259–60.   The law of privileges in the United States is a mixture of constitutional (eg, Fifth Amendment privilege against self-incrimination), statutory, and common law. Under Federal Rule of Evidence 501, the federal common law of privileges (rather than State law privileges) applies in federal criminal cases and most federal question cases. Some of the more popular privileges include the lawyer-client privilege and privilege for confidential marital communications. See K Broun (ed), McCormick on Evidence, 6th edn (St Paul, Thomson West, 2006) 130–304. 32   Intel (n 9) 246–47. 33   ibid 263 fn 15; see also Marubeni America Corp v LBA YK 335 Fed Appx 95, 2009 WL 1738509 (2nd Cir 2009) (Supreme Court expressly declined to adopt a rule requiring parties seeking discovery under s 1782(a) to demonstrate that the information would be discoverable in the foreign jurisdiction); Re Servicio Pan Americano de Proteccion 354 F Supp 2d 269, 275 (SD NY 2004) (since discovery sought under s 1782(a) will be useful to foreign tribunal but potentially unobtainable under foreign law for purely technical reasons, application of the foreign discovery rules ‘would be senseless’); American Bar Association (ABA) Section of Antitrust Law, Antitrust Law Developments, vol II, 6th edn (Chicago, ABA, 2007) 1245. 34   Intel (n 9) 263. 35   Labor Court of Brazil (n 7) 1031; Kang v Nova Vision Inc No 06-21575-CIV, 2007 WL 1879158 (SD Fla 26 June 2007) 2 (availability of discovery in foreign tribunal is irrelevant); Roz Trading (n 21) 1229 (no statutory exhaustion requirement); Re Procter & Gamble 334 F Supp 2d 1112, 1116 (ED Wisc 2004); ABA, Antitrust Law Developments (n 33) 1245. 36   Minatec Finance (n 20) 6 (calling parties’ ‘cannonade of legal affidavits’ on admissibility and discoverability of requested evidence in foreign proceeding ‘meaningless’); Labor Court of Brazil (n 7) 1028 (warning that US courts ‘should avoid complex, costly, and inefficient issues such as determining the admissibility in a foreign court of a specific piece of evidence for a specific case’). 37   Labor Court of Brazil (n 7) 1029; see also Kang v Noro-Moseley Partners 246 Fed Appx 662, 664 (11th Cir 2007) (affirming lower court’s denial under s 1782(a) of irrelevant discovery); Re Apotex Inc Misc No M12-160, 2009 WL 618243, 4 (SD NY 9 March 2009) (as discovery concerns a legal theory unavailable in foreign country, 29 30 31

Discovery in a Global Economy  321 intended to offer the evidence to the foreign tribunal.38 Generally, the less relevant the requested discovery, and the costlier the discovery request, the less inclined the US court will be to order discovery under section 1782(a).39

B.  When Will the US Courts Exercise Their Discretion and Permit Discovery under Section 1782? After determining that it has the authority under section 1782(a) to order discovery, the US district court next determines whether to exercise its authority. ‘Once the statutory requirements are met, a district court is free to grant discovery in its discretion’.40 Section 1782(a) ‘authorises, but does not require, a federal district court to provide assistance to’ the person seeking discovery.41 A critical issue is how much discretion should the US district courts be afforded? One US appellate court observed that the district court’s discretion is ‘not boundless’: district courts must exercise their discretion under Section 1782 in light of the twin aims of the statute: ‘providing efficient means of assistance to participants in international litigation in our federal courts and encouraging foreign countries by example to provide similar means of assist­ ance to our courts.’42

But these vague factors do not significantly mitigate rule-of-law concerns. Moreover the discovery process under section 1782(a) creates a greater risk of inconsistent results than civil antitrust discovery. An antitrust plaintiff brings a federal civil action in one judicial district, and in many districts, one judge oversees any discovery disputes.43 In contrast the ‘interested person’ under section 1782(a) cannot always procure its discovery in one US judicial district. Instead the applicant must go wherever the persons who control the documents are found or reside. So if the applicant seeks discovery from five different firms, all of whom reside in five different US judicial districts, then the applicant must make discovery applications in the five different judicial districts before five different judges. Section 1782 sets the stage for similar discovery requests simultaneously made before different district courts across the United States. This does not mean each judge is unaware of her fellow judges’ decisions. Some discovery applications are resolved quicker in some judicial districts than in others.44 So one district court can benefit in learning how discovered information is not relevant or useful to foreign tribunal); Cryolife Inc v Tenaxis Medical Inc No C0805124 HRL, 2009 WL 88348, 4 (ND Cal 13 January 2009) (applicant need only show that information will be useful); Procter & Gamble (n 35) 1115 (need only consider whether requested discovery would be useful or designed merely to burden an opponent). 38   Re Imanagment Services Ltd No Civ A 05-2311(JAG), 2006 WL 547949, 3 (D NJ 3 March 2006); Re Grupo Qumma SA No M 8-85, 2005 WL 937486, 2 (SD NY 22 April 2005). 39   Babcock Borsig (n 21) 241 (if foreign tribunal would not make any use of the requested evidence, ‘it may be irresponsible for a district court to order discovery, especially where it involves substantial costs to the parties involved’). 40   Intel (n 9) 264 (quoting Re Metallgesellschaft AG 121 F 3d 77, 78 (2d Cir 1997)). 41   Intel (n 9) 255. 42   Schmitz (n 7) 84 (quoting Metallgesellschaft (n 40) 79). 43   Moreover, when multiple private antitrust actions are pending in different federal districts involving one or more common questions of fact, then these civil actions can be transferred to one federal district for coordinated or consolidated pretrial proceedings. 28 USC s 1407. This statute’s aim is to avoid duplication of discovery, prevent inconsistent pre-trial rulings, and conserve the resources of the parties, their counsel and the judiciary. 44   Time permitting, an applicant under s 1782(a) may stage the filing of applications, starting first with the judicial districts where a favourable result is more likely, and use this precedent in the other judicial districts.

322  Maurice E Stucke a sister court adjudged a similar section 1782(a) application.45 Nonetheless the greater the discretion, the greater the risk of different district courts reaching inconsistent determinations as to whether, and to what extent, to afford discovery under section 1782(a).46 Moreover, when reviewing the district court’s decision regarding discovery under section 1782, the US appellate courts do not reweigh the factors for granting or denying discovery. They instead apply an ‘extremely limited and highly deferential’ abuse of discretion standard.47 Although section 1782(a) poses a greater risk of inconsistent discovery decisions, the Supreme Court in Intel declined to adopt supervisory rules to expressly limit the discretion of 975 full-time and senior district court judges across the 94 US judicial districts.48 The Supreme Court recognised that such categorical limits could minimise the expensive, timeconsuming battles of discovery. But the Supreme Court felt specific supervisory rules were premature: there was no indication that applications for discovery under section 1782(a) were indeed imposing significant costs on the parties or foreign tribunal or that the district courts were reaching inconsistent results.49 The Supreme Court, however, did not leave the lower courts’ discretion wholly unchecked. It identified the following four factors for the district courts to consider when exercising their discretion.50

i.  Is the Person from whom Discovery Is Sought a Participant in the Foreign Proceeding? When the documents or testimony sought under section 1782(a) are within the foreign tribunal’s jurisdictional reach, then the need for section 1782(a) aid is not as apparent as when the evidence is sought from a non-participant outside the foreign tribunal’s jurisdictional reach.51 45   eg, in connection with the EC antitrust proceeding, Microsoft on 3 March 2006 filed three similar applications under s 1782(a) for discovery in three different judicial districts. All three courts denied discovery under s 1782(a). The federal district court in the Northern District of California was the first to quash Microsoft’s sub­poenas, Re Microsoft 2006 WL 825250 (ND Cal 29 March 2006), followed several weeks later by the district court in the District of Massachusetts, Re Microsoft Corp 2006 WL 1344091 (D Mass 19 April 2006), followed one day later by the district court in the Southern District of New York, Re Microsoft Corp (n 6) 188, 191 fn 3 (citing Re Microsoft Corp 2006 WL 825250 (ND Cal 29 March 2006)). 46   eg, two circuit courts, on the same facts in decisions rendered within the same week, reached different holdings as to whether the appeal of the district court’s denial of discovery under s 1782(a) was moot. cp Comisión Ejecutiva, Hidroeléctrica Del Río Lempa v Nejapa Power Co LLC No 08-3518, 2009 WL 2358694 (3d Cir 3 August 2009) (rejecting applicant’s re-opening theory, and holding appeal moot) with El Paso (n 22) 3 (accepting applicant’s re-opening theory so appeal not moot, but holding that s 1782(a) does not authorise discovery for proceeding before private arbitral tribunal). 47   Clerici (n 8) 1331 (quoting United Kingdom v United States 238 F 3d 1312, 1319 (11th Cir 2001)); see also Marubeni America Corp v LBA YK (n 33) 1; Kang v Noro-Moseley Partners (n 37) 662. The district court’s interpretation of the statute, on the other hand, is reviewed de novo. 48   In 2008, there were 651 active federal district court judges and 324 senior judges. Administrative Office of the United States Courts, 2008 Annual Report of the Director: Judicial Business of the United States Courts (Washington, US Government Printing Office (USGPO), 2009) 38, www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2008/ front/JudicialBusinespdfversion.pdf. 49   Intel (n 9) 265 fn 17. 50   These factors are similar to those found in s 1782’s legislative history. S Rep No 88-1580 (n 8) 3788 (noting how a district court in exercising its discretionary power ‘may take into account the nature and attitudes of the government of the country from which the request emanates and the character of the proceedings in that country, or in the case of proceedings before an international tribunal, the nature of the tribunal and the character of the proceedings before it’). 51   Intel (n 9) 264; Labor Court of Brazil (n 7) 1031 (while wholly-owned subsidiary a party in the foreign proceeding, American parent company had not shown that foreign tribunal could order it to respond to discovery request).

Discovery in a Global Economy  323

ii.  Comity Considerations The second factor involves ‘the nature of the foreign tribunal, the character of the pro­ ceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to US federal-court judicial assistance’.52 Comity considerations often play a significant, if not decisive, role in the district court’s analysis.53 When the foreign tribunal expressly and clearly objects to the applicant’s discovery request under section 1782, then, as one US court observed, granting such discovery ‘would undermine the spirit and purpose of the statute by discouraging that and other foreign tribunals from “heeding similar sovereignty concerns posited by our governmental authorities to foreign courts”’.54 US courts generally will deny discovery under section 1782(a) when there is authoritative evidence that such discovery ‘would interfere with the foreign tribunal, not assist it’.55 Such is the case when granting discovery under section 1782(a) would pre-empt or contradict the foreign tribunal’s decision on confidentiality, which carefully balanced the need for third-party cooperation against the need to preserve a defendant’s rights to defence.56 US courts after Intel also routinely deny discovery under section 1782(a) when the foreign tribunal affirmatively states it would interfere with the foreign tribunal’s ‘orderly handling of its own enforcement proceedings’.57 On the other hand, the US court is more likely to grant discovery under section 1782(a) when the foreign tribunal is silent, or absent clear evidence that the foreign government or tribunal is unreceptive to US judicial assistance under section 1782(a).58 At times the litigants try to fill this void with competing affidavits by legal experts familiar with the foreign tribunal. These experts opine whether the foreign tribunal would likely admit the US discovery into evidence. But the US district courts generally dismiss these expert affidavits. Absent clear evid­ ence from the foreign tribunal itself (or some other relevant government authority), the US courts generally do not attempt to predict whether the sought-after evid­ence would be admissible in the foreign proceeding.59 The ensuing speculative, ‘costly, time-consuming, and inherently unreliable’ foray into the foreign tribunal’s receptivity to the discovered evidence, while lucrative for the competing foreign law experts, does not promote the aims of section 1782(a).60   Intel (n 9) 264.   Re Microsoft Corp (n 6) 188, 194; Re Microsoft Corp (D Mass) (n 45) 4; Re Microsoft Corp (ND Cal) (n 45) 3; Advanced Micro Devices Inc v Intel Corp No C 01-7033, 2004 WL 2282320, 2 (ND Cal 4 October 2004) (noting how the EC did not consider it necessary to request or even subsequently review the documents sought under s 1782). 54   Re Microsoft Corp (n 6) 188, 194 (quoting Re Schmitz 259 F Supp 2d 294, 298 (SD NY 2003)). 55   Re Microsoft Corp (D Mass) (n 45) 4. 56   Re Microsoft Corp (n 6) 196 (‘In short, § 1782 was not intended-and Microsoft cannot invoke it as a vehicle to avoid or appeal an unfavorable discovery decision by the Commission’). 57   Re Microsoft Corp (ND Cal) (n 45) 3; see also Schmitz (n 7) 84–85 (deferring to the German government’s request to deny discovery under s 1782); Re Microsoft Corp (n 6) 194–96 (expressing concern of pitting US court against EC); Advanced Micro Devices (n 53) 2–3. 58   Cryolife (n 37) 3; Re Carsten Rehder Schiffsmakler und Reederei Gmbh & Co No 6:08-mc-108-Orl-35DAB, 2008 WL 4642378 (MD Fla 17 October 2008) 2 (while unclear whether Chinese court is receptive to evidence, no evidence that discovery is futile); Minatec Finance (n 20) 7–8 (noting absence of dispositive German authority objecting to requested discovery under s 1782(a) and no showing that applicant is pursuing discovery in bad faith); Re Sveaas 249 FRD 96, 107 (SD NY 2008); Labor Court of Brazil (n 7) 1032 (distinguishing cases where EC opposed discovery under s 1782); Re Gemeinschaftspraxis Dr Med Bernard Schottdorf No Civ M19-88 (BSJ), 2006 WL 3844464 (SD NY 29 December 2006) 6 (court can consider only ‘authoritative proof ’ when the representative of a foreign sovereign expressly and clearly makes its position known); Imanagment Services (n 38) 3 (distinguishing cases where foreign tribunal had authoritative proof from foreign tribunal of its receptivity). 59   Grupo Qumma (n 38) 3, quoting Re Euromepa SA 51 F 3d 1095, 1099–100 (2d Cir 1995). 60   Re Michael Wilson Partners Ltd No 06-cv-02575-MSK-PAC (MEH), 2007 WL 2221438, 4 (D Colo 27 July 2007); Schottdorf (n 58) 7. Although the battle by expert affidavit over foreign discovery and evidentiary law may be costly, time-consuming and inherently unreliable, it is not unique to s 1782. See Fed R Civ P 44.1: ‘In determining foreign 52 53

324  Maurice E Stucke Some US courts go a step further and infer the foreign tribunals’ receptivity to the evid­ ence from the existence of treaties that facilitate cooperation between the US and that foreign country.61 Ultimately, when the receptivity of the foreign government or tribunal to US judicial assistance is unknown, many US courts allow the discovery under section 1782(a) and leave it to the foreign tribunal to either admit or exclude the discovered information.62 The fact that the foreign tribunal elects not to pursue such discovery, while informative, is not always determinative.63 Besides assisting the foreign tribunal, section 1782(a) also seeks to assist any ‘interested person’ in that foreign proceeding, which may include the litigants. For example, in Intel, the European Commission as amicus curiae said it did not want or need the US courts’ assistance.64 But such opposition did not automatically preclude a complainant from obtaining discovery under section 1782(a). This may reflect the reality of the litigants’ and tribunal’s divergent interests. Although a foreign tribunal could obtain the sought-after documents and provide them to the interested party, it could decline to do so. Similarly, the complainant before the foreign tribunal at times may have greater incentives to pursue investigatory leads than a governmental agent. Competition authorities in the US or abroad, while earnest, are fallible and at times may miss an import­ ant aspect of the case. Moreover governmental agencies are not beyond being captured by political, financial or ideological interests.65 Incriminatory (or exculpatory) evidence submitted by the complainant (or defendant) may make it more difficult for the foreign tribunal to justify its terminating (or prosecuting) its antitrust investigation. So even in cases where the foreign tribunal formally opposes discovery under section 1782, the US district court must still consider the interests of the interested party. Thus, one district court noted that Microsoft made ‘no showing of fundamental unfairness’ if its discovery requests were denied under section 1782(a).66 Presumably, if the applicant makes such a strong showing of fundamental unfairness, then, despite the protestations of the foreign tribunal, the US court could weigh the second discretionary factor in the applicant’s favour.

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? Here again principles of comity and fair play come to the fore.67 If the defendant in the foreign proceeding seeks to ‘circumvent the procedures for and limitations on proof-­ law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence’. 61   Imanagment Services (n 38) 4 (noting both US and Russia are parties to Hague Evidence Convention); Servicio Pan Americano (n 33) 274 (Venezuela indicated its receptivity to federal judicial assistance by its signature of treaties facilitating such cooperation). Another basis to infer the receptivity of the foreign government and tribunal to US judicial assistance is when they themselves seek discovery under s 1782. See, eg, Clerici (n 8) 1324 (Panamanian court); Re Czech Republic No 3:08-mc-001-J-33TEM, 2008 WL 179263 (MD Fla 17 January 2008) (Czech prosecutor office seeking evidence under statute and treaty for criminal investigation); Re United Kingdom No 3:07-mc-46-J-32MCR, 2007 WL 3286689 (MD Fla 5 November 2007) (UK); Re Letter of Request from Costa Rica No 07-20037-CIV-SEITZ/MCALILEY, 2007 WL 141155 (SD Fla 16 January 2007). 62   See, eg, Cryolife (n 37) 3; Carsten (n 58) 2; Schottdorf (n 58) 7; Grupo Qumma (n 38) 3. 63   Kang v Nova Vision (n 35) 2 (fact that German court neither requested nor indicated that it will use the discovery is not decisive). 64   Intel (n 9) 265. 65   See, eg, Roz Trading (n 21) 1222 (applicant alleging that foreign government violently seised applicant’s interest in joint venture, and fearful of its employees’ lives, applicant cannot return to foreign country to retrieve documents). 66   Re Microsoft Corp (D Mass) (n 45) 4. 67   Intel (n 9) 265.

Discovery in a Global Economy  325 gathering established by the laws of the European Community’68 by obtaining under section 1782(a) documents from third-party complainants, discovery is denied. On the other hand, the mere fact that the applicant is seeking discovery under section 1782, as opposed to using other means (such as the foreign tribunal’s discovery mechan­ isms), is not viewed negatively.69

iv.  Is the Discovery Request Unduly Intrusive or Burdensome? In assessing whether the discovery request is ‘unduly intrusive or burdensome’,70 the district court considers the requested information’s ‘relevance, the need of the party for the documents, the breadth of the document request, the time period covered by it, the particularity with which documents are described and the burden imposed’ as well as the subject’s ‘status as a nonparty to the litigation’.71 Section 1782’s flexibility enables the courts to ‘be creative in fashioning relevant discovery mandates’.72 The US courts look favourably on discovery requests that are ‘short, simple and welldefined’,73 such as discovery relating to insurance coverage for a single loss on a single day.74 On the other hand, the US courts look unfavourably on discovery requests perceived as overly broad and unduly burdensome.75 This will likely be the case if the discovery request lacks reasonable limitations as to the time, place or subject matter76 or involves hard-tolocate dated documents.77 The district court can trim the discovery request to something more manageable or dismiss the application, with leave for the applicant to file a more reasonable discovery request.78 The district court can issue protective orders to protect confidential business information,79 require a ‘reciprocal exchange of information’ to lend parity to the disclosure 68   Re Microsoft Corp (D Mass) (n 45) 4; see also Re Microsoft Corp (ND Cal) (n 45) (denying discovery under s 1782(a) when Microsoft sought to circumvent specific discovery restrictions the EC placed on Microsoft); Re Microsoft Corp (n 6) 188, 192 (deferring to EC’s claim that European rules adequately protected Microsoft’s ‘rights of defense’ in accessing files, and Microsoft’s s 1782(a) application was ‘not objectively necessary but rather an attempt to circumvent the established rules on access to file in proceedings before the Commission’). 69   Schottdorf (n 58) 7; Grupo Qumma (n 38) 3. 70   Intel (n 9) 265. 71   Re Heraeus Kulzer GmbH No 09-MC-00017, 2009 WL 2981921, 4 (ED Pa 11 September 2009) (quoting Lady Liberty Trans Co v Philadelphia Parking Authority No 05-1322, 2007 WL 707372, 9 (ED Pa 1 March 2007)); see also Re Fischer Advanced Composite Components AG No C08-1512RSM, 2008 WL 5210839, 4 (WD Wash 11 December 2008) (finding that when discovery is equally available in foreign or US jurisdiction, and the source or recipient of the requested discovery is a litigant in a foreign proceeding then s 1782(a) application is duplicative, and unduly intrusive and burdensome to the American parent company). 72   Minatec Finance (n 20). 73   Carsten (n 58) 2. 74   Servicio Pan Americano (n 33) 275. 75   Re Blue Oil Trading Ltd No 3:09MC152-RJC, 2009 WL 3247854, 2–3 (WDNC 5 October 2009) (denying discovery request, but leaving applicant opportunity to amend application to topics relevant to foreign proceeding); Re Marano No CV-09-80020-MISC-DLJ, 2009 WL 482649, 3 (ND Cal 25 February 2009) (denying overly broad, unduly burdensome discovery request). 76   Heraeus Kulzer (n 71) 2 (‘vague and overbroad’ discovery requests going back to 1996); Kang v Nova Vision (n 35) 2 (discovery requests span more than seven years and are located at seven sites); Re Degitechnic No C07414-JCC, 2007 WL 1367697, 5 (WD Wash 8 May 2007) (denying broadly-worded discovery requests over sevenyear period made only days before applicant’s appellate brief was due in foreign proceeding). 77   Apotex (n 37) 3–4 (denying unduly intrusive and burdensome discovery request for nearly 30-year-old documents). 78   Roz Trading (n 21) 1230 (trimming overbroad discovery requests which lacked reasonable limitations as to time, place or subject matter). 79   Cryolife (n 37) 5; Re Michael Wilson Partners Ltd No 06-cv-02575-MSK-KLM (MEH), 2007 WL 3268475 (D Colo 30 October 2007) (person seeking a protective order, which rests within the court’s discretion, must show

326  Maurice E Stucke mix,80 shift significant discovery costs from the non-party to the section 1782(a) applicant,81 and require the applicant to advance some of the anticipated discovery costs.82 Alternatively if the recipient of the subpoena does not have any responsive discovery, that is not a basis to deny a section 1782(a) request. The recipient must still reply accordingly (namely by attesting that it has no information responsive to the discovery request).83

III.  When Can Private Litigants in the US Seek Discovery Abroad? Similar to the inquiry described above, the US district courts also engage in a two-part inquiry in determining when litigants in civil US proceedings seek discovery abroad. First, the US courts inquire whether they have statutory authority to order the requested discovery. This answer will depend on whether the US court can exercise personal jurisdiction over the person who has control over the sought-after discovery. If the court has statutory authority to order discovery, it next determines whether it should exercise its authority.

A.  Does the US Court Have the Statutory Authority to Order the Requested Discovery? Civil litigants in US federal court can seek (i) discovery for documents (including computer data);84 (ii) to depose individuals (including videotaped depositions);85 (iii) party interrogatories;86 (iv) physical and mental examinations;87 and (v) requests for admissions.88 The litigants may obtain discovery ‘regarding any non-privileged matter that is relevant to any party’s claim or defense’.89 The sought-after discovery need not be admissible at trial ‘if the discovery appears reasonably calculated to lead to the discovery of admissible evidence’.90 The litigants in the US mainly determine the discovery they require. The person from whom discovery is sought can object to the discovery request. If the parties cannot resolve their discovery dispute, then one party can motion the court, and the district court will determine whether or not the discovery must be produced. ‘The jurisdiction of American courts is unquestioned when they order their own nationals to produce documents located within this country’, observed one US district court. ‘But under Fed R Civ P 26(c) and (c)(7) good cause, to ‘protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense’, and can include an order ‘that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a designated way’). 80   Minatec Finance (n 20) 9. 81   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 (n 8) 3788 (noting how US court may order ‘fees for opponents’ counsel, attendance fees of witnesses, fees for interpreters and transcribers of the testimony and similar provisions’). 82   Kang v Nova Vision (n 35) 2–3 (ordering applicant to cover up to $10,000 of the discovery expenses). 83   Kolomoisky (n 6) 2. 84   Fed R Civ P 26. 85   ibid 27–32. 86   ibid 33. 87   ibid 35. 88   ibid 36; T Main, Global Issues in Civil Procedure (St Paul, Thomson West, 2006) 33–34. 89   Fed R Civ P 26(b)(1). 90  ibid.

Discovery in a Global Economy  327 jurisdiction is less certain when American courts order a defendant to produce documents located abroad, especially when the country in which the documents are situated prohibits their disclosure’.91

i.  Federal Rules of Civil Procedure Versus the Hague Convention In seeking discovery abroad, the party, as a threshold issue, must decide whether to obtain civil discovery under the traditional route (the Federal Rules of Civil Procedure) or under the Hague Convention.92 If the US federal court lacks personal jurisdiction over the person from whom discovery is sought (or the non-party is geographically beyond service of process), then the US litigant lacks this option. The litigant can opt for the Hague Convention’s procedures (if the country where the foreign national resides is a party)93 or otherwise can seek discovery by letters rogatory.94 But if the US district court has personal jurisdiction and subpoena power over the foreign person, then, as the Supreme Court held in Société Nationale, the litigant and district court have a choice. The Hague Convention procedures are not the exclusive means for US litigants to obtain discovery abroad.95 Nor must US litigants first resort to the Hague Convention’s procedures whenever discovery is sought from foreign nationals.96 Instead, the Supreme Court left the choice between the two options to the litigants’ and ultimately the district court’s discretion. In exercising its discretion, the district court, besides weighing the Restatement’s comity factors, which are discussed below,97 ‘must supervise pretrial proceedings particularly closely to prevent discovery abuses’ and ‘exercise special vigilance to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position’.98 Moreover, the district court must ‘demonstrate due respect for any special problem confronted by the foreign litigant on account of its nationality or the location of its operation, and for any sovereign interest expressed by a foreign State’.99 Some US courts consider the non-party status of the person subject to discovery in their comity analysis.100

  Re Uranium Antitrust Litigation 480 F Supp 1138, 1144 (ND Ill 1979).   Société Nationale (n 1) 522, 524. 93   For means to secure evidence located abroad through international assistance see ss 473–74 Restatement (Third) of the Foreign Relations Law of the United States. 94   11 CFR Section 92.54; US Department of State, Preparation of Letters Rogatory, http://travel.state.gov/law/ judicial/judicial_683.html. 95   Société Nationale (n 1) 524. 96   ibid 542. 97   ibid 544 fn 28 (quoting s 437(1)(c) Restatement of Foreign Relations Law of the United States (Revised) (Tentative Draft No 7, 1986)). 98   Société Nationale (n 1) 546; see also s 442 cmt a Restatement (Third) of the Foreign Relations Law of the United States (before compelling production, court should scrutinise discovery request more closely than comparable discovery requests in the US). 99   Société Nationale (n 1) 546. 100   See, eg, First American Corp v Price Waterhouse LLP 154 F 3d 16, 21 (2d Cir 1998) (non-party status is considered in comity analysis); Gap Inc v Stone International Trading Inc No 93 Civ 0638 (SWK), 1994 WL 38651 (SD NY 4 February 1994) 1 (in determining whether to apply the Hague Convention’s discovery procedures or those of the Federal Rules, ‘courts commonly look to the status of the person from whom discovery is sought as one factor in determining whether to apply the provisions of the treaty’); Minpeco SA v Conticommodity Services Inc 116 FRD 517, 526–27 (SD NY 1987) (noting that historically ‘restrictive’ Second Circuit law on ordering disclosure in the face of foreign disclosure laws probably evolved because the cases concerned non-parties and that ‘it is . . . important to focus on the status in the litigation at hand of the party resisting discovery’). 91 92

328  Maurice E Stucke Generally, US courts opt for the more familiar Federal Rules of Civil Procedure over the Hague Convention.101

ii.  Personal Jurisdiction To order discovery under the Federal Rules of Civil Procedure, the US court must have personal jurisdiction over the person from whom discovery is sought.102 As long as the US court has personal jurisdiction, then the subpoenaed companies or individuals may not resist the subpoena on the ground that they are non-resident aliens.103 A US court may exercise personal jurisdiction over the corporation or individual when ‘consistent with the United States Constitution and laws’.104 The issue of personal juris­ diction involves a fact-specific analysis over whether the person purposefully established ‘minimum’ contacts in the forum State or judicial district,105 and second whether exercising jurisdiction comports with fair play and substantial justice.106 The fact that the foreign corporation is not a party to the US litigation does not absolve it of its duty to comply with the US discovery request. Even for non-parties, the US discovery rules make clear that the person subject to the subpoena is required to produce materials in that person’s control whether or not the materials are located within the district or within the territory within which the subpoena can be served. The non-party witness is subject to the same scope of discovery under this rule as that person would be as a party [to the litigation].107

However, when discovery is requested from a non-party as opposed to a party, the US litigants must take steps to reduce the non-party’s burden. Under the applicable discovery rule, a ‘party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena’.108 The US district court can impose ‘an appropriate sanction – which may include lost earnings and reasonable attorney’s fees – on a party or attorney who fails to comply’.109 101   GB Born and PB Rutledge, International Civil Litigation in United States Courts, 4th edn (New York, Aspen, 2007) 910 (noting that ‘uncertainties and delays that were traditionally associated with such requests have led US courts to prefer unilateral US discovery efforts’); US Departement of State, Preparation of Letters Rogatory (execution of letters may take a year or more worldwide) http://travel.state.gov/law/judicial/judicial_683.html; JR Martin ‘Putting the Case Together: Organizing and Maximizing Discovery in Civil Antitrust Cases’, www. abanet.org/antitrust/at-committees/at-yld/pdf/OrganizingMaximizingDiscoveryCivil_Ant.pdf (usually in plaintiffs’ interests to seek discovery under the Federal Rules, while defendants likely advocate for discovery under the Hague Evidence Convention or foreign discovery rules). 102   Dexia Credit Local v Rogan 231 FRD 538, 541 (ND Ill 2004); Uranium (n 91) 1144. 103   Re Marc Rich & Co 707 F 2d 663, 667 (2d Cir 1983) (citing United States v Field 532 F 2d 404, 407–10 (5th Cir 1976); United States v Germann 370 F 2d 1019, 1022–23 (2d Cir), vacated on other grounds, 389 US 329 (1967)). 104   Fed R Civ P 4(k)(2)(B); Adams v Unione Mediterranea Di Sicurta 364 F 3d 646 (5th Cir 2004). 105   The constitutional touchstone of due process analysis is whether the entity purposely established minimum contacts in the forum (Burger King Corp v Rudzewicz 471 US 462, 474 (1985)) such that it could reasonably anticipate being haled into court there. World-Wide Volkswagen Corp v Woodson 444 US 286, 297 (1980). 106   Burger King (n 105) 476 (quoting International Shoe Co v State of Washington, Office of Unemployment Compensation and Placement 326 US 310, 320 (1945)); ABA (n 33) 1221–28. 107   Advisory Committee Notes, 1991 Amendments to Fed R Civ P 45. 108   Fed R Civ P 45(c)(1). 109  ibid. According to one recent survey, however, non-parties still claimed that undue burdens and costs occurred ‘frequently’ or ‘very frequently’ and the US courts were not sympathetic to the non-parties’ undue cost arguments. The Sedona Conference, ‘The Sedona Conference Commentary on Non-party Production & Rule 45 Subpoenas’ (2008) 9 Sedona Conference Journal 197, 204. However, nearly 80% of the surveyed members of the working group felt that the threshold for cost-shifting or cost-sharing was lower when discovery of a non-party’s electronically-stored information (ibid 205).

Discovery in a Global Economy  329

iii.  US Court’s Subpoena Power In addition to personal jurisdiction over the foreign corporations and individuals, the US court must have the power to subpoena such persons. If the foreign person is not a party to the US litigation, it may be beyond the court’s subpoena power.110 The court’s subpoena power is generally not an issue for the parties to a federal antitrust suit.111 But under the US discovery rules, service of a subpoena duces tecum on non-parties is subject to territorial limitations. Namely the subpoena may validly be served 1. within the judicial district of the issuing federal district court; 2. outside that judicial district but within 100 miles within the US of the place specified for the deposition, hearing, trial, production or inspection; 3. within the State of the issuing federal district court if a State statute or court rule allows service at that place of a subpoena issued by a State court of general jurisdiction sitting in the place specified for the deposition, hearing, trial, production, or inspection; or 4. where the federal district court authorises on motion and for good cause, if a federal statute so provides.112 In one antitrust case, a trade association was properly subpoenaed. But it argued that the subpoena was invalid because the requested documents were located in Belgium, and the discovery rules cannot be used to require a non-party to produce documents not located within 100 miles of the judicial district.113 The district court disagreed. The word “ ‘Production’ [in Federal Rule of Civil Procedure 45(a)(2)] refers to the delivery of documents, not their retrieval’.114 Thus, the judicial district where the documents are to be produced need not be the same district where the documents are housed.115

iv.  Seeking Discovery from Multi-National Corporations Operating Through Subsidiaries in Various Countries US litigants may realise that the district court cannot order discovery under the Federal Rules of Civil Procedure. The court lacks personal jurisdiction over the foreign person or 110   Federal statutes can expand the court’s subpoena power beyond Rule 45. US nationals or residents living in a foreign country, for example, can be subpoenaed under the Walsh Act, 28 USC s 1783. To obtain discovery, a litigant must show that (i) there is a pending proceeding in the United States, (ii) the information cannot be obtained through any other source, and (iii) the information is necessary in the interest of justice. Oxus Gold (n 6) 8–9 (denying discovery when no showing why testimony could not be obtained through other means including written interrogatories). Like s 1782, issuing a subpoena under s 1783 ultimately lies within the district court’s discretion. ibid 10 (denying subpoena requiring person to travel across continents for a deposition in connection with international arbitration). As to where to take depositions of persons living abroad, see Born and Rutledge, International Civil Litigation (n 101) 920–23; Fed R Civ P 28(b). 111   s 12 Clayton Act, 15 USC s 22, provides antitrust plaintiffs with worldwide service of process on corporate antitrust defendants. See McManus v Tato 184 F Supp 958 (SD NY 1959). US courts are divided whether s 12’s worldwide service of process provision applies only when plaintiff satisfies the section’s venue requirement. cp Daniel v American Board of Emergency Medicine 428 F 3d 408 (2d Cir 2005) (must satisfy venue requirements) with Re Automotive Refinishing Paint Antitrust Litigation 358 F 3d 288, 297 (3d Cir 2004) (service and venue provisions independent). 112   Fed R Civ P 45(b)(2). 113   Re Automotive Refinishing Paint 229 FRD 482 (ED Pa 2005). 114   ibid 494 (quoting Hay Group Inc v EBS Acquisition Corp 360 F 3d 404, 412 (3d Cir 2004)). 115   ibid; see also Fed R Civ P 45(a)(2) advisory committee note (‘Paragraph (a)(2) makes clear that the person subject to the subpoena is required to produce materials in that person’s control whether or not the materials are located within the District or within the territory within which the subpoena can be served’); C Wright and A Miller, Federal Practice and Procedure, vol 9A (2nd edn 1995 and 2004 Supp) para 2456, p 31: ‘Even records kept beyond the territorial reach of the district court issuing the subpoena may be covered if they are controlled by someone subject to the court’s jurisdiction’.

330  Maurice E Stucke the foreign person, while subject to personal jurisdiction, is not a party to litigation, is located outside the US, and is beyond the subpoena’s geographic reach. Because the US litigants cannot subpoena directly the foreign non-party for the documents, the US litigants instead may subpoena the foreign company’s US affiliate to retrieve and produce the documents located with the foreign affiliate. The US court can subpoena and exercise personal jurisdiction over the domestic corporate affiliate. The question is whether the domestic corporate affiliate must produce the documents located abroad. To answer this question, the district court must determine whether the US company has possession, custody, or control over the requested documents, electronically stored information or other tangible things located abroad with the foreign affiliate.116 Under the US civil discovery rules, the ‘test for the production of documents is control, not location’.117 A corporation or individual cannot resist a subpoena simply because the requested documents are located abroad.118 Thus a person can be ordered to produce documents, wherever their location, over which it has control. But a person cannot be ordered to produce documents over which it lacks control.119 On the issue of control, it is ‘well-settled that a party need not have actual possession of the documents to be deemed in control of them’; rather, the ‘test is whether the party has a legal right to obtain them’.120 This definition of control applies to individuals and corporations.121 There are few bright-line rules of when a person has the requisite control over the requested discovery. The issue of ‘control’ over documents is ‘often highly fact-specific’.122 As one court said the issue of control is more a question of fact than of law, and it rests on a determination of whether the defendant has practical and actual managerial control over, or shares such control with its affiliate, regardless of the formalities of corporate organization.123 When the domestic corporation ‘has practical and actual managerial control’ over a corporate organisation, then that domestic corporation has the requisite ‘control’ to order production of corporate documents from the foreign affiliate.124

116   Fed R Civ P 34(a)(1) (party may serve on any other party a request to produce documents and other items in the responding party’s ‘possession, custody, or control’); Fed R Civ P 45(a)(1)(A) (litigant may subpoena a nonparty subject to the court’s personal jurisdiction by a specified time and at a specified place to ‘attend and testify; produce designated documents, electronically stored information, or tangible things in that person’s possession, custody, or control; or permit the inspection of premises’); Re Citric Acid Litigation 191 F 3d 1090 (9th Cir 1999). 117   Marc Rich (n 103) 663, 667 (citing Re Canadian International Paper Co 72 F Supp 1013, 1020 (SD NY 1947)). 118   Marc Rich (n 103) 667 (citing United States v First National City Bank 396 F 2d 897, 900–01 (2d Cir 1968) and Federal Maritime Commission v DeSmedt 366 F 2d (2d Cir 1966) 464, 468–69); Dexia Credit Local (n 102) 541; Uranium (n 91) 1144. 119   C Wright, A Miller, and R Marcus, Federal Practice & Procedure: Federal Rules of Civil Procedure, vol 8A, 2nd edn (St Paul, Thomson West, 2009) para 2210. 120   Dexia Credit Local (n 102) 542 (quoting Re Folding Carton Antitrust Litigation 76 FRD 420, 423 (ND Ill 1977)); see also United States v International Union of Petroleum & Industrial Workers 870 F 2d 1450, 1452 (9th Cir 1989) (defining control as ‘the legal right to obtain documents upon demand’); Cochran Consulting Inc v Uwatec USA Inc 102 F 3d 1224, 1229–30 (Fed Cir 1996); Re Bankers Trust Co 61 F 3d 465, 469 (6th Cir 1995); Chaveriat v Williams Pipe Line Co 11 F 3d 1420, 1426 (7th Cir 1993); Gerling International Insurance Co v Commissioner 839 F 2d 131, 140–41 (3d Cir 1988); Searock v Stripling 736 F 2d 650, 653 (11th Cir 1984); Comcast of Los Angeles Inc v Top End International Inc No CV 032213 JFWRCX, 2003 WL 22251149, 4 (CD Cal 2 July 2003); Avery Dennison Corp v UCB Films PLC No 95 C 6351, 1998 WL 293002, 2 (ND Ill 28 May 1998). 121   Dexia Credit Local (n 102) 542; Uranium (n 91) 1144–45. 122   Wright, Miller, and Marcus, Federal Practice & Procedure (n 119) para 2210. 123   Uranium (n 91) 1145. 124   ibid 1145; see also Société Internationale Pour Participations Industrielles et Commerciales SA v Rogers 357 US 197, 204 (1958).

Discovery in a Global Economy  331 Before ordering a US parent corporation to produce the documents of a foreign subsidiary, the district court must determine if the US parent corporation ‘has power, either directly or indirectly, through another corporation or series of corporations, to elect a majority of the directors of another [foreign] corporation’.125 If the US corporation has the power to elect to office the foreign corporation’s directors, then the US corporation is considered in control of the foreign corporation.126 Thus, if the US parent company owns more than 50 per cent of the foreign subsidiary’s stock, it possesses the necessary control over that subsidiary’s documents.127 So a litigant can subpoena the US parent company, who must produce any of its foreign subsidiary’s non-privileged responsive documents. On the other hand, when the American subsidiary of a foreign corporation is asked to produce documents from its head office located abroad, the ‘test is less clear’.128

B.  Should the US Court Exercise Its Discretionary Authority to Compel Production? If the US court has the authority under the federal civil discovery rules to compel discovery, then the court must determine whether to exercise its authority. Generally, the US court first exercises its discretion when considering a pending motion – either a motion to compel discovery or a motion by the recipient to quash the subpoena or seek a protective order. If the court grants the motion to compel discovery and if the responding party elects to withhold the requested discovery, then the US court exercises its discretion when determining the consequences of non-compliance.129 In exercising its discretion, the court can ‘explore the possibility of less severe steps’ such as postponing the foreign discovery at issue until it is clear that other discovery is inadequate, having the parties inspect the documents abroad, or utilising the Hague Convention procedures.130 This chapter considers two contexts where courts consider comity principles when deciding to compel discovery from foreign corporations: applications for leniency and blocking statutes.

i.  EC’s Leniency Program The European Commission and US DOJ have promoted their antitrust leniency programs.131 One issue is whether private US litigants may discover communications between   ibid 1144–45 (quoting Re Investigation of World Arrangements 13 FRD 280, 285 (D DC 1952)).   ibid 1144–45 (quoting World Arrangements (n 125) 285). 127   ibid 1145 (citing W Fugate, Foreign Commerce and the Antitrust Laws, 2nd edn (Boston, Little, Brown, 1973) 116). 128   ibid 1145; see also Born and Rutledge (n 101) 931 (findings of control in these cases ‘typically turn on highly fact-specific circumstances and provide little basis for broad generalizations’). 129   Fed R Civ P 37 (rules outlining sanctions for failure to make disclosures or cooperate in discovery) and 45(e) (district court may hold in contempt a person who having been served fails without adequate excuse to obey the subpoena); s 442 cmt g Restatement (Third) of the Foreign Relations Law of the United States. 130   SW Waller, Antitrust & American Business Abroad, vol II, 3rd edn (St Paul, West Group, 2010) section 14:22. 131   F Hoffmann-La Roche Ltd v Empagran SA 542 US 155, 174–75 (2004) (noting the US government’s concern that ‘an expansive interpretation of the FTAIA would greatly expand the potential liability for treble damages in United States courts and would thereby deter members of international cartels from seeking amnesty from criminal prosecution by the United States Government’ and an expansive ‘interpretation adopted by the court of appeals thus would weaken the DOJ’s criminal amnesty program, which has served as an effective means of cracking international cartels’); Re Rubber Chemicals Antitrust Litigation 486 F Supp 2d 1078, 1084 (ND Cal 2007) (EC describing its leniency program as its most effective tool in combating illegal cartels). 125 126

332  Maurice E Stucke a defendant (or its corporate affiliate) and the European Commission that were made pursuant to the EC’s Leniency Program. Here the results are mixed. In a couple of cases, the US courts were sensitive to the EC’s concerns and denied civil discovery of materials submitted as part of the Leniency Program.132 But in another case, the district court granted the motions to compel production of the materials defendants filed with several foreign antitrust enforcement agencies.133 The recent Rubber Chemicals case illustrates a careful weighing of the EC’s and private litigants’ interests. Flexsys NV disclosed to the European Commission anti-competitive practices in the rubber chemicals industry.134 The plaintiff Korea Kumho Petrochemical Co Ltd sued, among others, Flexsys for unlawfully excluding the plaintiff from the US rubber chemicals market. The private antitrust plaintiff thereafter sought to discover from Flexsys its communications with the European Commission generated under the EC’s Leniency Program. Both Flexsys and the European Commission opposed this discovery request. In deciding whether to compel discovery, the US district court relied on section 442 of the Restatement (Third) of the Foreign Relations Law of the United States.135 That section recognises that a US court or agency may order discovery from ‘a person subject to its jurisdiction . . . even if the information or the person in possession of the information is outside the United States’.136 To balance comity principles and the policies underlying promoting civil discovery, the district court considered the Restatement’s five factors: (a) the importance to the investigation or litigation of the documents or other information requested; (b) the degree of specificity of the request; (c) whether the information originated in the United States; (d) the availability of alternative means of securing the information; and (e) the extent to which non-compliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the State where the information is located.137 132   Rubber Chemicals (n 131) 1080; Re Methionine Antitrust Litigation MDL No 00-1311 CRB (ND Cal 17 June 2002) (materials submitted to EC and Australian Competition and Consumer Commission). 133   Re Vitamins Antitrust Litigation MDL No 1285, 2002 US Dist LEXIS 26490 (D DC 23 January 2002) (special master’s report and recommendation) and 2002 US Dist LEXIS 25815 (18 December 2002). In a recent case, the district court initially ordered that plaintiffs could obtain confidential information defendants received through the EC’s Access to File process. Re Flat Glass Antitrust Litigation No 08-180 (29 July 2009); SR Miller, ‘US Discovery of European and US Leniency Applications and Other Confidential Investigatory Materials’ (March 2010) Competition Policy International (CPI) Antitrust Journal 13. The EC intervened, and both the EC and DOJ asked the court to reconsider its ruling. The parties thereafter entered into a consent order that substantially reflected the EC’s initial demands (ibid 14). In another recent case, Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation No 05-1720, 2010 WL 3420517 (ED NY 27 August 2010), the US court after hearing the EC’s objections and the parties’ submissions, ordered defendant MasterCard to produce the transcript of the oral hearing held before the EC and ordered defendant Visa to produce a copy of the EC’s statement of objections issued against it. The court concluded that the international comity concerns raised by the EC do not require the plaintiffs to forego information to which they would otherwise be entitled. The district court, however, stayed enforcement of its discovery order to allow the EC to further elaborate its objection to discovery. Judge Gleeson subsequently denied the plaintiffs access to them pursuant to the doctrine of international comity. He concluded that compelling disclosure would be ‘contrary to the law of international comity, which mandates an exception in this instance to the usual rule that all relevant information is discoverable’. Re Payment Card Interchange Fee and Merchant Discount (above) 1. 134   Rubber Chemicals (n 131) 1080. 135   s 442 Restatement (Third) of the Foreign Relations Law of the United States (1987). 136   ibid 442(1)(a). 137   Rubber Chemicals (n 131) 1082, citing s 442(1)(c) Restatement (Third) of the Foreign Relations Law of the United States.

Discovery in a Global Economy  333 Under the Restatement’s first factor – the importance to the investigation or litigation of the documents or other information requested – the US courts ‘are less inclined to ignore a foreign State’s concern where the outcome of litigation “does not stand or fall on the present discovery order”, or where the evidence sought is cumulative of existing evidence’.138 The plaintiff in Rubber Chemicals failed to convince the US court how the defendant’s admissions to the European Commission were relevant to its US antitrust litigation which involved a different geographic market. Moreover, the plaintiff received the defendant’s submissions to the US competition authorities, including all documents relating to any actual or proposed amnesty, agreement or plea. The second factor – the degree of specificity of the request – weighed in favour of disclosure. The plaintiff ’s discovery request was ‘sufficiently specific’ rather than a ‘generalized’ search.139 The third factor – whether the information originated in the United States – weighed against disclosure. The requested documents ‘were created, transmitted, and used only in Europe and in conjunction with the European enforcement proceeding’.140 The fourth factor – the availability of alternative means of securing the information – also weighed against disclosure. The private antitrust plaintiff already secured the more probative information (namely the DOJ amnesty documents) and to the extent the European Commission proceeding was relevant, the European Commission issued a detailed decision detailing the price fixing ‘communication-by-communication’.141 Finally, the fifth factor – the extent to which compliance or non-compliance with the request would undermine important interests of the State where the information is located and the United States – also weighed against production.142 The European Commission in its letter to the US district court argued that production of the EC communications would undermine its ability to initiate and prosecute future investigations by creating disincentives for future applicants to cooperate with the EC.143 Moreover, disclosure could compromise the EC’s cooperation with the US in prosecuting cartels. Consequently, since the European Commission took a clear position and articulated why the requested discovery would harm its interests, and three of the remaining factors weighed against disclosure, the US court denied the motion to compel discovery.

ii.  Blocking Statutes Another issue is when a foreign person claims that a sovereign’s ‘blocking statute’ seeks to prevent the foreign person from producing the requested information as part of US 138   ibid (quoting Richmark Corp v Timber Falling Consultants 959 F 2d 1468, 1475 (9th Cir 1992)); see also s 442 cmt a Restatement (Third) of the Foreign Relations Law of the United States (ordinarily reasonable to limit foreign discovery to information ‘necessary to the action – typically, evidence not otherwise readily obtainable – and directly relevant and material’). 139   ibid 1083. 140  ibid. 141  ibid. 142   s 442 cmt c Restatement (Third) of the Foreign Relations Law of the United States (the court should consider the ‘expressions of interest by the foreign state, as contrasted with expressions by the parties; to the significance of disclosure in the regulation by the foreign state of the activity in question; and to indications of the foreign state’s concern for confidentiality prior to the controversy in connection with which the information is sought’). Moreover, a ‘communication privileged where made – for instance, confidential testimony given to a foreign government investigation under assurance of privilege – is not subject to discovery in a United States court, in the absence of waiver by those entitled to the privilege’ (ibid s 442 cmt d). 143   Rubber Chemicals (n 131) 1084.

334  Maurice E Stucke discovery.144 Such blocking statutes reflected historically a dislike toward US antitrust policies.145 Over the years, however, other nations have taken a tougher stance on antitrust violations; so the extent to which blocking statutes still have traction probably comes from a lingering hostility to the exportation of the US’s liberal discovery policies.146 In a famous US antitrust case involving blocking statutes, Re Uranium Antitrust Litigation, the Tennessee Valley Authority and Westinghouse Electric Corporation, among others, sued 12 foreign and 17 domestic companies for fixing uranium prices in violation of the Sherman Act.147 In the ensuing discovery, many defendants withheld foreign documents based on foreign law objections under Swiss, Australian, South African and Canadian law. The latter three jurisdictions enacted or modified their statutes ‘for the express purpose of frustrating the jurisdiction of the United States courts over the activities of the alleged international uranium cartel’.148 All the ‘blocking statutes’ imposed criminal penalties for any violation.149 When faced with a blocking statute, the US district court must first determine whether a conflict exists between the laws of the United States and the foreign countries.150 ‘[T]o meet that burden, the party resisting discovery must provide the [c]ourt with information of sufficient particularity and specificity to allow the [c]ourt to determine whether the discovery sought is indeed prohibited by foreign law’.151 If the foreign law does prohibit the disclosure of the requested documents, this by itself does not eliminate the US court’s power.152 As the US Supreme Court noted, the ‘lesson of comity is that neither the [US court’s] discovery order nor the blocking statute can have the same omnipresent effect that it would have in a world of only one sovereign’.153 Even ‘The fact that foreign law may subject a person to criminal sanctions in the foreign country if he produces certain information does not automatically bar a domestic court from compelling production’.154

144   Born and Rutledge (n 101) 914–15 (describing various types of blocking statutes); Strauss v Credit Lyonnais SA 249 FRD 429 (ED NY 2008); Bodner v Paribas 202 FRD 370 (ED NY 2000). 145   s 442 Restatement (Third) of the Foreign Relations Law of the United States, Reporters’ Note 1 (‘To a considerable extent, the hostility to United States discovery practices reflects dislike of aspects of substantive American law, notably United States antitrust law and laws providing for regulation of international shipping’). 146   ibid (noting: ‘No aspect of the extension of the American legal system beyond the territorial frontier of the United States has given rise to so much friction as the requests for documents in investigation and litigation in the United States’ and that by 1986, ‘some 15 states had adopted legislation expressly designed to counter United States efforts to secure production of documents situated outside the United States’); Re Air Cargo Shipping Services Antitrust Litigation 2010 WL 1189341, 4 (ED NY 29 March 2010) (noting France’s and US’s shared interest in prohibiting price fixing). 147   Uranium (n 91) 1138. 148   Uranium (n 91) 1143. 149  ibid. 150   Dexia Credit Local (n 102) 541; Alfadda v Fenn 149 FRD 28, 34 (SD NY 1993) (‘the party relying on foreign law bears the burden of demonstrating that such law actually bars the production or testimony at issue’). 151   Alfadda (n 150) 34. 152   Société Nationale (n 1) 544 fn 28: ‘It is well settled that such statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute’ (citing Rogers 357 US 204–06); see also Uranium (n 91) 1145: ‘The existence of a conflicting foreign law which prohibits the disclosure of the requested documents does not prevent the exercise of this power’. 153   Société Nationale (n 1) 544 fn 29. 154   Reinsurance Company of America Inc v Administratia Asigurarilor 902 F 2d 1282 (7th Cir 1990) (quoting United States v First National Bank of Chicago 699 F 2d 341, 345 (7th Cir 1983)). If the foreign blocking statute provides civil rather than criminal sanctions, the case for non-production is less compelling. First National Bank of Chicago (above) 346–47.

Discovery in a Global Economy  335 On the other hand, ‘American courts should not ignore the fact that such a law exists’.155 After the Supreme Court’s 1958 Société Internationale decision,156 the US courts consider the five factors under the Restatement section 442, which are discussed above in the context of the leniency program.157 The US courts consider the importance of the Congressional policies underlying the US law which forms the basis for the plaintiff ’s claim.158 Despite the Supreme Court’s recent statements that may suggest the contrary,159 the federal antitrust laws ‘have long been considered cornerstones of [the United States’] economic policies’.160 Thus, this first factor is generally met for federal antitrust claims.161 In considering how important the requested documents are to determining the pivotal statutory inquiry,162 the US courts employ a higher standard than that for ordinary civil discovery under the federal civil discovery rules. When a conflict of law exists, the person seeking discovery must show ‘whether the requested documents are crucial to the resolution of a key issue in the litigation’.163 In Uranium, the antitrust plaintiffs’ showing on this factor was ‘simply overwhelming’ as their discovery requests were probative of the case’s fundamental issues, including (i) the time period of the uranium producers’ alleged conspiracy; (ii) defendants’ alleged efforts to conceal their conspiracy; (iii) the impact of that alleged conspiracy on US interstate and foreign commerce; (iv) the defendants’ defences of sovereign compulsion; and (v) information on uranium sales and market conditions.164 The US courts also inquire on the degree of flexibility in the foreign nation’s application of its non-disclosure laws,165 and whether the party was ‘in a favourable position to secure a waiver of those laws from its government or to explore alternative procedures for achieving compliance’.166 In Uranium, South Africa was the most flexible in its application of its nondisclosure laws. It allowed the private antitrust plaintiff to inspect the domestic firm’s uranium-related documents in that country.167 Australia rejected all past requests for a waiver of its regulations, but interpreted its laws as authorising the Attorney General to grant such waivers.168 Canada, the least flexible, rejected all requests for waivers.169   Uranium (n 91) 1145.   Société Internationale v Rogers (n 124) 197, 204–06. 157   Re Westinghouse Electric Corp Uranium Contracts Litigation 563 F 2d 992, 999 (10th Cir 1977) (district court erred in not balancing interests); Air Cargo Shipping Services (n 146). 158   Uranium (n 91) 1148. 159   Stucke (n 10) 1378–79 (collecting Court’s recent statements). 160   Uranium (n 91) 1154 (quoting United States v First National City Bank (n 118) 897, 903); see also Novell Inc v Microsoft Corp 505 F 3d 302, 315 (4th Cir 2007) (quoting United States v Topco Associates Inc 405 US 596, 610 (1972) (Sherman Act is ‘the Magna Carta of free enterprise’)); Kochert v Greater Lafayette Health Services Inc 463 F 3d 710, 715 (7th Cir 2006) (same); Glen Holly Entertainment Inc v Tektronix Inc 343 F 3d 1000, 1014–15 (9th Cir 2003) (same); Allegheny General Hospital v Philip Morris Inc 228 F 3d 429, 439 (3d Cir 2000) (same). 161   Westinghouse (n 157) 999 (distinguishing between contract and antitrust actions); Air Cargo Shipping Services (n 146) 4; Uranium (n 91) 1154; see also Waller, Antitrust & American Business Abroad (n 130) section 14:22 (first element is ‘arguably satisfied in every antitrust case, given the substantial national polices advanced by antitrust’). 162   Uranium (n 91) 1148. 163   ibid 1146; see also Westinghouse (n 157) 999 (noting that litigant’s defence ‘does not stand or fall on the present discovery order’ and discovery is cumulative). 164   Uranium (n 91) 1138. 165   ibid 1148; Air Cargo Shipping Services (n 146) 3 (in discussing hardship of compliance, noting that a number of courts have discounted this hardship when considering the French blocking statute). 166   Uranium (n 91) 1146. 167   ibid 1155. 168  ibid. 169  ibid. 155 156

336  Maurice E Stucke Section 442 of the Restatement also adds a good faith requirement to the analysis: If disclosure of information located outside the United States is prohibited by law, regulation, or order of court or other authority of the State in which the information is located, . . . a court or agency of the United States may require the person to whom the order is directed to make a good faith effort to secure permission from the foreign authorities to make the information available.170

Thus a US litigant raising a foreign law defence must make a good faith effort to obtain permission to disclose.171 Evidence, on the other hand, that the party ‘actively sought [this statutory] prohibition against disclosure, or that the information was deliberately moved to a state with blocking legislation, may be regarded as evidence of bad faith and justification for sanctions’.172

IV.  Friction from US Discovery This part examines several criticisms expressed about the United States’ liberal discovery mechanisms for foreign litigants, and offers two proposals. Since the 1990s, competition authorities have increasingly prosecuted multinational price-fixing cartels and other anticompetitive behaviour by multinational firms. Global cartels produce global victims. In seeking to recover for their antitrust injuries, these private antitrust plaintiffs may forum shop. In determining which forum will likely yield the best result, the antitrust plaintiff weighs the benefits and costs of different judicial fora, including (i) the scope of relief, (ii) the amount of potential monetary damages, (iii) the costs to prosecute the claim, and whether, and to what extent, litigation costs including attorney’s fees are recoverable, (iv) rule-of-law principles, and the likelihood of prevailing under that forum’s legal standards, (v) the likely time to litigate the claim, and (vi) the ability to collect the judgment against the defendants. Presently, the United States is an attractive venue for some antitrust claims. No other country affords private antitrust plaintiffs the combination of (i) broad civil discovery largely determined by the parties, rather than the courts;173 (ii) the ability to lower individual litigation costs by bringing antitrust claims as a class;174 (iii) treble damages;175 (iv) recovery of the costs of a successful suit, including reasonable attorney’s fees;176   s 442(2)(a) Restatement (Third) of the Foreign Relations Law of the United States.   Reinsurance (n 154) 1282: ‘Thus, at its discretion, the district court may require a good faith effort from the parties [or non-parties] to seek a waiver of any blocking provisions’; United States v Bank of Nova Scotia 691 F 2d 1384, 1388–89 (11th Cir 1982); Westinghouse (n 157) 996; Air Cargo Shipping Services (n 146) 2 (distinguishing case where defendant relies on statute to block discovery in one instance, while ignoring the statute in another where it served the defendant’s interests to do so). 172   s 442 cmt h Restatement (Third) of the Foreign Relations Law of the United States. 173   See Fed R Civ P 26–37. 174   Fed R Civ P 23. 175   15 USC s 15. 176   s 4 Clayton Act, 15 USC s 15. Fee-shifting on certain costs is permitted generally in civil litigation between private parties. See Fed R Civ P 54(d) (‘Unless a federal statute, these rules, or a court order provides otherwise, costs – other than attorney’s fees – should be allowed to the prevailing party’); 28 USC s 1920 (setting out recoverable costs). But in the absence of an agreement or statute providing for attorney’s fees, the ‘American Rule’ is that ‘the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser’. Alyeska Pipeline Service Co v Wilderness Society 421 US 240, 247 (1975). Under the Clayton Act, a prevailing antitrust plaintiff can recover attorney’s fees. But the unusual feature under the ‘American Rule’ is its going one-way: 170 171

Discovery in a Global Economy  337 (v) broad injunctive relief;177 (vi) a per se illegal standard for evaluating price fixing and other ‘hard core’ cartel behaviour;178 (vii) expansive jurisdictional rules; and (viii) the use of collateral estoppel for follow-on private antitrust suits.179 In contrast, the lack of treble damages, broad civil discovery, and limitations on class actions made ‘litigating in European courts less favourable from the perspective of the economics of litigation and damages awards’.180 As the European Commission noted in 2008, ‘victims of EC antitrust infringements only rarely obtain reparation of the harm suffered’.181 Foreign plaintiffs may recognise after Empagran that US courts lack jurisdiction to hear their antitrust claim.182 But antitrust litigants in foreign proceedings nonetheless may still seek to benefit from the United States’ liberal civil discovery rules. In the 1960s, the United States wanted to make it easier for foreign litigants to discover evidence in the United States. The US sought to be at ‘the forefront of nations adjusting their procedures to those of sister nations and thereby providing equitable and efficacious procedures for the benefit of tribunals and litigants involved in litigation with international aspects’.183 By making it easier for foreign litigants to seek discovery in the US, Congress hoped other foreign countries would adjust similarly their discovery procedures.184 One critical issue is whether the United States’ liberal civil discovery rules are viewed as a shining example of equitable and efficacious procedures or as a nuisance. To what extent do the United States’ generous discovery mechanisms for foreign litigants assist or frustrate a foreign sovereign’s exercise of power and promote or violate principles of comity? The United States has long recognised the ‘degree of friction created by [its litigants’] discovery prevailing defendants, absent statutory authority, cannot obtain their costs and fees from an unsuccessful plaintiff. Sharp Electronics Corp v Metropolitan Life Insurance Co 578 F 3d 505, 513 (7th Cir 2009). Thus under the American Rule, an antitrust defendant that prevails generally cannot recover its attorney’s fees from the defeated plaintiff. Exceptions exist to the general rule. See 15 USC s 4304(a)(2) (permitting defendant in a qualifying research and development joint venture to recover attorney’s fees for frivolous claims). This one-sidedness can contribute to the international friction from US civil discovery. Although the ‘loser pays’ principle, which prevails in the EU Member States, ‘plays an important function in filtering out unmeritorious cases’, the EC recognised that ‘under certain circumstances, this principle could also discourage victims with meritorious claims’. European Commission, ‘White Paper on Damages Actions for Breach of the EC Antitrust Rules’ SEC(2008) 404, SEC(2008) 405, SEC(2008) 406 (2 April 2008) 9, http://ec.europa.eu/competition/antitrust/actionsdamages/documents. html#link1. Thus, the EC recommended the national courts to derogate from this principle when, for example an unsuccessful claimant would have to bear the defendants’ costs that ‘were unreasonably or vexatiously incurred or are otherwise excessive’. 177   15 USC s 26. 178   United States v Socony-Vacuum Oil Co 310 US 150 (1940). 179   15 USC s 16(a) (if the United States brings a civil or criminal antitrust action, and testimony is taken, then any resulting final judgment or consent decree can be used as prima facie evidence against the defendants for the same conduct in a later private antitrust action). 180   Empagran SA v F Hoffman-La Roche Ltd 453 F Supp 2d 1, 12 fn 12 (D DC 2006). 181   EC White Paper (n 176). 182   Empagran (n 131) 155. Private plaintiffs filed a class action on behalf of foreign and US purchasers of vitamins under the Sherman Act, the antitrust laws of the relevant foreign nations and international law. The plaintiffs alleged that the defendant foreign and domestic vitamin manufacturers and distributors had engaged in a global price-fixing conspiracy. The vitamins cartel significantly and adversely affected both customers outside and within the United States. The defendants moved to dismiss the claims by the foreign purchasers who purchased their vitamins entirely outside US commerce. The Supreme Court framed the price-fixing activity as causing some antitrust injury in the US and ‘independently’ causing a separate foreign injury. Two sets of considerations, ‘one derived from comity and the other reflecting history,’ convinced the Supreme Court ‘that Congress would not have intended the [Foreign Trade Antitrust Improvements Act of 1982 (FTAIA)] exception to bring independently caused foreign injury within the Sherman Act’s reach.’ Ibid 173. 183   S Rep No 88-1580 (n 8) 3783. 184  ibid.

338  Maurice E Stucke requests’ and ‘the differing perceptions of the acceptability of American-style discovery under national and international law’.185

A.  Criticisms about the United States’ Liberal Discovery Mechanisms for Foreign Litigants Critics in Intel complained about the ‘one-sided imposition of US-style discovery obligations’.186 Some complained that the United States’ liberal discovery rules for foreign litigants present ‘a threat to foreign sovereigns’.187 Others warned that foreign rivals can abuse these discovery rules to ‘inquire into competitively sensitive information, under the imprimatur of a US District Court, even though the information is not needed by the foreign sovereign’s court or administrative body’.188 They predicted that helping foreign litigants obtain discovery in the US would ‘make US companies the preferred targets of future [product liability] litigation’, and place American manufacturers at a competitive disadvantage in selling their products internationally.189 In Intel, the European Commission expressed several concerns if complainants could secure discovery under section 1782(a). So it is interesting whether these concerns materialised in the five years since Intel was decided. First, the EC warned of the ‘inevitable unpredictability and inconsistency’ from a US court’s case-by-case weighing.190 But the inevitable thus far is evitable, at least for the EC. When the European Commission protests, the US courts nearly always listen. The one exception, as discussed in III.B.i above, is discovery regarding materials submitted as part of the EC’s leniency program. Otherwise, I have not found any decision in the five years since Intel where the district court ordered discovery under section 1782 over the EC’s opposition. The district court in Intel on remand and the three district courts in Microsoft all deferred to the EC’s comity concerns and denied discovery. Of course, the European Commission may lose future cases – when the ‘interested person’ raises a strong countervailing interest for compelling discovery. But absent that scenario, the US courts likely will defer to the foreign tribunal’s opposition to the grant of discovery. The EC’s second concern in Intel was that companies would inundate the European Commission with pretextual complaints to gain access under section 1782(a) to their competitors’ business secrets.191 A firm could obtain broad discovery against its competitor simply by filing an antitrust complaint with the European Commission. The EC, as a result, would ‘waste precious time and resources on unfounded antitrust complaints’.192 The firm 185   Société Nationale (n 1) 544 fn 29 (quoting s 437 Restatement of Foreign Relations Law of the United States (Revised) Reporters’ Note 5 41–42); see also US Department of State, Preparation of Letters Rogatory, http:// travel.state.gov/law/judicial/judicial_683.html (advising litigants in drafting letters rogatory to avoid ‘use of the term discovery’ and ‘the appearance of a fishing expedition’). 186   Brief of Amicus Curiae the Commission of the European Communities, Intel Corp v Advanced Micro Devices Inc 2003 WL 23138389, 1 (US 23 December 2003). 187  ibid. 188   Brief of the Chamber of Commerce of the United States as Amicus Curiae in Support of Petitioner, Intel Corp v Advanced Micro Devices Inc 2003 WL 23112944, 3 (US 31 December 2003). 189   Brief of the Product Liability Advisory Council Inc as Amicus Curiae in Support of Petitioner, Intel Corp v Advanced Micro Devices Inc 2003 WL 23112943, 2 (US 31 December 2003). 190   EC Amicus Brief (n 186) 17. 191   ibid 15. 192  ibid.

Discovery in a Global Economy  339 would benefit from the discovery without incurring the possible sanctions under the Federal Rules of Civil Procedure.193 This abuse has not materialised, at least in the reported US decisions regarding section 1782(a) since Intel. The premise that US courts cannot sanction frivolous section 1782(a) applications is itself suspect. Moreover, unlike substantive antitrust issues, which US district courts infrequently address, the courts routinely deal with confidential commercial information and protective order issues in general business litigation.194 When mistakes or unforeseen consequences arise, the US litigants often raise them and seek modifications to their existing protective order. Thus, with this trial-and-error feedback loop, US courts are familiar with different mechanisms to protect confidential information from falling into a direct competitor’s hands.195 An applicant under section 1782, for example, must show a substantial need for the commercially sensitive information that cannot be otherwise met without undue burden.196 After the applicant makes this threshold showing, the court may limit access to the commercially sensitive information to a select few. For example, the court can allow discovery under specific conditions, such as limiting disclosure to ‘attorneys’ eyes only’.197 Only the outside counsel (or in some cases corporate counsel) can access the competitor’s commercially-sensitive information. If an outsideattorneys’ eyes-only restriction is unworkable, the district court can opt for alternative solutions.198 A third concern, which the Supreme Court in Intel recognised but did not resolve, was that disclosure under section 1782(a) may undermine another jurisdiction’s antitrust leniency program.199 As Professor Spencer Waller noted, if ‘such materials are routinely required to be disclosed, this would have an obvious chilling effect on the use of amnesty and leniency programs and lower the overall deterrent effect of such programs on international cartel behavior’.200 The European Commission likewise warned in Intel that ‘any enhanced risk of public disclosure’ of the confessions by its leniency program’s applicants would ‘deter their participation’.201 In 2006, the European Commission adopted procedures to address its concern. Leniency applicants may now make their corporate statements orally at the EC’s premises; the statements are recorded and transcribed. Leniency applicants do not ‘retain or receive from the

  Intel (n 9) 268 (J Breyer, dissenting).   Procter & Gamble (n 35) 1117 (courts generally ‘possess sufficient tools to ensure that confidential discovery material is not publicly disclosed’). 195   Schottdorf (n 58) 8 (confidentiality agreement should mitigate concerns, and if parties cannot agree to terms, then court ‘is willing and ready to assist’). 196   Heraeus Kulzer (n 71) 5 (quoting Fed R Civ P 45(c)(3)(C)). 197  ibid; Michael Wilson Partners (n 79) 3 (confidential competitive information ordinarily protected by attorney’s-eyes-only provision). 198   Cryolife (n 37) 5 (to protect confidential data, parties can enter into agreement, enforceable in US court and foreign tribunal, that parties will not use any s 1782(a) discovery in foreign proceeding unless they first obtain a ruling from foreign tribunal that the material will be kept confidential); Kang v Nova Vision (n 35) 3 (in response to company’s confidentiality concern, US court ordered all relevant discovery to bypass the applicant and be submitted directly to German appraiser); Procter & Gamble (n 35) 1117 (parties in foreign tribunal can agree not to submit any s 1782(a) discovery to foreign tribunal unless the tribunal first orders that the discovery will be kept confidential; if the foreign court would not enforce such an agreement, then the US district court can retain jurisdiction for purposes of enforcing confidentiality agreement). 199   Intel (n 9) 266. 200   Waller (n 130) section 14:26. 201   EC Amicus Brief (n 186) 14–15. 193 194

340  Maurice E Stucke Commission any copies of these statements’.202 Nonetheless, even under the EC’s oral statement approach, leniency applicants cannot always rely on memory in making their oral application. There remains the risk that drafts or other materials that the applicant created in applying for amnesty may be discoverable. Accordingly, this is one area, as discussed below, where the US courts can provide greater clarity. The European Commission’s fourth concern in Intel was that a case-by-case discretionary approach by US courts increases the EC’s monitoring costs. The European Commission’s concern is that any of the 975 US district court judges may be currently contemplating discovery that could compromise the European Commission’s interests. This concern remains unresolved. The European Commission has been successful when voicing its concerns to the US district court. But the onus remains on the European Commission ‘to appear regularly in courts across the United States to explain itself and its objections to Section 1782 discovery’, which the European Commission argues is contrary to principles of comity.203 The target of discovery may have the incentive to contact the European Commission to assist its efforts to quash the subpoena. But there is no assurance that the European Commission is always aware of section 1782(a) applications where its interests are at stake.204 A related concern after Intel is about applying section 1782(a) to discovery located outside the United States. This, some fear, would turn the US courts into a discovery clearinghouse for global litigants seeking documents located anywhere around the world, and would interfere with foreign proceedings.205 Accordingly, some US district courts have held that section 1782(a) does not reach discovery located abroad.206 Other US courts disagree: section 1782(a) only requires that the person from whom discovery is sought resides or is found in the US.207 Absent any express statutory language to the contrary, the location of the documents is at most a discretionary consideration.208 The difference between the two conflicting positions taken by the US courts is a matter of degree: to what extent should the documents’ situs be an absolute bar to discovery versus a discretionary factor? Discovery can be hit-or-miss, such as obtaining the draft contract physically located in the investment firm’s New York office, but not obtaining the version sent to the London branch office. As companies achieve economies of scale and scope by outsourcing tasks to employees throughout the globe, and with the proliferation of, and improvements in, communication capabilities, company employees communicate daily across the globe. Moreover, US companies cheaply outsource their data warehousing to other countries. One hot issue today in the US is electronic discovery, and within electronic discovery, one of the more problematic practices is ‘cloud computing’. Cloud computing involves Internetbased computer services that allow ‘businesses and consumers to use software and hardware located on remote computer networks operated by third parties’, who can be located 202   Competition: revised Leniency Notice – Frequently Asked Questions, Reference: MEMO/06/469, 07/12/2006, http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/06/469&format=HTML&aged=1&language= EN&guiLanguage=en. 203   EC Amicus Brief (n 186) 17. 204  ibid. 205   Godfrey (n 6) 423. 206  ibid; Norex Petroleum Ltd v Chubb Insurance Co of Canada 384 F Supp 2d 45, 50–51 (D DC 2005). 207   Schottdorf (n 58) 5. 208   ibid; see also Minatec Finance (n 20) 4 fn 8 (in dictum agreeing with Schottdorf); Re Nokia Corp 2007 WL 1729664, 5 fn 4 (WD Mich 13 June 2007) (without determining issue, court considers the location of the documents as a discretionary factor).

Discovery in a Global Economy  341 outside the US.209 Cloud computing can offer businesses and individuals a cheaper way to manage, store, and use their data, and reduce their need to purchase, operate, and maintain software and hardware themselves. Such services will increase with the growth of the iPhone and its competitors, which can access data from remote servers.210 Cloud computing adds a layer of complexity to the otherwise difficult issue of deciding where computerised data is really located. Many companies around the world outsource all kinds of information technology work to other countries, such as India. But at the tap of a computer key, the US company can pull up its own data wherever located. With the ease to which data can be stored in, and retrieved from, foreign countries, it is unrealistic to hinge discovery under section 1782(a) on the documents’ situs. Instead, the Internet should compel the US courts to adopt under section 1782(a) the approach they have taken under the Federal Rules of Civil Procedure. As discussed in part III above, the US courts in civil litigation focus on their power over the person who controls the data, rather than the data’s physical location.211 Given the realities of discovery in a global economy, it makes little sense for the judiciary to add its gloss onto section 1782(a) that the documents are located physically in the United States. Unless one has little faith in the US judiciary’s exercising its discretion (such as a significant risk of inconsistent results), the district courts should consider the documents’ location as a discretionary factor when ordering discovery. Namely, the district court can consider, along with the other discretionary factors, the alleged hardship to the person subject to the discovery request in locating and retrieving the requested documents from the foreign site. For example, one district court observed that the requested documents could be easily shipped to the company’s New York headquarters or perhaps accessed electronically.212

B.  Policy Proposals Section 1782 does raise the risk of costly, time-consuming, and unpredictable and inconsistent discovery adjudications. But it appears that the European Commission’s concerns in Intel largely have not materialised. Section 1782 is not perfect. But the US courts, in their decisions after Intel, appear to reach workable accommodations to address the parties’ needs. Absent any empirical data of the undue costs and burdens imposed by section 1782, the case-law does not suggest the need for wholesale revision of the statute. But two changes can help reduce the friction with foreign sovereigns. First, with respect to leniency materials, to the extent they are not legally privileged, the US court, as in the case involving Flexsys, should provide greater clarity to such discovery requests. To reduce uncertainty, the US courts should employ the following presumption: if the requested documents were created, transmitted and used solely for the foreign country’s leniency program, if the requested materials are otherwise non-public, and if the foreign sovereign expressed concern in the past that production of this narrow category of 209   Letter from DC Vladeck, Director of Consumer Protection, US Federal Trade Commission to MH Dortch, Secretary, Federal Communications Commission (9 December 2009) http://fjallfoss.fcc.gov/ecfs/document/ view?id=7020352132. 210   J Menn, ‘Battle of Quality Instead of Quantity’ (23 December 2009) Financial Times 14. 211   See Fed R Civ P 34(a)(1); Fed R Civ P 45(a)(1)(A); Norex (n 206) 55–57 (noting that even if documents located abroad were within s 1782, there was no showing that documents were within US subsidiary’s possession, custody, or control). 212   Schottdorf (n 58) 8.

342  Maurice E Stucke materials would undermine its ability to initiate and prosecute future investigations by creating disincentives for future applicants to cooperate, then the leniency materials should not be produced, absent written consent by the foreign country. Second, Congress should amend section 1782(a) to require the applicant to simultan­ eously file written notice of its discovery request under section 1782(a) with the foreign tribunal. Such notice would enable the European Commission or any other foreign tribunal to timely object to any discovery request under section 1782, and thereby lower the foreign tribunal’s monitoring costs.

V. Conclusion As this chapter addresses, section 1782(a) provides litigants in foreign proceedings access to broad discovery from persons located in the US. Likewise, litigants in US antitrust pro­ ceedings can often seek discovery abroad. The US courts, eschewing bright-line rules, weigh several factors to determine whether it should exercise its authority to permit such discovery. The US courts consider, among other things, the burdens imposed by the dis­ covery request, the interests of the foreign State or tribunal, and the importance of the information requested. The US’s liberal discovery mechanisms have been a source of friction. Some are concerned about the United States becoming a clearinghouse for discovery requests. But as this chapter discusses, a couple of the European Commission’s concerns about the US’s liberal discovery mechanisms did not materialise after the Supreme Court’s Intel decision. The US courts, in their decisions after Intel, sought to reach workable accommodations that addressed the parties’ needs and were deferential to any expressed concerns of the foreign tribunal. As discovery continues to cross borders, discovery requests invariably will result in some friction. As more jurisdictions promote private antitrust actions, cross-border discovery issues will likely increase. But it is unrealistic to view discovery as a parochial matter. Already by the 1960s and early 1970s, the US saw the ‘substantial increase in litigation with foreign aspects arising, in part, from the unparallel expansion of international trade and travel’ which ‘intensified the need for an effective international agreement to set up a model system to bridge differences between the common law and civil law approaches to the taking of evidence abroad’.213 Since then, the Internet and other improvements in com­ munication technology have lowered the costs and speed in communicating around the world. Thus, litigants cannot return to the days where discovery was mostly located within walking distance. To meet the increased demand for discovery located abroad, government institutions must coordinate on global discovery issues. This chapter offers two policy proposals for US courts to further reduce friction with foreign sovereigns. Ultimately the heat from any friction will depend on the advancement of international mechanisms to secure the just, speedy and inexpensive resolution of discovery issues.

213   Société Nationale (n 1) 531 (quoting CF Salans, Deputy Legal Advisor, US Department of State, Convention on Taking of Evidence Abroad, S Exec Rep No 92-25 (1972)).

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? BARRY J RODGER*

I. Introduction This chapter will consider the enforcement of EU competition law through the European Competition Network following the significant changes introduced on 1 May 2004 as a result of the introduction of Regulation 1/2003.1 Regulation 1/2003 instituted a dramatic change in the system for enforcement of EU competition law. Prior to its introduction the EU Commission had been effectively the sole body responsible for enforcement of Articles 101 and 102 TFEU (formerly Articles 81 and 82 EC), save for sporadic and limited private litigation involving certain national courts.2 Regulation 1/2003 was introduced under the mantra of ‘decentralised enforcement’: from the centre, ie the Commission in Brussels, to the Member States’ courts and national competition authorities (NCAs). This chapter will concentrate on the latter aspect and the role of the NCAs, alongside the Commission, in applying the rules in Articles 101 and 102 TFEU (ex Articles 81 and 82 EC). Part II of the chapter will outline the provisions set out in Regulation 1/2003 to facilitate the working of the ECN, which shall also be considered in this first part. Part III of the paper will consider the issue of the caseload allocation within the ECN in more detail together with an appraisal of some of the key issues in relation to ‘jurisdiction’ and allocation/re-allocation of cases. Part IV will outline two particular potentially problematic aspects of the new enforcement network: how leniency applications are dealt with in the Network, and the extent to which the rules may be applied concurrently by sectoral regulators. Part V will explore two alternative methods of dealing with potentially overlapping jurisdiction of courts in relation to *  Professor Barry J Rodger, The Law School, University of Strathclyde, Glasgow. 1   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. 2   See, eg, the Ashurst Report: 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/economic_clean_en. pdf; S Kon and A Maxwell, ‘Enforcement in National Courts of the EC and New UK Competition Rules: Obstacles to Effective Enforcement’ (1998) 7 European Competition Law Review (ECLR) 443.

346  Barry J Rodger the private international rules of jurisdiction within the UK to examine if any lessons can be learned or parallels drawn between the two systems. Finally, a concluding section (part VI) will highlight that the ECN operates in the context of a wider debate on appropriate modes of governance at the EU level, and the public law context and public interest inherent in administrative enforcement reinforce the view that the jurisdictional rules of case allocation in relation to private competition litigation within Europe do not act as an appropriate comparator for case allocation mechanisms within the ECN, and vice versa.

II.  Regulation 1/2003 and the Functioning of the ECN A.  The nature of the ECN The European Competition Network (ECN) was established as a forum for cooperation between the European competition authorities in cases where the Treaty competition rules are to be applied, with a view to ensuring an efficient division of work and consistent application of the rules.3 The EU Commission and NCAs from the various Member States cooperate with each other through the ECN by: informing each other of new cases and envisaged enforcement decisions; coordinating investigations, where necessary, and helping each other with investigations; exchanging evidence and other information; and discussing various issues of common interest. The ECN operates via a virtual network and it was not instituted by Regulation 1/2003, but its basic functioning was outlined in the Commission Notice on cooperation within the Network of Competition Authorities4 and in the Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities. There are different fora within the ECN: high level meetings discussing major policy issues and the ECN Plenary involving officials from NCAs and the Commission where discussions concern inter alia implementation of the Regulation. There are also working groups dealing with a range of topical issues such as leniency and sanctions and procedures more generally. There are also various sector-specific ECN subgroups that bring together sectoral experts from the different Member States, for instance, in relation to the environment, energy, railways and telecommunications.

B.  ECN Functioning Article 5(1) Regulation 1/2003 empowered Member States’ competition authorities to apply Articles 101 and 102 TFEU, irrespective of national law. Furthermore, Article 3(1) required national courts and authorities, where they were applying their domestic competition law rules, to also apply Articles 101 and 102 TFEU where interstate trade was affected. Nonetheless, Regulation 1/2003 contains remarkably few provisions regarding the working of the ECN in the new decentralised framework for enforcing EU law. Chapter IV 3   See, eg K Dekeyser and M Jaspers, ‘A New Era of ECN Co-operation: Achievements and Challenges with Special Focus in Work in the Leniency Field’ (2007) 30(1) World Competition 3–24; F Cengiz, ‘Multi-Level governance in competition policy: the European Competition Network’ (2010) E L Rev 660–677. M De Visser, NetworkBased Governance in EC Law (Oxford, Hart Publishing, 2009). 4  Commission Notice on cooperation within the Network of Competition Authorities (Network Notice) [2004] OJ C101/43.

Coordination in the ECN  347 Regulation 1/2003 makes provision in relation to cooperation and exchange of information in Articles 11 and 12. The basic provision, emphasising the new cooperative approach between the Commission and Member States in enforcement, is set out in Article 11. Article 11(1) provides as follows: ‘The Commission and the competition authorities of the Member States shall apply the Community competition rules in close cooperation’. The most significant provision (‘the nuclear option’) is set out in Article 11(6), as follows: The initiation by the Commission of proceedings for the adoption of a decision under Chapter III shall relieve the competition authorities of the Member States of their competence to apply Articles 81 and 82 of the Treaty. If a competition authority of a Member State is already acting on a case, the Commission shall only initiate proceedings after consulting with that national competition authority.

In order to facilitate the tasks of the NCAs, and the Commission, Article 12 provides for the exchange of information as between authorities undertaking their roles as EU competition law enforcers. To this effect, Article 12(1) states that: For the purpose of applying Articles 81 and 82 of the Treaty the Commission and the competition authorities of the Member States shall have the power to provide one another with and use in evid­ ence any matter of fact or of law, including confidential information.

Limitations are imposed in terms of the scope and purpose for which the information may be utilised in Articles 12 (2) and (3).5 These provisions are important practical means of seeking to ensure an effective coordination of the enforcement functions, which was the intention behind Regulation 1/2003. However, one would search in vain for rules allocating jurisdiction to the appropriate competition authority in the European Union. The closest Regulation 1/2003 comes to this is in Article 11(6) which effectively gives the Commission the power of pre-emption,6 which it may exercise to assert its competence in relation to a case, where for instance the cases raises serious issues of Community interest or there are potential problems in ensuring the consistent application of the Treaty rules. Paragraph 54 Network Notice considers the exercise of this power as follows: After the allocation phase, the Commission will in principle only apply Article 11(6) of the Council Regulation if one of the following situations arises: (a) Network members envisage conflicting decisions in the same case. (b) Network members envisage a decision which is obviously in conflict with consolidated case law; the standards defined in the judgements of the Community courts and in previous  ‘2. Information exchanged shall only be used in evidence for the purpose of applying Article 81 or Article 82 of the Treaty and in respect of the subject-matter for which it was collected by the transmitting authority. However, where national competition law is applied in the same case and in parallel to Community competition law and does not lead to a different outcome, information exchanged under this Article may also be used for the application of national competition law.

5

3. Information exchanged pursuant to paragraph 1 can only be used in evidence to impose sanctions on natural persons where: – the law of the transmitting authority foresees sanctions of a similar kind in relation to an infringement of Article 81 or Article 82 of the Treaty or, in the absence thereof, – the information has been collected in a way which respects the same level of protection of the rights of defence of natural persons as provided for under the national rules of the receiving authority. However, in this case, the information exchanged cannot be used by the receiving authority to impose custodial sanctions’.   See De Visser, Network-Based Governance (n 3) 169–71.

6

348  Barry J Rodger decisions and regulations of the Commission should serve as a yardstick; concerning the assessment of the facts (eg market definition), only a significant divergence will trigger an intervention of the Commission; (c) Network member(s) is (are) unduly drawing out proceedings in the case; (d) There is a need to adopt a Commission decision to develop Community competition policy in particular when a similar competition issue arises in several Member States or to ensure effective enforcement; (e) The NCA(s) concerned do not object.

The potential use of the power where conflicting decisions by NCAs are envisaged – ‘positive conflicts of jurisdiction’ – is probably the most significant in this context. In addition, Article 13 provides legal support to a competition authority to reject a complaint on the basis that another authority is dealing with the case,7 although this provision does not deal with any potential conflict of jurisdiction,8 at least from the perspective of the respective competition authorities. Following this basic outline of the key provisions of Regulation I and the functioning of the ECN, it is important to understand in more detail the system of ‘case allocation’ within the ECN.

III.  ECN ‘Case Allocation’ A.  The Network Notice As noted above, there are no direct provisions in relation to allocation of jurisdiction in Regulation 1/2003. However, the Commission issued a Network Notice designed to help complainants and the relevant competition authorities to ascertain which would be the most appropriate authority to deal with a particular case.9 The Commission Notice on cooperation within the Network of Competition Authorities10 sets out the principles for ‘allocation’ of cases within the Network, the key parts of which are as follows: 5.  The Council Regulation is based on a system of parallel competences in which all competition authorities have the power to apply Articles 81 or 82 of the Treaty and are responsible for an efficient division of work with respect to those cases where an investigation is deemed to be necessary. At the same time each network member retains full discretion in deciding whether or not to investigate a case. Under this system of parallel competences, cases will be dealt with by:   ‘Article 13

7

1. Where competition authorities of two or more Member States have received a complaint or are acting on their own initiative under Article 81 or Article 82 of the Treaty against the same agreement, decision of an association or practice, the fact that one authority is dealing with the case shall be sufficient grounds for the others to suspend the proceedings before them or to reject the complaint. The Commission may likewise reject a complaint on the ground that a competition authority of a Member State is dealing with the case. 2. Where a competition authority of a Member State or the Commission has received a complaint against an agreement, decision of an association or practice which has already been dealt with by another competition authority, it may reject it’. 8   See S Brammer, ‘Concurrent Jurisdiction under Regulation 1/2003 and the issue of case allocation’ (2005) Common Market Law Review (CML Rev) 1383; Cengiz (n 3). 9   See De Visser (n 3) particularly 291–301. 10   Network Notice. See Brammer ‘Concurrent Jurisdiction under Regulation 1/2003’ (n 8).

Coordination in the ECN  349 – a single NCA, possibly with the assistance of NCAs of other Member States; or – several NCAs acting in parallel; or – the Commission . . . 7.  Where re-allocation is found to be necessary for an effective protection of competition and of the Community interest, network members will endeavour to re-allocate cases to a single well placed competition authority as often as possible. In any event, re-allocation should be a quick and efficient process and not hold up ongoing investigations. 8.  An authority can be considered to be well placed to deal with a case if the following three cumulative conditions are met: 1. the agreement or practice has substantial direct actual or foreseeable effects on competition within its territory, is implemented within or originates from its territory; 2. the authority is able to effectively bring to an end the entire infringement, ie it can adopt a cease-and-desist order the effect of which will be sufficient to bring an end to the infringement and it can, where appropriate, sanction the infringement adequately; 3. it can gather, possibly with the assistance of other authorities, the evidence required to prove the infringement. 9.  The above criteria indicate that a material link between the infringement and the territory of a Member State must exist in order for that Member State’s competition authority to be considered well placed . . . 14. The Commission is particularly well placed if one or several agreement(s) or practice(s), including networks of similar agreements or practices, have effects on competition in more than three Member States (cross-border markets covering more than three Member States or several national markets).

Flexibility does appear to be a key concept in this process, and indeed, the term ‘allocation of jurisdiction’ is a misnomer. What may happen as between NCAs is that there may be a ‘re-allocation’ based on the criteria in the Notice. The Network Notice sets out that most cases should be dealt with by a single ‘well-placed’ authority. Interestingly, the original draft Notice sought to identify the ‘best-placed’ authority but this concept was revised in the final Notice. The Notice envisages three possibilities: enforcement by a single NCA; enforcement by several NCAs acting in parallel; or enforcement by the Commission. Cases will normally remain with the authority that begins the proceedings, either of its own initiative or as the result of a complaint, but some proceedings will need to be reallocated. Where reallocation is required, the proceedings will preferably go to ‘a single well-placed’ authority. There are three key factors in determining which authority is most appropriate, and they are as follows: (i) the area in which the anti-competitive practice has substantial, actual or foreseeable effects, is implemented, or originated, (ii) which authority is most able to effectively bring the infringement to an end and impose an appropriate sanction, and (iii) which authority can gather the evidence required to prove the infringement. The Commission will usually be best placed to deal with a practice that produces effects in more than three Member States or the Community interest requires a decision to develop competition policy. To ensure this division of work operates effectively, Regulation 1/2003 provides, in Article 11, for the exchange of information between all the authorities, as indicated above. This seeks to ensure that where related practices are being examined by more than one authority this should be identified quickly. When a case has been allocated to an authority, any other authorities that have received similar complaints are empowered by Article 13 Regulation 1/2003 to reject those complaints and terminate their investigations

350  Barry J Rodger – ie a complainant cannot insist on a particular authority dealing with a complaint – and in any event, the ECJ has recognised that the European Commission can legitimately prioritise its resources in dealing with complaints11 – a factor which clearly differentiates public enforcement mechanisms from private litigation, as discussed further below. Aside from the potential for inconsistent application of the Treaty Rules, an issue of great debate prior to the adoption of the Regulation,12 but which is not the focus of this chapter, a key question concerns the extent to which there have been any ‘jurisdictional struggles’ between competing NCAs, where they have been ‘seised’ of the same case at the same time.13 There was concern following Regulation 1/2003 that in the absence of any clear allocation rules, except for Article 11(6) discussed above, NCAs would be involved in bitter jurisdictional disputes, and complainants (and others) would be left in a very difficult position in trying to ascertain who to approach with complaints or how to deal with two potentially concurrent investigations by different competition authorities.14 Nonetheless, as discussed in the following section, jurisdictional conflicts do not appear to have been a practical problem in the workings of the ECN system.

B.  2009 Commission Report on Regulation 1/2003 The Commission Report on the functioning of Regulation 1/2003, published in April 2009, suggested that to date the provisions for cooperation and work sharing have been successful: 29.  Enforcement of the EC competition rules has vastly increased since the entry into application of Regulation 1/2003. By the end of March 2009, more than 1000 cases have been pursued on the basis of the EC competition rules in a wide variety of sectors. 30.  Work sharing between the enforcers in the network has generally been unproblematic. Five years of experience have confirmed that the flexible and pragmatic arrangements introduced by Regulation 1/2003 and the Network Notice work well. Discussions on case-allocation have come up in very few cases and have been resolved swiftly. 31.  Cooperation mechanisms for fact-finding purposes within the ECN have worked well overall.15

Accordingly, the Regulation appears to have been successful in terms of its central premise that more cases should be dealt with at the national level.16 The associated Staff Working Paper provides a little more detailed consideration of how work-sharing has evolved in practice: 11   Case T-24/90 Automec Srl v Commission [1992] ECR II-2223. See also the Commission Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty (Complaints Notice) [2004] OJ C101/65; the Office of Fair Trading (OFT) Prioritisation Principles, OFT 953, 2008 are available at www.oft.gov.uk. 12   See, eg, J Temple-Lang, ‘Decentralised Application of Community Competition Law’ (1999) 22(4) World Competition 3–20; J Venit, ‘Brave New World: the Modernisation and Decentralisation of Enforcement under Articles 81 and 82 of the EC Treaty’ (2003) CML Rev 40, 560–63; A Riley, ‘EC antitrust modernisation: the Commission does very nicely – thank you! Part 2: between the idea and the reality: decentralisation under Regulation 1’ [2003] ECLR 657–72. cf K Pijetlovic, ‘Reform of EC antitrust enforcement: criticism of the new system is highly exaggerated’ (2004) 25(6) ECLR 356–69. 13   See, eg, Dekeyser and Jaspers, ‘A New Era of ECN Co-operation’ (n 3); Brammer (n 8). 14   See Venit, ‘The Modernisation and Decentralisation of Enforcement’ (n 12); Brammer (n 8). 15   Commission, ‘Report on the functioning of Regulation 1/2003’ (Communication) COM (2009) 206 final, 29 April 2009. 16   This is borne out by the statistics published on the Commission’s website at http://ec.europa.eu/competition/ ecn/statistics.html.

Coordination in the ECN  351 5.2.2.  Work sharing – practical experience 214.  Five years of experience of work-sharing within the ECN have clearly demonstrated and confirmed the well-functioning of the flexible and pragmatic approach introduced by Regulation 1/2003 and the Network Notice. Contrary to the various concerns raised at the time of the adoption of the modernisation package, discussions on case-allocation came up only in a few cases and actual re-allocation of cases took place even less, ie cases mostly remain with the competition authority that started the investigation . . . 224.  In conclusion, work sharing within the ECN has worked very well. The ECN is well equipped to avoid unnecessary duplication of work and to ensure efficient enforcement. The ECN members have demonstrated their readiness to solve case allocation issues in a manner that ensures efficient work-sharing.

This is, perhaps inevitably given the source, a very positive review of the working of the Network and recounts the absence to date of any positive case allocation conflicts.17 The absence of case allocation difficulties has also been highlighted by Andreas Bardong of the Bundeskartellamt as follows: As regards the operation of the case allocation rules in practice, we were quite surprised by our first experiences. At the stage of the discussions that lead to the network notice, we were working on all the details of the case re-allocation procedures and expected there would be more cases in which we would have to enter into case allocation discussions with other national competition authorities. But in practice, it has turned out that in most situations it is quite clear from the start where the cases should be handled; and they stay with the authority that starts the investigation.18

However, there is an interesting reference at paragraph 222 of the Working Paper to a limited number of instances involving a ‘negative conflict of allocation’, alternatively referred to as negative conflicts of jurisdiction,19 where there is effectively an enforcement lacunae due to the absence of enforcement action by any of the relevant authorities.20 Nonetheless, although related to the issue of jurisdictional competence, given that authorities can prioritise their limited enforcement resources, that issue may call for greater cooperation, assistance and information-sharing as opposed to a strictly jurisdictional response.

C.  Procedures, Sanctions and Inconsistent Outcomes: Divergence and Convergence Overall, although it may appear, at least in this general context (see below regarding leniency and sectoral regulators)21 that there have been no jurisdictional conflicts, the allocation (or re-allocation) of competence to deal with a case may have significant importance in terms of the outcome of the case.22 The potential for inconsistent application of the 17   There have been unsubstantiated accounts of conflict at the Commission/NCA level regarding case allocation. 18   The Antitrust Source, ‘The European Competition Network: What it is and Where It’s Going’, available at www.abanet.org/antitrust/at-source/05/07/Jul05-ECNBrBag7=28f.pdf. 19   See Brammer (n 8) particularly 1405–09. 20   See further discussion below at the end of III.C. 21   cf A Schwab and C Steinle, ‘Pitfalls of the European Competition Network: Why Better protection of Leniency Applicants and Legal Regulation of Case Allocation is Needed’ (2008) ECLR 523–31. 22   ibid. It will also affect the procedural rights and guarantees afforded to parties during the process: see, for instance, in this book, the contribution of D Gerard, ‘Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations’ (ch 16).

352  Barry J Rodger substantive law is limited by Treaty requirements, specific provision in the Regulation23 and the cooperation mechanisms in the ECN. However, when applying the Treaty Rules, the NCA must rely upon the powers granted to it by domestic law as neither Regulation 1/2003 nor the Network Notice sought to harmonise domestic rules on enforcement procedures and powers of the various NCAs.24 At one stage there was a possibility that a future Modernisation II package, involving some form of harmonisation of national NCA powers, procedures and remedies in cases of Community law infringements, would be proposed. However, the ability to exchange information and engage in dialogue within the ECN has facilitated a certain degree of convergence already,25 particularly in relation to leniency where virtually all Member States now have some form of leniency programme, and the ECN has developed a Model Leniency Programme.26 However the Commission Report and Staff Working Paper, as demonstrated in these passages, have recognised the potential problem of divergent procedures and sanctions, first in the Report as follows: 36.  Regulation 1/2003 does not formally regulate or harmonise the procedures of national com­ petition authorities, meaning that they apply the same substantive rules according to divergent procedures and they may impose a variety of sanctions. Regulation 1/2003 accommodates this diversity. It has also given rise to a significant degree of voluntary convergence of Member States’ laws that has been supported by policy work in the ECN. 38.  . . . divergences of Member States’ enforcement systems remain on important aspects such as fines, criminal sanctions, liability in groups of undertakings, liability of associations of under­ takings, succession of undertakings, prescription periods and the standard of proof, the power to impose structural remedies, as well as the ability of Member States’ competition authorities to formally set enforcement priorities. This aspect may merit further examination and reflection.

The Staff Working Paper considered in greater detail the impact and scope of Article 5 Regulation 1/2003, which provides as follows: Article 5 The competition authorities of the Member States shall have the power to apply Articles 81 and 82 of the Treaty in individual cases. For this purpose, acting on their own initiative or on a complaint, they may take the following decisions: – requiring that an infringement be brought to an end, – ordering interim measures, – accepting commitments, – imposing fines, periodic penalty payments or any other penalty provided for in their national law. Where on the basis of the information in their possession the conditions for prohibition are not met they may likewise decide that there are no grounds for action on their part.

  Art 16(2) Regulation 1/2003.   See De Visser (n 3) 300–01. 25   See in particular the ECN Working Group on Cooperation Issues, Questionnaire Results in relation to MS national laws as at April 2008, available at http://ec.europa.eu/competition/ecn/ecn_convergencequest_April2008. pdf. 26   The ECN model leniency programme, available at http://ec.europa.eu/competition/ecn/model_leniency_ en.pdf and see report on Assessment of the state of Convergence at http://ec.europa.eu/competition/ecn/model_ leniency_programme.pdf. 23 24

Coordination in the ECN  353 The tension between convergence in the application of the substantive rules with pro­ cedural divergence between the NCA powers was acknowledged by the Working Paper, which also outlined the ongoing developments in procedural convergence across the ECN, as follows: 5.1.5.  Convergence and Divergence of national competition authorities’ powers 200.  Crucially, Article 5 is a very rudimentary rule. Regulation 1/2003 does not formally regulate or harmonise the procedures of national competition authorities over and above Article 5 and the rules applicable to cooperation mechanisms. This implies that European competition authorities apply the same substantive rules according to divergent procedures and they may impose a variety of sanctions. In important respects, the Regulation reconciled the requirements of substantive coherence with the existing procedural diversity amongst European Competition authorities. 201. Nevertheless, the entry into force of Regulation 1/2003 has generated an unprecedented degree of voluntary convergence of the procedural rules dedicated to the implementation of Articles 81 and 82 EC. 202.  An area where considerable convergence has taken place is leniency where 25 Member States now operate a leniency programme and have largely aligned their programmes to the ECN Model Programme adopted in September 2006. 203. However, this remarkable level of convergence should not lead to an underestimation of the still existing divergences on important procedural issues that may influence the outcome of individual cases, eg fines, criminal sanctions, liability of undertakings or associations of undertakings, succession of undertakings, prescription periods, standard of proof and the power to impose structural remedies. Moreover, the ability of national competition authorities to set priorities is greatly divergent insofar as a large number of authorities are obliged to investigate and/or rule on complaints that they are seized with, while others are legally empowered to set priorities in one form or another.

Accordingly, the ‘selection’ of an NCA to deal with a case will have important repercussions on the legal processes involved27 and the types and range of sanctions likely to be imposed and consequently divergent outcomes according to the NCA ‘allocated’ jurisdiction.28 Therefore it is in the interests of the complainer/infringed party to seek to influence the process in order to gain some advantage in relation to the case outcome. Arguably, this merely replicates the problems in level of international private litigation where parties can raise ‘torpedo actions’ in an attempt at ‘forum shopping’29 – although strictly speaking the term ‘forum shopping’ is a misnomer in that context as the party will have to establish that the court seised has jurisdiction. The advantage of the flexible, non-strict jurisdiction criteria within the ECN is the anticipation that it will lead to the more appropriate forum for dealing with a case. Flexibility is useful and helpful for authorities although it lacks certainty and is unpredictable for companies being investigated, and the system of overlapping competences risks breaching the fundamental principle of ne bis in idem.30 There is, as indicated, evidence of considerable convergence across a range of issues relating to the procedures and sanctioning powers of the NCAs in the 27 Member States as outlined in the Working Paper, although there also exists the potential problematic of differing prioritisation of workload   See in this book the contribution of D Gerard, ibid, in relation to the exchange of information.   See De Visser (n 3) particularly 300–01. 29   See, eg, FM Moretti and L Nascimbene, ‘No Scent of Torpedo’ (2009) Global Competition Litigation Review 67. 30   Schwab and Steinle, ‘Pitfalls of the European Competition Network’ (n 21). 27 28

354  Barry J Rodger across the different members of the ECN. For instance, in the UK, the OFT has developed a set of prioritisation principles31 but there is no coordination of this issue at the EU level. The risk of an enforcement lacuna is evident, particularly given the Commission’s focus on the Community interest in dealing with suspected infringements.32 Accordingly, although there have been no recorded instances of positive conflicts of jurisdiction to date, the risk of under-enforcement through negative conflicts of jurisdiction exists.33 Two other areas of potential difficulty concern the relationship between the general system of ECN ‘case allocation’ and the specific enforcement contexts involving leniency applications and concurrent regulators, as discussed in the following section.

IV.  Leniency and Concurrency One of the most significant developments in the enforcement of EU competition law has been the introduction and subsequent revision and refinement of a leniency policy, following the success of the US Department of Justice antitrust leniency programme in uncovering cartels.34 Prior to the introduction of Regulation 1/2003, potential leniency applicants faced a straightforward choice – either not to apply for leniency or to apply for leniency in relation to a cartel caught by Article 101 TFEU from the Commission alone. Of course, the position is now more complicated in the context of a network of enforcers as part of the ECN following the adoption of Regulation 1/2003, as indicated by the following passage in the Network Notice: 38.  In the absence of a European Union-wide system of fully harmonised leniency programmes, an application for leniency to a given authority is not to be considered as an application for leniency to any other authority. It is therefore in the interest of the applicant to apply for leniency to all competition authorities which have competence to apply Article 81 of the Treaty in the territory which is affected by the infringement and which may be considered well placed to act against the infringement in question. In view of the importance of timing in most existing leniency programmes, applicants will also need to consider whether it would be appropriate to file leniency applications with the relevant authorities simultaneously. It is for the applicant to take the steps which it considers appropriate to protect its position with respect to possible proceedings by these authorities.

The Network Notice reiterates that there is no all-EU leniency application process, although there is provision for information regarding a leniency application to be circulated around the NCAs and the Commission.35 Because of the problem of parallel competences in the context of a process where speed and certainty are of the essence in ensuring the continued significance of the leniency policy in detecting cartels across Europe, the Commission and NCAs developed an ECN model leniency programme.36 This seeks to   OFT prioritisation principles, OFT 953, October 2008.   See Recital 18 Regulation 1/2003; Brammer (n 8). 33   See, eg Cases T-339/04 and T-340/04 France Telecom SA v Commission [2007] ECR II-521. 34   A Riley, ‘Cartel Whistleblowing: Toward an American Model’ (2002) Maastricht Journal of European and Comparative Law 67–102; A Riley, ‘The Consequences of the European Cartel-Busting Revolution’ (2005) Irish Journal of European Law 3–52; WJ Wils, ‘Leniency in Antitrust Enforcement: Theory and Practice’ (2007) World Competition 25. 35   See Art 12 Regulation 1/2003 and paras 37–42 Network Notice. 36   See C Gauer and M Jaspers, ‘Designing a European Solution for a “one stop leniency shop”’ (2006) ECLR 685–92; Schwab and Steinle (n 21). 31 32

Coordination in the ECN  355 provide a model programme involving best practices, for NCAs to consider using as a template to revise existing policies or adopt a leniency programme afresh. The ECN Model Programme also introduced a new procedure for a uniform summary application system for cases concerning more than three EU Member States. If a full application has been made with the Commission, national competition authorities can temporarily protect the applicant’s position on the basis of very limited information that can be given orally. Should any of the national competition authorities want to act on the case it will grant the applicant an additional time to complete its application. The summary application model seeks in effect to provide a centralised first come first served principle to protect, in multistate cases, those who apply first to the Commission, and is therefore broadly akin to a lis pendens rule, discussed below. Of course it does not apply where a party has simply applied for leniency in one State, but the well-placed authority is another NCA. Nonetheless, in private litigation under the Brussels I Regulation, the lis pendens rule does not preserve any priority to a party who raises an action erroneously in the courts of a Member State which does not have jurisdiction under the Regulation, an issue to which we return further below, so one should not exaggerate the issue of the leniency applicants’ legitimate expectations. The Commission has in 2009 reported on the development of the ECN Model Programme37 and emphasised the ongoing processes of convergence in this sphere, although there are still criticisms about the impact on potential leniency applicants:38 6.  Already in the run-up to the Model Programme, there was a rapid development in a number of national leniency programmes. In 2002, only four Member States had leniency programmes, while on the date when the Model Programme was endorsed there were 19 national programmes. 7.  In 2006–2008, a significant process of alignment with the Model Programme took place. Today, all the Member States, except two, have leniency programmes. Most Member States have already revised their existing programmes or adopted new ones to align with the Model Programme . . . It appears that there still remain some divergences in the ECN concerning certain aspects of the Model Programme . . . 63.  . . . Pending legislative reforms demonstrate that the convergence is still an ongoing process. The work within the ECN has been a major catalyst in encouraging Member States and/or authorities to introduce and develop their leniency policies and in promoting convergence between them.

A further potential complicating factor is the involvement of sectoral regulators in the application of the competition rules. This is a particular issue in the United Kingdom39 where there are a number of regulators with concurrent powers, in addition to the OFT, and who have signed the Commission Statement regarding the Notice of Cooperation within the Network of Competition Authorities: Office of Communications (Ofcom); Gas and Electricity Markets Authority (Ofgem); Northern Ireland Authority for Utility Regulation (NIAUR); Office of Water Services (Ofwat); Office of Rail Regulation (ORR) and The Civil Aviation Authority (CAA). It should be stressed that those authorities were first given concurrent powers in relation to domestic UK competition law, the Competition Act 1998. The Competition Act 1998 (Concurrency) Regulations 200440 set out the process for determining which body is well-placed to act in a particular case of an alleged breach of   ECN Model Leniency Programme, 15 October 2009, Memo 09/456.   Schwab and Steinle (n 21). 39  See also the Greek national Telecommunications and Post Commission and the Commission for Communications Regulation in Ireland. 40   The Competition Act 1998 (Concurrency) Regulations 2004, SI 2004/1077. 37 38

356  Barry J Rodger competition law, in relation now to both the EU and domestic prohibitions. Those Regulations set out requirements on providing information to other parties with concurrent jurisdiction, provide for dispute resolution, the avoidance of double jeopardy and transfer of cases.41 Accordingly, in the UK, the OFT and regulators share competence for applying the prohibitions contained in the Competition Act 1998 and the EU prohibitions, and a Concurrency Working Party (CWP) was formed in 1997 to facilitate a consistent approach by the concurrent regulators and OFT in the exercise of their functions and powers under the Competition Act 1998. Although there have not been any publicised specific problems regarding concurrency and case allocation, the potentially difficult relationship between competition law and sectoral regulation, and the role played by the sectoral regulators in determining that relationship may have significant repercussions in terms of the outcome of any processes.42 In the various sectors, there is little guidance in a domestic context as to how a determination is to be made that it is more appropriate to proceed under the Competition Act 1998 as opposed to sector-specific powers.43 As Monti notes, in the EU context the issue is complicated by Article 3(3) Regulation 1/2003,44 but an NCA may consider whether it is applying competition law, for instance, in enforcing a non-discrimination obligation. The difficult divide between sector regulatory powers and enforcement of competition law led Monti to suggest that ‘the role played by regulatory authorities may require reconsideration in order to articulate more clearly the division between competition law and sector specific regulation’.45 Therefore, it appears that the key problem is not ‘case allocation’ as such, but how to determine whether the case is in fact a ‘competition law case’ which is then open to allocation.

V.  International Private Law and Conflicts of Jurisdiction A. Introduction This section shall turn to the private enforcement context and consider the rules allocating jurisdiction and how potential overlaps or conflicts of jurisdiction are resolved in relation to competition law litigation, in order to compare and contrast with the ECN model of public enforcement. The Brussels I Regulation provides the rules for determining jurisdiction in civil and commercial disputes in the courts of the Member States.46 The primary rule is that one sues the defendant where they are domiciled,47 but there are various additional options48 allowing an action to be raised in courts of the Member State where there   See especially paras 3–7.  See G Monti, ‘Utilities Regulators and the Competition Act 1998’ in B Rodger (ed), Ten Years of UK Competition Law reform (Dundee, Dundee University Press (DUP), 2010) ch 6; see also G Monti, ‘Managing the Intersection of Utilities Regulation and EC Competition Law’ (2008) 4(1) Competition Law Review 123–45. 43   See, eg, s 28(5) Gas Act 1986, OFT 405. 44   See Monti, ‘Utilities Regulators’ (n 42) 143. 45   ibid 144. 46   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. See the Commission Proposal to revise the Brussels I Regulation, COM (2010) 748 final, 14.12.2010. 47   Art 2 Brussels I Regulation. 48   As well as limitations, noting for instance the protective rules in relation to consumer contracts in Arts 15–17 Brussels I Regulation. 41 42

Coordination in the ECN  357 is a particularly close connection with a dispute.49 Therefore, very broadly speaking, one can identify similar issues in relation to the determination of which authorities are ‘wellplaced’ under the Network Notice – based on a close connection with the dispute, including where the parties (domicile) and evidence are based, and effects produced. Nonetheless, the rules of jurisdiction provide claimants with choices as to where they may sue, and it is their right to choose and insist on suing in a certain court, subject to their claim reasonably falling within the scope of the jurisdictional rule. It is in this context that the issue of ‘reallocation’ arises and that the treatment in the private litigation and public enforcement contexts may differ markedly. This is because the Brussels I Regulation seeks to provide certainty and rights which claimants can rely on,50 irrespective of the broader public interest. The following sections outline the Regulation’s approach to competing jurisdictional claims and contrasts these with the common law doctrine of forum non conveniens, which has greater parallels with the public enforcement approach to re-allocation to an appropriate forum.

B.  Lis Alibi Pendens – First Come First Served The Brussels I Regulation only applies to civil and commercial matters, and the rules on lis alibi pendens are limited to the situation where concurrent civil and commercial proceedings have been raised in the courts of two or more Member States. Article 27 of the Regulation provides a strict ‘first come first served’ principle and encourages a ‘race to the court’. Its scope is more restricted than Article 28, on related actions, which although also relying on a chronological basis, provides courts with a discretionary approach. Article 27 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.

This provision is partly necessary due to the existence of provisions in the Regulation which may offer the parties different jurisdictions in which to raise an action, and it applies irrespective of whether the action is a positive action seeking to establish liability or a defensive action seeking a declaration of non-liability.51 Its purpose is primarily to avoid potentially conflicting judgments, given the simplified recognition and enforcement procedures contained in the Regulation.52 Article 30 Brussels I Regulation seeks to minimise the difficulties in the practical application of the rules in Articles 27–29 by providing an autonomous interpretation of when a court is seised for these purposes. Article 27 is only applicable where the parties to two actions are identical,53 and the same cause of action is   eg, Art 5(3) Brussels I Regulation Re delictual disputes.   See Case 34/82 Martin Peters Bauunternehmung GmbH v Zuid Nederlandse Aanemers Vereniging [1983] ECR 987, 1002 para 11. 51   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, referred to hereinafter as ‘The Tatry’. See A Briggs, ‘The Brussels Convention tames the Arrest Convention’ (1995) Lloyd’s Maritime and Commercial Law Quarterly (LMCLQ) 161. 52   c III Brussels I Regulation. See Case C-144/86 Gubsich Maschinenfabrik KG v Palumbo [1987] ECR 4861. 53  See The Tatry (n 51) para 33. See, eg Sony Computer Entertainment Ltd v RH Freight Services Ltd [2007] 2 49 50

358  Barry J Rodger involved.54 It should be stressed that the court first seised may decide that in fact it is not allocated jurisdiction under any of the relevant rules, and therefore the lis pendens provision does not provide it with jurisdiction. There is a more flexible approach under Article 28 Regulation 1/2003, which affords the court a discretion to sist or dismiss proceedings where there is a related action in another Member State court. The two key issues under this provision are: (i) what constitutes related actions under Article 28, as this embraces a wider category of situations than the ‘same parties’ and ‘same cause of action’ criteria under Article 27,55 and (ii) how a court should exercise its discretion. The European Court in The Tatry stressed that the objective of this provision, was to improve coordination between the Community judiciary in order to ‘avoid conflicting and contradictory decisions, even where the separate enforcement of each of them is not precluded’.56 Article 28 however provides no further detail on how courts are to exercise the discretion given by the provision. In Sarrio SA v Kuwait Investment Authority57 the House of Lords confirmed that a ‘broad common-sense’ approach should be adopted and that the requirement for actions to be so closely connected that it was expedient to hear and determine them together covered a wide range of circumstances. It should be stressed that the Article 28 discretionary approach is limited to situations involving ongoing concurrent private law proceedings before the two separate courts rather than the issue of the relative appropriateness per se of the respective potential fora.

C.  Forum Non Conveniens Forum non conveniens is a common law plea,58 normally by the defendant that a court with jurisdiction should decline to exercise its jurisdiction because the just determination of the dispute requires that the action should be tried elsewhere in a more appropriate forum.59 Lord Goff, in the leading case of Spiliada Maritime Corporation v Cansulex Ltd 60 focused on the issues of appropriateness and justice as underpinning the plea. The plea will only succeed where there is some other available forum, with competent jurisdiction, which is the appropriate forum for the action, and is clearly or distinctly more appropriate.61 Lloyd’s Law Reports (Lloyd’s Rep) 463, QBD; Re Cover Europe Ltd [2002] EWHC 861 (Ch). 54   Gubisch v Palumbo (n 52) para 11. 55   See for instance Dresser UK Ltd and others v Falcongate Freight Management Ltd and others [1992] 1 QB 502, CA. 56   The Tatry (n 51) para 55. 57   Sarrio SA v Kuwait Investment Authority [1999] AC 32; [1997] 3 WLR 1143; [1998] 1 Lloyd’s Rep 129, HL. See A Briggs, ‘Related Proceedings under the Brussels Convention’ (1997) 68 British Year Book of International Law 331. 58   See P Beaumont, ‘Great Britain’ in JJ Fawcett (ed), Declining Jurisdiction in Private International law (New York, Oxford University Press (OUP), 1995) 207–33. See the classic dicta by Lord Kinnear in Sim v Robinow [1892] 9 R 665, 668: ‘the plea can never be sustained unless the Court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice’. 59   See, eg, the discussion by Lord Goff of Chievely in Airbus Industrie GIE v Patel and others [1999] 1 AC 119, HL 131–33 outlining the distinctive civilian and common law approaches to clashes of jurisdiction. 60   Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460. It should be noted that Spiliada, as with a number of the other English authorities, concerned leave to serve out of the jurisdiction under RSC Ord 11 but the principles to be applied were held by Lord Goff to be exactly the same except for the reversal of the burden of proof. 61   It is not sufficient that the court is not the natural or appropriate forum, but also that there is another available forum which is clearly or distinctly more appropriate forum. See Argyllshire Weavers Ltd v A Macaulay (Tweeds) Ltd, 1962 SC 388, IH (1st Div); Morrison v Panic Link Ltd 1993 SC 631, IH (1st Div).

Coordination in the ECN  359 Appropriateness is determined by ascertaining how real and substantial the connection is between the forum (and alternative forum) and the dispute. If the defender satisfies the court that there is a prima facie more appropriate forum the plea will succeed unless the claimant can establish circumstances by reason of which justice requires that the plea should be repelled. The court requires to be satisfied that the other court is an alternative competent court to try the matter. There are a wide range of factors which may be relevant, and significant to varying degrees, in determining the appropriateness of a particular forum for dealing with a dispute. A starting point for the inquiry, and indeed its ultimate rationale, is the existence of a real and close connection between the forum and the dispute. A number of particular factors have been considered as relevant in the inquiry. The existence of litigation pending elsewhere is relevant (lis pendens) and this stems from a basic desire to avoid concurrent proceedings insofar as possible.62 The Spiliada principles provide that if the defender satisfies the court that there exists an available forum of competent jurisdiction which is clearly more appropriate, the plea of forum non conveniens will succeed unless the court is satisfied that ‘substantial justice’ cannot be done elsewhere. This is an ephemeral concept but some guidance has been provided by the House of Lords. The House of Lords has stressed that courts should not generally accept arguments based on the quality of justice likely to be afforded in the foreign jurisdiction, for instance where the claimant merely seeks to rely on, and enjoy the benefit of, certain procedural advantages. As Lord Bingham noted in Lubbe v Cape plc: The plaintiff will not ordinarily discharge the burden lying upon him by showing that he will enjoy procedural advantages, or a higher scale of damages or more generous rules of limitation if he sues in England; generally speaking, the plaintiff must take a foreign forum as he finds it, even if it is in some respects less advantageous to him than the English forum . . . It is only if the plaintiff can establish that substantial justice will not be done in the appropriate forum that a stay will be refused.63

In particular it was stressed in Lubbe v Cape plc that considerations of public interest and public policy which did not relate to the private interests of any of the parties and to securing the ends of justice in the particular case are to be left out of account.64 There has been considerable debate regarding the competency of the plea in relation to jurisdiction under the Brussels I Regulation and its predecessor, the Brussels Convention. The issue arose in Owusu, and was referred to the European Court.65 The Court ruled that the plea of forum non conveniens was not available where jurisdiction is based on the defender’s domicile under the Brussels Convention. The Court stressed the general principles 62   See, eg, Lord Brandon in The Abidin Diver [1977] 373 AC 423. See also: Argyllshire v Macaulay (n 61) in which it was noted that the issues in the different proceedings were not identical, the remedies sought and parties involved both different. 63   Lubbe v Cape plc [2000] 1 WLR 1545, 1554. See also Lord Hope of Craighead in Berezovsky v Forbes Inc (No 1) [2000] 1 WLR 1004. However in Spiliada, Lord Goff suggested obiter that although a stay would normally be awarded where an action would be time-barred in the appropriate forum, where a plaintiff did not act unreasonably in failing to raise an action in that forum within the relevant time-period, it would not be just to deprive the plaintiff of the benefit of having commenced proceedings within the forum’s time-period. 64   Lubbe v Cape plc (n 63) (HL) Lord Hope 1566–67. Lord Hope was particularly concerned about the approach in the United States where broad grounds of public policy as to where a case ought to be tried were relevant: see, eg, Union Carbide Corporation Gas Plant Disaster at Bhopal, India in December 1984, 634 F supp 842 (1986). See also Lord Salmon in Mackshannon v Rockware Glass Ltd [1978] AC 795 (HL) 822. 65   Case C-281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ and others [2005] ECR I-1383; see B Rodger, ‘Forum Non Conveniens Post-Owusu’ (2006) Journal of Private International Law 71.

360  Barry J Rodger underlying the Convention of legal certainty,66 uniformity and legal protection to parties.67 These guaranteed the claimant the availability of any of the fora provided under the Convention’s rules, an entitlement which would be seriously undermined if discretion were permitted. Advocate General Leger considered that the Brussels I Regulation would also exclude the application of the forum non conveniens plea in similar circumstances.68 Therefore the scope for application of the forum non conveniens approach before the courts in the UK is now very limited.69

VI.  Concluding Remarks A.  Lessons from the US? It should be noted at the outset that, unlike generally in relation to the substantive development of US antitrust law, we cannot learn any lessons in this context from the United States. The uneasy relationship between sectoral regulation and antitrust law application, exemplified for instance by Trinko,70 has very broad similarities to the issue of the powers utilised by the various regulators with concurrency in the UK. However, more generally the US experience is very different, and reminiscent of the pre-Regulation 1/2003, pre-ECN period. The States enforce State antitrust law – and only the federal antitrust authorities apply federal antitrust law, on the basis of the broadly defined interstate commerce criterion, the US equivalent of the EU’s effect on interstate trade criterion.

B.  The Private and Public Enforcement Context Compared My view is that the question of jurisdictional competence and appropriateness in relation to enforcement within the public network cannot be compared directly with private enforcement including the EU jurisdiction rules which are based on the principle that a court must exercise jurisdiction where an action has been raised before that court in accordance with one or more of the specific grounds of jurisdiction. The differing context within which public enforcement operates has been recognised generally by the acceptance by the courts, notably the ECJ, that public authorities, with scarce resources, have the right to prioritise their enforcement resources, and reject complaints on the basis of their prioritisation principles.71 It should also be recognised that the ECN network enforcement   cf G Cuniberti, ‘Forum Non Conveniens and the Brussels Convention’ (2005) 54 ICLQ 973, 977–79.   See, eg, J Harris, ‘Stays of Proceedings and the Brussels Convention’ (2005) 54 ICLQ 933, 939, noting that: ‘it is undeniable that cogent arguments based upon legal certainty can be made against the use of forum non conveniens under the Brussels Convention’. cf A Peel, ‘Forum Non Conveniens and European Ideals’ (2005) LMCLQ 363, 370–71. See A Briggs, ‘The Death of Harrods: Forum Non Conveniens and the European Court’ (2005) 121 LQR 535, 538–39. 68   Para 278 Brussels I Regulation. See in particular Recitals 8 and 11 of the Regulation. 69   See Cheshire, North and Fawcett, Private International Law, 14th edn (Oxford, OUP, 2008) 320–33. 70   See, eg, Verizon Communications v Trinko 540 US (2004); Credit Suisse Electronics (USA) LLC v Billing 551 US (2007). See, eg, D Sokol, ‘Limiting Anti-Competitive Government Interventions that Benefit Special Interests’ (2009) University of Florida Legal Studies Research Paper No 27. 71   Automec v Commission (n 11). See also the Complaints Notice; the OFT Prioritisation Principles, OFT 953, 2008 are available at www.oft.gov.uk. See the discussion in De Visser (n 3) 292–94. 66 67

Coordination in the ECN  361 system has arisen in the context of the wider development of new governance methods in the European Union,72 and the expansion of ‘networks’ generally:73 Rather than operating through a hierarchical structure of governmental authority, the ‘centre’ (of a network, a regime, or other governance arrangement) may be charged with facilitating the emergence of the governance infrastructure, and with ensuring coordination or exchange as between constituent parts. A further characteristic often present in new governance processes is the voluntary or non-binding nature of the norms.74

Although the debate surrounding new governance, and the Open method of coordination (OMC) in particular, tends to focus on new institutional arrangements for law and regulation formation, rather than enforcement, there are parallels with the more flexible, soft-law approach to coordination between different actors, such that the ECN and the processes operating can be considered as a differentiated strand of a broader process.75 The networkbased model probably works best, and is most appropriate in the context of an integrated economic and legal regime such as the European Union. As Oliver Budzinski has suggested, a greater focus on competence allocation based on jurisdictional rules may be more appropriate in the construction of an international multi-level competition policy system, but is neither necessary, nor appropriate in the EU context.76

C.  Case Allocation Methods Compared Despite anticipated difficulties of caseload jurisdictional disputes, there has been no evid­ ence to date of ‘positive’ jurisdiction conflicts between NCAs in the ECN network, and although there are potentially significant divergences in outcomes dependent on where a case is handled, rules on sanctions and processes are slowly converging across the ECN Member State NCAs.77 The ‘(re)allocation’ principles are ‘soft law’, a feature which is increasingly appropriate from a public law perspective. The competition law public enforcement context is clearly differentiated from the competition law private litigation context within the EU, where in accordance with the EU scheme for civil jurisdiction of the Member States’ courts, subject to certain limitations, the claimant has a right to insist on proceeding in a particular jurisdiction as long as the relevant claim can be brought within the ambit of one of several potentially overlapping rules which may be applicable. However, there are, as indicated, two potential means of resolving private litigation jurisdictional ‘conflicts’. The 72   See I Maher, ‘Regulation and Modes of Governance in EC Competition Law: What’s new in Enforcement’ (2007-2008) 31 Fordham International Law Journal 1713; see also J Scott and DM Trubeck, ‘Mind the gap: law and New Approaches to Governance in the European Union’ (2002) 8 European Law Journal 1, 5–6: Cengiz (n 3). 73   AM Slaughter, A New World Order (Princeton, Princeton University Press, 2004); S Wilks, ‘Agencies, networks, Discourses and the trajectory of European Competition Enforcement’ (2007) European Competition Journal 437. 74   G de Búrca and J Scott, ‘Introduction: New Governance, law and Constitutionalism’ in G de Búrca and J Scott (eds), New Law and Governance in the EC and US (Oxford, Hart Publishing, 2006) 3. 75   De Visser (n 3) particularly ch 1, ‘Modes of Governance in EC Law’. See also de Búrca and Scott, ‘New Governance, law and Constitutionalism’ (n 74) 6, where they discuss the hybridity thesis to explain the relationship between new governance and law: ‘hybridity is conceived primarily in terms of the interaction of hard and soft law, both substantively and procedurally’. See also J Scott and JJ Holder, ‘Law and New Environmental Governance in the European Union’, New Law and Governance in the EC and US (Oxford, Hart Publishing, 2006) 236. 76   See, eg, O Budzinski, ‘An International Multilevel Competition Policy System’ (2009) 6(4) International Economics and Economic Policy 24–37. 77   See especially the ECN Working Group on Cooperation Issues, Questionnaire Results (n 25).

362  Barry J Rodger first is the common law forum non conveniens plea, a flexible approach to determining the most appropriate forum to deal with a dispute. This has similarities with the approach underlying case allocation in the ECN, albeit a claimant does not instigate the process in the latter. However, under the Brussels I Regulation, a different approach is taken and the lis pendens rule is based on chronological priority as opposed to appropriateness, rooted in the idea that the court first seised deals with a case (as long as it has jurisdiction under one of the rules), regardless of which is the most appropriate, in order to enhance certainty and predictability. The civil jurisdiction rules are based on guarantees of a forum for a claimant to raise an action and as such can and should be contrasted with a more discretionary approach to enforcement from a public law perspective. Furthermore, this general approach underlies the specific approach adopted in the case of potential or actual conflicts of jurisdiction, or ‘case (re)allocation’ as it is referred to in the ECN public enforcement system. There are ongoing issues regarding sectoral regulators, the process involving leniency applications and the exercise of priorities which may lead to ‘negative conflicts’ but the nature of those issues only serves to demonstrate the different context from private-rights focused litigation, involving the public law interest inherent in competition law administrative enforcement.

D.  Mutual Lessons? Overall, what lessons can be learned by the public enforcement network within the ECN from the European rules of international private law jurisdiction and vice versa? First, one misconception is that jurisdiction/competence in either the private law or the public law context is based on the so-called ‘territoriality’ principle. Indeed, the purpose of the ECN is to seek to ensure that NCAs can apply EU competition law to activity and companies outwith their territorial reach, although inevitably in terms of enforcement and, for example, recovery of fines, assistance may be required from other NCAs. Similarly although the civil jurisdiction rules are based on a close connection with the dispute, and the primary rule is that one sues in the domicile of the defender, the rules allow actions to be raised in relation to delictual (anti-competitive) activity beyond the confines of the Member State.78 In my view, there is little scope for mutual learning given the limited equivalence between the two concepts of private law civil jurisdiction and public law case allocation, although parallels can be drawn. Both ‘systems’ start from a broad notion of appropriateness – either of the public enforcer/regulator to deal with a complaint or potential infringement or of the court to deal with a particular dispute – although the more specific term adopted is a ‘close connection’ between a dispute and the court. However, inevitably, the underlying notion of appropriateness is insufficient per se to allocate jurisdiction in a private law context, and this was recognised in the context of the drafting of the provisions of the original Brussels ‘double’ Convention. Jurisdiction rules broadly reflecting the notion of appropriateness achieve a careful legal balance as they respect the autonomy of the claimant but also protect the defendant by providing them with a reasonably foreseeable forum in which litigation

78   Before the national courts, additional complicated issues may arise as to the applicable law under the Rome II Regulation, which are absent in relation to NCA enforcement within the ECN – the only issue being whether domestic and/or EU law is to be applied.

Coordination in the ECN  363 may be raised against him.79 Furthermore, the lis pendens doctrine seeks to provide a further degree of certainty and predictability in the case of potential conflicts of jurisdiction between different courts. In this context, the common law doctrine of forum non conveniens has appropriately been rejected by the European Court in Owusu.80 The doctrine was developed outwith a coherent and harmonised body of civil jurisdiction rules and also embodies a potentially fractious exercise in assessing the availability of justice in different fora,81 which is inappropriate in a system of shared jurisdiction based upon mutual trust. The discretionary and flexible approach inherent in that doctrine and the ECN approach to ‘case allocation’ have similarities with the discretionary approach to ‘related actions’ in Article 28.82 Nonetheless, one has to understand the context of the Brussels I Regulation to appreciate the rationale behind the limited scope of a discretionary approach. One particular aspect is the emphasis on party autonomy, reflected in the impact of prorogation agreements which confer exclusive jurisdiction on particular courts,83 a factor which has no formal bearing on the ECN case allocation process.

E.  Future Issues in Case Allocation The European Judicial Network (EJN)84 cannot be considered as a true corollary of the ECN in this context, not only because of the more focused subject-matter ‘competence’ of the latter, and the fact the ECN only deals with EU (competition) law. The EJN is developing and evolving85 but it is difficult to conceive of any role for it in the coordination of the jurisdiction of the private courts across the EU, generally and specifically in relation to competition law disputes. Case allocation at the ECN level may be equally, and arguably more, significant than the civil jurisdiction rules in terms of impact on private parties, but it is predicated upon the notion of the EU public interest. Although there is no formal jurisdiction as such, ‘case (re)allocation’ is important, not primarily because of the concerns prior to the introduction of Regulation 1/2003 over the substantive application of the rules,86 but due to the potentially diverse prioritisation principles which may lead to underenforcement87 and the diverse nature of remedies and procedures and enforcement powers and sanctions available to the different NCAs within the ECN. It is in relation to this issue, and not jurisdiction/case allocation, that the greatest similarity exists as between the public and private processes, given the diversity of procedures and remedies for competition litigation across the EU national legal systems, a matter which has still to be addressed

79   See especially Owusu (n 65). See also, eg Case C-256/00 Besix SA v WABAG and Plafog [2002] ECR I-1737 in particular paras 24–26 and Case C-334/00 Fonderie Officinie Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS) [2002] ECR I-7357. 80  ibid. 81   See especially Lubbe v Cape plc (n 63) 1554. 82   Note that Art 6(1) Brussels I Regulation is different as it provides a rule of jurisdiction, reflecting both appropriateness and the desire to avoid fragmentation of disputes. 83   Art 23 Brussels I Regulation. 84   See www.ejn-crimjust.europa.eu/ejn/EJN_StaticPage.aspx?Bread=2. 85   See, eg, Council Decision (JHA) 2008/976 of 16 December 2008 on the European Judicial Network [2008] OJ L348/130. 86   See, eg, Riley (n 12). 87   This is not an issue where a national court has jurisdiction over a dispute.

364  Barry J Rodger following the Commission White Paper.88 However, although encouraging and facilitating private enforcement of competition law is important, as I have argued elsewhere,89 there is strength in Wouter Wils’ argument about the dichotomous public and private interest functions that are inevitably served by public and private enforcement respectively.90 In the context of a discretionary case allocation model within the ECN, two issues require to be considered: the possible introduction a form of harmonised prioritisation principles in relation to enforcement of Articles 101 and 102 TFEU to ensure consistency of approach and minimise the risks of negative conflicts of jurisdiction; and further (‘hard’ or ‘soft’) convergence of NCA powers, remedies and sanctions to minimise the potential for differential treatment of similar infringements and thereby reduce the significance of case (re)allocation within the Network.

88   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) available at http://ec. europa.eu/competition/antitrust/actionsdamages/documents.html#link1. See ‘A Little more Action please! The White Paper on damages actions for breach of the EC antitrust rules’ (2008) CML Rev 609–15; F Bulst, ‘Of Arms and Armour: The European Commission’s White Paper on Damages Actions for Breach of EC Antitrust Law’ (2008) Bucerius Law Journal 81–95. See also the earlier Green Paper: Commission, ‘Damages actions for breach of the EC antitrust rules’ (Green Paper) COM (2005) 672 final, 19 December 2005, and associated Staff Working Paper, SEC (2005) 1732, both available at http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html#greenpaper. See also Kon and Maxwell, ‘Enforcement in National Courts’ (n 2) 443; C Hodges, ‘Competition Enforcement, Regulation and Civil Justice: What is the Case? (2006) CML Rev 1381.  The Commission has recently undertaken a public consultation on collective redress: ‘Towards a Coherent European Approach to Collective Redress’, SEC (2011) 173, 4 February 2011, and is likely to adopt a Communication on the topic in 2012. See http://ec.europa.eu/justice/news/consulting_public/0054/sec/ 2011_173_en.pdf 89   See, eg, B Rodger, ‘UK Competition Law and Developments in Private Litigation’ in B Rodger (ed), Ten Years of UK Competition Law Reform (Dundee, DUP, 2010). 90   W Wils, ‘Should Private Antitrust Enforcement be Encouraged in Europe?’ (2003) 26(3) World Competition 473–88; cf CA Jones, ‘Private antitrust enforcement in Europe: a policy analysis and reality check’ (2004) 27(1) World Competition 13–24.

16 Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-border Antitrust Investigations DAMIEN MB GERARD*

I. Introduction At the core of the EU antitrust enforcement system lies the challenge of ensuring the effective and uniform application of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU, formerly Articles 81 and 82 of the EC Treaty) while relying on the diverse procedural frameworks in place in the various EU Member States, that is a diversity/effectiveness conundrum. During the wide consultation and the many debates that preceded the adoption of Regulation 1/2003,1 some doubted this was at all possible or at least practicable. Calls for harmonisation of national procedures and sanctions were voiced because of the fear that applying the same provisions under many different standards would lead to inconsistencies and hamper due process.2 To accommodate those concerns, the European Competition Network (ECN) was established as a forum to promote virtuous practices among the Commission and the various National Competition Authorities (NCAs), and to support the implementation of the cooperation mechanisms established by Regulation 1/2003.3 The functioning of the ECN and of those mechanisms, which include prominently the exchange of information within the network and the execution of cross-border fact-finding measures, was then spelled out in the Commission Notice on cooperation within the Network of Competition Authorities (ECN * Research fellow, Chair of European Law, Université Catholique de Louvain (UCL). 1   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 [now 101 and 102 TFEU] [2003] OJ L 1/1. 2   The notion of ‘due process’ is used in a generic sense to designate the constitutional safeguards designed to ensure compliance with the requirements of the rule of law in all legal proceedings directed against private persons. For a partial response to those concerns, see, eg, C Gauer, ‘Does the Effectiveness of the EU Network of Competition Authorities Require a Certain Degree of Harmonisation of National Procedures and Sanctions?’ in CD Ehlermann and I Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford, Hart Publishing, 2003). 3   See Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities No 15435/02, 10 December 2002.

366  Damien MB Gerard Notice).4 Those mechanisms were designed with care but still largely overlooked the coordination issues likely to arise from the diversity in procedural rules and standards governing – or impacting on – antitrust enforcement at national level. The reality of those issues was acknowledged in the first Commission’s report on the functioning of Regulation 1/2003 (the Report).5 Yet great uncertainty has remained up until now as to the proper way to manage those issues, in particular in the implementation of the cooperation mechanisms. The present contribution endeavours to highlight the main concerns surrounding the implementation of cooperation mechanisms, proposes a framework to reconcile effectiveness and due process imperatives and recommends ways to clarify the current state of uncertainty by means of additional guidance and/or, to a limited extent, amendments to Regulation 1/2003. Thus, part II maps out the coordination issues arising from the diversity/effectiveness conundrum created by Regulation 1/2003 (A) and outlines different approaches to address them (B). In turn, part III proposes a consistent framework to accommodate effective enforcement and due process concerns in cross-border antitrust investigations (A) and makes concrete proposals to put that framework into effect (B). Ultimately, the reasoning developed hereafter is generally relevant for the coordination of any international antitrust investigations, beyond the scope of Regulation 1/2003.

II.  Issues and Approaches From the outset, the European Commission (the Commission) saw the decentralisation of antitrust enforcement, ie the empowerment of NCAs to apply in full Articles 101 and 102 TFEU, as going hand in hand with the setting up of ‘a network of authorities operating on common principles and in close collaboration’, which became the ECN composed of the 27 NCAs and the Commission.6 The main operational objective sought for that network was to allow an authority considering a case, whether at Community or national level, [to] be in a position to pass a file on it to another authority, including any confidential information that might be used in procedures for infringement of the Community competition rules.

That proposition laid the foundation for Article 12 of Regulation 1/2003, which allows for ‘the exchange of information and the use of such information in evidence . . . between the members of the network’.7 Even though Article 12 is a general provision that can be relied upon on a stand-alone basis, it is inherently and even expressly linked to Article 22 Regulation 1/2003, which allows for mutual assistance among NCAs, and with the Commission, in carrying out inspections and other fact-finding measures. Together, those 4   Commission Notice on cooperation within the Network of Competition Authorities (ECN Notice) [2004] OJ C101/43. 5   Commission, ‘Report on the functioning of Regulation 1/2003’ (Commission Report) (Communication) COM (2009) 206 final, 29 April 2009, para 31; Commission, ‘Staff Working Paper accompanying the Report on the functioning of Regulation 1/2003’ (Staff Working Paper) SEC (2009) 574 final para 201. The two documents are available at http://ec.europa.eu/competition/antitrust/legislation/regulations.html. 6   Commission White Paper on the modernisation of the rules implementing Articles 85 [101] and 86 [102] of the EC Treaty [on the Functioning of the European Union] [1999] OJ C132/1 para 91. 7   Recital 16 Regulation 1/2003.

Cross-border Investigations  367 two provisions form the main horizontal cooperation mechanisms designed to enable cross-border antitrust investigations in the European Union. Practically, according to Article 22, ECN members can request each other to carry out inspections and any other fact-finding measures on each other’s behalf and for each other’s benefit. Any information collected pursuant to Article 22, or otherwise in the context of national proceedings, including confidential information,8 may then be communicated by the ‘transmitting authority’, ie the ECN member that gathered the information, to the ‘receiving authority’, ie the ECN member that requested the information, in accordance with Article 12. The information may then be used as evidence by the receiving ECN member ‘for the purpose of applying Article [101] or Article [102] of the Treaty and in respect of the subject matter for which it was collected by the transmitting authority’.9 Limitations apply in relation to the prosecution of individuals: information can be ‘used in evidence’ by the receiving authority only if the law of the transmitting authority ‘foresees sanctions of a similar kind’ for individuals or applies the ‘same level of protection of the rights of defence’ of individuals than under the law of the receiving authority.10

A.  Coordination Issues: Dealing with Diversity and Uncertainty Cross-border investigations, ie those relying on the cooperation mechanisms provided for in Articles 22 and/or 12 Regulation 1/2003, raise coordination issues because they involve interactions between different legal orders, which are both autonomous and diverse. National legal orders are autonomous in the sense that they each reflect a delicate balance between the exercise of State powers and the protection of fundamental rights, including in antitrust enforcement matters. They are diverse because they achieve such balance in different ways, in furtherance of the principle of procedural autonomy.11 The design and implementation of Member States’ respective law enforcement system is constrained by the guarantees embodied in the European Convention of Human Rights – in particular Article 6 on the right to a fair trial. When enforcing EU law, each system must also comply with general EU law principles, as defined by the European Court of Justice (ECJ). Nonetheless, in relation to the enforcement of Articles 101 and 102 TFEU, and in spite of the wave of procedural convergence prompted by the entry into force of Regulation 1/2003,12 8   A special regime applies to the exchange of leniency statements, which requires the consent of leniency applicants, except in very specific circumstances, as well as compliance with other safeguards (see paras 37–42 ECN Notice and the concluding remarks below). 9   Art 12(2) Regulation 1/2003. In addition, it can be used as evidence for the purpose of applying national competition law so long as it is applied in parallel to Community competition law and ‘does not lead to a different outcome’. This is the corollary of Art 3 Regulation 1/2003, which imposes the parallel application of EU and national competition law when trade between Member States is affected. 10   Art 12(3) Regulation 1/2003. In the latter case, the information exchanged ‘cannot be used by the receiving authority to impose custodial sanctions’. For an in-depth analysis of that provision, see II.B.ii.a below. 11   Procedural autonomy, ie reliance on national institutional and procedural frameworks, is a general feature of the enforcement of EU law. In the area of antitrust enforcement, it results from the express acknowledgment of the Member States’ freedom to design their antitrust enforcement system by Art 35 Regulation 1/2003 and para 2 ECN Notice. 12   In the aftermath of the entry into force of Regulation 1/2003, a growing convergence of national procedural rules has been observed leading, eg, to a progressive abolition of prior notification systems for agreements, some alignment of investigative powers, the introduction of commitments procedures and leniency programs in most Member States, etc. It is apparent, for example, that the exchange of information system introduced by Art 12 Regulation 1/2003 prompted the alignment of the French rules on access to file and business secrets on the EU standards so as to ensure that the French authorities could secure the communication of confidential information

368  Damien MB Gerard there remain important differences between the national enforcement frameworks, notably with respect to the rules regulating the exercise of inspections powers, implementing due process standards and governing sanctions. In the Report, the Commission acknowledges that, notwithstanding the ‘significant degree of voluntary convergence’ achieved so far, notably by policy initiatives within the ECN, differences between the Member States’ enforcement systems remain significant and require further examination and reflection.13 The existing or ‘remaining’ diversity in the Member States antitrust enforcement systems generate important information costs and asymmetries, to which parties to antitrust proceedings are particularly sensitive given the harsh sanctions to which they can be exposed. Even though coping with national differences is somewhat inherent to the enforcement of EU law in general, the limits of diversity are reached when the parties’ due process rights become threatened. Hence, the coordination issues arising from the implementation of the cooperation mechanisms introduced by Regulation 1/2003 – which are likely to arise from virtually any cooperative system set up with the purpose of facilitating international antitrust enforcement – need to be managed with the view to achieving a satisfactory balance between effective enforcement and due process. As explained further in section II.B below, solutions to the diversity/effectiveness conundrum created by Regulation 1/2003 lie for the most part in responses to three basic questions, reminiscent of the field of conflict of laws:14 (i) Which is the competent authority? (ii) What is the applicable law? and/or (iii) To what extent can ‘foreign’ evidence be ‘recognised’ and used by the competent authority of the forum? Regulation 1/2003 and the ECN Notice lack guidance in that respect, with the result of creating significant legal uncertainty, affecting the credibility of enforcement authorities and, in turn, undermining confidence in the whole system.

i. Diversity It is inherently difficult to capture the exact scope of the diversity still prevailing among the procedural rules and standards affecting antitrust investigations, in place in the various EU Member States. Doing so goes beyond the scope of this chapter but greater visibility in that respect is called for given the stakes at play. For present purposes, relying on a few examples and Commission statements as ‘diversity proxies’ appears reasonable. Thus, important differences remain between the national enforcement frameworks, notably with respect to the rules governing inspections powers, due process standards and sanctions. In relation to inspection powers, some NCAs are still deprived of the power to carry out inspections in private premises.15 Important differences also remain in relation to due process standards applicable to inspections, for example with respect to the scope of by other ECN members (see C Lemaire and J Gstalter, ‘The Silent Revolution Beyond Regulation 1/2003’ (October 2008) 2 Competition Policy International Journal, www.competitionpolicyinternational.com). 13   Commission Press Release IP/09/683 of 30 April 2009, ‘Antitrust: Commission adopts report on functioning of key antitrust Regulation’; para 33 Commission Report; para 203 Staff Working Paper. 14   The essence of conflict-of-law principles is indeed to cope with the tensions arising from the contacts of private matters with more than one legal order (see, eg, P Mayer, ‘Le phénomène de la coordination des ordres juridiques étatiques en droit privé’ (2007) 327 Collected Courses of the Hague Academy of International Law 23–369). 15   To our knowledge, this is still the case in four Member States, namely Bulgaria, Denmark, Italy and Portugal (see ECN Working Group on Cooperation Issues, ‘Results of the questionnaire on the reform of Member States national competition laws after EC Regulation No 1/2003’, 14 April 2008).

Cross-border Investigations  369 the power to take statements and ask questions on the spot,16 the obligation to specify the purpose of a fact-finding measure,17 the availability of counsel during inspections18 or the scope of legal privilege.19 As far as sanctions are concerned, whereas all NCAs have the power to impose fines on undertakings, the magnitude of such fines varies tremendously,20 and many NCAs still do not have the power to impose structural remedies,21 let alone criminal sanctions. Many of those differences, and various others, are acknowledged in the Report.22 Yet, the Commission appears reluctant to appreciate fully the legal consequences of that remaining diversity. Indeed, in the Staff Working Paper accompanying the Report,23 it admits, on the one hand, that the ‘still existing divergences on important procedural issues . . . may influence the outcome of individual cases’ (citing, for example, fines, criminal sanctions, liability of undertakings or association of undertakings, succession of undertakings, prescription periods, standard of proof and the power to impose structural remedies) and that legal issues [arose] as a result of divergent national procedural frameworks and concerned for instance the acquisition of evidence, due to divergences in national legislation concerning the requirements to conduct an inspection or proceed with a request for information and with regard to varying powers to conduct forensic IT searches.24

On the other hand, it also contends that, in spite of remaining differences, ‘Information collected in one system can . . . be used in evidence in another system’, almost unconditionally, because ‘Regulation 1/2003 assumes a sufficient degree of equivalence of the rights of defence in the different enforcement systems’.25 As further explained below, the latter statement derives largely from a bold but fictitious statement enshrined in Recital 16 Regulation 1/2003. 16   In Germany, for instance, cartel investigations conducted by the Bundeskartellamt with a view to imposing a fine are essentially equated to criminal proceedings. As a consequence, the individuals subject to such an investigation (and exposed to the risk of being fined) enjoy all the guarantees applicable in criminal proceedings including, for instance, the right to remain silent (s 136 of the Strafprozessordnung). 17   So-called ‘fishing expeditions’ remain theoretically possible in the Netherlands, for example, where inspections can be carried out without a decision describing the purpose of the investigation and in France, inspections carried out pursuant to Art L450-3 French Commercial Code (ie non-coercive inspections) are not subject to the duty to state reasons according to the French Cour de Cassation (see E David, ‘Cooperation among national authorities in the European Competition Network’ (2008) 4 Concurrences paras 13 ff). 18   Until recently, the right to request and obtain the effective assistance of counsel during an investigation was a contentious issue in France, for example (see Art L450-4(5) Commercial Code, as amended by Order 2008-1161 of 13 November 2008 modifying the regulation of competition (2008) 265 Journal Officiel de la République Française, 14 November 2008, Art 1 3° e), overruling Cass Com, 21 January 1997 (1997) IV Bulletin civil No 19). 19   Utmost diversity prevails in particular in relation to the recognition by NCAs of legal privilege to documents drafted by or correspondence with in-house counsel. For example, in-house counsel privilege is recognised in the UK, the Netherlands and Belgium but denied in France, Denmark and many Central and Eastern European countries. 20   eg, fines are capped at about e255,000 in Bulgaria, at 10% of domestic turnover in Belgium and at 10% of worldwide turnover in France (see the ‘Antitrust Encyclopedia’ available at www.concurrences.com). 21  To our knowledge, the following Member States do not have such power: Denmark, Estonia, Finland, Hungary, Lithuania, Latvia, Luxembourg, Poland, Portugal, Slovakia and Bulgaria (see ECN Working Group on Cooperation Issues (n 15)). 22   Para 33 Commission Report: ‘Notwithstanding, divergences of Member States’ enforcement systems remain on important aspects such as fines, criminal sanctions, liability in groups of undertakings, liability of associations of undertakings, succession of undertakings, prescription periods and the standard of proof, the power to impose structural remedies, as well as the ability of Member States’ competition authorities to formally set enforcement priorities. This aspect may merit further examination and reflection’. 23   Para 203 Staff Working Paper. 24   ibid para 247. 25   ibid para 240.

370  Damien MB Gerard The Commission’s reluctance to acknowledge the legal consequences resulting from the remaining diversity among the rules and standards applicable to antitrust enforcement at national level, to the point of affecting the outcome of individual cases, is a source of great uncertainty, as apparent from the current legal framework. At this stage, though, suffice is to say that the differences in procedural enforcement rules and standards highlighted above are significant and raise important questions such as: (i) To what extent can an NCA rely as evidence on information obtained abroad, which it could not have obtained pursuant to its own investigation powers or which would be privileged under its own due process rules? (ii) Can information obtained abroad be admissible as evidence if it was collected during an inspection carried out without the presence of counsel or without specifying the purpose for which it was collected? Responses to those questions are fundamental to ensure effective judicial protection for undertakings facing cross-border investigations and, generally, the observance of the rule of law in the application of Articles 101 and 102 TFEU.

ii. Uncertainty In a cooperative enforcement system aimed to facilitate cross-border investigations, effective judicial protection mandates ‘management rules’ capable of solving the coordination issues resulting from the differences between the national enforcement frameworks. Regulation 1/2003 and the ECN Notice contain too little and confused guidance in that respect. The few relevant provisions that can be found therein are scattered all over and do not offer a consistent set of rules, with the result of creating lasting uncertainty. It is telling, for example, that paragraph 28 of the ECN Notice, which is supposed to deal with the safeguards associated with the exchange of information pursuant to Article 12 Regulation 1/2003, is silent on the competent authority and the law applicable to a review of the legality of such exchange and/or of the information-gathering process. Thus, it follows essentially from Article 22(1) Regulation 1/2003, read in conjunction with Article 12 and the ECN Notice, notably paragraph 29, that inspections and other factfinding measures are conducted pursuant to the laws of the Member State whose NCA actually carries out the relevant measure.26 In other words, as provided for in the ECN Notice: ‘Where an NCA acts on behalf of another NCA, it acts pursuant to its own rules of procedure, and under its own powers of investigation’.27 The same rule applies a fortiori in the case of information obtained in the framework of purely national (or EU) proceedings. Consequently, the legality of these measures ought to be reviewed by the competent review authority in that Member State and pursuant to the laws and principles applicable in that Member State. This is confirmed by paragraph 27 ECN Notice: The question whether information was gathered in a legal manner by the transmitting authority is governed on the basis of the law applicable to this authority. When transmitting information the transmitting authority may inform the receiving authority whether the gathering of the information was contested or could still be contested.

At the same time, paragraph 4 ECN Notice establishes that the NCA handling a case, ie the NCA that will eventually decide on the merits of the case, ‘remains fully responsible for ensuring due process’ regardless of whether it conducts the investigation entirely on its

  See also para 246 Staff Working Paper.   Para 29 ECN Notice.

26 27

Cross-border Investigations  371 own or with the assistance of other NCAs (or the Commission).28 It appears logical that the authority that will actually rule on the case and possibly sanction private parties, and thus affect their legal position, is subject to the due process standards mandated by its own domestic law. It follows from the above that parties subject to cross-border investigations are exposed to the application of two sets of rules and thus, potentially, double standards: those applicable in the ‘transmitting’ Member State where the information has been gathered, pursuant to Article 22 Regulation 1/2003 or by the transmitting NCA (or the Commission) acting independently, and those of the ‘receiving’ Member State where the information will be used as evidence.29 How then are the two (or more) legal orders at play in cross-border investigations supposed to interconnect and combine so as to balance effective enforcement and due process concerns? Indeed, the rules elicited so far are not helpful, as such, in managing the coordination issues arising from the remaining diversity between national enforcement frameworks. Solutions, if any, have therefore to be found elsewhere. The only relevant EU provision to that effect appears to be Recital 16 Regulation 1/2003. Recital 16 states the following: When the information exchanged is used by the receiving authority to impose sanctions on undertakings, there should be no other limit to the use of the information than the obligation to use it for the purpose for which it was collected given the fact that the sanctions imposed on undertakings are of the same type in all systems. The rights of defence enjoyed by undertakings in the various systems can be considered as sufficiently equivalent.

In essence, Recital 16 mandates the quasi-unconditional recognition as evidence by and before the receiving authority of information obtained by, and according to the law applicable to, the transmitting authority. Most striking is the apparent exclusion of any possibility on the part of the receiving authority of opposing or conditioning such recognition,30 notably for reasons of public policy, the assumption being that due process standards are ‘sufficiently equivalent’ throughout the EU. In effect, Recital 16 conveniently clears at once all issues resulting from the remaining diversity among the national antitrust enforcement frameworks. How extraordinary such a solution may seem, it finds support in paragraph 8 of the Joint Statement of the Council and the Commission recorded at the time of the entry into effect of Regulation 1/2003, which contains the following: ‘Member States accept that their enforcement systems differ but nonetheless mutually recognise the standards of each other’s system as a basis for cooperation’.31 One could argue, of course, as to the exact scope of the terms ‘as a basis for cooperation’, as one could also doubt that Member States effectively consented to the extremely far-reaching solution embodied in Recital 16. At least, one

28   Para 4 ECN Notice: ‘Consultations and exchanges within the network are matters between public enforcers and do not alter any rights or obligations arising from Community or national law for companies. Each competition authority remains fully responsible for ensuring due process in the cases it deals with’. 29   As Prof L Idot underlines: ‘Le fait que l’information ait été obtenue légalement dans le pays d’origine peut ne pas suffire et la question se pose de savoir si l’information pourra être utilisée dans le pays de réception, dans l’hypothèse où celui-ci connaît des règles différentes’ (L Idot, ‘Pluralisme normatif et droit communautaire. L’exemple des pouvoirs d’investigation des autorités de concurrence’ in C Baudenbacher et al (eds), Liber Amicorum in honour of Bo Vesterdorf (Brussels, Bruylant, 2007) 394). 30   Leaving aside the situation of individuals (see II.B.ii.a below), Art 12(2) Regulation 1/2003 provides that the use of information obtained abroad as evidence against legal persons is limited to the enforcement of Art [101] and/or [102 TFEU] in respect of the subject matter for which it was collected by the transmitting authority. 31   Council doc 15435/02 (n 3). See also para 2 ECN Notice.

372  Damien MB Gerard should concede that it appears consistent with the Commission’s willingness, at the time, to enable the ‘free movement of evidence’ in antitrust matters.32 The solution advocated by Recital 16 is highly problematic, in two ways. First, from a substantive point of view, it could result in a lasting imbalance between, on the one hand, the exercise of public enforcement powers and, on the other hand, compliance with due process rights. As demonstrated in the remainder of this contribution, it is clearly unwarranted in terms of outcomes as it negates the mere fact of the remaining diversities among national antitrust enforcement frameworks and implies the possibility for cross-border investigations to lead to a lowering of the parties’ due process rights. Moreover, it is at odds with previous (and latter) attempts to foster enforcement cooperation in civil and criminal matters within the EU and, generally, with the current stage of the European integration process. Second, it also appears inconsistent with other provisions of the decentralisation package, ie Regulation 1/2003 and the accompanying Commission’s communications and notices, and therefore perpetuates a state of uncertainty, which only reinforces the concerns arising from its substance. To start with, the solution proposed by Recital 16 is nowhere to be found in the original legislative proposition of the Commission back in 2000, which envisioned a system of ‘exchange of information . . . between the members of the network . . . , subject to appropriate guarantees for undertakings’.33 Likewise, publicly available minutes of debates held within the Council at the time do not refer either to such solution. It is also inconsistent with repeated calls voiced during the debates that preceded the adoption of Regulation 1/2003 for caution in designing exchange of information rules, notably to prevent any harm to the parties’ due process rights.34 Most notably, it is irreconcilable with other provisions, in particular paragraph 4 ECN Notice. As noted, paragraph 4 establishes that ‘each competition authority remains fully responsible for ensuring due process in the cases it deals with’. As a consequence, the authority in charge of a case ought to remain free to determine the admissibility of any piece of evidence and could not be constrained by a duty to recognise as such information received from another NCA (or the Commission), unconditionally. Moreover, it expressly adds that ‘consultations and exchanges within the network are matters between public enforcers and do not alter any rights or obligations arising from Community or national law for companies’ (emphasis added). Yet, the solution articulated by Recital 16 carries precisely the potential for altering those rights. Before suggesting different approaches for the design of management rules, it is worth mentioning another set of very practical issues that may affect the judicial protection of parties to cross-border antitrust investigations and need to be factored into the design of a consistent framework to address the diversity/effectiveness conundrum created by Regulation 1/2003. Indeed, in many cases, parties to antitrust proceedings will not be informed of the gathering of evidence abroad either by means of a request for mutual assist­ance under Article 22(1) Regulation 1/2003 or otherwise. They could become aware of it if the fact-finding measure were directed against them (for example, inspection in one 32   See, eg, M Monti, ‘Fighting Cartels Why and How? Why should we be concerned with cartels and collusive behaviour?’, 3rd Nordic Competition Policy Conference, Stockholm, 11–12 September 2000 (SPEECH/00/295). 33   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, Recital 14. 34   See generally CD Elhermann and I Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford, Hart Publishing, 2004) in particular the contributions of M Bloom, M van der Woude and S Martinez Lage, 369–418.

Cross-border Investigations  373 of their subsidiaries or in the second residence of an executive) and if the persons directly subject to the measure are specifically notified of the purpose and legal basis thereof. Otherwise, or if the fact-finding measure were directed at third parties (for example, a trade association or a former employee), the parties may not become aware of the execution thereof and could then be deprived of the right to challenge effectively its legality.

B.  Approaches: Managing Diversity to Ensure Legal Certainty As noted, coordination issues arise in cross-border antitrust investigations because the cooperation mechanisms introduced by Regulation 1/2003 entail interactions between different legal orders, which provide for and abide by different procedural rules and standards when enforcing Articles 101 and 102 TFEU. Those coordination issues need to be managed to ensure legal certainty and, thereby, the effective judicial protection of parties subject to cross-border antitrust investigations. The management of conflicts between – and the coordination of – legal orders is the essence of conflict-of-laws principles. Even though those principles were developed in view of solving coordination issues arising in private disputes, the pursuance of public prosecutions beyond national borders triggers similar issues and may therefore call for similar solutions.35 Indeed, as developed in this section, designing management rules to address the diversity/effectiveness conundrum created by Regulation 1/2003 requires reasoning in terms of jurisdiction, applicable law and recognition, which constitute the three pillars of the conflict-of-laws field. Drawing inspiration from those principles, three possible approaches to the management of coordination issues arising in cross-border antitrust investigations are reviewed successively below.

i.  Conflictualist Approach Professor Laurence Idot was among the first scholars to draw attention to the relevance of conflict-of-laws principles in managing coordination issues arising from the decentralisation of EU competition law enforcement,36 and to propose a consistent theory to that effect.37 The premise of Professor Idot’s theory lies in the fact that the information exchanged within the ECN bears the closest relationship with the legal order of the transmitting Member State, ie with the law of the country where it was obtained or gathered in the first place. From there, she derives a conflict rule assuming that the relevant connecting factor to determine the applicable law ought to be the authority that carried out the inspection or the fact-finding measure which enabled the collection of the information. In her argument, the roots of such rule can be traced back to paragraph 27 ECN Notice according   See, eg, H Kelsen, General Theory of Law and State (Cambridge, Harvard University Press, 1945) 243–44.   See L Idot, ‘Le nouveau système communautaire de mise en œuvre des articles 81 et 82 CE’ (2003) Cahiers de Droit Européen 283–371; Idot, ‘Pluralisme normatif ’ (n 29). 37   Idot (n 29) 400–01. L Idot labels her theory ‘bilateral’ in reference to the prevalent technique in today’s choice-of-law theory, which aims to determine the competent legal order by means of connecting factors that are deemed to ensure that the applicable law bears the closest relationship with the relevant legal issue. That technique is deemed bilateral because it can result equally in the designation of the law of the forum seised (lex fori) or the law of a different ‘foreign’ legal order. Yet, L Idot’s theory does not fit well that traditional definition because it leads to the systematic designation of the law of the transmitting NCA as sole authority applicable to the determin­ ation of both the legality of the information-gathering process and of the admissibility of that information as evidence before the receiving NCA. This ambiguity is a testimony to the difficulty of transposing the exact categories, and not only the principles, of private international law to the public sphere. 35 36

374  Damien MB Gerard to which ‘The question whether information was gathered in a legal manner by the transmitting authority is governed on the basis of the law applicable to this authority’. Accordingly, appeals alleging an improper use of investigatory powers by the transmitting NCA would need to be brought, exclusively, before the court or authority competent to review the exercise, by the transmitting NCA, of its investigation powers. Once such appeals are settled, however, the information ought to be held admissible before the receiving NCA and the legality of the gathering thereof could not be further challenged in the receiving Member State. Moreover, the receiving NCA would be barred from raising any public policy exception to the admissibility of evidence in case the due process standards of the transmitting Member States were to be lower than its own ‘because the law of the originating State complies by definition with the fundamental rights standards provided for by Community law’. The cases where such solution could lead to a ‘shocking’ solution, Idot argues, are limited to the situations of individuals or leniency applicants, which have been properly anticipated by Regulation 1/2003 and the ECN Notice. Professor Idot’s approach appears to have the advantage of designating one single legal order to determine all issues relating to the gathering, exchange and use of evidence within the ECN, ie to regulate the cooperation mechanisms introduced by Regulation 1/2003. To reach that conclusion, she devises and relies on a conflict rule, hence the ‘conflictualist approach’. However, that approach is problematic for a number of reasons, some technical and practical, others more fundamental. The first among the technical and practical reasons to oppose the conflictualist approach relates to the determination of the relevant connecting factor. In effect, paragraph 27 of the ECN Notice does not embody a conflict rule but simply states that the inspections and other fact-finding measures carried out pursuant to Article 22 Regulation 1/2003 are conducted pursuant to the law of the Member State whose NCA has been requested to carry out the relevant measure, ie, territorially competent. Simply put, that principle does not imply that once information has been legally collected by the transmitting NCA, it ought to or could be admitted as evidence, without further review, by the receiving NCA. To the contrary, paragraph 27 ECN Notice and Article 22 embody the principle of territoriality in the exercise of public powers and, in essence, institutionalise an ad hoc system of inter­ national rogatory commissions.38 In turn, it is highly debatable whether the legal issue at stake, namely the extent to which the taking of evidence complies with the requirements of due process and the rule of law, bears a closer relationship to the legal order of the Member State where the information was gathered than with the legal order of the Member State where it will be used as evidence, possibly to impose a quasi-criminal sanction. In fact, as further developed in section III.A below, parties to antitrust proceedings ought to be entitled to benefit from the due process rights provided for in the legal order of the NCA that will eventually affect their legal position and which are presumably commensurate to the nature and scope of the remedies and sanctions applicable to them.39 Secondly, it is impracticable and ineffective in terms of judicial protection to rely exclusively on the judicial review of the exercise of its investigatory powers by the transmitting NCA. Indeed, as noted at the end of section II.A.ii, in many cases parties to the antitrust 38   Note that many national competition laws provide for the possibility to authorise officials of the NCA that has requested mutual assistance pursuant to Art 22 Regulation 1/2003 to take part in the execution of the measure sought. See, eg, L450-1(2) French Commercial Code. 39   On the relation between remedies, sanctions and due process rights, see, eg, Gauer, ‘The Effectiveness of the EU Network’ (n 2) 187.

Cross-border Investigations  375 proceedings on the merits may well remain unaware of the origin of information used in evidence against them until months if not years after it has been gathered. They are therefore unlikely to be able to challenge effectively the legality of the gathering thereof, assuming they could, for example, as a matter of standing. On a different but still practical note, discrepancies between the procedural rules and standards applicable in the legal order where the information was obtained and in the legal order that will eventually issue a prohibition decision, combined with remedies and/or sanctions, are capable of creating ‘shocking’ situations, from a due process point of view, for legal persons as well as and not solely for individuals or leniency applicants. In fact, legal persons are the main, if not the only real, targets of antitrust investigations and prosecution in the European Union so far and it is therefore by them that the burden of diversity and uncertainty is borne predominantly. In addition, there are some fundamental objections to the conflictualist approach. First, it is true that Member States share in common fundamental rights standards as signatories of the European Convention of Human Rights. Moreover, they are all bound by general EU law principles when applying the EU Treaties, including the antitrust provisions thereof. However, Member States comply with those common standards in their own ways, for example, by articulating specific due process rules corresponding to the specific design of their law enforcement system. It is precisely this diversity that creates the possibility of an imbalance between cross-border enforcement and due process in individual cases. Overlooking that situation amounts to negating the principle of procedural autonomy and allowing for the possibility of substandard outcomes. As a result, the fact that Member States all abide by common general and abstract standards cannot deprive the competent authorities from ensuring that the rules giving effect to the fundamental right standards they share in common are respected in each individual case, with due regard for imperatives of legal certainty and compliance with the rule of law.40 In turn, the conflictualist approach appears flawed in so far as it would bar the receiving NCA from controlling compliance with the due process rules in place in its own legal order when considering the admissibility of information as evidence, either by raising a public policy exception or otherwise as a matter of principle. Secondly, the due process rules articulated in each legal order necessarily embody public policy interests. Therefore, the due process rules of the forum have a natural vocation to apply each and every time a matter is handled by or arises before a domestic authority. Moreover, the control of the admissibility of evidence in any particular case is the primary vehicle for sanctioning breaches of those rules during the investigation leading to the prosecution of a case, by setting aside evidence obtained improperly. It should therefore come as no surprise that conflict-of-laws theory generally views the control of the admissibility of evidence as belonging to the realm of the lex fori, as a result of the centuries-old distinction between matters of substance and matters of procedure, the latter deriving from the States’ imperium with respect to the design of its own internal organisation.41 40   A similar reasoning was developed by the German Constitutional Court in the European Arrest Warrant Act case in so far as it distinguished clearly between the abstract and general principles common to all Member States, which form ‘a basis for mutual confidence’ among Member States, from the effectuation of those principles in individual cases, which require a specific examination of whether the rights of the person to be extradited are effectively guaranteed. Conversely, the absence of such examination (ie of effective remedies) carries the risk of undermining confidence in ‘the reliability of the legal system [that] is an essential prerequisite for freedom’. See Bundesverfassungsgericht (German Federal Constitutional Court), 2 BvR 2236/04 of 18 July 2005, paras 63–116 (especially 79, 84, 88, 89, 95, 98 and 105) available at www.bverfg.de/entscheidungen/rs20050718_2bvr223604en. 41   See generally P Mayer and V Heuzé, Droit international privé (Paris, Montchrestien, 2007) 327–36, especially 324.

376  Damien MB Gerard In view of the above, the conflictualist approach appears unsatisfactory to manage the coordination issues arising from the cross-border investigation mechanisms set up by Regulation 1/2003 and to balance adequately effective enforcement and due process.42 Ultimately, it appears mainly to provide an alternative theoretical justification for the uncertain ‘recognition’ approach that can be derived from Recital 16 Regulation 1/2003, provisions of the ECN Notice and certain Commission’s statements mentioned in the Staff Working Paper, as already mentioned in section II.A.ii above.

ii.  Cumulative Approach As apparent from the above, a cumulative approach – whereby the legality of fact-finding measures is assessed according to the law applicable to the transmitting NCA and the admissibility of information in evidence is assessed according to the law applicable to the receiving/deciding NCA – appears better suited to accommodate legal certainty and the protection of due process rights, on the one hand, and effective cross-border antitrust enforcement, on the other hand. This is due mainly to the diversity of procedural rules applicable to antitrust investigations at national level, on which cross-border enforcement relies, and to the nature of the issues at stake, namely evidence and due process. That approach, which is spelled out fully in section II.A, relies on the ‘will of application’ of the due process rules of each forum to frame the exercise of delegated State powers by public authorities, whether acting in an investigatory or deciding capacity. It is also motivated by the difficulty of dissociating the legality of a decision on the merits from the legality of the investigation on the outcome of which it is based. Moreover, it reflects the incomplete nature of the European Union legal order. The cumulative approach is neither marginal nor backward and is not even innovative.43 Its seeds can be found in Article 12(3) Regulation 1/2003 in relation to the sanctioning of individuals, it is reflected in the first case reportedly decided by an NCA on the basis of evidence obtained by means of Article 22 Regulation 1/2003,44 and has been relied on by the European Court of First Instance (CFI) and ratified by Advocate General Mengozzi of the European Court of Justice, in relation to the use as evidence in proceedings conducted by the Commission of information obtained from authorities of non-EU countries.45 a.  The Position of Individuals in Cross-Border Investigations In relation to the imposition of sanctions on ‘natural persons’, ie individuals, the first indent of Article 12(3) Regulation 1/2003 provides that information exchanged pursuant to the first paragraph of that provision ‘can only be used in evidence . . . where the law of the transmitting authority foresees sanctions of a similar kind in relation to an infringement of 42   It is even doubtful that the framework presented above is truly bilateral since it designates systematically the legal order of the origin of the evidence as the source of the validity thereof. 43   For a case of application of a cumulative approach in relation to a privilege claim challenged before a US court in an international antitrust case see, eg, Renfield Corp v E Remy Martin & Co and others 98 FRD 442 (D Del 1982). 44   Conseil de la concurrence, Decision No 08-D-30 of 4 December 2008 pertaining to practices implemented by Shell, Esso, Chevron and Total for the supply of kerosene at the airport of the Reunion Island, available at www. autoritedelaconcurrence.fr/user/avisdec.php?numero=08D30. 45  Case T-59/02 Archer Daniels Midland Co v Commission [2006] ECR II-3627 and Opinion of Advocate General Mengozzi of 6 November 2009 in Case C-511/06 P Archer Daniels Midland Co v Commission [2009] ECR I-5843.

Cross-border Investigations  377 Article [101] or Article [102] of the Treaty’ (emphasis added). The second indent of that provision adds that when no ‘sanctions of a similar kind’ are provided for in the legal order of the transmitting NCA, the information exchanged can be used as evidence only if it ‘has been collected in a way which respects the same level of protection of the rights of defense of natural persons as provided for under the national rules of the receiving authority’. However, in that situation, the imposition of custodial sanctions is excluded. Interestingly, Article 12(3) postulates the existence of a link between the due process standards in light of which the admissibility of evidence ought to be decided and the sanctions that can be imposed on the merits by the receiving NCA. However, the notion of ‘sanctions of a similar kind’ referred to in the first indent is inherently and unfortunately vague. In that regard, the ECN Notice suggests that the qualification of sanctions as administrative or criminal is not determinative.46 Instead, the ECN Notice relies exclusively on a distinction based on the nature of the sanctions, namely custody versus fine. The assumption that the rules giving effect to due process standards are generally commensurate to the nature of sanctions rather than to their qualification or magnitude, ie their actual impact on the position of individuals, is highly disputable. In specific cases, such presumption is dangerous and risks leading to substandard outcomes in terms of due process; rather, effective judicial protection would require a case-by-case analysis of the similarity of due process rules rather than of the similar nature of sanctions. Moreover, such an approach appears unworkable. Indeed, the first indent of Article 12(3) mandates in theory the receiving NCA to: (i) determine whether the legal order of the transmitting NCA provides for sanctions against individuals in antitrust matters; (ii) in the affirmative, determine whether those sanctions include fines and/or jail sentences, or the latter only; and (iii) if both the transmitting and the receiving NCAs are empowered to impose fines and/or jail sentences, or the latter only, then the receiving NCA ought to admit the information received pursuant to Article 12 as valid evidence with no consideration for the way in which it was obtained and the due process rules accompanying antitrust investigations in the legal order of the transmitting NCA. Not only may such a solution lead to an erosion of due process rights in specific cases, but it is very doubtful that the receiving NCA would agree to abide by such a reduced rule of law standard. Take the following stylised example: (i) assume that both the UK and French legal orders provide for criminal fines and jail sentences for individuals taking part in collusive agreements; (ii) assume that the UK legal order recognises legal privilege for in-house legal counsel, whereas the French legal order does not; and (iii) assume that the UK Office of Fair Trading (OFT) requests the Autorité de la Concurrence to carry out an inspection in France on its behalf; it is highly doubtful that the competent UK authority or court would, let alone should, agree to consider as evidence information obtained by the French authorities that would be covered by in-house legal privilege in the UK.47 Instead, it is more likely,   Para 28(c) ECN Notice.   This example also highlights the practical issues relating to the traceability of the information gathered and then exchanged by means of Art 12 Regulation 1/2003. In addition, concrete cases are likely to be much more complex. Imagine for example that French law provides for jail sentences for individuals only in cases where they have played a leadership role in a cartel or only in case of recidivism. How would the leadership or recidivism condition affect the outcome of the ‘similarity’ assessment mandated by the first indent of Art 12(3)? Arguably, in view of the stakes at play, this kind of uncertainty is hardly tolerable. It also highlights the danger of making the benefit of due process rights dependent on exogenous, general and abstract criteria and, hence, pleads in favour of a case-by-case examination of each situation in light of the due process rules of the forum, ie for a unilateral approach. 46 47

378  Damien MB Gerard and rightly so, that the UK authority or court would discard such information following an assessment of its admissibility as evidence pursuant to the due process rules applicable in the UK for the gathering thereof. This is also the solution adopted by the second indent of Article 12(3). As noted, the second indent of Article 12(3) Regulation 1/2003 envisages the possibility that the legal order of the transmitting NCA does not provide for ‘similar sanctions’ against individuals for violations of Articles 101 and 102 TFEU. In that case, the imposition of sanctions on individuals (to the exclusion of jail sentences) is conditioned on an assessment by the receiving NCA as to whether the information relied on as evidence has been obtained in accordance with due process rules which can be deemed of ‘the same level’ as those applicable in its own legal order. The notion of ‘level of ’ due process rights is inherently ambiguous but, practically, this solution entails a review by the receiving NCA of the admissibility as evidence of information collected abroad in light of its domestic due process rules and requirements applicable in the same or similar situation. In turn, it amounts to the cumulative application of each legal order’s due process requirements, which appears as the only valid solution to reach an adequate balance between effective enforcement and due process. Generally, the rationale for Article 12(3) lies in the fact that ‘individuals normally enjoy more extensive rights of defense’ whereas ‘they may be subject to substantially different types of sanctions across the various [national enforcement] systems’.48 In other words, although they ought to benefit from a high level of protection when subject to the exercise of State powers, generally, the great(er) diversity in the types of sanctions they may be subject to across national legal orders (compared to companies, thus including jail sentences) makes them particularly vulnerable to great differences in terms of due process standards. However, both the premise and the implementation of such policy objective are questionable. First, the fact that natural persons ‘normally enjoy more extensive rights of defense’ may be true as a matter of degree but not as a matter of principle and it can hardly be used to deny effective due process to companies that are the main targets of cross-border antitrust enforcement in the EU. Second, it is unclear whether the first indent of Article 12(3), in particular by disregarding the importance of the magnitude of sanctions, provides a level of protection commensurate to those alleged ‘more extensive rights of defense’ to which individuals are said to be entitled. Finally, it appears that some of the above considerations may have surfaced during the consultation organised by the Commission in preparation for its five-year Report on the functioning of Regulation 1/2003. Indeed, the Staff Working Paper accompanying the Report acknowledges the effectiveness of the cumulative approach – referred to by the Commission as the ‘double barrier approach’ – as an alternative to the rule provided for by the second indent of Article 12(3) and in particular the exclusion of custodial sanctions, which is deemed problematic in view of possible future international cooperation agreements.49 The statement is quite dubious, though, since that provision already embodies, in practice, a cumulative approach. In contrast, the Commission fails to recognise the unique potential of the cumulative approach in ensuring an appropriate balance between effective cross-border enforcement and due process.

  See, respectively, para 28(c) ECN Notice and Recital 16 Regulation 1/2003.   Para 245 Staff Working Paper and the referral in fn 304 to part 7.2 Staff Working Paper.

48 49

Cross-border Investigations  379 b. The Kerosene Case On 4 December 2008, the French NCA (Conseil de la concurrence, which in the meantime has become the Autorité de la concurrence) adopted the first reported decision pursuant to Article 101 TFEU (at the time still Article 81 EC), based on evidence obtained by means of the cooperation mechanisms provided for by Regulation 1/2003.50 Quite remarkably, the Conseil de la concurrence considered it quite natural in that case to assess the admissibility of evidence gathered abroad pursuant to Article 22 Regulation 1/2003 in light of its domestic due process standards. In the course of its investigation, the French prosecutor – the Rapporteur Général – had requested the assistance of the OFT to carry out an inspection at the premises of various aeroplane fuel companies located in the UK. Those inspections were successful in uncovering useful information and the French prosecutor relied on that information as evidence to establish its case. In its decision, the Conseil de la concurrence addressed objections raised by the defendants with respect to the taking of evidence abroad pursuant to Article 22 of Regulation 1/2003, its communication pursuant to Article 12 and its subsequent use in proceedings leading to the imposition of fines. At paragraphs 186 and 187 of its decision, the Conseil de la concurrence stated the following: 186. Articles 22 and 12 of Regulation 1/2003 set forth a procedure in three stages, each calling for separate control: – the request for assistance issued by the NCA that wishes to benefit therefrom; – the authorisation and performance of the inspection carried out by the addressee of the request for assistance; – and the use of the information obtained (reliance as evidence) by the NCA on behalf of which the inspection has been carried out. 187.  The first and third stages [thus the request for assistance and the use of the information] are subject to the domestic law of the Member State whose NCA requested assistance [ie French law], under the control of the competent courts of that Member State. In contrast, the second stage [the performance of the inspection] is subject to the domestic law of the Member State whose NCA was the addressee of the request for assistance [ie UK law], under the control of the competent courts of that other Member State (author’s translation).

Even though the procedural issues raised in the Kerosene case pertained to the applicability of Article 22 – in particular whether trade between Member States was affected – and the legality of the inspection as carried out by the OFT, the Conseil de la concurrence took the view that, as a matter of principle, it was entitled to review the admissibility as evidence of the information gathered in the UK pursuant to its domestic laws and due process rules.51 Thus the decision of the Conseil de la concurrence adopted a cumulative approach based on the underlying view that due process rules affecting the performance of fact-finding measures and the admissibility of evidence have each vocation to apply in cross-border cases.

  Conseil de la concurrence, Decision 08-D-30 (n 44).   This was a statement of principle and therefore the view according to which due process standards applicable in the UK are ‘in any event’ stricter, how open to question that view is, so that there was no risk of a finding of inadmissibility, is irrelevant. 50 51

380  Damien MB Gerard c.  The European Courts and Evidence Obtained from Third Countries On 6 November 2008, Advocate General Mengozzi issued an Opinion dealing with various evidentiary issues arising in cartel cases pursuant to Article 101 TFEU, including the admissibility in proceedings carried out by the Commission of materials obtained in a third (non-EU) country, namely transcripts of tape recordings made by the US Federal Bureau of Investigations (FBI). In that regard, the Advocate General stated the following: 119.  In any event, I fully endorse the view . . . that, for the purposes of the use as evidence in a proceeding conducted by the Commission of information obtained in a proceeding conducted by authorities of a non-member country, there must be observance both of the procedural safeguards laid down for the latter proceeding and of those established for the proceeding conducted by the Commission. That approach – which reflects the cumulative application of the laws of the State where the evidence originates and those of the State where the evidence is received – is necessary, in my opinion, in view of the fact that we are operating in the area of public law, and in particular in the matter of penalties, and that observance of the rights of the defence in any proceedings in which penalties may be imposed, in particular fines or default penalties, constitutes a fundamental principle of Community law which must be complied with even in the case of proceedings of an administrative nature. 120.  It is therefore necessary, for the observance of procedural rights in a case such as this, for the evidence from the foreign proceedings to have been obtained in accordance with the formalities laid down by the relevant foreign laws; for its transmission to the Commission and its use by the Commission to be allowed under those laws; and for such use to be compatible with the specific safeguards that the undertaking concerned would have enjoyed, under Community law, if the evid­ence had been taken directly in the proceeding conducted by the Commission (emphasis added).52

Thus the Advocate General endorsed the solution adopted by the General Court in its judgment at first instance, which held the FBI transcripts admissible.53 The reasoning of the General Court is interesting in that it outlines the practical requirements with which a receiving authority ought to comply when considering information obtained ‘abroad’ as evidence. First, that authority, ie the Commission in case at issue, ought to carry out an examination automatically if, prima facie, there is serious doubt as to whether the procedural rights of the parties concerned [as provided for in the legal order of the receiving authority] were complied with in the procedure during which [the information was obtained].

Second, ‘if there is no such serious doubt’ the authority must ‘make . . . it possible for the parties concerned to comment not only on the content of [the information], but also on any irregularities or special circumstances concerning their [gathering/composition] or submission [to the receiving authority]’. In turn, the receiving authority must indicate during the administrative procedure, in the equivalent of the statement of objections, its intention to rely on the information obtained from the third-party State and make that information available to the parties.54 The Opinion of Advocate General Mengozzi is also worth considering for it questions the existence of a possible difference in the approach applicable to the treatment of evidence originating from third (non-EU) countries and that originating from the competent   Opinion of Advocate General Mengozzi in Archer Daniels Midland v Commission (n 45).   Archer Daniels Midland v Commission (n 45) paras 261–70.   ibid, particularly para 265.

52 53 54

Cross-border Investigations  381 authorities of other EU Member States. That questioning was prompted by the language used by the European Court of Justice in the Dalmine case, another cartel case, which is reminiscent of the conflictualist approach spelled out above. In that case, which deals with the transmission to the Commission of information obtained in Italy in application of national criminal law, the ECJ held that ‘the Community judicature has no jurisdiction to rule on the lawfulness, as a matter of national law, of a measure adopted by a national authority’ and that ‘as the transmission of the [information] in issue was not declared unlawful by an Italian court, those documents cannot be considered to have been inadmissible evidence which ought to have been removed from the [Commission investigation] file’.55 Eventually, the Advocate General left the issue open while rejecting firmly a possible conflictualist approach with respect to information emanating from third countries. On the one hand, he pointed to the fact that the applicant in the Dalmine case ‘did not contest the legality of using the [information] concerned as evidence in the proceeding conducted by the Commission, on grounds of breach of specific procedural rights (such as the privilege against self-incrimination upheld by Community law)’.56 On the other hand, he suggested that the ‘particularly reductive’ approach adopted by the ECJ in that case may be based ‘ultimately’ on an ‘implicit presumption that the level of protection of the rights of the defence at Community level and at the level of the Member States is essentially equivalent’.57 In support of that last statement, the Advocate General referred to Recital 16 Regulation 1/2003, which forms the starting point of the ‘recognition approach’ discussed in the following section.

iii.  Recognition Approach The term ‘recognition’ in the field of conflict of laws refers to the circumstances governing the enforceability in the forum of a foreign judgment. It may therefore appear technically improper or at least a conceptual stretch to talk about the recognition of evidence. Yet, the focus of this section is on the circumstances governing the ‘enforceability’, ie admissibility, in the forum of foreign evidence and the attempt to force the mutual recognition of evid­ entiary rules (understood as embodying particular due process standards). Indeed, as noted above in section II.A.ii, Recital 16 of Regulation 1/2003 can be interpreted as mandating the unconditional recognition by the receiving authority of evidence obtained in the Member State of the transmitting authority, in view of enabling the ‘free movement of evidence’ in antitrust matters.58 As noted, the solution proposed by Recital 16 is inconsistent with other provisions of the decentralisation package, in particular paragraph 4 ECN Notice, and is the source of great uncertainty. Moreover, the unconditional character of the recognition duty enshrined therein, ie to the extent that it precludes the possibility to raise public policy interests to oppose such recognition,59 is truly extraordinary in view of:   Case C-407/04 P Dalmine v Commission [2007] ECR I-829 paras 62–63.   Opinion of Advocate General Mengozzi in Archer Daniels Midland v Commission (n 45) para 117. In addition, the reasoning of the ECJ in the Dalmine case pertained primarily to the probative value of the evidence, and not so much to their admissibility as evidence. 57   ibid para 118. 58   See, eg, Monti, ‘Fighting Cartels’ (n 32). 59   Leaving aside the situation of individuals (see II.B.ii.a above), Art 12(2) Regulation 1/2003 provides that the use of information obtained abroad as evidence against legal persons is limited to the enforcement of Article [101] and/or [102 TFEU] in respect of the subject matter for which it was collected by the transmitting authority. 55 56

382  Damien MB Gerard (i) previous (and latter) attempts to foster enforcement cooperation in civil and criminal matters within the EU; and (ii) the current stage of the European integration process. In turn, the solution advocated by Recital 16 could result in a lasting imbalance between the exercise of public enforcement powers and compliance with due process rights. a.  Recital 16 in the Broader Context of Enforcement Cooperation As is well-known, the cooperation in civil and criminal matters within the EU took off with the conclusions of the 1999 Tampere European Council (‘Conclusions’), laying down a roadmap for future cooperative efforts. The Conclusions expressly refer to ‘the principle of mutual recognition’ as ‘the cornerstone of judicial cooperation in both civil and criminal matters within the Union’ and consider mutual recognition as implying that ‘evidence gathered by one Member State’s authorities should be admissible before the courts of other Member States, taking into account the standards that apply there [ie in the other Member States]’ (emphasis added).60 Thus the Conclusions did not postulate the unconditional recognition of evidence but foresaw expressly the possibility for courts and authorities relying on cross-border cooperative measures to resort to the standards of admissibility applicable in their own legal order. Subsequently, it emerged that mutual recognition also required minimum harmonisation efforts in the area of national procedural rights.61 1.  Cooperation in Civil Matters In the area of cooperation in civil matters, one of the earliest instruments adopted at EU level related to the ‘cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters’.62 That instrument – Regulation 1206/2001 – allows a court before which a civil or commercial claim is pending to request, ‘in accordance with the provisions of the law of that State’, the competent court of another Member State to take evidence, or to take evidence directly in another Member State.63 In the former case, the requested court ‘should execute the request in accordance with the law of its Member State’.64 In the latter case, the competent authority of the other Member State where the evidence is to be taken directly may refuse to allow such a measure if ‘the taking of evidence requested is contrary to the fundamental principles of law in its Member State’. 65 It is therefore apparent that the taking of evidence in civil and commercial matters is based in essence on the successive application of the law of the requesting court and that of the requested court. To take a concrete example, Article 14 Regulation 1206/2001 entitles individuals to oppose to a request to be heard both safeguards originating in the law of the Member State of the requested court and of the Member State of the requesting court. Likewise, Article 10(3) allows the requested court to refuse executing a request for the taking of evidence in accordance with a special procedure provided for by the law of the Member State of the requesting court if that special procedure is incompatible with the law of the Member State of the requested court. Thus, even if the Regulation aims to improve,   Presidency Conclusions, Tampere European Council, 15–16 October 1999, paras 33, 36.   This is apparent, eg, from the conclusions of the Hague European Council of 13 December 2004, Sections 3.2 and 3.3 (see http://ec.europa.eu/home-affairs/doc_centre/docs/hague_programme_en.pdf). 62   Council Regulation 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil and commercial matters [2001] OJ L174/1. 63   ibid Art 1. 64   ibid Recital 12 and, eg, with respect to coercive measures, Art 13. 65   ibid Art 17(5). 60 61

Cross-border Investigations  383 simplify and accelerate the cross-border taking of evidence in civil and commercial matters, it provides for a number safeguards in situations affecting fundamental freedoms and/ or raising public policy issues.66 Moreover, the taking of evidence in civil and commercial matters takes place in the framework of adversarial proceedings, ie at the request and/or under the supervision of the parties to the proceedings which are therefore fully aware of it, and not in a prosecutorial context as is the case for the public/administrative enforcement of EU competition law as provided for by Regulation 1/2003. More generally, virtually all instruments involving recognition issues adopted by the EU under the heading of cooperation in civil matters, while being based on the principle of mutual trust, allow for public policy exceptions to that recognition. This is chiefly the case as far as Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is concerned: ‘A judgment shall not be recognised . . . if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought’.67 The exact same language is used in Article 22 of Regulation 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility,68 and still in Article 24 of Regulation 4/2009 relating to maintenance obligations.69 Likewise in Regulation of 1346/2000 on insolvency proceedings, Article 26 expressly provides that: Any Member State may refuse to recognise insolvency proceedings opened in another Member State or to enforce a judgment handed down in the context of such proceedings where the effects of such recognition or enforcement would be manifestly contrary to that State’s public policy, in particular its fundamental principles or the constitutional rights and liberties of the individual.70

Alternatively, either minimum procedural standards were established, such as in the case of the creation of the European Enforcement Order for uncontested claims,71 or a wholly uniform EU procedure was established, such as for small claims,72 thereby removing diversity, in theory, from the equation and with it the need to manage coordination issues. 2.  Cooperation in Criminal Matters Irrespective of the classification of sanctions for breaches of Articles 101 and 102 TFEU as non-criminal by Regulation 1/2003,73 the enforcement framework set forth therein bears

66   Regulation 1206/2001 also allows the presence of the parties before the requesting court or representatives of that court to be present during the taking of evidence by the requested court if this is provided for or compatible with the law of the Member State of the requesting court. 67   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 Art 34(1). For a recent interpretation of that provision, see, eg, Case C-420/07 Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams [2009] ECR I-3571 paras 54–62. 68  Council Regulation 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility [2003] OJ L338/1. 69   Council Regulation 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations [2009] OJ L7/1. 70   Council Regulation 1346/2000 of 29 May 2000 on insolvency proceedings [2000] OJ L160/1. In Eurofood, the ECJ interpreted Art 26 as allowing a Member State to refuse recognition in case of manifest violation of the right to be heard (see C-341/04 Eurofood [2006] ECR I-3813 paras 60–68). 71   European Parliament and Council Regulation 805/2004 of 21 April 2004 creating a European Enforcement Order for uncontested claims [2004] OJ L143/15. 72   European Parliament and Council Regulation 861/2007 of 11 July 2007 establishing a European Small Claims Procedure [2007] OJ L199/1. 73   Art 23(5) Regulation 1/2003.

384  Damien MB Gerard close resemblance to criminal proceedings.74 Hence, it appears even more relevant to consider the extraordinary proposition of Recital 16 Regulation 1/2003 within the context of instruments aimed to foster enforcement cooperation in criminal matters. In a 2005 communication on the mutual recognition of judicial decisions in criminal matters, the Commission announced its ‘ultimate objective . . . to adopt a single legislative instrument to facilitate the gathering of evidence of all kinds in criminal cases throughout the Union’.75 It also suggested that: As regards the rules governing the manner in which evidence is gathered, the national rules applicable in each Member State for the relevant type of investigation should be respected, subject to the application of certain formalities of procedures specified by the issuing State’

and that, unsurprisingly ‘the adoption of minimum harmonisation rules on the gathering of evidence should help to ensure that evidence lawfully gathered in one Member State can be used in the courts of another’,76 notably to ensure ‘respect for defence rights’.77 The single instrument foreseen in that communication was adopted in 2008 in the form of a Framework Decision on the European evidence warrant (EEW).78 Interestingly, when considering the scope of the EEW, the similarity of the most far-reaching measure available pursuant to that instrument with inspections carried out routinely in antitrust matters as provided for, for example, by Article 20 Regulation 1/2003, is striking.79 Remarkably, then, the Framework Decision subjects the EEW to the cumulative application of the law of the issuing State and that of the executing State. Indeed, while the execution of an EEW shall be carried out pursuant to the laws and procedures of the executing State,80 an EEW can only be issued if the objects, documents or data sought could legally be obtained under the law of the issuing State in a comparable domestic case.81 Moreover, additional safeguards apply, such as the possibility to refuse the execution of an EEW on the grounds that, in limited cases, the acts to which it relates would not constitute an offence under the law of the executing State, or that there is an immunity or privilege issue making it impossible to do so.82 Likewise, the executing authority may refuse to comply with a request that particular formalities be followed to ensure the admissibility of the evidence before the issuing authority if such formalities and procedures are contrary to the fundamental principles of law of the executing State.83 In addition, the recitals to the Framework Decision contain various interpretative statements emphasising the need to protect fundamental rights, notably in view 74   For a recent in-depth analysis of the criminal nature of EU antitrust proceedings, see D Slater, S Thomas and D Waelbroeck, ‘Competition law proceedings before the European Commission and the right to a fair trial: no need for reform?’, Global Competition Law Centre Working Paper 04/08, available at www.gclc.coleurop.be. 75   Commission, ‘Mutual recognition of judicial decisions in criminal matters and the strengthening of mutual trust between Member States’ (Communication) COM (2005) 195 final, 19 May 2005, para 6. 76  ibid. 77   ibid para 23. 78  Framework Decision (JHA) 2008/978 on the European evidence warrant for the purpose of obtaining objects, documents and data for use in proceedings in criminal matters [2008] OJ L350/72. 79   According to Arts 1(1) and 4(2) of the Framework Decision, the EEW is limited to obtaining objects, documents and data from another Member State; conversely, it cannot be used to conduct interviews, take statements or initiate other types of hearings involving suspects, witnesses, experts or any other party. However, Art 4(6) provides that the EEW ‘may, if requested by the issuing authority, also cover taking statements from persons present during the execution of the EEW and directly related to the subject of the EEW’. 80   Framework Decision on the European evidence warrant (n 78), eg Art 11. 81  ibid Art 7. 82   ibid Art 13. 83   ibid Art 12 and Recital 15.

Cross-border Investigations  385 of promoting mutual trust between Member States.84 Finally, Recital 28 indicates that the Framework Decision ‘does not prevent any Member State from applying its constitutional rules relating to due process’. In view of the safeguards contained in the EEW Framework Decision, the solution advocated by Recital 16 Regulation 1/2003 mandating an unconditional recognition of the admissibility and use in evidence of information obtained in another Member State, appears all the more unreasonable. The same conclusion prevails when considering other instruments of enforcement cooperation in criminal matters, such as those providing for the mutual recognition of orders freezing property or evidence, or of decisions requiring financial penalties to be paid.85 Those instruments provide for grounds of non-recognition or non-execution, mandate effective legal remedies and do not prevent Member States from opposing a measure that has the purpose of punishing a person on the grounds of his or her sex, race, religion, ethnic origin, nationality, language, political opinions or sexual orientation, or from applying their respective constitutional rules relating to due process. Similar safeguards can be found in the most contentious instrument in the area of cooperation in criminal matters, namely the European Arrest Warrant (EAW) Framework Decision.86 Articles 3 and 4, for example, lay down a list of mandatory and optional grounds for the non-execution of an EAW. Article 14 entitles the arrested person to be heard by the executing judicial authority, in accordance with the law of the executing Member State, in case he or she does not consent to his or her surrender. Moreover, recitals to the Framework Decision emphasise the possibility to suspend the execution of an EAW in case of a serious and persistent breach of general principles of EU law by a Member State or if there is a risk that the person subject to the EAW could be subjected to the death penalty, torture or other inhuman or degrading treatment or punishment.87 Even so, many Member States courts have voiced concerns at the implementation of the EAW.88 The Bundesverfassungsgericht (German Federal Constitutional Court) has notably subjected the implementation of the EAW in Germany to a specific examination in each individual case as to whether the issuing State’s legal system adheres to the principles of the rule of law in such a way that the fundamental rights of the prosecuted person are protected effectively.89 In that respect, the Belgian Constitutional Court also requested recently a preliminary ruling from the European Court of Justice on the legality of a refusal to execute a European arrest warrant on the ground that its execution would have the effect of infringing the fundamental rights of the person concerned.90 There is therefore a constitutional dimension to the limits of the principle of mutual recognition in enforcement cooperation within the EU and, to that   See generally Recital 8.   Framework Decision (JHA) 2003/577 of 22 July 2003 on the execution in the European Union of orders freezing property or evidence [2003] OJ L196/45; Framework Decision (JHA) 2005/214 of 24 February 2005 on the application of the principle of mutual recognition to financial penalties [2005] OJ L76/16. 86   Framework Decision (JHA) 2002/584 of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States [2002] OJ L190/1. 87   ibid Recitals 10, 12 and 13, respectively. 88  See, eg, Trybunal Konstytucyjny (Polish Constitutional Court), judgment of 27 April 2005 (P 1/05), summary in English available at www.trybunal.gov.pl/eng/summaries/summaries_assets/documents/P_1_05_GB.pdf; Bundesverfassungsgericht, judgment of 18 July 2005 (2236/04), available at www.bundesverfassungsgericht.de/ entscheidungen/rs20050718_2bvr223604en; Cyprus Supreme Court, judgment of 7 November 2005 (294/2005), available in Greek only at www.cylaw.org/cgi-bin/open.pl?file=apofaseis/aad/meros_1/2005/1-200511-294-05. htm&qstring=european AND arrest AND warrant. 89   See in particular paras 79–89. 90   Case C-306/09 IB v Conseil des Ministres, pending (notice available in [2009] OJ C 233/11). 84 85

386  Damien MB Gerard extent, as briefly suggested in the following section, Recital 16 Regulation 1/2003 appears at odds with the current stage of the process of European integration. b.  Recital 16 in the Broader Context of the European Integration Process As noted, Recital 16 suggests that information obtained abroad ought to be recognised, ie held admissible, unconditionally by the receiving NCA and used as evidence accordingly. In doing so, Recital 16 ignores the basic premise of European integration in the field of justice, namely that it is to be built out of respect for the diversity of national legal systems and traditions.91 In that respect, the fact that Member States adhere to the same abstract and general human rights standards does not imply that their national enforcement systems are necessarily compatible or could not give rise in particular circumstances to imbalances and/or to an erosion of due process standards for private parties. In particular, it does not imply that effective remedies are available for parties subject to cross-border investigations to seek redress in case of breach of their due process rights. This commitment to diversity underscores the fact that, at this stage, the purpose of cooperation in judicial matters in the European Union is not to forge a unified system of administration of justice as, for example, the framers of the US Constitution envisioned when they drafted the Full Faith and Credit Clause (FFCC).92 In contrast to the situation in the US under the FFCC,93 it is apparent from the above that EU Member States retain a general right to raise public policy exceptions to the mutual recognition of foreign EU judgments and prosecutorial acts, albeit in a limited ‘juridiciarised’ manner. Likewise, the Treaty on the European Union does not seek to create a unified system of government, even less so ‘one Nation indivisible’. However elaborated it may be, the European Union remains today a system of governance which relies ultimately on the authority of sovereign Member States and their constituent peoples.94 Hence, at the core of the Union lies respect for the respective identity of the Member States and deference towards their essential State functions.95 In such system, it is inconceivable that Member States would agree to disregard entirely the checks and balances peculiar to their respective law enforcement system, even more so in administrative matters,96 unless those checks and balances had been fully harmonised, which would entail the dissolution of Member States in a federal European State. Nor did the European Court of Justice ever suggest they had to, for example, on the basis of a hypothetical principle of ‘mutual trust’.97 To the contrary, the ECJ has found that ‘mutual 91   As restated in the latest Communication of the Commission to the European Parliament and the Council, ‘An area of freedom, security and justice serving the citizen’ COM (2009) 262 final, eg p 11. 92   See, eg, RH Jackson, Full Faith and Credit – The Lawyer’s Clause of the Constitution (New York, Columbia University Press, 1945) 7–9; WL Reynolds and WM Richman, The Full Faith and Credit Clause (London, Praeger, 2005) 10. 93   See in particular Baker and others v General Motors Corp 522 US 222 (1998). 94   See, for a recent account: Bundesverfassungsgericht, judgment of 30 June 2009 in Case BvE 2/08, ‘Lisbon Opinion’, available at www.bverfg.de/entscheidungen/es20090630_2bve000208en. 95   Art 4(2) of the Treaty on the European Union, as entered into force on 1 December 2009 ([2008] OJ C115/1). 96   Administrative decisions, such as repressive ones, are the expression of each State’s imperium and are inherently territorial in scope. See also the Opinion of Advocate General Mengozzi (n 45) para 119, which suggests that the successive application of the due process safeguards applicable in the State where the evidence has been obtained and that where it will be used is particularly required ‘in view of the fact that we are operating in the area of public law, and in particular in the matter of penalties’. 97   ‘Mutual trust’ underlies most of the policy initiatives in the fields of enforcement cooperation in civil and criminal matters in the EU. However, it appears both as a prerequisite to enable mutual recognition efforts and as something to nurture by providing for sufficient due process safeguards. At this stage, in the case-law of the EU courts, mutual trust is relied on an interpretative concept – usually favouring integration and mutual recognition

Cross-border Investigations  387 trust’ required deference for the diversity of the procedural rules applicable in criminal matters at national level, for example, with respect to limitation periods.98 The foregoing section has dealt with different models inspired by conflict-of-laws principles for the management of coordination issues arising in cross-border antitrust investigations, with the view to balancing effective enforcement and due process in the presence of different national enforcement systems. As explained, the conflictualist approach suffers from many practical and conceptual flaws, while the recognition approach is at odds with the current stage of enforcement cooperation in the EU and, generally, of the European integration process. More importantly, the two approaches overlook the diversity of national enforcement systems and the risks it entails for fundamental rights both in terms of standards and remedies. In contrast, the cumulative approach enables a satisfactory outcome, both in terms of enforcement and due process. Indeed, it allows cross-border investigations to develop and flourish while driving convergence among national procedural rules. Likewise, it ensures compliance with the rule of law while dispensing with the burden of having to pursue extensive harmonisation of the Member States’ procedural enforcement framework, in line with the principle of procedural autonomy that lies at the core of the system laid down by Regulation 1/2003 and, in fact, of the enforcement of the whole EU Treaties. The following, much shorter, section applies the cumulative approach to the specifics of Regulation 1/2003 and formulates a number of policy recommendations in view of implementing it and ensuring legal certainty.

III.  Solution and Recommendations Regulation 1/2003, in particular Recital 16, and the ECN Notice, notably paragraphs 4, 27 and 29, entertain uncertainty as to the law applicable to the assessment of the legality and admissibility of evidence in cross-border antitrust cases in the EU. In an attempt to bring clarity for parties to proceedings and enforcers alike, this section articulates the arguably superior cumulative approach outlined in section II.B.ii above, which relies on the successive application of the procedural rules and standards prevailing in the legal order where the relevant information is gathered and in that where it is used as evidence.

A.  Solution: Successive Application of the Lex Fori Mitigated by the Convergence between National Procedural Enforcement Frameworks As noted, achieving an appropriate balance between effective enforcement and due process in cross-border antitrust investigations requires the development of a consistent set of management rules to articulate the application of the laws that have vocation to apply in – and is not considered as a general principle of law from which autonomous legal consequences could derive (see, eg, in relation to Regulation 44/2001, Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-14693 para 72; Case C-159/02 Gregory Paul Turner v Felix Fareed Ismail Grovit, Harada Ltd and Changepoint SA [2004] ECR I-3565 paras 24–25 and, for a recent example, Apostolides (n 67) para 73, where the ECJ opposed mutual trust and the respect for the rights of defence as two principles to be balanced in interpreting Art 34(2) Regulation 44/2001). 98   See Case C-467/04 Criminal proceedings against Giuseppe Francesco Gasparini and Others [2006] ECR I-9199 paras 29–30.

388  Damien MB Gerard the different legal orders in presence. The cumulative approach suggests that, since the decentralised system exposes parties to cross-border proceedings to the application of ‘double standards’, namely those applicable in the legal order(s) where information is obtained and those of the legal order where it will be used as evidence, effective judicial protection requires reliance on ‘double safeguards’. Applying ‘double safeguards’ means that a control of legality before the competent authority and according to the domestic law of the Member State of the transmitting NCA must be combined with a control of admissibility before the competent authority and according to the applicable domestic law of the Member State of the receiving NCA. In terms of legal certainty, this approach also carries the advantage of providing a uniform solution irrespective of whether proceedings involve legal and/or natural persons and therefore of facilitating the application of Article 12 Regulation 1/2003, while ensuring that the relevant due process standards are complied with.

i.  Control of Legality As apparent from Article 22 of Regulation 1/2003 and paragraphs 27 and 29 of ECN Notice, the execution of a fact-finding measure is to be carried out according to, and within the boundaries of, the domestic law of the transmitting NCA. The parties to the case handled by the receiving NCA ought therefore to be allowed to challenge the legality of information gathering before the competent authority (and/or courts) and according to the applicable domestic law of the transmitting NCA. This basic condition has various implications, which are closely related to one another. First, there has to be a ‘competent review authority’ in the legal order of the transmitting NCA. Even though that may seem obvious in view of requirements of Article 6 ECHR, this is not always the case.99 As a corollary, the parties against which the investigation is directed need to have standing to challenge the legality of the fact-finding measure, even when that measure is directed at third parties. Again, this is not always the case.100 As a practical matter, parties need also to be aware of the fact-finding measure in order to be in a position to challenge its legality and benefit from an effective judicial protection. Since ex ante information (and review) of the fact-finding measure is likely to endanger its effectiveness, parties must at least be given the opportunity to challenge the measure ex post. Even if effective review mechanisms were to be available to control the legality of the fact-finding measure before the competent authority and according to the applicable domestic law of the transmitting NCA, coordination issues would still remain, ie the due process standards applicable in the legal order of the transmitting NCA may be laxer or incompatible with those of the legal order of the receiving NCA, which is the one that will sanction, eventually, the infringement of Articles 101 and/or 102 TFEU. Therefore a second safeguard is required to ensure the effective judicial protection of parties subject to crossborder investigations in the form of a control of admissibility before the competent authority and according to the applicable domestic law of the ‘receiving’ NCA. 99   eg, when the French NCA acts pursuant to Art 22 and carries out a fact-finding measure pursuant to Art L450-3 French Commercial Code, no review mechanism is available to the parties against which the investigation is directed to challenge the legality of that measure (see David, ‘Cooperation among national authorities’ (n 17) paras 16–17). 100   eg, under French law, when evidence used to convict an undertaking has been collected from third parties, the undertaking concerned has no standing to challenge the legality of the relevant fact-finding measure (see David (n 17) para 11).

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ii.  Control of Admissibility When information has been gathered abroad – pursuant to Article 22 Regulation 1/2003 or in the framework of national proceedings – and has been communicated to the receiving NCA, the parties ought to be entitled to challenge its admissibility as evidence in the case brought against them before the competent authority and according to the applicable domestic laws of the receiving NCA. Arguably, this is the only way to prevent an erosion of due process standards and to compensate for the possible absence of an effective control of legality, as described above. The control of admissibility can typically occur on two occasions: (i) at the time the right of access to the file is exercised and the reply to the domestic equivalent to the statement of objections is submitted (ie before the receiving NCA); or (ii) on the occasion of a challenge brought against the final decision addressed to the parties (ie before the competent review body). As noted, it comes in addition to and is independent from the possibility to challenge the legality of the information-gathering process in the Member State of the transmitting NCA.101 However, it implies the application of the domestic due process requirements of the legal order of the receiving NCA to information transmitted from abroad and thus also, inevitably, to the conditions under which that information has been obtained. Naturally, if and where the illegality of the information-gathering process carried out by the transmitting NCA has been established, the evidence becomes automatically inadmissible in the proceedings before the receiving NCA. Conversely, parties that have failed (or were barred) to challenge the legality of the information-gathering process cannot be estopped from challenging the admissibility of the information as evidence before the receiving NCA.102 The main condition for ensuring an effective control of admissibility is the traceability of information and its proper identification in the case file of the receiving authority. Information transmitted by a foreign NCA therefore needs to be identified as such in the case file by the relevant standardised network form and accompanying documents (for example, minutes of inspections), which must contain clear indications as to the actual origin of the information (author, transmitting authority, place where it was obtained, etc) and the legal basis according to which it was collected. As articulated hereinabove, the cumulative approach appears capable of striking the right balance between effective antitrust enforcement, including by means of cross-border cooperative mechanisms, and compliance with due process standards as implemented by the specific – and diverse – rules and remedies in place in the various EU Member States. At the same time, the burden associated with such an approach ought not to be overestimated. First, the case-by-case examination required under a unilateral approach will more often than not result in a finding of admissibility and it will be largely up to the parties to raise possible due process issues, as suggested by the CFI in the ADM case referred to above. 101   This means that even if the information gathering in the Member State of the transmitting NCA was not flawed at all, the parties can still challenge the admissibility of that information as evidence before the receiving NCA and/or the competent appeal body in view of higher protection standards applicable in the receiving Member State. 102   However, parties who were entitled to and have failed to challenge the legality of the information-gathering process in the Member State of the transmitting NCA could be barred from claiming before the receiving NCA that the (alleged) illegality affecting the gathering process ought to result in the inadmissibility of the information as evidence. This is particularly relevant in situations where the due process standards applicable in the transmitting Member State are ‘higher’ than or ‘equivalent’ to those applicable in the receiving Member State.

390  Damien MB Gerard Second, as the Commission emphasised in the Report and the Staff Working Paper, the system established by Regulation 1/2003 has already triggered a ‘significant degree of voluntary convergence’, including in procedural matters.103 To be sure, such convergence is to be welcomed since it reduces diversity and therefore limits the coordination issues arising in cross-border investigations, or at least facilitates their solution.

B.  Recommendations: Enhance Legal Certainty to Ensure a Proper Balance between Effective Enforcement and Due Process In the Report on the functioning of Regulation 1/2003, the Commission has acknowledged that ‘divergences of Member States’ enforcement systems . . . merit further examination and reflection’.104 In order to contribute to that reflection, this section offers some practical recommendations to implement the principles outlined hereinabove. As such, bringing clarity and additional legal certainty in those matters is a key condition to balance effective enforcement and due process and thus to strengthen the confidence of economic actors in the decentralised EU antitrust enforcement system as a whole. – Endorse a cumulative approach with respect to the application of Articles 12 and 22 of Regulation 1/2003 relying on the successive application of the national procedural rules and standards that have vocation to apply in the relevant legal orders, namely those where information is gathered and where it is used as evidence, respectively. A clear statement to that effect should preferably be included in the text of Regulation 1/2003, for example by amending Recital 16 and/or adding a third sentence to Article 12(2), establishing in substance that the use in evidence of information exchanged pursuant to paragraph 1 is subject to the appreciation of the receiving authority according to its domestic law. For the sake of clarity, additional guidance could be reflected in the ECN Notice, for example, by adding to the notice a section 2.2.5 entitled ‘Cooperation, Assistance and Due Process’ or a section 2.3.4 entitled ‘Position of Undertakings in Cross-Border Investigations’. – Ensure that undertakings have access to effective review mechanisms in the legal order of the transmitting NCA to challenge the legality of fact-finding measures carried out pursuant to Article 22 of Regulation 1/2003. To that effect, and with the view to bring some minimum harmonisation in this matter, one additional sentence could be added to Article 22 stating in substance that: (i) the decision whereby a competition authority carries out an inspection or other fact-finding measure on behalf and for the account of the competition authority of another Member State shall indicate the right to have the decision reviewed by the competent authority or court in the country of execution; and (ii) that parties to the proceedings should be notified thereof once the measure has been completed. –  With respect to individuals, instead of conditioning the reliance on information exchanged within the ECN on some formal assessment of the nature of sanctions available, as currently provided for by the first indent of Article 12(3) of Regulation 1/2003, mandate a case-by-case analysis of the due process rights enjoyed by individuals in the legal order of each of the transmitting and receiving NCAs. This would simply require removing the first indent of Article 12(3). Such solution would allow for the uniform operation of Article 12 irrespective of the nature of the parties to the proceedings (legal   Para 31 Commission Report; para 201 Staff Working Paper.   Para 33 Commission Report.

103 104

Cross-border Investigations  391 versus natural persons). It would also allow for the removal of the limitation enshrined in the second sentence of the second indent of Article 12(3) with respect to custodial sanctions, thereby solving potential issues in the negotiation of future international cooperation agreements. – Issue (or amend existing) best practices for dealings among ECN members in cross-­border investigations, notably to clarify issues relating to the traceability and identification of transmitted information in the case file, the timing of the transmission of information in view of possible disputes as to the legality of its gathering and the confidential treatment of information vis-a-vis third parties. Generally, achieving an appropriate balance between effective enforcement and due process within the system set forth by Regulation 1/2003 requires greater visibility as to the remaining differences in the various national enforcement frameworks and as to the obstacles to an effective judicial review of cross-border investigation measures. To that effect, the ECN ought to commission an EU-wide study and set up an ECN working group dedicated to solving the issues that such study will undoubtedly highlight.

IV.  Concluding Remarks Operating cross-border cooperation mechanisms to promote the effective enforcement of EU competition law, while relying on the different procedural frameworks in place at national level, generates coordination issues between the different legal orders in presence, which need to be properly managed to ensure due process for parties to antitrust proceedings. The current situation, characterised by diversity and uncertainty is unsatisfactory. A consistent framework capable of reconciling effectiveness and due process concerns is required. In that respect, various options inspired by conflict-of-laws principles have been considered. The only satisfactory solution, it has been argued, lies in the implementation of a cumulative approach relying on the successive application of the national procedural rules and standards that have vocation to apply in the relevant legal orders, namely those where information is gathered and where it is used as evidence, respectively. In turn, a set of principles aimed to implement that approach has been articulated, based on the combination of a control of the legality of fact-finding measures and a control of admissibility of the outcome thereof as evid­ence. Specific recommendations to that effect have been formulated with the view to contribute to the ongoing reflection on the functioning of Regulation 1/2003. The reliance on conflict-of-laws principles to address the coordination issues arising from cross-border antitrust investigations in the EU has been dictated largely by the design of the cooperation mechanisms provided for by Articles 12 and 22 Regulation 1/2003. There is, however, another ‘contractual’ approach available for the management of coordination issues, which has not been mentioned so far. That approach relies typically on ‘waivers’ of the right to oppose the exchange of investigative materials among antitrust enforcers. It is the privileged management mechanism relied on in the United States for dealing with the variety of laws that potentially come into play in large multistate or federal-State joint antitrust investigations.105 Likewise, it is the only mechanism available so far to the EU for   See generally, ABA, State Antitrust Enforcement Handbook, 2nd edn (Chicago, ABA Publishing, 2008) 46–67.

105

392  Damien MB Gerard the exchange of protected or confidential information with third countries pursuant to dedicated international cooperation agreements.106 The reliance on waivers raises a variety of legal issues of its own, which fall beyond the scope of concluding remarks. Nonetheless, a variant of the contractual model deserves particular attention since it governs the exchange of leniency statements within the ECN. The position of leniency applicants raises specific issues in relation to the exchange of information mechanism set forth in Article 12 of Regulation 1/2003. In particular, the voluntary and self-incriminatory nature of leniency statements mandates particular care in handling them to ensure their confidentiality and to avoid distorting the incentives of companies to ‘blow the whistle’. To that effect, the ECN Notice has introduced an ad hoc system whereby ‘information voluntarily submitted by a leniency applicant will only be transmitted to another member of the network pursuant to Article 12 . . . with the consent of the applicant’,107 except in specific situations expressly listed therein.108 Moreover, the system restricts access to leniency statements to those receiving NCAs which have committed to adhere to the consent requirement, and other accompanying safeguards, by signing a statement to that effect appended to the ECN Notice.109 Thus the system introduced by the ECN Notice is contractual in a double sense: (i) leniency applicants have to agree on a case-bycase basis to the communication of their leniency statements; while (ii) NCAs have to agree ex ante to request the consent of applicants to be allowed to communicate leniency statements to other ECN members, which they have all done at this point.110 That contractual system appears generally effective as no instance of misuse of leniency statements by or within the ECN appears to have been reported so far. In other words, the consent requirement and accompanying safeguards do not appear at this stage to affect negatively the position of leniency applicants and thereby their incentive to cooperate. In that respect, however, the absence of an EU-wide ‘one-stop-shop’ system to handle leniency applications remains highly problematic,111 irrespective of the level of convergence reached so far as to the substance of the various national leniency programs and of the other adjustments suggested by the ECN Model Leniency Programme. 106   So far, the EU has entered into such agreements with the United States, Canada, Japan and Korea. See, eg, Agreement between the European Community and the Government of the Republic of Korea concerning cooperation on anti-competitive activities [2009] OJ L202/35, Arts 4(4) and 7. 107   Para 40 ECN Notice. The consent requirement is combined with other safeguards, notably the fact that ‘information submitted to the network pursuant to Art 11 will not be used by other members of the network as the basis for starting an investigation on their own behalf whether under the competition rules of the Treaty or, in the case of NCAs, under their national competition law or other laws’ (para 39 ECN Notice). 108   ibid para 41. 109   ibid paras 42, 72. In line with EU courts’ precedents relating to the Commission’s fining guidelines and leniency notice, this system is supposed to bind NCAs by creating legitimate expectations on which leniency applicants ought to be able to rely. However, it is unclear to what extent it provides a sufficient legal basis to enable applicants to obtain redress in national courts in case the consent requirement and the other safeguards provided for under the ECN Notice have not been respected. Assuredly, though, allowing an NCA to rely as evidence on leniency statements obtained from another NCA in breach of the consent requirement and the other accompanying safeguards would run contrary to EU public policy, as stated in para 37 ECN Notice, and of Art 4(3) TUE (formerly Art 10 EC). In any event, this legal construct remains fragile, in particular in view of the potential consequences of a breach thereof for leniency applicants (imagine, eg, an informal ‘out-of-the-record’ conversation between NCA representatives during an ECN meeting leading to an ex officio investigation in a country where no leniency application has been filed, subsequently leading to a million Euro fine). 110   See http://ec.europa.eu/competition/antitrust/legislation/list_of_authorities_joint_statement.pdf. 111  An EU-wide ‘one-stop-shop’ system could either be operated centrally by the Commission or rely on the mutual recognition of leniency applications filed at EU or national level. Note, in that respect, the recent request formulated by the European Parliament for the Commission to establish an EU-wide ‘one-stop-shop’ leniency system (European Parliament resolution of 9 March 2010 on the Report on Competition Policy 2008 (2009/2173(INI))).

17 Recognition of Foreign Decisions within the European Competition Network JÜRGEN BASEDOW*

I.  Introduction: Integration Policy and Recognition According to the Founding Treaties, the Union pursues its objective of integration by the adoption of uniform legislative instruments, but not by its own enforcement institutions. Basically, the implementation of Union law is left to national authorities and courts of law. Prior to Regulation 1/2003,1 competition law was the most significant exception. In accordance with Regulation 17 of 1962, the Commission had the exclusive competence to grant exemptions under Article 101(3) TFEU (formerly 81(3) EC, 85(3) EEC).2 Therefore, national authorities and courts would hardly ever take decisions on the implementation of EC competition law unless the Commission had expressed an opinion on the matter beforehand. In view of Article 299 TFEU (formerly Article 256 EC), the Commission’s opinion would be effective in the whole of the Union in any event, no recognition being required. The Commission opinion would forestall decisions of national bodies running counter to the views expressed by the Commission,3 see now Article 16 Regulation 1/2003. A profound change was put into effect when Regulation 1/2003 decentralised the implementation of Articles 101 and 102 TFEU (formerly 81 and 82 EC). However, the decisions of national competition authorities (NCAs) and courts of law which are now competent to apply Article 101(3) (formerly 81(3) EC) only have territorial effect in their respective Member State unless they are recognised by other Member States. Thus, the situation in competition law is now similar to that existing in other areas of the law: Community law is implemented by national courts and authorities which are, however, unable to take decisions for the whole of the Community. As a consequence, a need for rules on the (horizontal) recognition of such decisions in other Member States becomes perceptible. The recognition principle, which may be addressed as a horizontal mechanism of integration, supplements the vertical integration which is effected by Community institutions *  Professor Dr Dr hc Jürgen Basedow, LLM (Harvard Univ); Director, Max Planck Institute for Comparative and International Private Law and Professor of Law, University of Hamburg. 1   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. 2   Council Regulation 17 of 6 February 1962, First regulation implementing Articles 85 and 86 of the Treaty, Amtsblatt (German version) 1962 L 204, see Art 9(1). 3   Case C-344/98 Masterfoods v HB Ice Cream (ECJ 14 December 2000) ECR I-11369 paras 49 ff.

394  Jürgen Basedow in exceptional instances. The recognition principle has been implemented by various Union instruments, for example, in respect of higher-education diplomas4 or driving licences;5 a more recent example relates to the mutual recognition of financial penalties.6 It is a common characteristic of such instruments that they harmonise certain rules to be applied in the Member State of origin in a given area of law, and put other Member States under an obligation to recognise decisions taken in accordance with those harmonised rules. This basic principle is also well-known from the Brussels I Regulation on jurisdiction and the enforcement of foreign judgments in civil and commercial matters.7 Its predecessor, the Brussels Convention, was the first recognition convention conceived as a convention double; it harmonised rules on jurisdiction to be applied by the courts of Member States to facilitate the recognition of their judgments in other Member States.8 No requirement of any such prior harmonisation exists where the Court of Justice has implemented the basic freedoms or the provisions on citizenship of the European Union. In those cases the Court has often stressed the need for recognition of the results flowing from the application of other Member States’ laws and even coined what has been called a principle of recognition.9 As a matter of fact those judgments have increased the political pressure towards harmonisation in the respective areas. Competition law is characterised, in the internal market, not only by harmonisation, but by outright unification of substantive law, in particular by Articles 101 and 102 TFEU (formerly 81 and 82 EC) and the various block exemption regulations. That is why the Commission could suggest a provision on recognition in its White Paper on damages actions for breach of the EC antitrust rules. The wording is as follows: National courts that have to rule in actions for damages on practices under Article 81 or 82 [now 101 or 102 TFEU] on which an NCA in the ECN has already given a final decision finding an infringement of those Articles, or on which a review court has given a final judgment upholding the NCA decision or itself finding an infringement, cannot take decisions running counter to any such decision or ruling.10 This text has almost literally been copied by the preliminary draft directive that appears to be still unpublished in autumn 2011. While it does not employ the term ‘recognition’, it deals with some effects of a foreign decision which are usually treated under the heading of recognition. This chapter is meant to comment on this proposal from a wider perspective. In fact, issues of intra-Community recognition may arise in four different types of situations: (i) the decision of an NCA may be invoked in administrative proceedings conducted by another 4   Council Directive 89/48 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration [1989] OJ L19/16. 5   First Council Directive 80/1263 on the introduction of a Community driving licence [1980] OJ L375/1. 6   Council Framework Decision (JHA) 2005/214 on the application of the principle of mutual recognition to financial penalties [2005] OJ L76/16. 7   Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1. 8   Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, done at Brussels on 27 September 1968, in Dutch, French, German and Italian in [1972] OJ L299/32; English version in [1978] OJ L304/36. 9   See, eg, Case C-353/06 Stefan Grunkin and Dorothee Regina Paul (ECJ 14 October 2008) not yet published in ECR; for a fundamental discussion of the recognition principle see HP Mansel, ‘Anerkennung als Grundprinzip des europäischen Rechtsraums’ (2006) 70 Rabels Zeitschrift für ausländisches und internationales Privatrecht 651– 731. 10   Commission, ‘White Paper on damages actions for breach of the EC antitrust rules’ COM (2008) 165 final, 2 April 2008, 6.

Recognition within the ECN  395 NCA, see II below; (ii) the issue of recognition of such a decision may also arise in civil proceedings in a court of another Member State, see III below; (iii) in a similar vein, a judgment of a Member State court resulting from civil proceedings may be invoked in civil proceedings in another Member State, see IV below; and finally (iv) such a judgment may also be referred to in administrative proceedings conducted by an NCA of another Member State, see V below. Finally, I shall shed some light on the effect of recognition, in particular in view of geographical limitations which are inherent to many competition enforcement proceedings, see VI below.

II.  The Recognition of an NCA Decision by the NCA of another Member State While the recognition of foreign judgments in civil and commercial matters has been a widespread practice since ancient times,11 public law has traditionally been characterised by the strictly territorial effect of administrative decisions. International conventions, in particular bilateral treaties, sometimes provide for the recognition of specific administrative acts, especially those of a declaratory nature like diplomas. But there is no evidence in general international law that a duty to recognise foreign acts of State exists.12 Nevertheless, States often recognise foreign administrative Acts as a matter of national law, but this practice is usually confined to specific types of administrative acts, for example, adoption decrees or driving licences. In contrast to the law of civil procedure, national public law usually does not contain general rules on the conditions and effects of recognition of foreign administrative decisions. As a consequence, the decisions of an NCA of a Member State, for example a declaratory statement on the infringement of European competition law by a certain anti-competitive conduct or a cease-and-desist order issued by that NCA, would generally not be eligible for recognition by the NCAs of other Member States. Those other NCAs may take into account the foreign decision as a matter of fact while they themselves assess the conduct of the undertakings involved. The NCA may consider the foreign order as providing some evid­ ence of what has occurred. But this is a purely factual consequence of the existence of the foreign decision which does not produce any legal effect outside the territory of the Member State of origin. It is noteworthy that the proposal made by the European Commission’s White Paper does not amend this situation. It only deals with the effects which a foreign administrative decision may entail in civil proceedings in a civil court of another Member State, but not with any consequences that such decision may have for another NCA within the European Competition Network. Apart from a lack of consistency, the proposal may also be blamed for favouring outright contradictions. Suppose that an administrative order of the NCA in Member State X gives rise to a follow-up action for damages in Member State Y. Suppose further that the NCA of Member State Y also initiates administrative proceedings against 11  See D Martiny, ‘Anerkennung ausländischer Entscheidungen nach autonomem Recht’ in Handbuch des Internationalen Zivilverfahrensrechts, vol III/1 (Tübingen, Mohr, 1984) paras 18 ff. 12   W Meng, ‘Recognition of foreign legislative and administrative Acts’ in R Bernhardt (ed), Encyclopedia of Public International Law, vol 4 (North-Holland, Amsterdam, 2002) 50, 52.

396  Jürgen Basedow the defendant of the civil proceedings, but that these administrative proceedings lead to a finding that there are no grounds for action on its part, cf Article 5(2) Regulation 1/2003. What would be the consequence for the court dealing with the civil action in Member State Y? Would that court adhere to the finding of its own national NCA, as it might be compelled to do under its own national law of civil procedure and consequently consider the relevant conduct as not being illegal for the purposes of the damages action, or would it be bound by the infringement order issued by the NCA of Member State X? According to the proposal of the White Paper, the court would have to recognise only final decisions ‘finding an infringement’; therefore, the infringement order of the NCA of Member State X would have to be recognised, and the court would have to disregard the decision of its own national NCA. This unfortunate consequence is due to the fact that the proposal of the White Paper is far too limited in scope. It would be appropriate for a European Competition Network that decisions of one NCA are recognised by all other NCAs unless there are specific reasons for non-recognition, for example, the lack of a fair trial in the proceedings of the NCA of the Member State of origin. The practice of de facto recognition of NCA decisions within the European Competition Network does not make a specific rule to this effect redundant.

III.  The Recognition of an NCA Decision in Civil Proceedings of another Member State Where the victim of an infringement of Articles 101 and 102 claims damages in a follow-up action in the court of a Member State, it shall be entitled to rely on the finding by the NCA of the same or of another Member State that Article 101 or 102 TFEU (formerly 81 or 82 EC) has actually been infringed. This is the essence of the White Paper proposal which is inspired by section 33(4) German Act Against Restraints of Competition as amended in 2005. That provision reads: Where damages are claimed for an infringement of a provision of this Act, or of Article 81 or 82 of the EC Treaty [now 101 or 102 TFEU], the court shall be bound by a finding that an infringement has occurred, to the extent that such a finding was made in a final decision by the cartel authority, the Commission of the European Community, or the competition authority – or a court acting as such – in another Member State of the European Community’.13

In the Commission Staff Working Paper published together with the White Paper14 the effect of a recognition of a foreign NCA decision is explained as an ‘irrebuttable probative effect’. Although the reference to proof would indicate that the binding effect of the foreign NCA decision is limited to its findings of fact, the Commission Staff Working Paper also refers to the legal assessment of those facts by the foreign NCA.15 In all events, the recognition would not extend to any further requirements of a claim for damages, in particular the 13   English translation adapted from the website of the Bundeskartellamt (Federal Cartel Office of Germany): www.bundeskartellamt.de/wEnglisch/download/pdf/GWB/0911_GWB_7_Novelle_E.pdf. 14   Commission Staff Working Paper accompanying the White Paper on damages action for breach of the EC antitrust rules, SEC (2008) 404, 2 April 2008, headline preceding para 144. 15   ibid para 146.

Recognition within the ECN  397 extent of loss suffered by the victim, the causation of that loss by the infringement of Article 101 or 102 TFEU (formerly 81 or 82 EC), or the fault of the defendant undertakings.16 The rule has been criticised in the European Parliament ‘for deviating from the principle that an administrative decision by a State can only be valid within its sovereign territory. Decisions by NCAs can therefore only acquire legally binding status internally’.17 But the main objection against the White Paper proposal rather concerns its narrow scope which will again give rise to inconsistencies. Just like the German model, the option outlined by the Commission is intended to bind only in respect of damages actions in the State of recognition, not with regard to actions aiming at injunctive relief or other possible private law consequences of anti-competitive conduct. Moreover, the White Paper proposal would be applicable only to final NCA decisions and does not set forth any further conditions for recognition. The explicit requirement of the final character of the foreign decision amounts to an exhaustion of legal remedies in the country of origin. It implies that an undertaking which wants to challenge the foreign decision on procedural or substantive legal grounds shall produce all relevant objections in the country of origin and not in the Member State of recognition. It is questionable whether this is a sufficient safeguard against breaches of substantive law or of procedural guarantees. It should be recalled that the list of grounds for non-­ recognition of foreign judgments contained in Article 34 Brussels I Regulation explicitly mentions the lack of sufficient notice of a claim to the defendant in respect of judicial proceedings. It is difficult to understand why a decision of the executive should be given effect abroad under more lenient conditions than a decision of the judiciary. If infringements of procedural fairness are possible in judicial proceedings, why should they be impossible or irrelevant in administrative proceedings or when it comes to the judicial review of such proceedings? They may even be more likely to happen in an administrative proceeding which is conducted by a State authority close to the government and usually less formal than a judicial proceeding. Where those breaches occur in the Member State of origin of the decision, the courts of another Member State called upon to recognise that decision do not appear to have any possibility to refuse recognition under the rule proposed in the Commission White Paper. They will nonetheless have to comply with Article 6 European Human Rights Convention which also ensures that only decisions resulting from a fair trial are recognised in other contracting States.18 The requirements set forth by Article 6 EHRC have been recognised as forming part of primary Community law.19 To sum up, the White Paper proposal on the recognition of foreign NCA decisions should be extended in its scope and refined with regard to the preconditions of recognition.

16   See the Draft Report of Rapporteur KH Lehne on the White Paper on damages actions for breach of the EC antitrust rules to the Committee on Economic and Monetary Affairs of the European Parliament, PE412.315v01-00, PR/743381EN.doc, 2008/2154(INI) of 19 September 2008; for German law, the same view is taken by M Dreher, ‘Der Zugang zu Entscheidungen mit Bindungswirkung für den kartellrechtlichen Schadensersatzprozess’ (2008) Zeitschrift für Wettbewerbsrecht 325, 327. 17   See the Draft Report of Rapporteur Lehne (n 16) 8. 18   Pellegrini v Italy no 30882/96 ECHR 20 July 2001, Reports of Judgments and Decisions 2001-VIII, 353; cf P Kinsch, ‘The Impact of Human Rights on the Application of Foreign Law and the Recognition of Foreign Judgments: A survey of the cases decided by the European Human Rights Institutions’ in T Einhorn and K Siehr (eds), Essays in Memory of Peter Nygh (The Hague, TMC Asser Press, 2004) 197–228, 218 ff. 19   Case C-7/98 Krombach v Bamberski (ECJ 28 March 2000) ECR I-1935 paras 39, 42; see now Art 6 EU as amended by the Treaty of Lisbon.

398  Jürgen Basedow

IV.  The Recognition of Civil Judgments by a Civil Court of a Foreign Member State The White Paper of the European Commission deals with the effect that court decisions may have in other Member States only to the extent that such courts review the administrative decisions of the NCA of their respective Member State. The White Paper does not examine the effects that a judgment taken by the civil court of a Member State may produce in civil proceedings in the courts of other Member States. Situations where the recognition of decisions of the latter type is sought are not unlikely and may occur more often in the future, in particular in the context of contractual disputes. Where contracting parties are litigating claims which flow from contracts containing restrictive agreements, for example exclusive dealership clauses, the courts would in the past have stayed proceedings, because only the Commission was in a position to exempt such restrictive agreements from the prohibition of Article 81(1) EC (now 101(1) TFEU). Under Regulation 1/2003, the civil courts of the Member States dealing with such disputes may now conclude themselves that a restrictive clause under scrutiny is valid or invalid because of an infringement of Article 101(1) TFEU (formerly 81(1)). The effect of such a finding in other Member States may become relevant both for administrative proceedings (see V below) and in civil proceedings aiming at compensation. The situation outlined above had already been covered by the Brussels Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,20 and it is now covered by the Brussels I Regulation. Competition-related civil proceedings, whether of a contractual or non-contractual nature, deal with civil and commercial matters for the purpose of Article 1 of that Regulation; consequently, the resulting judgments are capable of being recognised and enforced in other Member States in accordance with Articles 32 and following.21 While there is some doubt as to the classification of a judgment awarding punitive damages or treble damages as a civil and commercial matter, this can only relate to the part of the award exceeding the amount needed for compensation.22 While it is possible to argue that this surplus part of the award has a penal character, such a contention does not concern the basic finding of a court that competition law has or has not been infringed and that this infringement has caused a certain amount of loss. The recognition of that finding in another Member State may be sought under the Brussels I Regulation, and that is what matters in the context at hand.

  See n 8.  See I Schwartz and J Basedow, ‘Restrictions on Competition’ (1995) III International Encyclopedia of Comparative Law ch 35, section 93; for more recent statements see J Kropholler, Europäisches Zivilprozessrecht, 8th edn (Heidelberg, Verlag Recht und Wirtschaft, 2005) Art 1 para 15; AP Komninos, EC Private Antitrust Enforcement (Oxford, Hart Publishing, 2008) 250. 22   See for Germany BGH (Federal Court) 4 June 1992 (1992) Neue Juristische Wochenschrift 3096, 3102 ff. 20 21

Recognition within the ECN  399

V.  The Recognition of Civil Judgments by an NCA of a Foreign Member State As pointed out earlier, the finding made by the national court of a Member State in civil proceedings that Article 101 or 102 TFEU (formerly 81 or 82 EC) has been infringed may trigger administrative proceedings conducted by the NCA of another Member State. Would that NCA be bound by the finding of the court of the first Member State? This situation is not dealt with by the White Paper of the European Commission. Is it covered by the Brussels I Regulation which deals with the recognition in Member States, ie the States ad quem, of judicial proceedings conducted in another Member State, ie the State a quo? Article 33 Brussels I which lays down the principle of ipso iure, ie automatic recognition of foreign judgments within the European Union, does not limit the effect of recognition to judicial proceedings in the Member State ad quem, but contains a very broad statement that ‘a judgment given in a Member State shall be recognised in the other Member States’. It would appear that this statement is binding not only on courts of law, but also on administrative authorities such as an NCA in the country ad quem. But this assumption is not beyond doubt. It is true that some of the rules of the Brussels I Regulation on recognition seem to suggest or even presuppose that the recognising body is a court of law. Thus, Article 33(3) deals with cases where recognition is an incidental question for the outcome of proceedings in a court of the Member State ad quem and lays down that ‘that court shall have jurisdiction over that question’; one might argue that an NCA as an administrative body of the State of recognition is not covered by this provision. Moreover, the legislative basis of the Brussels I Regulation, ie Articles 61 and 65 EC (now 81 TFEU), deal with the ‘judicial cooperation in civil matters’ (emphasis added) and do not mention a cooperation between a court in Member State A and an administrative authority in Member State B. On the other hand, Article 67(4) TFEU makes express reference to ‘the principle of mutual recognition of judicial and extra-judicial decisions in civil matters’ (emphasis added), leaving little doubt that the Union’s objective transcends the cooperation between courts of law. A narrow reading of Articles 33 and following of Brussels I is also excluded by other provisions which explicitly refer to ‘the court or competent authority’ in the country of recognition, see for example Article 55. Moreover, the doubts about the applicability of Articles 33 and following would not subsist once a party has successfully sought a judicial declaration of recognition of the foreign judgment or has applied for a declaration of enforceability under Articles 33(2) and 53 and following. To sum up, the principle of automatic recognition as laid down in Article 33 Brussels I would appear to apply as well where a competition-related civil judgment of the court of a Member State is invoked in administrative proceedings conducted by an NCA in another Member State. If single provisions of the Brussels I Regulation do not suit the conduct of administrative proceedings in the State ad quem, they would have to be adjusted by way of interpretation. As against this proposition one might argue that the recognition of judicial proceedings – processes which are inherently influenced by the autonomy of the parties and their agreements – may produce effects in foreign administrative proceedings which are conducted in the public interest and which do not allow for contractual arrangements. Would recognition of the foreign judgment not undermine the public good of the State ad quem? Where

400  Jürgen Basedow this gives rise to problems, recognition may be refused for infringement of public policy, Article 34(1) Brussels I Regulation. Another objection concerns the limited effect of the recognition, by an NCA, of a foreign judgment given in a civil case. Recognition extends the res iudicata effect of a foreign decision to the domestic sphere, and that res iudicata will usually be limited to the parties of the foreign proceedings. Thus, an authority of the Member State ad quem, which has not been a party to the foreign proceedings, cannot be formally bound by the recognition of the foreign res iudicata where the foreign judgment only has inter partes effects. For this authority, the foreign judgment will however generally unfold a persuasive effect, provided that it satisfies the conditions of recognition laid down in the Brussels I Regulation. In certain circumstances, however, the foreign judgment is effective erga omnes; this may occur, for instance, where a company has been dissolved by the foreign judge because of an infringement of competition law. In such cases the foreign decision will produce a binding effect on the domestic administrative proceedings by virtue of a recognition in the proper sense.

VI.  The Effect of Recognition The Brussels I Regulation does not clearly spell out what recognition means. But the Jenard Report on the Brussels Convention of 1968 makes clear that ‘recognition must have the result of conferring on judgments the authority and effectiveness accorded to them in the State in which they were given’.23 Recognition thus extends the res iudicata effect of the foreign decision to the Member State of recognition. This has a positive meaning: the legal relation and the facts disputed between the parties are deemed to be the same in the State of recognition as in the country of the judgment’s origin. There is also a negative meaning: any deviating decision in the country of recognition is forestalled.24 With regard to NCA decisions, the White Paper proposal of the Commission only takes up the latter aspect of prohibiting a national court of the Member State of recognition to ‘take decisions running counter’ to the foreign NCA decision. For both the Brussels I Regulation and a future rule on the recognition of NCA decisions, it is essential to identify the scope of the foreign decision. As pointed out before, the effect of recognition of a foreign NCA decision shall be limited to the facts established and their legal assessment by the foreign NCA. Further aspects such as the extent of loss suffered by the victim, the causal link between the infringement of competition law and the loss, or the fault of the defendant undertakings are not affected by the recognition of the foreign decision.25 But even beyond that limitation, a careful analysis of what has been decided by the foreign NCA is required for a precise determination of the scope of recognition. This is due to the circumstance that the facts relevant for competition law and their legal assessment often have an inherent local and/or substantive dimension which makes their recognition in other countries meaningless. 23   See P Jenard, Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, done at Brussels on 27 September 1968, English version published in [1979] OJ C59/1, 43; this approach has been endorsed by the Court of Justice, see Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg (ECJ 4 February 1988) ECR 645 para 10. 24   For further details, see P Wautelet in U Magnus and P Mankowski (eds), Brussels I Regulation (Munich, Sellier, 2007) 548 ff, Art 33 paras 3–11 with further references. 25   See n 14–16.

Recognition within the ECN  401 An illustrative example would be a price cartel concluded between suppliers of construction materials in Eastern Bavaria. The undertakings involved are also doing business in the neighbouring regions of Austria and the Czech Republic. As a result of a consultation in the European Competition Network,26 the German Federal Cartel Office is charged with the investigation of the case. The Cartel Office starts an enquiry which is, however, limited to the German market for practical reasons. Finally, the Federal Cartel Office finds an infringement of Article 101 TFEU (formerly 81 EC), imposes fines on the undertakings and issues an order requiring them to terminate the infringement. Invoking that decision, a Czech customer who has bought construction materials from one of the undertakings in the Czech Republic brings an action, in a Czech court, for compensation of the loss he sustained through paying the cartelised prices. The case illustrates two types of uncertainty that may occur if the Commission Proposal for a rule on recognition is accepted. The first relates to the facts. Since the enquiry of the German Cartel Office was limited to the German market, it is unclear whether the pricefixing agreement of the undertakings also covered their activities in the Czech Republic; recognition of the German NCA decision by the Czech court obviously makes sense only in the latter case. The second relates to the legal consequences. Even if the findings of the German Cartel Office leave no doubt about the cross-border extension of the price-fixing cartel, it may still be inappropriate to recognise the NCA’s legal assessment of an infringement of Article 101(1) TFEU (formerly 81(1) EC). This would presuppose a separate investigation into the Czech market. There may be non-cartelised suppliers in the Czech market who offer substitutes for the cartelised products, extending the relevant product market beyond the findings made by the German Federal Cartel Office. As a consequence, the market share of the cartelised suppliers may fall short of the de minimis threshold established by the European Commission.27 Thus, a separate investigation of the anti-competitive conduct of the cartelised suppliers in the Czech market would have led to a finding that no infringement of Article 101(1) TFEU (formerly 81(1) EC) had occurred. The different market conditions cannot be ignored by a mechanical recognition rule which has been proposed to facilitate the compensation for true cartel victims; it is not meant to accord damages for breach of competition law where competition has not been restricted. If the Czech court dismisses the damages action against a German cartel member, this decision might be considered at first sight to run counter to the decision of the Federal Cartel Office. But a closer look must inevitably reveal the geographical limitations of the German NCA decision. Consequently, a dismissal of the damages action by the Czech court could be in accordance with the decision of the German Cartel Office. Further examples illustrating the same geographical limitations of many administrative findings could be given. While they do not question the principle of recognition of foreign NCA decisions in the European Competition Network as such, they would require a very careful analysis of the scope of the NCA decision by the iudex ad quem. The wording of the 26  See the Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities, www.ec.europa.eu/competition/ecn/joint_statement_en.pdf; see also Commission Notice on cooperation within the Network of Competition Authorities [2004] OJ C101/43; on the principles of case allocation see C Oelke, Das europäische Wettbewerbsnetz (Baden-Baden, Nomos, 2006) 155 ff; S Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (Oxford, Hart Publishing, 2009). 27   Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (de minimis) [2001] OJ C368/13 establishing for example a 10% aggregate market share of the undertakings involved for horizontal restrictions.

402  Jürgen Basedow rule suggested by the European Commission on the recognition of foreign NCA decisions should be amended so as to address this need.

VII. Conclusion Issues of recognition of foreign decisions may arise in various contexts. To the extent that competition-related judgments of civil courts are invoked in other Member States, the Brussels I Regulation provides a sufficient basis for recognition. The Commission White Paper now tackles the recognition of NCA decisions in competition-related civil proceedings conducted in the courts of other Member States and aiming at the compensation of losses caused by the infringement of EU competition law. A more comprehensive approach designed to cover recognition of such decisions in other Member States in general would appear more appropriate. Recognition must depend on compliance with the requirements of a fair trial by the NCA in the country of origin. A rule on recognition should also take account of the frequent geographical limitations that are inherent in administrative proceedings conducted by NCAs; they may make the recognition of such a decision in a foreign Member State completely meaningless. To cope with the various objections, the recognition rule should be drafted as a rebuttable presumption at a first stage. As further research is conducted, the rule can be amended to achieve more precision concerning the conditions and the effects of recognition.

Policy Proposals

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.  Introductory Proposals 1.  As regards private enforcement actions, the rules of Article 5(1) and Article 5(3) need not be modified in the context of the review of the Brussels I Regulation. As a matter of fact, these rules benefit from a now long-standing tradition of application in the case-law of the Court of Justice. Moreover, the recently-added provisions of Article 5(1)(b) have in recent months been the object of a number of judgments of the Court of Justice. The construction of this provision is thereby facilitated, and it seems logical to expect that other judgments will ensue and further facilitate its application (Color Drack, Falco, Peter Rehder, Car Trim and, especially, Wood Floor). 2. The key issue to a coherent application and proper treatment of competition law enforcement cases requires carrying out an accurate delimitation between contractual issues and non-contractual issues.1 To that end, it is important to bear in mind the principles stemming from the case-law of the Court of Justice, namely regarding the precedence to be given to the contractual characterisation: a matter should be only considered tortious insofar as it cannot be characterised as contractual. The trend toward considering private enforcement actions as falling exclusively within Article 5(3) ought to be avoided and the precedence of the contractual characterisation should be preserved.

II.  Interpretative Proposals Concerning Article 5(1) 3.  According to the above-mentioned case-law, the concept of ‘contractual matters’ has to be broadly construed. It only requires the identification of an obligation, regardless of the question whether a contract has effectively been concluded, ie including nullity actions   See the Proposals of S Poillot-Peruzzetto and D Lawnicka.

1

406  Blanca Vilà Costa which challenge the very existence of the contract (see Courage with regard to the scope of the nullity sanction). Hence, as long as they affect the parties to the contract, Article 5(1) applies to nullity actions claiming restitution, damages, the declaration of nullity or validity and/or the performance or non-performance of a contractual obligation. 4.  The special provisions of Article 5(1)(b) should as a general rule apply in cases of dis­ tribution contracts, notwithstanding their admittedly hybrid nature. This is particularly relevant due to the importance of distribution contracts in the framework of competition law private enforcement. Moreover, for the sake of coherence and as required by Recital 17 Rome I Regulation, the interpretation and application of these rules must be carried out on the basis of a close coordination with the provisions of Articles 4(1)(a) and (b), as well as (e) and (f). 5.  By means of the provision of Article 5(1)(c), and also for contracts other than sales of goods and provisions of services, the special rule of Article 5(1)(a) will also apply to private enforcement actions. However, difficulties may admittedly arise in the context of actions based not on a breach of the contract by one of the parties, but on the general violation of antitrust rules – for example, when the plaintiff claims that the distribution contract itself is in violation of Article 101 TFEU regardless of the defendant’s behaviour.

III.  Interpretative Proposals Concerning Article 5(3) 6.  Where an action can be characterised as tortious, the rule of Article 5(3) will apply. This includes not only actions for damages, but also injunctions (including ex ante injunctive relief) and actions for a declaration of non-liability (rather than mere declarations of nullity). 7.  Concerning the interpretation of the rule and the localisation of the place where the harmful event occurred, it is necessary to interpret the content and scope of antitrust rules as a means of pre-localisation of the place of the harmful event (for example, Manfredi). It should be borne in mind that the localisation in terms of the competition infringement may act as a ‘first step’ also with regard to the localisation of the harm, for the determination of jurisdiction rules. 8.  As for cases of dissociation, the ubiquity rule will favour the use of the place of manifestation of the harmful effects. Nevertheless, it should not be overlooked that in some cases the place of production of the harmful event may also play a relevant role – as far as ‘violation by object’ (not only ‘by effect’) is concerned. The Shevill doctrine shall also apply, notwithstanding some necessary adjustments required by the special nature of antitrust torts, and in close coordination with the special rules of Article 6(3) Rome II Regulation, for the sake of coherence. 9.  Under the case-law of the Court of Justice (Manfredi in particular), indirect purchasers – in their capacity as indirect victims – may also avail themselves of the above-mentioned dissociation rule as long as they sue in the place where the direct harmful effects were felt.

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

In respect of the infringement of competition 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.1

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. 1   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.

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

I. Introduction It is important not to exaggerate the importance of encouraging actions for damages as a means of private enforcement of competition law. Nor should it be pretended that such actions represent a special case that warrants derogations from the normal 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.

II.  Article 6(1) 1.  In order to ensure that the European Court adopts a more balanced approach to the interpretation of Article 6(1), the minimum requirement is 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. 2.  It would be preferable to go further by deleting the words ‘to avoid the risk of irreconcilable judgments resulting from separate proceedings’. 3.  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 to prevent actions being brought outside the natural forum.

410  Michael Wilderspin It is important to ensure that Article 6(1) permits the concentration of actions against several defendants in proper cases while, at the same time, protecting defendants from improper forum shopping. Looked at from the competition policy angle, the European Commission does not appear to attach importance to Article 6(1) Brussels I Regulation as a vehicle to concentrate cross-border actions for damages. Neither the White Paper on Damages actions for breach of the EC antitrust rules,1 the Commission Staff Working Paper Accompanying the White Paper2 nor the draft proposal for a Directive on rules governing actions for damages for infringements of Articles 81 and 82 of the EC Treaty pay any attention to that provision. Nor, with the specific exception of intellectual property cases, does Article 6(1) receive attention in the context of the review of the Brussels I Regulation. The Heidelberg Report3 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.4 Roche Limited v Provimi5 provides a useful illustration of the application of Article 6(1) by a national court. In that case, the actions of the English claimants were directed first and foremost against the English subsidiary from which the claimants had purchased vitamins. That company was clearly a proper defendant, as was the parent company which had been instrumental in forming and implementing the cartel. The defendant parent companies did not challenge the jurisdiction of the English court to entertain jurisdiction against them based on Article 6(1). The dispute in relation to the jurisdiction of the English court concerned the action by the German claimant which sought to bring its action in England against the English defendant (from which it had not purchased any vitamins) as anchor defendant, on the basis of which it could assert jurisdiction against also the German subsidiary and the parent company based on that same provision. Having accepted that the German claimant had an arguable case against the English defendant, the Court allowed the German defendant and the parent company to be joined. 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. With regard to the question whether the decision of the High Court regarding the German claimants was in conformity with the European Court’s case-law, it is doubtful whether they had a claim against the German defendant since the latter 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 Community competition law, to hold that the German claimant had an arguable claim against the English defendant, this, according to Reisch Montage v Kiesel,6 would not be fatal to joining the German subsidiary and the parent company on the basis of Article 6(1). It

1   Commission, ‘Damages actions for breach of the EC antitrust rules’ (White Paper) COM (2008) 165 final, 2 April 2008. 2   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. 3   Report on the application of Regulation Brussels I in the Member States by Professors Doctors B Hess, T Pfeiffer and P Schlosser. 4   Heidelberg Report para 227. 5   Roche Products Ltd and others v Provimi Ltd [2003] EWHC 2609 (Comm). 6   Case C-103/05 Reisch Montage v Kiesel [2006] ECR I-6827.

Jurisdiction Issues  411 can also be debated whether the decision of the High Court is reconcilable with the muchcriticised judgment of the European Court in Roche Nederland BV v Primus Goldberg.7 In Roche Nederland, the decisive factor behind the Court’s restrictive approach was that, although the patent infringed was a European patent, it took effect as a bundle of national patents: thus, so the Court held, any divergences arising from judgments given by courts in the countries for which the patents had been granted would not have arisen in the context of the same legal or factual situation. The Court left open a question of general importance, namely whether the condition that it be ‘expedient to hear and determine [the claims] together in order to avoid the risk of irreconcilable judgments arising from separate proceedings’8 bears the same meaning as in Article 28 Brussels I Regulation, where, in order for a judgment to be irreconcilable within the meaning of Article 6(1), it suffices that ‘separate trial and judgment would involve the risk of conflicting decisions, without necessarily involving the risk of giving rise to mutually exclusive legal consequences’?9 Or, by contrast, does ‘irreconcilable judgments’ bear the same meaning as in Article 34(3) of the Regulation where there must exist a risk of judgments which ‘entail consequences which are mutually exclusive’?10 Logically, the answer should be that the expression in Article 6(1) bears the same meaning as in Article 28 since, in Kalfelis, the condition added by the Court was taken directly from that Article. However, even if this problem is ironed out, the extremely restrictive interpretation of the concept of ‘the same factual situation’ that the Court adopted may make it advisable to remove the criterion of the risk of irreconcilable judgments altogether.

III.  Article 23 4.  No amendment The idea of reforming Article 23 Brussels I Regulation11 in order to allow agreements on jurisdiction to be given their fullest effect has been floated in the Commission’s Green Paper. Such reform could reverse the rule in Gasser v MISAT.12 However, in 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 may present themselves differently. In Provimi, the High Court did not call into question the possibility in principle of a jurisdiction 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 some of the   Case C-539/03 Roche Nederland BV and Others v Frederick Primus and Milton Goldenberg [2006] ECR I-6535.   This condition was added judicially to the Brussels Convention by the judgment in Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co and others [1988] ECR 5565, and incorporated by the legislature into the text of Art 6(1) Brussels I Regulation. 9   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. 10   Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645. 11   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. 12   Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-4693. 7 8

412  Michael Wilderspin different defendants to require actions to be brought in a multiplicity of different courts, thereby defeating the purpose of Article 6(1). Second, where the chosen court is in a nonEU Lugano State,13 there would be a danger of the chosen court not attaching liability to the breach of EU competition law.14 However, it is far from certain that this is a real danger. It is perhaps unlikely that sellers would insert a clause which states baldly that all disputes arising in connection with the sale of goods, including actions for damages flowing from a breach of national or Community antitrust law, are to be submitted to the chosen court and equally unlikely that courts would be prepared to infer such a meaning from a more ambiguously worded agreement. Thus, though it would be possible to amend Article 23 Brussels I Regulation15 in order to prevent its application to disputes arising from breaches of antitrust law, there is insufficient evid­ ence 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.

IV.  Article 27 5.  Article 27 should be amended by permitting the court second seised to take jurisdiction if the court first seised has not determined whether it has jurisdiction over the action within six months of proceedings being commenced. Article 27 may lend itself to abuse, as the practice of torpedoes in intellectual property cases has shown, if one party that is threatened with proceedings before a court that has jurisdiction brings proceedings before a court whose workings are notoriously slow in order to delay a determination on the merits. It would be unwise to reverse the rule in The Tatry that proceedings for a negative declaration trigger off the application of the lis pendens rule since such proceedings may have a legitimate aim. However, the proposed rule would have the effect of encouraging the court first seised to determine its jurisdiction rapidly and would discourage torpedo actions before courts that prove unable to speed up their proceedings.

V.  Article 28 6. No amendment There is little evidence of Article 28 causing problems in practice in this field.

13   Clearly, if the chosen court is within the EU, this danger would not exist, albeit the risk of fragmentation would still be present. 14   Swiss courts have shown a willingness to take account of Community antitrust law where the dispute 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. 15   Amendment of the Brussels I Regulation would not of course solve the potential problem identified with regard to 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.

Rome I and Antitrust Litigation MARC FALLON AND STÉPHANIE FRANCQ

1. No legislative amendment seems necessary concerning the law applicable to contractual issues since the Rome I Regulation contains suitable choice-of-law provisions in regard of the different kinds of rules coming into play in contractual disputes raising issues of competition law (market rules on the one hand and rules of private law on contracts on the other hand, see below, no 2). 2. Core provisions of competition law (be it at the domestic or the EU level), ie rules prohibiting specific behaviours (prohibition of antitrust agreements or prohibition of abuse of a dominant position), are market rules. In international situations, market rules apply, on a territorial basis, to all behaviours likely to affect the market, irrespective of the law otherwise applicable to the contractual (or non-contractual) issues. Like overriding mandatory rules in private international law, market rules apply directly and contain a special unilateral rule defining their scope of application. Market rules contained in the EU Treaty (Articles 101 and 102 TFUE) apply on their own motion, by way of primacy and according to their own applicability criteria. 3. Competition law also contains substantive rules of private law. EU law, in particular, contains common rules of private law in case of infringement of competition law: – the automatic nullity of prohibited agreements (Article 101(2) TFEU and its inter­ pretation by the ECJ); – the obligation to provide damage to the victims of an infringement of competition law, be it on a contractual or extra-contractual basis (the Courage and Manfredi rulings); and – a set of provisions contained in several block exemption regulations. In respect of these common rules of private law, it is sustained that: (a) the nullity regime and the liability regime in case of infringement of competition law are not entirely determined by the EU provisions and ECJ case-law and recourse to domestic law is still necessary to fill the gaps; (b) the precise impact of the provisions of block exemption on private disputes should be clarified by the Commission, at best in a future instrument on private enforcement, since at this stage the mission of domestic judges is unclear; (c) the common EU rules on the private law aspects of infringements of competition law apply on their own motion by way of primacy and according to their own applicability criteria, independently of the provisions of the Rome I Regulation.

414  Marc Fallon and Stéphanie Francq 4.  Since the ‘private law’ regime of competition law infringements is not entirely defined at EU level, it is still necessary to designate the law applicable to the contractual dispute, whose provisions will play a subsidiary role in regard of the EU provisions. Designation of the applicable law to the contractual dispute is the role of the Rome I Regulation. 5.  The Rome I Regulation as it stands will in most cases lead to satisfactory results for private enforcement litigation. In the absence of choice of law by the parties under Article 3, Article 4 designates, in case of distribution contracts, the law of the place of establishment of the distributor. The market rules of the same State are likely to command their own application. 6.  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. 7.  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. 8.  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.

Rome II and Antitrust Litigation STÉPHANIE FRANCQ AND WOLFGANG WURMNEST

The wording of Article 6(3) Rome II raises important practical and theoretical problems. Neither the preparatory works nor the other provisions and recitals of Rome II provide clear indications in this respect. Most of these problems can be solved by the way of interpretation. Some require clarification by the legislature.

I.  The General Reach of the Rome II Regulation 1.  With regard to market rules, ie rules that prescribe market actors what kind of behaviour is forbidden (Kartellverbotsnorm), the scope of application of competition law (be it EU competition law or national competition law) should not be modified by the entry into force of the Rome II Regulation. Rather the application of market rules should depend on the criteria of applicability set by competition law itself. 2.  Concerning EU competition law, this result is reached by way of primacy. EU competition law (as primary law) takes precedence over the Rome II Regulation (secondary law) and the application of Articles 101/102 TFEU (ex Articles 81/82 EC) is therefore not a question to be solved by applying Article 6(3) Rome II. Primacy covers the interpretation of Articles 101/102 TFEU. 3.  Concerning competition law of national origin, this result can be reached in two ways: (a) The market rules of national competition law can be considered as excluded either from the scope of Article 6(3) Rome II as a whole, or even from the scope of the Rome II Regulation. According to this interpretation, Article 6(3) Rome II deals only with the question of the law applicable to damages or other remedies such as injunctions. Market rules of competition law are thus applicable according to their own applicability criteria. (b) Article 6(3) Rome II can be construed as an ‘open gate’ (Öffnungsklausel). If it is considered that 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 market rules), the designation criterion of Article 6(3) Rome II should be construed in a flexible manner. First, if the market rules of the competition law of the country

416  Stéphanie Francq and Wolfgang Wurmnest designated under Article 6(3)(a) Rome II refuse to apply, they should not be applied. Second, if competition law provisions (market rules) of another country claim for their application, this application should be rendered possible. This ‘open’ approach is necessary because other provisions of the Rome II Regulation, which could govern the application of market rules of competition law, are drafted in too restrictive a way. Article 16 Rome II (overriding mandatory provisions) allows the application of the lex fori only. Article 17 Rome II (rules of safety and conduct) refers only to the rules of safety and conduct of the country where the event giving rise to liability took place. These connecting factors are unsound for competition law disputes. (c) Practical and theoretical arguments backing each position are discussed in the paper. The group agrees that market rules remain certainly outside the scope of Article 6(3)(b) Rome II. No consensus could be reached on the question whether Article 6(3)(a) Rome II covers market rules (and must be interpreted as an ‘open gate’ (Öffnungsklausel)) or whether market rules are entirely outside the scope of Article 6(3) Rome II or even the entire Rome II Regulation. Adopting one or the other position has great influence on the interpretation of Article 6(3) Rome II.

II.  Specific Issues of the Interpretation of Article 6 Rome II 4.  The concepts of non-contractual obligations arising out of acts of unfair competition (Article 6(1) Rome II) and non-contractual obligations arising out of restrictions of competition (Article 6(3) Rome II) shall be given an autonomous meaning. The line between Articles 6(1) and (3) Rome II must be drawn in accordance with the goals of each area of law. 5.  On the question whether Article 6(3) Rome II designates the law of a non-EU Member State (a third State), a distinction needs to be drawn between subparagraph (a) and subparagraph (b). As far as Article 6(3) Rome II has no impact on the applicability of the market rules of competition law (see above), the rule enshrined in Article 6(3)(a) Rome II may determine the applicable law of a third State. In contrast, as one can infer from the wording of subparagraph (b), the concentration rule enshrined in Article 6(3)(b) Rome II designates only the law of the EU Member State where the case is pending. In this context, the lex fori governs merely the questions relating to the civil remedy claimed for (for example, damages, injunction). Article 6(3)(b) Rome II has no influence on the question whether a given conduct infringes competition law. 6.  Despite the wording of Recital 23 Rome II, Article 6(3)(a) Rome II should cover situations, which are totally or partially localised in third States. As one can infer from the criterion set forth in Article 6(3)(b) Rome II Regulation (one of the defendants has domicile in the EU, market of that Member State is directly and substantially affected by the restriction of competition), the concentration rule, however, applies only to situations which have a connection with the EU. 7.  The concentration rule set forth in Article 6(3)(b) Rome II should be construed narrowly. It applies only to factual situations in which the plaintiff sustained damages in the EU. Plaintiffs having sustained damages outside the EU should not be entitled to invoke the

Rome II and Antitrust Litigation  417 concentration rule with respect to these damages. As a second limitation, only plaintiffs having themselves sustained harm in two or more EU Member States are entitled to rely on the concentration rule. Without such a limitation, 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 lex fori. No consensus could be reached on the question whether Article 6(3)(b) Rome II applies only to non-contractual claims based on an infringement of EU competition law or to claims based on an infringement of national competition law as well.

III.  Suggested Amendments to the Rome II Regulation 8.  Recital 23 Rome II should be reformulated in order to clarify that Article 6(3)(a) Rome II is universal (meaning that it can designate the law of any State, including a third State, and covers situations irrespective of the fact that they are connected or not with the EU). 9.  The wording of Article 16 Rome II should be modified in order to authorise the application of overriding mandatory laws other than those of the lex fori. Even if one is of the opinion that Article 6(a) Rome II covers market rules, this amendment is necessary to ensure the coherence of reasoning under Rome I and Rome II in general. 10.  For the sake of legal certainty Recital 22 or 23 Rome II should be amended to clarify whether Article 6(3)(b) Rome II also applies to situations in which a plaintiff invokes an infringement of national competition law or whether this concentration rule is restricted to claims based on an infringement of EU competition law.

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

The following proposals concern the determination of the applicable law to a claim based on a restriction of competition and they do not deal with the issue of the applicability of market rules of competition law. On the basis of the assessment that a restriction of competition is a breach of legal duty whose consequences should attract private action for compensation for economic losses irrespective of whether there is a contractual or a non-contractual relation between the plaintiff and the defendant, we propose the following three alternative legislative responses: 1.  The material field of the Rome II Regulation is extended to cover all situations whether based on contractual or non-contractual obligations. 2.  The distinction between the Rome I and the Rome II Regulations is maintained but in the Rome I Regulation specific provisions for breach of competition are inserted; these provisions are similar to the provisions provided in the Rome II Regulation (Article 6). 3.  A new and specific text replaces the Rome I and Rome II Regulations for private actions based on breach of competition rules and this issue is excluded from the material field of application of both Regulations. Whichever legislative response is selected, the text(s) would provide the following: – a definition of restriction of competition (on the model of Recital 23 Rome II); – a general reasoning methodology based on conflict-of-laws rules and possible exceptions based on public policy or overriding mandatory rules; – a specific connecting factor in order to link private action with a public interest; – the exclusion of freedom for the parties to choose the applicable national law; – a specific solution in case several markets are affected by a single or multiple anticompetitive event; – a specific solution in the case of several defendants; and – a specific provision related to the use of public policy in cases of punitive damages (model of Recital 23 Rome II).

International Litigation and Competition Law: the Case of Collective Redress DIMITRIOS-PANAGIOTIS L TZAKAS

I. Introduction The term ‘collective redress’ constitutes a general term encompassing both representative and collective/group actions. Under representative actions fall actions brought by a natural or, usually, a legal person on behalf of two or more individuals who are not themselves party to the action, and which are aimed at obtaining either injunctive relief or damages for the individual harm caused to the interests of all those represented (and not to the representative entity). Collective actions characterise claims of individuals or businesses which are combined into one single action. Notwithstanding the controversial discussion concerning the Community-law basis of civil antitrust liability, it is very questionable whether the findings of the ECJ in the cases Courage and Manfredi can build a solid base for interfering with the Member States’ procedural autonomy. It is beyond reasonable doubt that collective redress remedies provided by Member State laws shall not contravene the preconditions of Community law and, especially, the principles of equivalence and effectiveness. However, it seems very doubtful if the requirements of the acquis communautaire and of the effectiveness of the EU Competition rules can foster a basis for affirming either a Community collective redress remedy or an obligation to prescribe such remedies.

II. Jurisdiction 1.  It is beyond doubt that the jurisdiction of a Member State court in case of collective proceedings (both representative and collective/group actions) will be determined de lege lata under the Brussels I Regulation. The courts of the forum State should have jurisdiction for all claims brought by the representative entity or for all class members. The provisions of Articles 2 and 6(1) Brussels I Regulation do not pose any specific problems. This is also the case with the place of occurrence of the harmful event pursuant to Article 5(3) Brussels I Regulation.

422  Dimitrios-Panagiotis L Tzakas 2.  From the standpoint of the same provision regarding the place where the (primary or immediate) damage occurred, it has to be asked whether the ruling of the ECJ in Shevill also applies in competition cases. 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.

III.  Applicable Law 3.  The law applicable on the merits shall be designated pursuant to the Rome II Regulation. The requirements laid down by the connecting factor enshrined in Article 6 Rome II Regulation shall be determined by reference to the persons suffering damages caused by the infringement of Article 101 or 102 TFEU.

IV.  Specific Issues of Representative Actions 4. Standing (a) Proposition. 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 has to be endorsed. The NCA of the Member State where the real or statutory seat of the representative entity is situated could be conferred jurisdiction over granting a general or ad hoc certification. The certification should be communicated to the European Commission, and the relevant information should be available to the other members of the ECN, thus promoting significant transparency. (b) Discussion. The diverging understanding of the Member States regarding the legal nature and qualification of the standing requirement enhances the legal uncertainty prevailing in the field of cross-border collective litigation. The existing uncertainties remain after the enactment of the Rome II Regulation since there is no unambiguous provision answering the question whether the applicable law shall also govern standing of representative entities. An answer in the affirmative to this question would allow collective entities to also invoke the concentration rules of Article 6(3)(b) Rome II Regulation, amounting to a significant potential for forum shopping. Furthermore, the representative actions of many Member State laws are tailored only for domestic entities (or more precisely for entities certified under the domestic laws), thus impeding cross-border proceedings. The principle of non-discrimination can only have a limited impact on that context. 5.  Represented individuals (a) Proposition. It could be suggested to require an authorisation from an entity having its real seat in the Member State in the market of which the (identifiable) harmed individuals suffered damages. The entity granting the power of authorisation should be eligible to initiate collective proceedings pursuant to the laws of its real

International Litigation and Competition Law  423 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. (b) Discussion. The wording of the Commission documents does not exclude the representation of harmed individuals or enterprises located in a Member State other than the one where certification has been obtained. This approach is 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 is ensured. Yet deficiencies may arise in case of actions for damages brought by qualified entities on behalf of not only identified, but also (in rather restricted cases) identifiable victims who are not necessarily their members. One can imagine the initiation of parallel proceedings on behalf of overlapping groups of claimants. Allowing qualified entities to initiate proceedings on behalf of individuals who are domiciled or have suffered damages in a Member State other than the one where certification has been obtained could promote abusive litigation. Furthermore, this situation could amount to ‘a race to the court’ among entities seeking compensation in favour of the widest possible group of harmed individuals. 6.  Distribution of damages (a) Proposition. The matter of the distribution of damages should be governed by the law(s) designated under the basic rule of Article 6(3)(a) Rome II Regulation. The concentration rules should be excluded. (b) Discussion. Although the White Paper considers the adoption of some variation of the cy près doctrine, the pre-draft Directive prescribes merely that damages awarded in a representative action shall be distributed, to the largest possible extent, to the injured parties represented. Since it is almost certain that in many cases a significant amount of damages are likely to remain undistributed, it is necessary to introduce a conflict-of-laws rule governing this issue so that the diverging concepts of the national laws will be respected.

V.  Specific Issues of Collective Actions 7.  Admissibility. The admissibility of collective actions will be determined by the lex fori. Giving consideration to the evolving patchwork of national mechanisms, the introduction of such remedies at the EU level is necessary. 8.  Nationality of group claimants. Restrictions concerning the nationality of the plaintiffs should not be allowed in intra-EU cases since such discrimination contravenes EU primary law. 9.  Applicability of several national laws. In the event of the applicability of more than one national law, it seems 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.

424  Dimitrios-Panagiotis L Tzakas

VI.  Recognition and Enforcement 10.  Due process. From the perspective of due process requirements, an ad hoc analysis as to whether effective and sufficient information mechanisms are provided cannot be excluded from the scope of the public policy clause. Instead, examining the adequacy of the notice directed to the absentee claimants on an ad hoc basis seems appropriate for safeguarding fundamental procedural rights. This approach has been fully considered by the pre-draft Directive according to which qualified entities have to undertake ‘the appropriate means to make the representative action known’. The requirement of the court approval of these means has to be welcomed as well. Taking into account the different procedural traditions of the Member States, it has to be considered whether more guidance on this issue should be provided. For example, the appropriateness of a rule prescribing that individual notice by postal mail is mandatory where names and addresses of the putative claimants are known (or can be found through reasonable effort) could be discussed. 11.  Principle of party disposition versus opt-out requirement. It has to be observed that the principle of party disposition constitutes neither an imperative nor an axiom prohibiting any diverging provision. Accordingly, the concerns relating to this principle are outweighed by the promotion of judicial efficiency and the enactment of sufficient procedural guarantees. Taking that aspect into account, the introduction of a limited opt-out group mechanism following the Danish or the Norwegian model should be considered.

Arbitration and EU Competition Law ASSIMAKIS P KOMNINOS

I. Introduction Arbitration is a generally accepted method for the resolution of international business disputes and, for antitrust enforcement purposes, it represents another forum for the application of the competition rules. There is nowadays no doubt that EU competition law disputes can be submitted to arbitration (they are arbitrable), notwithstanding their public policy (ordre public) nature. After modernisation, exactly like courts, arbitrators have full competence to apply the whole of Article 101 TFEU, including its third paragraph. If the Commission were to issue in the future a notice or another informal instrument on arbitration, for clarity it could explicitly state the above proposition.

II. Cooperation The neglect of arbitration in Regulation 1/2003 and in the accompanying ‘Modernisation Package’ is not in itself problematic; however, the European Commission should always remain open to cooperate with arbitration tribunals either in an informal or a more formal way. In the future, the Commission could consider publishing a Notice or some Guidelines on cooperation with arbitral tribunals. Such a Notice could provide for a more structured dialogue between arbitrators and the Commission, while increasing the transparency of the whole system of cooperation. It would also raise the EU competition law awareness of arbitrators and parties, but should strive not to encroach on the fundamental principles of flexibility, confidentiality and privity of the arbitral process.

III.  Control of arbitral awards and public policy Arbitration is not an organ of the Member States and therefore Articles 4(3) TEU and 16 Regulation 1/2003 are not directly binding on it. However, arbitral awards can be reviewed by EU-based State courts on public policy (ordre public) grounds, and this constitutes the

426  Assimakis P Komninos ultimate and most efficient safeguard for the respectful application of the EU competition rules by arbitrators. To the extent an arbitral award may be reviewed and set aside on such grounds, the arbitrators should exercise caution when applying EU competition law and should even proceed to apply it of their own motion (ex officio). In the extreme case where an arbitral tribunal is an internal structure of a cartel and its function is to ensure compliance and resolve ‘disputes’ within the cartel, the arbitration clause itself would be illegal and the ‘arbitrators’ would be liable to fines under Article 101 TFEU.

Recognition and Enforcement of Foreign Judgments CATHERINE KESSEDJIAN

As far as recognition and enforcement of foreign judgments are concerned, private international rules in Europe, the United States, and the rest of the world are fairly well settled by now. Private enforcement of competition law has not so far given rise to many decisions until today. Thus, the following proposals have been prepared without much support from positive law, but are formulated de lege ferenda. 1.  Recognition and enforcement process in competition matters must not depart in essence from the rules which are now in force for other decisions in civil and commercial matters. 2.  If there is one model to be followed, it is the European one and not that of the United States. This is true not only for procedural rules, but also for the verifications which the requested judge must conduct, or for the reciprocity requirement. 3.  If Regulation 44/2001 is extended to judgments from third States (see the ongoing work performed by the GEDIP/EGPIL), two distinct bodies of rules must be prepared, one for judgments rendered in a Member State, the other for judgments rendered in third States. 4.  Two questions are specific to the competition area: (a) It is not unusual that judges grant punitive damages, which are considered, at least in Europe, as private sanctions essentially destined to deterrence. These damages are sometimes considered as exorbitant. What should the requested judge do? This question has given rise to a long and heated debate in the Hague. One of the best solutions could be to authorise the requested judge to lower the amount of damages granted by the judge of origin, taking into consideration all circumstances of the case. Indeed, it is not entirely clear that the public policy exception, classically available against foreign judgments is a sufficient barrier in case of exorbitant punitive damages. (b) The European Commission (and probably other competitive authorities) orders ever-increasing penalties against companies which are found in violation of competition law. Therefore, if in the same case, the same company is ordered to pay penalties and is also ordered to pay damages for private enforcement, the requested judge should probably take into consideration the amount of penalties paid before it accepts the recognition and enforcement of the damages ordered by the judge of origin. It could be that partial enforcement is the best solution in such a case.

Access to Evidence and Files of Competition Authorities LAURENCE IDOT

1.  In private antitrust litigation, the issue of access to evidence is one of the most complex ones. As many actions are follow-up actions, any solution must not only take into account the issue of disclosure inter partes, but also the issue of access to files of Competition Authorities (CA). Moreover, it is necessary to make a distinction between the situation within the European Union and in relations with third countries, like the US, in which courts unilaterally apply their own law.

I.  In the EU Context A.  Recognition of a Right of Access i. Disclosure Inter Partes – It would be helpful if the notion of ‘provisional or protective measure’ were specified in Regulation 44/2001. – The substantive solutions proposed in the ‘pre-draft’ Directive, which are an adaptation of the Council Directive 2004/48, seem satisfactory since they lead to a minimum harmonisation of the 27 national laws of the EU Member States. – However, the pre-draft Directive does not take into account the international dimension of the issue. A future EU instrument on the strengthening of private competition law enforcement should include a reference to the existing Council Regulation 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters. Since the first studies on the application of this regulation show that it has not really been a success, so far the issue has only been dealt with in the context of access to files of the European Commission.

430  Laurence Idot

ii.  Access to the file of a CA So far, we only have experience in respect of access to the files detained by the EU Commission. Although the ECJ ruled that Regulation 1049/2001 on public access to documents applies in this respect, this instrument is clearly not an appropriate tool. As far as access to files of a national competition authority is concerned, the relevant national rules (for instance, Article 11 Code of Civil Procedure (NCPC) in France) are limited to domestic relations and do not fit in the international context. There is at this stage no requirement for a NCA to give effect to a foreign injunction on access to file.

iii. Conclusion In both situations, the general issue is the same: should the order of the requesting court be recognised and opposed either to a CA (Commission or NCA) or to a party? If the answer is affirmative, what tool do we need? The EU principles of mutual trust and cooperation as laid down in Article 4(3) TEU (as it applies both to the Commission and to national authorities) seems to infer an obligation to take into consideration a demand of access to file emanating from a tribunal. This obligation, as well as an accompanying cooperation mechanism, should be clearly stated in the future EU Act.

B.  Limits to the Right of Access A limitless right to access is not warranted. Private parties or CAs do not have to disclose documents containing confidential information, such as business secrets (Article 28 Regulation 1/2008; Postbank case) or special information of leniency applicants. In the pre-draft Directive, the Commission proposed a balancing test and exceptions for corporate statements (leniency) and ‘all legal privileges and other rights’ existing under EU law. Once again, two points are missing: the specific issue of access to files of a CA, and consideration of the international aspect of the situation. From a theoretical point of view, there are two solutions: – On the one hand it would be feasible to restrain the order of the requesting court. This solution is suggested by the ‘pre-draft’ for leniency statements. It seems to be satisfactory. – On the other hand it would be feasible to restrain the recognition of the order by the requested authority. If there are common standards regarding the right of access to confidential information, the ‘procedural conditions’ governing actions to enforce this Community right in national courts should be left to national law, even though this might lead to some differences regarding the reach of this right. In the context of an access to the file of a CA, it would make sense that the CA could oppose a request for confidential information on the basis on its own law.

Access to Evidence and Files of Competiton Authorities  431

C. Conclusion In the pre-draft Directive (or any other future EU instrument on the issue of access to evid­ ence), attention should be given to both access to the files of a CA, which is of great import­ ance for follow-on actions, and to the international dimension of issues concerning access to information. An explicit reference to the existing tools on the European level, such as Regulation 1206/2001, should be made, but it could be completed by the introduction of specific rules which take into account the international dimension.

II.  In an International Context So far, the issue has only appeared in the relations between the US courts and the Commission, but it could extend to relations with other countries in the future. It is much more difficult to make some propositions. We already have the example of cooperation between CAs. There are mainly two types of tools: multilateral discussion within the International Competition Network which leads to soft law and bilateral cooperation agreements. The objectives are clear. Unilateral application should be limited. When some international conventions exist, they should be applied. – For instance, for disclosure inter partes, in the relations between a Member State party to the Convention and the US, the Hague Convention on the taking of evidence abroad in civil and commercial matters (March 1970). – As far as access to files of a CA is concerned, for the time being, it would be useful to introduce additional provisions on access to files in the existing bilateral cooperation agreements concluded by the European Commission. In order to draw the attention of CAs on this intricate topic, it could be suggested to submit the work made at the EU level to the ICN, which then, could set up a working group.

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

The modernisation of the application of EU competition law in May 2004 entailed a farreaching decentralisation, empowering national courts and NCAs to apply EU competition law fully. The only way for a national court to obtain binding guidance on the interpretation of EU competition law is to make a reference for a preliminary ruling to the Court of Justice. However, this procedure entails a delay of 15–16 months which is the average time for the Court of Justice to process a reference. During the first 14 years of Sweden’s EU membership, from 1995 to 2009, Swedish courts made references for a preliminary ruling in 67 cases; only two of these references concern the interpretation of EU competition law. In order to prevent the decentralisation of the application of EU competition law from leading to a significant loss of coherence in the uniform application of substantive EU competition law, Regulation 1/2003 introduced a number of new coordination measures, which are the subject of my contribution. Between May 2004 and April 2009, the Commission received 18 requests for an opinion on the application of EU competition law, of which two requests from Swedish courts. In the same period, the Commission submitted written amicus curiae observations on the application of EU competition law to national courts on two occasions. Since then, the Commission has decided to submit amicus curiae observations on three more occasions. The Swedish Competition Authority submitted its first ever amicus curiae observations in the Soda Club case on 25 March 2010. I share the view expressed in the Commission’s Report on the functioning of Regulation 1/2003 from April 2009 that there are probably good reasons for the Commission to have greater recourse to the instrument of amicus curiae observations. Before the entry into force of Regulation 1/2003, Swedish courts regularly requested opinions on the interpretation of Swedish and EU competition law from the Swedish Competition Authority. While Swedish courts still regularly request opinions from the Swedish Competition Authority on the interpretation of Swedish and EU public procurement law, no Swedish court has requested any opinion on the interpretation of EU competition law since the entry into force of Regulation 1/2003.

434  Robert Moldén One possible explanation for the absence of any requests of opinions from the Swedish Competition Authority may be an e contrario interpretation of Article 15(1) Regulation 1/2003, which would lead to the conclusion that Regulation 1/2003 as of May 2004 precludes national courts from requesting opinions on the interpretation of EU competition law from a NCA as no such right is foreseen by Article 15(1) Regulation 1/2003. In my view, such an e contrario interpretation of Regulation 1/2003 is not appropriate. Instead, Regulation 1/2003 should correctly be understood not to constitute any legal obstacle for Swedish courts’ right under Swedish procedural law to request an opinion from the Swedish Competition Authority on the interpretation of Swedish or EU competition law. It appears that the pros and cons of giving national courts a right under Article 15(1) to request information and opinions also from NCAs – as opposed to only from the Commission – were not really debated during the legislative process behind Regulation 1/2003. In my view, there are good reasons for the Commission now to consider amending Article 15(1) Regulation 1/2003 in this respect, giving national courts the right to request information and opinions also from NCAs. Such an amendment may lead to a more efficient coordination scheme. I think that this right may be particularly useful in private enforcement cases before courts lacking such expert knowledge of EU competition law which is held by judges active at the specialised courts of public enforcement. The subsequent intrusion into the procedural autonomy of the Member States may well be a price worth paying. Moreover, the degree of additional intrusion into the procedural autonomy of Member States is rather limited as compared to the quite far-reaching intrusion into the procedural autonomy of Member States already caused by the introduction of the right of the NCAs and the Commission to submit amicus curiae observations on their own initiative to national courts. In order to enable the Commission to monitor national court proceedings where EU competition law is applied, its Member States are obliged to forward to the Commission a copy of any written judgment of national courts applying EU competition law. However, it appears that a significant number of such judgments are not reported to the Commission. One possible explanation for the poor performance of Member States in reporting judgments in which EU competition law is applied to the Commission may be a lack of transparency in national competition law acts on which court or authority shall be responsible for the forwarding of judgments to the Commission. In this respect, it is interesting to look at the provisions of Article 90a(1) German Act against Restraints of Competition. The provisions in question state explicitly that it is the duty of the German court giving the judgment to forward a copy to the Bundeskartellamt, which then forwards it to the Commission. In my view, the provisions of Article 90a German Act against Restraints of Competition may serve as an example of high transparency and user-friendliness concerning the rights and duties of national courts stemming from Article 15 Regulation 1/2003. In particular, I propose that similar provisions should be inserted in the Swedish Competition Act to increase transparency and make clear which authority is responsible for ensuring that copies of judgments by Swedish courts on EU competition law are forwarded to the Commission. Moreover, I propose that corresponding amendments should be made in competition law acts of other Member States which lack the transparency and user-­ friendliness of the German Act against Restraints of Competition.

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

1.  There should be greater convergence of procedures, sanctions and remedies in relation to the enforcement of the EU competition rules by NCAs within the European Competition Network, to ensure effective harmonisation and equality of treatment across the Union. 2.  Consideration should be given to the issue of negative conflicts of jurisdiction, whereby differing views on prioritisation of work by NCAs may lead to inconsistency and patchy enforcement of the competition rules across the Union.

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

Operating cross-border cooperation mechanisms to promote the effective enforcement of EU competition law, while relying on the different procedural frameworks in place at national level, generates coordination issues between the different legal orders in presence, which need to be managed to ensure due process for parties to antitrust proceedings. In that regard, the application of Articles 12 and 22 Regulation 1/2003 suffers from a lack of legal certainty, which ought to be remedied to ensure the confidence of economic actors in the decentralised enforcement system.

Proposals 1.  Endorse a distributive approach with respect to the application of Articles 12 and 22 Regulation 1/2003 relying on the successive application of the national procedural rules and standards that have vocation to apply in the relevant legal orders, namely those where information is gathered and where it is used as evidence, respectively. A clear statement to that effect should preferably be included in the text of Regulation 1/2003, for example by amending Recital 16 and/or adding a third sentence to Article 12(2), establishing in substance that the use in evidence of information exchanged pursuant to paragraph 1 is subject to the appreciation of the receiving authority according to its domestic law. For the sake of clarity, additional guidance could be reflected in the ECN Notice, for example, by adding to the Notice a Section 2.2.5 entitled ‘Cooperation, Assistance and Due Process’ or a Section 2.3.4 entitled ‘Position of Undertakings in Cross-Border Investigations’. 2.  Ensure that undertakings have access to effective review mechanisms in the legal order of the transmitting NCA to challenge the legality of fact-finding measures carried out pursuant to Article 22 Regulation 1/2003. To that effect, and with the view to bring some minimum harmonisation in this matter, one additional sentence could be added to Article 22

438  Damien MB Gerard stating in substance that: (i) the decision whereby a competition authority carries out an inspection or other fact-finding measure on behalf and for the account of the competition authority of another Member State shall indicate the right to have the decision reviewed by the competent authority or court in the country of execution; and (ii) that parties to the proceedings should be notified thereof once the measure has been completed. 3. With respect to individuals, instead of conditioning the reliance on information exchanged within the ECN on some formal assessment of the nature of sanctions available, as currently provided for by the first indent of Article 12(3) Regulation 1/2003, mandate a case-by-case analysis of the due process rights enjoyed by individuals in the legal order of each of the transmitting and receiving NCAs. This would simply require removing the first indent of Article 12(3). Such solution would allow for the uniform operation of Article 12 irrespective of the nature of the parties to the proceedings (legal versus natural persons). It would also allow for the removal of the limitation enshrined in the second sentence of the second indent of Article 12(3) with respect to custodial sanctions, thereby solving potential issues in the negotiation of future international cooperation agreements. 4.  Issue (or amend existing) restatements best practices for dealings among ECN members in cross-border investigations, notably to clarify issues relating to the traceability and identification of transmitted information in the case file, the timing of the transmission of information in view of possible disputes as to the legality of its gathering and the confidential treatment of information vis-a-vis third parties. 5.  Seek greater visibility as to the remaining differences in the various national enforcement frameworks and as to the obstacles to an effective judicial review of cross-border investigations. This could be achieved by commissioning an EU-wide study and/or setting up an ECN working group dedicated to solving the enforcement issues resulting from Member States’ procedural autonomy.

Recognition of Foreign Decisions within the European Competition Network JÜRGEN BASEDOW

1.  While the White Paper envisages to prohibit civil courts in Member States dealing with damages actions from taking decisions that run counter to a finding of infringement of Article 101 or 102 TFEU made by the NCA of a foreign Member State or by a review court, the scope of this rule appears to be too narrow in a double sense: (a) The prohibition should not only operate with regard to damages actions; it should rather address all kinds of civil actions including those for injunction or restoration. (b) The addressees of the prohibition should include administrative authorities of other Member States. 2.  The prohibition for a civil court to take a decision running counter to the administrative or judicial review decision issued in a foreign Member State amounts to an obligation to recognise (but not enforce) the foreign decision. It is difficult to see why such recognition should be ordered without any restrictions with regard to a foreign administrative decision while the judicial decision of a foreign civil court will be recognised, under Regulation 44/2001 (Brussels I) only if certain conditions are met (notice, compatibility with public policy and with res iudicata). The conditions set forth in Article 34 Regulation 44/2001 are the minimum requirements that should equally be established mutatis mutandis for the recognition of a decision of the NCA of a foreign Member State or of the review decision of a court of that State. 3.  Competition-related civil proceedings are civil and commercial matters for the purpose of Regulation 44/2001. Judgments of Member State courts dealing with such matters are therefore liable to be recognised and enforced in other Members States, no amendment of Regulation 44/2001 being required for that purpose. 4.  Under Article 33 Regulation 44/2001 judgments made by civil courts of Member States in competition-related proceedings ‘shall be recognised in the other Member States’. This could and should be understood as applying not only to judicial proceedings in civil courts, but equally to administrative proceedings conducted in other Member States. While this would appear to follow from the present wording of the Regulation, some provisions of the act (for example, Article 33 paragraph 3) should be reviewed to exclude possible doubts. However, the inter partes effect of a judgment may limit the significance of recognition in administrative proceedings.

440  Jürgen Basedow 5.  A rule ordering the recognition of decisions made by a foreign NCA or of a review court should remind the addressee that recognition does not attribute effects to a foreign decision which it does not purport to have. Where the foreign decision is based on an investigation of the relevant conduct and its effects, limited to the territory of the foreign country, a decision of a domestic NCA or court that is equally geographically limited to the domestic effects, cannot run counter to the foreign decision. While both proceedings may come to opposite conclusions, there is no contradiction. Here, recognition becomes meaningless.

INDEX NCAs = national competition authorities abuse of a dominant position 3–5, 106–7, 126, 205, 291–5, 302–5 abusive litigation 170, 423 access to evidence and files of NCAs    abroad, access by private parties to evidence located 280–3    acknowledgment of right of access 263–73   administrative decisions, recognition of 3   administrative proceedings, rights and privileges in 273–5      applicable law 280    approximation of laws 268, 278    Austria 271    authorisation 270, 285    best practices 285    bilateral cooperation agreements 260–1    blocking statutes 280–3    Brussels I Regulation 263–6, 269, 272, 429    business/professional secrets 8, 274–9, 285, 430    cartels 269, 271, 283, 285–6    civil and commercial matters 265   comity 282–4    Commission 263, 267–8, 270–2, 275–6, 281, 284, 430    confidentiality 268, 270, 274–9, 285, 286, 430    conflict of laws 268, 280    context of EU 263–79    cooperation 270–1, 280–1, 284–7, 431    criminal penalties 286    damages 5, 260, 268, 271, 279, 283    data protection 286    defence, rights of the 259   diversity 263–4    documentary evidence 261    effectiveness, principle of 263   England 272    equivalence, principle of 263    European Competition Network 260, 275, 277–9    exchange of information between NCAs 275    existing instruments, limits of 264–7    experts 261, 271, 285–6    extraterritoriality 264, 272, 280    follow-on actions 269, 431    forum shopping 264    France 264, 270, 272, 275–6    Freedom, Security and Justice, Area of 264–5    general provisions of law, unsuitability of 271–2   Germany 276    Green Paper 260    Hague Evidence Convention 281–2   harmonisation 277–8

   identification of limits 273–6   injunctions 430    intellectual property rights 267, 277   inter partes disclosure 263–9, 272, 429, 431    International Competition Network 285, 431    international context 279–87, 431    intra-EU level 264–8    items in the file, access to 270–2    jurisdiction 266, 268–9    legal professional privilege 273–4, 278, 285    leniency programmes 261, 275–7, 282–3, 430    letters rogatory 266, 281   lex fori 263   limits 273–9, 430    mutual legal assistance 266–7, 286–7    national law 270, 276    Notice on cooperation between Commission and national courts 270–1, 275    parallel proceedings 271, 277    positive law 263–9, 270–3    pre-draft Directive 260, 267–9, 273, 277, 429–31    private enforcement 3, 5, 8, 259–60, 279–83, 285–6, 430    privilege 273–4, 278   Provimi case 264    provisional and protective measures 265–6, 269, 429    public enforcement 260, 263, 279, 284    recognition of right of access 429–30    Regulation 1/2003 260, 270, 275    relations between persons 261–2, 264     res judicata 273    self-incrimination, privilege against 285    sincere cooperation, principle of 270–1, 276, 279    soft law 284–5    Taking of Evidence Regulation 7, 265–9, 272, 429, 431   territoriality 264    third countries 261, 279–81    United States 279–84, 286    vertical relations between EU law and national law 276    White Paper 260 administrative proceedings 1–2, 98, 254–5, 273–5, 384–400, 439 admissibility    collective redress 172, 423    discovery in United States 320   lex fori, successive application of 389–90    Regulation 1/2003 372, 374–9, 382, 387–90    representative actions 170–1, 172, 176–7 admissions, requests for 326

442  Index affected market    applicability criteria 110–11    applicable law 6    Brussels I Regulation 21    collective redress 185    connecting factors 104, 121–3    contractual and non-contractual issues, delimitation between 27, 29    effects doctrine 109, 122–5   localisation 119–20    market rules 112–14, 118    overriding mandatory rules 97    relevant market, definition of 120–2    Rome II Regulation 91–3, 97, 100, 119–24 agency 25 aggregation of claims 164, 168, 182, 188, 244 amicus curiae observations    arbitration 194, 203    Commission 290–1, 296–300, 310–13, 433–4   Garage Gremeau case 297–8   Germany 310    national competition authorities, right of submission of 290–1, 296–300,     310–13,  433–4    national courts, right to submit of 290–1, 296–300, 310–13, 433–4   Netherlands 298–9   Pierre Fabre Dermo-Cosmétique case 299–300    Regulation 1/2003 296   Sweden 290–1, 296–300, 310–13, 433–4    United States 318–19 anchor defendants 46–7, 52–3, 409–10 applicability of EU competition law    affected market 110–11    basic principles 67–78, 82, 413–14    market rules 109–15, 416    Rome II Regulation 9, 126–7 applicable law    access to evidence and files of NCAs 280   affected market 6    arbitration 6, 195, 201, 211, 222   cartels 6, 143–4    class actions 241–3    close connection test 65    collective redress 182–5, 422    concentration rule 233–5    connecting factors 65    contractual and non-contractual spheres, delimitation between 131–57, 419    damages 89–90, 231–7, 244    distribution agreements 141–2    effects doctrine 232–3    European principles, conflicts with 154–5    Freedom, Security and Justice, Area of 153, 154    habitual residence 65    horizontal agreements 143–5   lex contractus, designation of 65–82    market rules 113–15    merits, to the 5–6   nullity 86–90    refusal to supply 97    Regulation 1/2003 368, 371

   representative actions 172–3    Rome I Regulation 63–7, 73–9, 86–90, 142–3, 152, 414    Rome II Regulation 92–5, 100, 128, 152, 184–5, 415    trans-border disputes 198–200    United States 231–44    vertical situations 141–3 approximation of laws 268, 278 arbitration 191–222    abuse of a dominant position 205   amicus curiae 194, 203    applicable law 6, 195, 201, 211, 222    arbitrability of EU competition law 194–6    arbitration agreements 4, 6, 191, 194    arbitrators 192–3, 196–8, 206–8     competences 196–8      cooperation, proposal for notice on 206–7     decentralised system of enforcement, competences in 196–8     defensive attitudes 192     immunity 208     notice on cooperation 206–7   awards     balanced award 218–21     errors of law 221     finality 192, 214, 221     free movement 209      public policy 192, 195–8, 213–22, 425–6      recognition and enforcement 210–12, 218–22      review 203, 209, 213–22, 426      setting aside 213, 218, 221    behavioural commitments 193   Belgium 217–18    binding effect of national competition authorities’ decisions 210–11    block exemptions 192, 217    Brussels Convention 1968 219–20    cartels 201, 208–12, 426    choice of law 153, 195    close connection 199, 201–2    Commission 192–3, 196, 202–12   complementarity 193    confidentiality 192, 203–4    conflict of laws 199–202, 210    conflicts of resolution between arbitration and competition authorities 207–12    connecting factors 199, 201–2   contract 194–5   cooperation      arbitrators, proposal for notice on cooperation with 206–7      duties of Regulation 1/2003 202–4, 425      notice between Commission and national courts 204–7    coordination mechanisms 202–3    courts cooperation notice, exclusion from 204–6    damages 194, 210–11, 214–15    decentralised system of enforcement 196–8    direct intervention by Commission as exceptional corrective mechanism 211–12   discovery 198    effectiveness principle 196, 214, 216

Index  443    enforcement 192–3, 196, 202, 209–12, 218–22    England, Competition Act 1998 and 210–11    errors of law 221    evidence 198, 209   exemptions 196   exequatur procedure 218    field-of-use restrictions 216    finality 192, 214, 221    fines 201, 426    flexibility 193, 207, 221    foreign mandatory rules 201–2    forum shopping 213    France 215, 217    Freedom, Security and Justice, Area of 153   Germany 211   Greece 216    ICC Rules 221–2    illegality 201, 217–18, 220   immunity 208    independence 203–4, 210    indirect interference by Commission 212    informality 193, 221    institutional position of arbitration in relationship with Commission 202–7    internal market 201    international arbitration tribunals, application of EU competition law to 198–202   interpretation 219    joint ventures 4, 6    mandatory public law provisions 194–5   mergers 193    modernised EU competition law 192–8   NAFTA 204    national competition authorities 204, 208–11    national law 8    Netherlands 8, 201, 213–19   neutrality 192    New York Convention 1958 209, 217–18, 249    notice on cooperation between Commission and national courts 204–7    nullity of contracts 194    per se violations 220    preliminary measures 205    private enforcement 210    privity 203–4, 206–7    procedural remedies 193, 197    public interest 194–5, 200    public policy 192, 195–201, 208–9, 213–22, 425–6    recognition and enforcement of awards 210–12, 218–22    Regulation 1/2003 197, 202–4, 207–10, 425    review of awards 203, 209, 213–22, 426    Rome I Regulation 201–2   res judicata 191,208, 212    rule of reason 220    seat of arbitration 202    shield litigation 194    soft law 204–5    stay of proceedings 208   Sweden 216   swiftness 193

   Swiss Act on Private International Law 199, 201–2    sword litigation 194    tort/non-contractual matters 194    United States 217, 219, 238 Area of Freedom, Security and Justice 134, 136, 138, 147–9, 153–4, 157, 250, 264–5 arrest 385 associations 36, 39, 98, 164–7, 171, 174–80 Australia 334, 335 Austria 46–7, 186, 271 Belgium 217–18, 385–6 best practices 285, 391, 438 block exemptions 69–73, 82, 192, 217, 413 blocking statutes 280–3, 331, 333–6 boycotts 106–7 breach of statutory duty 45 Brussels Convention 1968   arbitration 219–20    Brussels I Regulation 42   communitarisation 220    contractual and non-contractual spheres, delimitation between 132    European Competition Network 359–60, 362, 394, 400   forum non conveniens 359–60    Jenard Report 400    punitive damages 252   recognition and enforcement of foreign judgments 245, 249–50 Brussels I Regulation    abuse of a dominant position 55   access to evidence and files of NCAs 263–6, 269, 272, 429    affected market 21    anchor defendants 46–7, 52–3    Brussels Convention 1968 42    cartels 31–9, 42, 43–55, 143, 407, 410–11    certainty 20–1, 357    collective redress 183–4, 187, 421    concentration of actions 42, 46–7, 50–2, 56, 59, 410    conflict of laws and competition law, interplay between 23    connecting factors 32, 52   contract     characterisation 21–6, 405     distribution 21, 24–6, 406      non-contractual actions distinguished 19, 21, 23, 26–9, 132, 136, 139, 150–2, 155     private enforcement 21–6, 405   convergence 155–6   Cooper Tire 42    damages 22–3, 41, 45, 51–2, 252, 406, 410    declining jurisdiction 54–6    dissociation rule 28, 406    discretion 53–6, 409    distribution contracts 21, 24–5, 406    ECJ, case law of 20–3, 405    European Competition Network 356–7, 359–60, 362, 394, 398–402, 439    forum shopping 46–7, 52–3, 409–10    Green Paper on review of Regulation 19–20, 52

444  Index Brussels I Regulation (cont.):    Hague Convention on Choice of Court Agreements 55    Heidelberg Report 52    identification of court 7, 20    intellectual property 52, 411    interpretation 8, 19–29, 45–6, 49–52, 54–7, 405–6, 409    irreconcilable judgments, risk of 42–3, 409–11   jurisdiction 41–59, 409–12    jurisdiction agreements 44–5, 53–6, 151   lex specialis 21   lis pendens 43, 53, 56–8, 357–8, 412    localisation 27, 406    Lugano Convention 54–6, 412    multiple parties 19, 42, 52, 411–12    national courts 20–1    non-contractual and contractual issues, delimitation between 19, 21, 23, 26–9    nullity 23–4, 27, 406    ousting jurisdiction of courts 43    patents 48–9, 57–8, 411    place of acting 31–9, 407    place of harmful event 28, 406    place of manifestation of harmful events 28, 406    place of performance 151–2    private enforcement 17–29, 51, 54, 56–9, 407   Provimi litigation 42, 43–55, 410–11    provisional and protective measures 265–6, 269, 429    public policy 54–5    punitive damages 252    recognition and enforcement of foreign judgments 245, 250, 256, 427    Regulation 1/2003 383    related actions 20, 42, 43–4, 58–9    representative actions 183    review of Regulation 18–23, 51–2    Rome I Regulation 25, 406    Rome II Regulation 28–9, 406    sale of goods and provision of services 21, 55   Shevill doctrine 28–9, 406    stay of proceedings 56    striking out 44–6    tenancy agreements 55–6    third states, courts of 55–6    tort/non-contractual matters 19, 21, 23, 286–9, 54, 151, 405–6    United States 228, 229–30, 244   validity 53–4    vitamins cartels 42, 43–51 business consortiums 36 business networks 36 business/professional secrets    access to evidence and files of NCAs 8, 274–9, 285, 430    approximation of laws 278    confidentiality 274–9, 285, 307, 325–6, 339, 430   definition 274    discovery in United States 325–6, 339    leniency programmes 275–7, 430   Sweden 307

Canada 335 cartels    abuse of a dominant position 33   access to evidence and files of NCAs 269, 271, 283, 285–6    applicable law 6, 143–4    arbitration 201, 208–12    block exemptions 70–2    Brussels I Regulation 31–9, 42, 43–55, 143, 407, 410–11    business consortiums and networks 36    centralisation of litigation 143, 144–5    collective redress 6, 167–9    complex cartel agreements 37–8    concentration rule 126    concerted action or place of agreement 33–4, 39    connecting factors 39    contract 3, 4, 143–5   damages 3–5, 32, 34, 37–9, 144, 407    direct effect 75    discovery in United States 333, 336    domicile 33, 143, 407    European Competition Network 354, 401    evidence 32, 38–9    follow-on actions 269    forum shopping 34, 143, 144–5    Germany 31–2, 35–6, 45    hard core 285–6    horizontal agreements 143–4   injunctions 34    intellectual property 57–8    international cartels 31–9, 407   interpretation 34–5    jurisdiction 5, 32–5, 42, 43–55, 410–11    legal uncertainty 34    leniency programme 283    liner shipping consortia 36   lis pendens 57–8    localisation 5, 37–9, 407    market rules 118   multinationals 336    multiplicity of places of acting 39      multiple defendants 52    multistate effects 32–3    non-contractual and contractual spheres, delimitation between 143–5   OECD 285    outside of (quasi-) corporate structures, cartel agreements made 36–7    place of acting 31–9    place of agreement 33–4, 39    place of damages 32, 39, 407    place of implementation 34, 37, 38, 39, 407    place where harmful event occurred 32    price cartels 36, 38, 125, 127, 143, 336, 401    private enforcement 3, 4   Provimi litigation 42, 43–54    (quasi-) incorporated cartels 35–6     Regulation 1/2003 70–1, 380–1    related actions 37, 59    representative actions 180    Rome I Regulation 75, 83, 144

Index  445    Rome II Regulation 99, 143    seat of defendant as place of acting 35    single-instance cartel agreements 37    stable place of implementation 38   syndicates 36    third countries 380–1    tort/non-contractual matters 32, 35, 37–8, 143–5, 150    trade associations 36, 39    United States 226, 234–5    variety of forms of cartels 35–8 causation 5, 32, 234–5, 397 centralisation 143, 144–5, 149–52 choice of court agreements see jurisdiction agreements/clauses choice of law    arbitration 153, 201, 208–12, 426    collective redress 184    concentration rule 125–8    connecting factors 124    contractual and non-contractual spheres, delimitation between 139, 153, 156    damage, limitations with regard to type of 127   damages 124    direct and substantial effect 124–5    domicile 124, 125   lex fori 124, 125    forum shopping 124–5    incorporation theory 177    multiple defendants 124    national competition law, limitations on application of 126–7    price-fixing cartels 125    private enforcement 124    representative actions 174, 177, 184    Rome I Regulation 67, 75–6, 78, 80, 87–90, 413    Rome II Regulation 95, 124–8, 184    United States 225–44 citizenship 148, 394 civil and commercial matters   access to evidence and files of NCAs 265    collective redress 183–4    consumer associations 98    contractual and non-contractual spheres, delimitation between 132–3    definition 96, 97–8    European Competition Network 394–5, 439    European principles, conflicts with 155   fines 98    Freedom, Security and Justice, Area of 148   Germany 183   private and public law divide 97–8    punitive damages 98    recognition and enforcement of foreign judgments 248, 427    Regulation 1/2003 382–3    Rome I Regulation 64    Rome II Regulation 96–8 class actions see also collective redress   applicable law 241–3   cartels 6    certification, conflict of law issues in 240–4

   conflict of laws 240   costs 336    discovery in United States 336–7    Federal Rules of Civil Procedure 8    jurisdiction over non-resident class members 240–1   multinationals 230    recognition of foreign judgments, preclusion and 243–4    superiority requirement 242   threshold 227    United States 8, 182–3, 240–4, 336–7 Clayton Act 230, 237 close connection 65, 89–92, 199, 201–2, 357, 362 cloud computing 339–40 collective redress 161–89, 421–4 see also class actions; representative actions    abusive litigation 170, 423   acquis communautaire 164, 421    admissibility 172, 423    affected market 185   affiliation 182    aggregation of claims 164, 168, 182, 188    applicable law 182–5, 422    Brussels I Regulation 183–4, 187, 421   cartels 167–9   certification 423    choice of law 184    civil and commercial matters 183–4    civil remedies 162    Commission, proposals from 168–70, 176–8, 182    concentration rules 185    conflict of laws 161, 170, 172–5, 189    connecting factors 185, 422    consolidation of claims 182    consumer contracts 184    cross-border aspects 170    current state in EU 165–70    damages 162–3, 168–9, 180–1, 184–7, 422–3   definition 162, 421   Denmark 165   domicile 183, 185, 423    due process 187–8, 424    effectiveness, principle of 163–4, 170, 188, 421    effects doctrine 185    eligible entities, defining 172–8   England 167–8    equivalence, principle of 162–4, 421    EU legal principles 170    fair hearing, right to a 187–8   Finland 167    France 167, 187    Germany 167, 183, 188    Group Litigation Orders 167–8    Hague Service Convention 183   harmonisation 170    heard, right to be 187–8    individual actions 163–4, 168    interchangeability or substitution 175–6    internal market 187    Italy 164, 168    joint petitions 168    jurisdiction 162, 170, 183–4, 421–2

446  Index collective redress (cont.):    legal uncertainty 170   lex fori 182, 423    member states, legal systems of 165–8      mosaic principle 182, 185    multiple defendants 184    nationality discrimination 182, 423   Netherlands 165    opt-in/opt-out models 164, 168–9, 182, 185–8, 255, 256, 424    parallel proceedings 184    party disposition, principle of 187–8, 424    place of harmful event 183–4, 421    popular actions, prohibition of 187   Portugal 165    postal mail, notice by 424    pre-draft Directive 424    private enforcement 162, 255    procedural rules 162–4, 170, 185–6, 189, 421   proportionality 170    public policy 187–8    punitive damages 186–7    recognition and enforcement of rulings 161, 185–8, 252, 255, 256, 424    recognition of representative entities 170–1    represented individuals 178–80, 422–3    right to sue 185    Rome II Regulation 182, 184–5    several national laws, applicability of 179, 182, 423   Shevill principle 184, 422    specific issues 170–83, 422–3    standing 163, 422, 185   subsidiarity 170    substantive law 182    superiority or predominance requirement 182–3, 186   Sweden 167    United States 161, 182–3, 185–6, 189, 255 collusion 233, 378 comity 233–7, 242–3, 246, 282–4, 323–7, 331, 337 commercial agency 25 Commission    access to evidence and files of NCAs 263, 267–72, 275–6, 281, 284, 430   amicus curiae observations, right to submit 290–1, 296–300, 310–13, 433–4    arbitration 192–3, 196, 202–12    collective redress 168–70, 176–8, 182    discovery in United States 317–20, 324–5, 331–3, 338–42    European Competition Network 345–7, 350–1, 365, 393–7, 401–2    national judgments to Commission, obligation of member states to forward       307–12    Notice on cooperation between Commission and national courts      access to evidence and files of NCAs 270–1, 275     arbitration 204–7       European Competition Network 346        Sweden 296, 301, 307, 309–10, 312   pre-emption 347

  proposals 267–8    public enforcement 2    Regulation 1/2003 350–1, 365–72, 384, 390    representative actions 176–8, 181    Sweden 290–314, 433 concentration rule    abuse of a dominant position 126    applicable law 233–5    Brussels I Regulation 42, 46–7, 50–2, 56, 59, 410   cartels 126   certainty 128    choice of law 125–8    collective redress 185    conflict of laws 93, 95–6, 105, 125–6    damages 51–2, 126–7, 410    direct and substantial effect 125–6   domicile 125    jurisdiction 42, 46–7, 50–2, 56, 59, 410   lex fori 125    market rules 125–7    national competition laws 126–7    overriding mandatory rules 125–6    private enforcement 126–7    Regulation 1/2003 126    Rome II Regulation 93, 95–6, 105, 185, 416–17    safety and conduct, rules of 125–6    tort/non-contractual matters 127    United States 233–5 concerted actions 33–4, 39 conciliation process 122–3 Conciliation Committee 95–6 confidentiality    access to evidence and files of NCAs 268, 270, 274–9, 285, 286, 430    arbitration 192, 203–4    business/professional secrets 274–9, 285, 307, 325–6, 339, 430    discovery in United States 323, 325–6, 339    Regulation 1/2003 367, 392, 438   Sweden 307 conflict of laws see also applicable law; choice of law; jurisdiction    access to evidence and files of NCAs 268, 280    arbitration 199–202, 210    blocking statutes 334    Brussels I Regulation 23   certainty 373–6    class actions 240–4    collective redress 161, 170, 172–5, 189    concentration rule 93, 95–6, 105, 125–6    contractual and non-contractual spheres, delimitation between 131–7, 156, 419    discovery in United States 334    double fines 81    dual characterisation 73–4    effects doctrine 94–5    European Competition Network 80, 348, 350–1, 354, 356–62, 435    free movement of goods 74    indirect unilateral conflicts rule 199    irreconcilable judgments 80–1   lis pendens 80

Index  447    market rules 92, 116–17    national laws 79–81    ne bis in idem 81    overriding mandatory provisions 73–4, 80–1, 156    private enforcement 23    public interest 156    public policy 74, 156    recognition and enforcement of foreign judgments 80–1    Regulation 1/2003 368, 373–6, 381–7    representative actions 165, 172–7, 180–1, 423    Rome I Regulation 63, 73–4, 79–81    Rome II Regulation 91–9105, 125–6, 128    secondary law 75–6   Sweden 290    United States 225–7, 240–4    universal bilateral conflicts rule 201 connecting factors   affected market 122–3   anchor defendants 52   applicable law 65    arbitration 199, 201–2    Brussels I Regulation 32   cartels 39    choice of law 124    close connection 65, 89–92, 199, 201–2, 357, 362    collective redress 185, 422    contractual and non-contractual spheres, delimitation between 131, 144, 156    distribution contracts 65    escape clause 65    franchise contracts 65    Freedom, Security and Justice, Area of 154    habitual residence 65   joinder 52    jurisdiction agreements 151    market rules 114, 117, 416    nature of link 121–3    place of agreement 33    private enforcement 32   Provimi litigation 50    Regulation 1/2003 375    representative actions 171    Rome Convention 1980 152    Rome I Regulation 65, 76, 152    Rome II Regulation 92, 94, 103–5, 124, 152, 416    safety and conduct, rules of 118    sale of goods and provision of services 65    territorial connection 144    tort/non-contractual matters 144 consistency, principle of 154–5 conspiracy 229–30 consumer associations 98, 164, 165, 171, 175, 179 consumer contracts 66–7, 184 consumer protection 175–7 context of EU competition law enforcement 1–2 contingency fees 254 contract see also jurisdiction agreements/clauses; contractual and non-contractual spheres, delimitation between; distribution agreements; Rome I Regulation   arbitration 194–5

   Brussels I Regulation 21–6    cartels 3, 4    characterisation 21–6, 149, 151–2, 405    commercial agency 26    consumer contracts 66–7, 184    distribution contracts 24–6   domicile 26   employment 66–7    exoneration from obligations 26    freedom of contract 194–5    Freedom, Security and Justice, Area of 134, 153–4    interpretation 23–9, 405–6   jurisdiction 4–5   lex specialis 21    matters relating to a contract 23–4    nullity actions 23–4    private enforcement 2–7, 21–6    Rome Convention 1980 66, 78, 87, 116–17, 152    sale of goods 24–6    services, supply of 25–6    substance of contracts 68–9    United States 231–40, 244    validity 68–9, 237–40 contractual and non-contractual spheres, delimitation between131–57    affected markets 27, 29    applicable law 131–57, 419    Brussels Convention 1968 132    Brussels I Regulation 19, 21, 23, 26–9, 132, 136, 139, 150–2, 155–6   cartels 143–5    centralisation of litigation 143, 144   certainty 149–52    characterisation 132–4, 149, 151–2, 155    choice of law 139, 153, 156    civil and commercial law 132–3    conflict of laws 131–7, 156, 419    connecting factor 131, 144, 156    consistency, principle of 154–5    convergence, proposals of means of 155–6    damages 26–7, 131–2, 135–41, 153, 156, 419    delictual, definition of 133–4    difference in treatment, unjustified 155      dissociation rule 28    distortion of competition 148    distribution agreements 141–2   domicile 139–40    economic loss, damages for 155, 419    effectiveness, principle of 149–54, 157   electio fori clause 150    European legal order, specificity of 145    European principles, conflicting with 145–55    exclusive distribution 140    forum shopping 144    Freedom, Security and Justice, Area of 134, 136, 138, 147–9, 153–4, 157    horizontal agreements 143–5    implementation of distinction, difficulties with 151–2   injunctions 27    internal market 146–7, 156    jurisdiction 131–57, 419

448  Index contractual and non-contractual spheres, delimitation between (cont.):   lis pendens 139   localisation 27    multiple defendants 139    necessity of simplification 149–52    overriding mandatory rules 140, 142, 144–5, 419    parallel jurisdiction 139    place of performance 139–40    place of the harmful event 140   predictability 149–52      private enforcement 19, 21, 23, 26–9, 135–7, 140, 156–7, 419    public interest 140    public policy 140–1    punitive damages 141, 156, 419    related actions 139    restrictions of competition 138–45    Rome Convention 1980 152    Rome I Regulation 132–3, 139–40, 142, 151–6, 419    Rome II Regulation 28–9, 96–7, 132–3, 136, 139–44, 147, 151–2, 155–6, 419    several defendants and several markets, torts affecting 143–4   simplification of litigation 148    specific policies, differences based on assessment of 141    specification of policies, differences based on 141    substantive law 137, 152, 156    unity of competition matters through a single text, formal 155–6 convergence 76, 155–6, 351–4, 364, 367–8, 387–90, 435 costs 124, 240, 322, 326, 336 criminal matters    access to evidence and files of NCAs 286   certainty 383–6    civil and commercial matters 98    discovery in United States 318, 334    European Arrest Warrant 385–6   fines 98    penal rule 239–40    Regulation 1/2003 381, 383–6, 391, 438   sanctions 2, 286    United States 280 286 cross-border actions 1–2 culpa in contrahendo 96 cy près doctrine 181 damages see also punitive damages   access to evidence and files of NCAs 5, 260, 268, 271, 279, 283    administrative sanctions 254–5    anti-competitive assessments 88–9    applicable law 89–90, 231–7, 244    arbitration 194, 210–11, 214–15    assessment of 88–90    block exemptions 71    Brussels I Regulation 22–3, 41, 51–2, 406, 410    cartels 3–5, 32, 34, 37–9, 144, 407   causation 32    characterisation of claims 89

   choice of law 124    collective redress 162–3, 168–9, 180–1, 184, 186–7, 422    concentration rule 126–7, 410, 416–17    contractual and non-contractual issues, delimitation between 26–7, 131–2, 135–9, 153    discovery in United States 336    distribution of damages 180–1, 423    economic loss 88, 155, 419    effects doctrine 232–3    equivalence and effectiveness principle 88    European Competition Network 394, 396–8, 401   fault 147    Freedom, Security and Justice, Area of 153   funds 181   Green Paper 9, 22–3, 93–5, 168–9    jurisdiction 51–2, 410    jurisdiction agreements 56    market rules 92, 113–14, 415    mosaic principle 181   nullity 88–90    overriding mandatory provisions 88–9, 90    place of damages 32, 39, 407    primacy principle 89, 90    private enforcement 22–3, 140, 406   Provimi litigation 44–5    recognition and enforcement of foreign judgments 251–4, 256, 427    related actions 59    representative actions 161–2, 163–7, 169, 176, 178–81, 421–3    Rome I Regulation 64, 88–90, 142    Rome II Regulation 92–6, 99, 104, 106, 111, 119, 416–17   Sweden 293    treble damages 231, 279, 336    United States 226, 231–7, 240–1, 283    universal character 136    validity of contracts 237–8    White Paper 8, 17, 135–6, 169, 394, 396, 439 data protection 286 de lege lata (positive law) 263–7, 270–3 death penalty, risk of 385 decentralisation   arbitration 196–8    enforcement of antitrust law 1    European Competition Network 346–7    Regulation 1/2003 372, 373, 381, 437    Sweden 290, 310, 433    United States 225–6 defence, rights of the 259, 367, 378, 381 delict see tort/non-contractual matters Denmark 165 dépeçage 180, 238–9 depositions 326, 329 direct and substantial effect 122–6, 232 direct effect 75, 145 disassociation rule 28, 406 discovery in United States 315–42    abroad, private litigants in US seeking discovery 326–36

Index  449    access to evidence and files of NCAs 268   admissibility 320    admissions, requests for 326   abuses 327   amicus curiae 324   arbitration 318–19    blocking statutes 331, 333–6    business/professional secrets 325–6, 339    cartels 333, 336    class actions 336–7    cloud computing 339–40    comity 323–5, 327, 331, 337    Commission 317–20, 324–5, 331–3, 338–42   complexity 7   compulsion 331–6    confidentiality 323, 325–6, 339    conflict of laws 334    control over documents 330    costs 326, 336    crime 318, 334    criticism of liberal discovery mechanisms 338–41   damages 336    depositions 326, 329    discretion 321–7, 331–6, 341    electronic discovery 339–42   experts 323    Federal Rules of Procedure 8, 315–30, 339, 341–2    ‘for use’, meaning of 320–1    foreign litigants 315–26, 338–41    foreign proceedings 318–20, 322–3, 337–41    foreign proof-gathering restrictions, circumvention of 324–5    friction from discovery 336–8, 342    good faith 336    Hague Evidence Convention 7, 315–16, 327–8, 331   injunctions 337    interested parties 316–21, 324, 338   Internet 341–2    intrusive or burdensome, as 325–6    jurisdiction 326, 328–30, 339    legal privilege 320    leniency program of EU 331–3, 335, 338–42    multinationals with subsidiaries in various countries 329–31, 336    participation in foreign proceedings 322    party interrogatories 326    personal jurisdiction 326, 327–30    physical and mental examinations 326   policies     circumvention of 324–5     proposals 341–2   price-fixing cartels 336    private litigants in US seeking discovery abroad 326–36    procedural rights 317–18    protective orders 331    quasi-judicial proceedings 318    reasonable contemplation, temporal limit of 319–20   residence 316    Restatement (Third) of Foreign Relations Law 331–2, 335–6    rule of law 321

   rule of reason 319   sanctions 328   Sherman Act 334   South Africa 335    statutory authority 315–19, 326–31    subpoena power of courts 326–31    types of discovery 320–1   waiver 335 discrimination 105–7, 182, 305, 423 distribution agreements   applicable law 141–2    block exemptions 71–2   characterisation 24–6    contractual and non-contractual issues, delimitation between 141–2    exclusive distribution 4, 140, 142    habitual residence 65    private enforcement 21, 24–5, 406    Rome I Regulation 25, 65–6, 71, 76–8, 142, 152, 414    Rome II Regulation 141    selective distribution 141, 297–8   Sweden 297–8    vertical agreements 71, 71–2, 141–3 diversity jurisdiction 365–92    access to evidence and files of NCAs 263–4   certainty 373–87   effectiveness 365–70, 373    jurisdiction 227–8, 237, 239    Regulation 1/2003 365–87, 390    United States 227–8, 237, 239, 246–7 domicile    cartels 33, 143, 407    choice of law 124, 125   collective redress 183, 185, 423    concentration rule 125    contract 26, 139–40    European Competition Network 359–60    forum non conveniens 359–60    Freedom, Security and Justice, Area of 153    non-contractual issues and contractual, delimitation between 139–40   Provimi litigation 44    Rome II Regulation 100, 142    United States 230, 233, 244 dominant position 3–5, 106–7, 126, 205, 291–5, 302–5 double jeopardy 254–5, 356 due process    collective redress 187–8, 424   jurisdiction 238    Regulation 1/2003 365–92, 437    United States 228, 230, 241, 255 ECN see European Competition Network (ECN) economic loss, damages for 88, 155, 419 effectiveness, principle of    access to evidence and files of NCAs 263    arbitration 196, 214, 216    collective redress 163–4, 170, 188, 421    contractual and non-contractual issues, delimitation between 149–54, 157   damages 88    diversity jurisdiction 365–70, 373

450  Index effectiveness, principle of (cont.):    due process 365–92, 437    European legal order, specificity of 145   fault 147    Freedom, Security and Justice, Area of 153–4    private enforcement 145   Regulation 1/2003 365–6, 373, 390–1, 437–8    representative actions 176, 178    Rome II Regulation 111 effects doctrine   applicable law 232–3   affected market 109, 122–5    autonomous criteria of applicability 109–10    collective redress 185    conflict of laws 94–5    connecting factors 122–3   damages 232–3    direct and substantial effect 122–3, 232    foreseeability 123, 232    market rules 109    primary law 77    representative actions 174    Rome I Regulation 77    Rome II Regulation 94–5, 97, 124, 128    United States 8, 225–6, 229, 232–3 effet utile principle 86–7, 111 electio fori clause 150 electronic discovery 339–42 employment contracts 66–7 enforcement see private enforcement; public enforcement; recognition and enforcement of foreign judgments equivalence, principle of    access to evidence and files of NCAs 263    collective redress 162–4, 421   damages 88    Regulation 1/2003 369    Rome II Regulation 111   Sweden 298 errors of law 221 European Arrest Warrant 385–6 European citizenship 148, 394 European Competition Network (ECN) 3, 345–64    access to evidence and files of NCAs 260, 275, 277–9        administrative proceedings 394–400, 439    automatic recognition of foreign judgments 399    Brussels Convention 1968 359–60, 362, 39, 400    Brussels I Regulation 356–7, 359–60, 362, 394, 398–402, 439    cartels 354, 401    case allocation 3, 348–54, 361–4   causation 397   citizenship 394    civil and commercial matters 394–5, 439    civil proceedings of other member states, recognition of NCA decisions in 395–7      close connection 357, 362    Commission 345–7, 350–1, 393–7, 401–2   concurrency 354–6    conflicts of law 80, 348, 350–1, 354, 356–62, 435    convergence 351–4, 364, 435    damages 394, 396–8, 401

  decentralisation 346–7   declarations 395   discretion 363    divergence and convergence 351–4   domicile 359–60    double jeopardy 356    European Convention on Human Rights 397    European Judicial Network 363    exhaustion of local remedies 397    fair hearing, right to a 396–7, 402    foreign member states, recognition of civil judgments by civil courts of 398    foreign NCAs, recognition of civil judgments by 399–400   forum non conveniens 358–63    forum shopping 353    functioning of ECN 346–8   Germany 396–7    harmonisation 352, 364, 394    inconsistent outcomes 351–4    integration policy 393–5    irreconcilable judgments 357–8    judgments of other courts in civil proceedings of other states, recognition of tion 345–50, 355–8, 360–3, 435    leniency programmes 346, 352–6, 392   lis pendens 355, 357–9, 363    Model Programme 355–6    national competition authorities 345, 350–5, 362, 365, 393–9, 435, 439–40    national courts 393, 395   ne bis in idem 353    Network Notice 2, 348–50, 352, 354, 357    Notice on cooperation between Commission and national courts 346    Office of Fair Trading 354–6    Open Method of Coordination 361    overlapping jurisdiction 345–6, 353    pre-emption, Commission’s power of 347    price-fixing cartels 401    prioritisation 353–4, 360, 363, 435    private and public enforcement, comparison of 360–1    procedure 346, 351–4    public enforcement 3, 345–64    public interest 346, 359, 362–4    public policy 359, 400, 439    punitive damages 398    recognition of foreign decisions 393–402    Regulation 1/2003 345–56, 363–77, 381–2, 390–3, 396, 398, 437–8    related actions 363    representative actions 178, 422   res judicata 300, 439    sanctions 346, 349, 351–4, 364    sectoral regulation 355–6, 360, 362    soft law 361    stay of proceedings 398    substantive law 352, 363, 397    summary applications 355    territoriality principle 5, 362, 395, 402, 440    transfer of cases 356

Index  451    United Kingdom 354–6    United States 360    vertical integration 393–4    work-sharing, practical experience of 350–1 European Convention on Human Rights    European Arrest Warrant 385    European Competition Network 397    fair hearing, right to a 187–8, 367, 388      Regulation 1/2003 367, 375, 388    torture of inhuman or degrading treatment 385 European Enforcement Order 383 European Evidence Warrant 384–5 European Integration Process 386–7 European Judicial Network (EJN) 363 European legal order, specificity of 145 European principles, conflicts with 145–55 evidence see also access to evidence and files of NCAs; discovery in United States    arbitration 198, 209    cartels 32, 38–9   certainty 380–1    European Evidence Warrant 384–5    free movement of evidence 372, 381    Hague Evidence Convention 7, 245, 281–2, 315–16, 327–8, 331    Regulation 1/2003 380–1    Taking of Evidence Regulation 7, 265–9, 272, 383–3, 429, 431    third countries 380–1 exclusive distribution 4, 140, 142 exequatur procedure 218, 250 exhaustion of local remedies 397 experts 198, 215, 249, 261, 271, 285–6, 304, 323, 434 extraterritoriality 264, 272, 280 fair hearing, right to a 187–8, 367, 388, 396–7, 402 field-of-use restrictions 216 files, access to see access to evidence and files of NCAs fines   amicus curiae observations, right to submit 298–9    arbitration 201, 426    civil and commercial matters 98    conflict of laws 81    double fines 81    ne bis in idem 81    recognition and enforcement of foreign judgments 254–5, 256    Regulation 1/2003 369, 377, 379    Sweden 292–3, 295, 297, 298–9    tax deductibility in Netherlands 298–9 Finland 167 follow-on actions 3, 58, 269, 431 foreign judgments see recognition and enforcement of foreign judgments foreseeability 77, 122–3, 199, 232, 349, 362 forum non conveniens    appropriateness 358–9, 362–3    Brussels Convention 1968 359–60   domicile 359–60    European Competition Network 358–63    public interest 230

   substantial justice 359    United States 8, 228, 230–1, 236–7, 240–3 forum shopping   access to evidence and files of NCAs 264   arbitration 213    Brussels I Regulation 46–7, 52–3, 409–10    cartels 34, 143, 144–5    choice of law 124–5    contractual and non-contractual issues, delimitation between 144   damages 52   definition 6–7    European Competition Network 353    Freedom, Security and Justice, Area of 153    jurisdiction 46–7, 52–3, 409–10    legal uncertainty 34   Provimi litigation 46–7    representative actions 173, 175, 177–8    Rome I Regulation 82, 414 France    access to evidence and files of NCAs 264, 270, 272, 275–6    arbitration 215, 217    collective redress 167, 187    popular actions, prohibition of 187    punitive damages 252    recognition and enforcement of foreign judgments 245, 251    Regulation 1/2003 377, 379    representative actions 166–7, 173, 175–6 franchise agreements 65–6, 152 free movement of capital 178 free movement of evidence 372, 381 free movement of goods and services 18, 74, 79, 178 free movement of judgments 250–2 free movement of persons 18, 79, 178 freedom of establishment 18, 171 Freedom, Security and Justice, Area of 134, 136, 138, 147–9, 153–4, 157, 250, 264–5 freezing orders 385 Full Faith and Credit Clause (United States) 386 fundamental rights 367, 375, 384–8 see also European Convention on Human Rights geographic market 120–1 Germany    access to evidence and files of NCAs 276   amicus curiae observations 310   arbitration 211    cartels 31–2, 35–6, 45    civil and commercial matters 183    collective redress 167, 183, 188    European Competition Network 396–7    punitive damages 252–3    representative actions 165, 175, 180    Sweden 309–10, 434    transparency 309–10, 434    United States 183, 252–3 globally indivisible market theory 235 good faith 336 Greece 216, 237 Group Litigation Orders (GLOs) 167–8

452  Index habitual residence 65, 94, 142–3 Hague Convention on Choice of Court Agreements 55, 245, 247, 254 Hague Convention on product liability 117 Hague Convention on road traffic accidents 117 Hague Evidence Convention 7, 245, 281–2, 315–16, 327–8, 331 Hague Service Convention 183 harmonisation 170, 277–8, 352, 364, 387, 394, 437–8 heard, right to be 187–8 Heidelberg Report 52 immunity 208 incorporation theory 171, 173, 177 India 341 information, exchange of 289–314, 433–4 injunctions    access to evidence and files of NCAs 430   cartels 34    contractual and non-contractual issues, delimitation between 27    discovery in United States 337    representative actions 161–2, 164, 165–7, 421    Rome I Regulation 64    Rome II Regulation 93, 96, 106    Sweden 292–3, 300 Insolvency Regulation 383 inspection powers 366–9 insurance contracts 67 intellectual property    access to evidence and files of NCAs 267, 277    Brussels I Regulation 52, 411   cartels 57–8    Intellectual Property Directive 267    jurisdiction 521, 411   lis pendens 57–8    patents 48–9, 57–8, 411   Sweden 300    torpedo actions 57–8 interchangeability or substitution 175–6 internal market 146–7, 156, 177–80, 187, 423 International Competition Network (ICN) 285, 431 Internet 341–2 Ireland 300 irreconcilable judgments   Brussels Convention 1968 48   Brussels I Regulation 42–3, 409–11    conflict of laws 80–1    European Competition Network 357–8   interpretation 47–50    jurisdiction 42–3, 409–11   patents 48–9   Provimi litigation 47–50    punitive damages 252–3 Italy 164, 168 Jenard Report 400 joint ventures 4, 6 jurisdiction see also jurisdiction agreements/clauses   access to evidence and files of NCAs 266, 268–9    Brussels I Regulation 41–59, 409–12   cartels 32–5

   class actions 240–1    collective redress 162, 170, 183–4, 421–2   contract 4–5, 131–57, 419    declining jurisdiction 59    discovery in United States 326, 328–30, 339    diversity jurisdiction 227–8, 237, 239, 263–4, 365–87    due process 228    European Competition Network 345–50, 355–8, 360–3, 435    non-contractual and contractual issues, delimitation between 131–57, 419    non-resident class members 240–1    overlapping jurisdiction 345–6, 353   personal jurisdiction 5, 228–31, 240–4, 326–30    representative actions 165, 421    Rome II Regulation 93–4    statutory authority 228    subject matter jurisdiction 227–8, 241   supplemental 236–7    United States 8, 225–44 jurisdiction agreements/clauses    abuse of a dominant position 55   Brussels I Regulation 44–5, 53–6    cartels 5, 55    connecting factors 151   damages 45    declining jurisdiction 54–6   discretion 54–6    drafting 50, 54   effectiveness 50    Freedom, Security and Justice, Area of 153    Green Paper 53    Hague Convention on Choice of Court Agreements 55, 245, 247, 254    interpretation 45, 54   lis pendens 53, 57    Lugano Convention 50–1, 54–6   nullity 86   ordre public exception 54–5    private enforcement 54, 56   Provimi litigation 44–5, 50–1, 54, 411    Rome II Regulation 99    sale of goods 55    stay of proceedings 56    tenancy agreements 55–6    third states, courts of 55–6    tort/non-contractual matters 54   validity 53–4   scope 5 legal privilege 273–4, 278, 285, 320, 369, 377 leniency programmes    access to evidence and files of NCAs 261, 275–7, 282–3, 430    business/professional secrets 275–7, 430   cartels 283    chilling effect 339   concurrency 354–6    corporate statements, making 339–40    discovery in United States 331–3, 335, 338–42    European Competition Network 346, 352–6, 392

Index  453    Model Leniency Programme 392   one-stop-shows 392    Regulation 1/2003 392    United States 331–3, 335, 338–42, 354 letters rogatory 266, 281 lex causae see applicable law lex contractus 65–82, 86 lex fori    access to evidence and files of NCAs 263   admissibility 389–90    choice of law 124, 125    collective redress 182, 423    concentration rule 125   convergence 388–90    legality, control of 388–9    market rules 110, 114    Regulation 1/2003 388–90    representative actions 172–5, 181    Rome I Regulation 142    Rome II Regulation 94, 100, 142, 417    successive application 388–90 lex specialis 21, 67, 208 limit of liability 123–4 limitation periods 85–6, 90 liner shipping consortia 36 lis pendens   abuse of a dominant position 5    Brussels I Regulation 43, 56–8, 412   cartels 57–8    conflict of laws 80    contractual and non-contractual issues, delimitation between 139   delay 57–8    European Competition Network 355, 357–9, 363    follow-on actions 58    intellectual property 57–8   interpretation 56–8    jurisdiction agreements 53, 57    negative declarations 57–8, 412    related actions 58–9    torpedo actions 57–8, 412 localisation 5, 27, 36–9, 98–9, 117–20, 406–7, 416 Lugano Convention 1988 42, 44–5, 51, 54–6, 245, 252, 412 Maintenance Regulation 383 management rules 370 margin of appreciation 73, 117, 178 market rules    concentration rule 125–7    Rome I Regulation 69, 74, 80, 413    Rome II Regulation 92, 108–19, 128, 415–16 mergers 77, 122, 193 mosaic principle 174, 181–2, 185, 233 multinationals 230, 329–31, 336 multiplicity of courts 54 multiplicity of places of acting 39 multiple parties    Brussels I Regulation 19, 42, 52, 411–12   cartels 52    choice of law 124    collective redress 184

   contractual and non-contractual issues, delimitation between 139, 143–4    jurisdiction 42, 52, 411–2    private enforcement 19    United States 226, 244 mutual legal assistance 266–7, 286–7 mutual trust, principle of 386–7 national competition authorities (NCAs) see also access to evidence and files of NCAs; European Competition Network (ECN)   amicus curiae observations, right to submit 290–1, 296–300, 310–13, 433–4    arbitration 204, 210–11    European Competition Network 345, 350–5, 362, 393–9, 435, 439–40    foreign NCAs, recognition of civil judgments by 399–400    legality, control of 388–9    national courts, exchange of information and opinions with 289–314, 433–4    recognition of foreign decisions 395–400   Regulation 1/2003 365–7, 370, 374–8, 386–92   Sweden 289–314, 433–4 national courts   amicus curiae observations, right to submit 290–1, 296–300, 310–13, 433–4   Brussels I Regulation 20–1    European Competition Network 393, 395    national competition authorities, exchange of information and opinions with 289–314, 433–4    Notice on cooperation between Commission and national courts      access to evidence and files of NCAs 270–1, 275     arbitration 204–7       European Competition Network 346        Sweden 296, 301, 307, 309–10, 312    private enforcement 20–1    Sweden 289–314, 433–4 national laws   access to evidence and files of NCAs 270, 276    another member state, application of law of 79   arbitration 8    concentration rule 126–7    conflict of laws 79–81    limitation periods 75–6    limitations on application 126–7   nullity 85–7   prescription 85    restriction of competition laws, overlap with 104, 105–7    Rome I Regulation 77–81    Rome II Regulation 91–2, 104–11, 126–7    several national laws, applicability of 179, 182, 423 nationality discrimination 182, 423 NCAs see national competition authorities (NCAs) ne bis in idem 81, 353 negative declarations 57–8, 412 negotiorum gestio 96 nemo auditur 88–90

454  Index Netherlands 165, 201, 213–19, 298–9 New York Convention 1958 8, 209, 217–18 non-contractual matters see tort/non-contractual matters Nordic states 251 normative context 7–8 Notice on cooperation between Commission and national courts    access to evidence and files of NCAs 270–1, 275   arbitration 204–7    European Competition Network 346    Sweden 296, 301, 307, 309–10, 312 nullity    applicability of competition law, criteria for 82    applicable law 86–90   arbitration 194    Brussels I Regulation 23–4, 27, 406   characterisation 85   contracts 23–4   damages 88–90   effet utile principle 86–7    jurisdiction agreements 86   lex contractus 86    limitation periods 85–6, 90    market rules 108    material scope 83–6    national laws 85–7   nemo auditur 88–90    overriding mandatory rules 82–3, 86    private enforcement 23–4, 27, 82, 406   Provimi case 87–8    public policy 83    Rome I Regulation 76, 82–90, 413    severance 84, 90    substantive law 82    void contracts 83 Office of Fair Trading (OFT) 354–6, 377, 379 Open Method of Coordination (OMC) 361 opinions 289–314, 433–4 ordre public see public policy overriding mandatory rules    affected market 97    concentration rule 125–6   conflict of laws 73–4, 80–1, 156    contractual and non-contractual spheres, delimitation between 140, 142, 144–5, 419    damages 88–9, 90    Freedom, Security and Justice, Area of 149, 153    market rules 114–17, 119, 416–17    nullity 82–3, 86    place of performance 153    public interest 114–15    public policy 82    Rome I Regulation 66–7, 75, 78–9, 81–2, 142, 149, 414    Rome II Regulation 99–100, 149, 155, 416–17 parallel proceedings 5, 180, 184, 271, 277, 423 party disposition, principle of 187–8, 424 patents 48–9, 57–8, 411 penal rule 239–40

pending actions see lis pendens personal jurisdiction 5, 228–31, 240–4, 326–30 place of acting under Brussels I Regulation 31–9, 407 place of agreement 33–4, 39 place of central administration 78 place of damages 32, 39, 407 place of harmful events 28, 32, 140, 183–4, 406, 421 place of implementation 34, 37, 38, 39, 407 place of manifestation of harmful events 28, 406 place of performance 78, 139–40, 151–3 popular actions, prohibition of 187 Portugal 165 positive law (de lege lata) 263–7, 270–3 preclusion 243–4 pre-emption, Commission’s power of 347 preliminary rulings 293–5, 433 price cartels 36, 38, 125, 127, 143, 336, 401 primacy principle 75, 89, 90, 111, 213, 413, 415 private enforcement    access to evidence and files of NCAs 260, 263, 279–83, 285–6   arbitration 210    Brussels I Regulation 17–29, 51, 54, 56–9, 407   cartels 3, 4    characteristics of antitrust litigation 2    choice of law 124    collective redress 162, 255    concentration rule 126–7   consumers 6    contractual claims 2–7, 135–7, 140, 156–7, 419    damages 22–3, 140, 406    discovery in United States 326–36    effectiveness principle 145    European Competition Network 360–1    European principles, conflicts with 154–5    examples and issues 3–7    Freedom, Security and Justice, Area of 153    internal market 147    jurisdiction 51, 54, 56–9, 407    non-contractual claims 2, 135–7, 140, 156–7, 419    public enforcement 1–2, 279, 360–1    recognition and enforcement of foreign judgments 7, 246, 254–5    related actions 58–9    Rome I Regulation 7, 63–90, 413–14    Rome II Regulation 93–4    Sweden 290, 293–4, 302–7, 434    United States 226, 235–7 private international law see conflict of laws privilege    legal privilege 273–4, 278, 285, 320, 369, 377    self-incrimination, privilege against 285 product liability, Hague Convention on 117 product market 120–1 professional associations 166–7, 171, 174, 178, 180 professional secrets see business/professional secrets proper functioning of the market 68–9, 105–6 proportionality 170 protective orders 331 provisional and protective measures 205, 265–6, 269, 429

Index  455 public enforcement   access to evidence and files of NCAs 279, 284    characteristics of antitrust litigation 2   Commission 2    European Competition Network 3, 345–64    private enforcement 1–2, 279, 360–1    Regulation 1/2003 2, 8, 372    Sweden 292–3, 295, 304 public interest    arbitration 194–5, 200   conflict of laws 156    contractual and non-contractual issues, delimitation between 140   cy près doctrine 181    European Competition Network 346, 359, 362–4    forum non conveniens 230    overriding mandatory rules 114–15    Regulation 1/2003 381–2    representative actions 181    Rome I Regulation 149   Sweden 312    United States 230 public policy    arbitration 199–201, 208–9, 213–22, 425–6   collective redress 187–8     conflict of laws 74, 156    contractual and non-contractual issues, delimitation between 140–1    European Competition Network 359, 400, 439    jurisdiction agreements 54–5   nullity 83    overriding mandatory provisions 82    punitive damages 156    Regulation 1/2003 381–3, 386    Rome I Regulation 74–6, 414    Rome II Regulation 99    United States 240, 248    universal value of EU competition law 76 punitive damages    Brussels Convention 1968 252    Brussels I Regulation 252    civil and commercial matters 98   collective redress 186–7    contingency fees 254    contractual and non-contractual issues, delimitation between 141, 156, 419    European Competition Network 398    European principles, conflicts with 154   France 252    free movement of judgments 252   Germany 252–3    Hague Convention on the Choice of Court 254    irreconcilable judgments 252    overriding mandatory provisions 88    public policy 156, 252–3    recognition and enforcement of foreign judgments 251–4, 427    United States 251–4 real seat theory 171, 180, 422–3 reciprocity 248–9, 251, 427

recognition see recognition and enforcement of arbitration awards; recognition and enforcement of foreign judgments; recognition of foreign decisions and European Competition Network (ECN) recognition and enforcement of arbitration awards 210–12, 218–22 recognition and enforcement of foreign judgments 245–56    administrative penalties in addition to civil damages 254–5    automatic recognition 399    Brussels Convention 1968 245, 249–50    Brussels I Regulation 245, 250, 256, 427   certainty 381–7    civil and commercial matters 248, 427    class actions 243–4    collective actions 161, 185–8, 252, 255, 256, 424    conflict of laws 80–1    damages 251–4, 256, 427    double jeopardy 254–5   exequatur procedure 250   fines 254–5, 256    France 245, 251    free movement of judgments 250–1    Freedom, Justice and Security, Area of 250    Hague Convention on the Choice of Court 245, 247    Hague Evidence Convention 1970 245    legal certainty and predictability 251   liberalisation 245    models, choice of 246–51    near certainty standard 186    Nordic states 251    obstacles 251   preclusion 243–4    private enforcement actions 7, 246, 254–5    public policy 386    punitive damages 251–4, 427    reciprocity 248–9, 251, 427    Regulation 1/2003 381–7   res judicata 250    specific issues 252–5    United States 7, 185–6, 243–5, 246–50, 255 recognition of foreign decisions and European Competition Network (ECN) 393–402    civil proceedings of other member states, recognition of NCA decisions in 395–7     effect 400–2    foreign member states, recognition of civil judgments by civil courts of 398    foreign NCAs, recognition of civil judgments by 399–400    horizontal recognition of decisions 393–4    judgments of other courts in civil proceedings of other states, recognition of 395    national competition authorities 395–400    other member states, recognition of    NCA decisions by NCAs of 395–6    scope of recognition 400–1    territoriality principle 5, 362, 395, 402, 440    White Paper 397–9

456  Index refusal to supply 97 Regulation 1/2003 365–92    access to evidence and files of NCAs 260, 270, 275    admissibility of evidence 372, 374–9, 382, 387–90   amicus curiae observations, right to submit 296   applicable law 368, 371   arbitration 197, 202–4, 207–10, 425    best practices 391, 438    block exemptions 70–1    Brussels I Regulation 383   cartels 70–1, 380–1      certainty 367–8, 370–87    checks and balances of legal systems 386–7    civil and commercial matters 382–3   collusion 378    Commission 350–1, 365–72, 384, 390   companies 378    competent authority 368    concentration rule 126    confidentiality 367, 392, 438    conflict of laws 368, 373–6, 381–7   connecting factors 374    convergence between national procedural enforcement frameworks 367–8, 387–90   cooperation 372, 378–9, 382–6, 391, 438   coordination 8, 366–76, 383, 387–90, 437–8    criminal matters 381, 383–6, 391, 438    cross-border investigations 365–92, 437–8    cumulative approach 376–81, 387–9    decentralisation 372, 373, 381, 437    defence, rights of the 367, 378, 381   diversity 365–87, 390    double safeguards 388    due process 365–92, 437    effective enforcement 365–92, 437–8    equivalence, principle of 369    European Arrest Warrant 385–6    European Competition Network 345–56, 363–77, 381–2, 390–3, 437–8     best practices 391, 438     Commission 350–1, 365     leniency statements 392     Model Leniency Programme 392     NCAs 365      Network Notice 368, 370–1, 373–7, 387, 390, 392      recognition of decisions 393, 396, 398     working group 391    European Convention on Human Rights 367, 375, 388      European Enforcement Order 383    European Evidence Warrant 384–5    European Integration Process 386–7    evidence from third countries and European courts 380–1      exchange of information 365–7, 370, 372–4, 438    fair hearing, right to a 367, 388     fines 369, 377, 379   France 377, 379    free movement of evidence 372, 381    freezing orders 385    Full Faith and Credit Clause (United States) 386

  fundamental rights 367, 375, 384–8   harmonisation 387, 437–8    individuals in cross-border investigations, position of 376–8   Insolvency Regulation 383    inspection powers 366–9    integration process 386–7   Kerosene case 379    legal certainty 373–87, 390–1    legal privilege 274, 369, 377    legality, control of 388–9   leniency statements 392   lex fori, successive application of 388–90   Maintenance Regulation 383   management rules 370    mutual trust, principle of 386–7    national competition authorities 365–7, 370, 374–8, 386–92    Network Notice 368, 370–1, 373–7, 387, 390, 392    Office of Fair Trading 377, 379    opinions, right of national courts to request 301–7, 311–14   procedure 381, 387–91    public enforcement 2, 8, 372    public interest 381–2    public policy 381–3, 386    recitals 371–2, 376, 381–7, 390    recognition and enforcement of foreign judgments 381–7   sanctions 369, 371, 374–8, 383–4, 387, 390–1, 438   standing 375    Sweden 289–91, 296, 298–314, 433–4    Taking of Evidence Regulation 382–3    Tampere European Council 382   territoriality 374    third countries, evidence from 380–1    uncertainty 367–8, 370–3    United Kingdom 377–8   United States 386, 391   waiver 391–2 related actions 20, 37, 42–4, 58–9, 363 relevant market 113, 120–2 remoteness 123–4 renvoi 99 representative actions 165–7, 170–81    admissibility 170–1, 172, 176–7    affiliation of foreign claimants 180    applicable law 172–3    associations 164, 166–7, 171, 174–80    authorisation system 180, 422–3    Brussels I Regulation 183   capacity 171   cartels 180    certification of representative entities 177, 179–80, 422–3    choice of law 174, 177, 184    Commission, proposals of 176–8, 181    conflict of laws 165, 172–7, 180–1, 423    connecting factors 171    consumer associations 164, 165, 171, 175, 179    consumer protection 175–7   cy près doctrine 181

Index  457    damages 161–7, 169, 176, 178–81, 421–3    definition 161–2, 421   dépeçage 180   deterrence 176   divergences 165    economic benefit, surrender of 165    effectiveness principle 176, 178    effects doctrine 174    eligibility conditions 169    England 166, 175–6    European Competition Network 178, 422    foreign associations, admissibility and 172    foreign individuals 178–80    foreign representative entities 176   forum regit processum 172    forum shopping 173, 175, 177–8    France 166–7, 173, 175–6    free movement of goods, persons, services and capital 178    freedom of establishment 171    Germany 165, 175, 180    incorporation theory 171, 173, 177    individual actions 164, 178–80    injunctions 161–2, 164, 165–7, 421    interchangeability or substitution 175–7    internal market 177–80, 423    joint representative actions 166, 175    jurisdiction 165, 421    legal certainty 172–3, 422    legitimate interests 169   lex fori 172–5, 181    margin of appreciation 178    mosaic principle 174, 181    national competition entities, certification of 178    near certainty standard 186   notification 169    opt-in/opt-out models 165    pan-European passport 177    parallel proceedings 180, 423    pre-draft Directive 423    procedural rules 173, 177–8      public interest 181   qualified entities     defining eligible entities 172–8      representative actions brought by 169–71    real seat theory 171, 180, 422–3    recognition of representative entities 170–1    remedies 161–2, 163–7, 169, 174, 180–1, 423    represented individuals 178–80, 422–3    right to sue 172, 174, 178    Rome II Regulation 174–5, 179–80, 422    seat of representative entities 171, 178, 180, 422–3    specific issues 422–3    standing 164, 165, 172–3, 177–9, 422    substantive rules 173   substitution 175–7    trade or professional associations 166–7, 171, 174, 178, 180    United States 181 res judicata 191, 208, 212, 250, 273, 400, 439 research and development contracts 65 road traffic accidents, Hague Convention on 117

Rome Convention 1980 66, 78, 87, 116–17, 152 Rome I Regulation    administrative authorities 64    applicability of EU competition law, basic principles on 67–78, 82, 413–14    applicable law 63–7, 73–9, 86–90, 142–3, 152, 414   arbitration 201–2    block exemptions 69–73, 82, 413   cartels 144   certainty 144    characterisation of contracts 65    choice of law 67, 75–6, 78, 80, 87–90, 413    civil and commercial matters 64    conflict of laws 63, 73–4, 79–81    connecting factors 65, 76, 152    consumer contracts 67    contractual and non-contractual issues, delimitation between 132–3, 139–40, 142–4, 151–6, 419    convergence 76, 155–6    damages 64, 88–90, 142    direct effect 75, 83    distribution agreements 25, 65–6, 71, 76–8, 142, 152, 414    effects principle 77    employment contracts 67    escape clause 65, 67    exclusive distribution 142    forum shopping 82, 414    franchise agreements 65–6, 152    Freedom, Security and Justice, Area of 147–8    habitual residence 65, 142–3    influence of EU competition law on contractual litigation 69–73   injunctions 64    insurance contracts 67    internal market 147   interpretation 64    intervention of competition law rules 74–81   lex contractus, designation of 65–82   lex fori 142   lex specialis principle 67    market rules 69, 74, 80, 115–16, 119, 413    Merger Regulation 77    national laws 77–81   nemo auditur 89–90    nullity 76, 82–90, 142, 413    overriding mandatory rules 66–7, 75, 78–9, 81–2, 142, 149, 414    place of central administration 78    place of performance 78   precedence 77   predictability 154    primary law 74–7, 79    private enforcement 7, 63–90, 413–14    public interest 149    public policy 74–6, 414    research and development contracts 65    secondary law 75–7    services, provision of 65    several markets, contracts affecting 142–3    shield, competition law   as a 63

458  Index Rome I Regulation (cont.):    soft law 77    substance and validity of contracts, influence of competition law on 68    third parties 64    United States 232    void contracts 63 Rome II Regulation 7, 91–129, 415–17    abuse of dominant position 106–7    affected market 91–3, 97, 100, 119–24   amendments 418    applicability criteria 110–11, 119, 415–16    applicability of national competition law 9, 126–7    applicable law 92–5, 100, 128, 152, 184–5, 415    bilateral rules 91    Brussels I Regulation 28–9, 406    cartels 99, 143   certainty 144   characterisation 89    choice of law 95, 124–8, 184    civil and commercial matters 96–8    civil remedies 108–9    close connection 92    collective redress 182, 184–5    concentration rule 93, 95–6, 105, 125–6, 185, 416–17    Conciliation Committee 95–6    conflict of laws 91–9, 105, 125–6, 128    connecting factors 92, 94, 103, 104–5, 124, 152, 416    contractual and non-contractual issues, delimitation between 28–9, 96–7, 132–3, 136, 139–44, 147, 151–2, 155–6, 419   convergence 155–6   culpa in contrahendo 96    damage, limitations with regard to type of 127    damages 92–6, 99, 104, 106, 111, 119, 416–17    definition of competition law 107–8    definition of non-contractual obligations 96–7   dépeçage 180   discrimination 105    distortion of competition 100    distribution agreements 141   domicile 100  , 142    economic dependence 106–7    ECJ, case law of 96   effect utile 111    effectiveness, principle of 111    effects doctrine 94–5, 97, 124, 128    equivalence, principle of 111   foreclosure 106    Freedom, Security and Justice, Area of 147–9    Green Paper on damages 93–5    habitual residence 94    injunctions 93, 96, 106    internal market 147    interpretation 8, 93, 96–102, 124, 416–17   jurisdiction 93–4    jurisdiction agreements 99    law of the affected market 119–24    legislative amendments 107, 119, 124, 128    legislative history 93–6   lex fori 94, 100, 142, 417

   localisation of damage 98–9, 416    market rules 92, 108–19, 128, 415–17    material scope 96, 156    mosaic rule 182    multistate actions 95, 101, 417    national competition law 91–2, 104–11, 126–7    nature of rules 107–11   negotiorum gestio 96    ‘open gate’, Rome II as an 111–15, 119, 415–16    overlap between national competition laws and restriction of competition laws 104, 105–7    overriding mandatory rules 99–100, 149, 155, 416–17    primary law 110–11    private enforcement 28–9, 93–4, 406    private law norms 93    proper functioning of market 105–6    public interest 149    public policy 99    reach of Regulation 107–11    recitals 91–2, 105–7, 116, 151, 416    refusal to supply 97   renvoi 99    representative actions 174–5, 179–80, 422    restrictions of competition 100, 103–5, 141, 416    safety and conduct, rules of 99, 117–19, 125–6    scope of Rome II Regulation 96–8      selective distribution 142   Sherman Act 115    simplification of litigation 148    tort/non-contractual matters 96–7, 99, 142–3   travaux préparatoires 108    unfair competition and restriction of competition, dividing line between 105–7, 416    unfair competition, definition of 103–4    unilateral rules 91   United States 227, 230, 232, 235, 242, 244    universal scope of Regulation 100–2, 107, 128, 417    unjust enrichment 96, 99    vertical restrictions 99 rule of law 321, 385 rule of reason 220, 319 safety and conduct, rules of 99, 117–19, 125–6 sale of goods and provision of services    Brussels I Regulation 21   contract 24–6   damages 55    jurisdiction agreements 55    place of performance 139    private enforcement 21   reciprocity 65    Rome I Regulation 65 sanctions see also fines   administrative sanctions 2, 98, 254–5    crime 2, 98    discovery in United States 328    European Competition Network 346, 349, 351–4, 364    Regulation 1/2003 369, 371, 374–8, 383–4, 387, 390–1, 438 seat of parties 35, 171, 178, 180, 422–3

Index  459 secrets see business/professional secrets sectoral regulation 355–6, 360, 362 self-incrimination, privilege against 285 services, provision of see sale of goods and provision of services severance 84, 90 Sherman Act 109, 115, 122, 231, 235–9, 334 sincere cooperation, principle of 272, 276, 279 Slovak Republic 300 soft law 77, 204–5, 284–5, 361 South Africa 335 spillover effects 123 standing   collective redress 163, 185, 422    Regulation 1/2003 375    representative actions 164, 165, 172–3, 177–9, 422 stay of proceedings 56, 59, 208, 398 striking out 44–6 subsidiarity 170 subpoenas 326–31 substitution 175–6 superiority or predominance requirement 182–3, 186, 242 Sweden 289–314    abuse of a dominant position 291–5, 302–5    amicus curiae observations, right of NCAs and Commission to submit to national courts 290–1, 296–300, 310–13, 433–4    anti-competitive practices 291   arbitration 216    business/professional secrecy 307    collective redress 167    Commission 290–314, 433    Competition Act 2008 292–3, 308–9    Competition Authority 292–3, 300, 304–6, 310, 433–4   confidentiality 307    conflict of laws 290    coordination measures 289–314, 433–4   damages 293    decentralisation 290, 310, 433   discrimination 305   Ekfors case 303–4    equivalence, principle of 298    exchange of information and opinions 289–314    experts 304, 434    fines 292–3, 295, 297, 298–9   Garage Gremeau case 297–8    Germany, transparent provisions and 309–10, 434    injunctions 292–3, 300    intellectual property rights 300   Ireland 300    legal certainty 300    legislative process 313–14    national competition authorities and courts, exchange of information between 289–314    national judgments to Commission, obligation of member states to forward 307–12    non-transparent provisions 308–9    Notice on cooperation between Commission and national courts 296, 301, 307, 309–10, 312    nullity 293, 305

   opinions, right of national courts to request 301–7   Pierre Fabre Dermo-Cosmétique case 299–300    preliminary rulings 293–5, 433    private enforcement 290, 293–4, 302–7, 434    procedure 292–7, 304, 306, 314, 434    public enforcement 292–3, 295, 304    public interest 312    Regulation 1/2003 289–91, 296, 298–314, 433–4   SAS v Luftfartsverket case 305–6    selective distribution 297–8    Slovak Republic 300   Soda-Club case 300, 433   STIM case 294–5    substantive law 291–2    tax deductibility of Commission fines in Netherlands 297, 298–9   TeliaSonera ADSL case 295    transparency 308–10, 434    user-friendliness 309–10, 434   Ystad Harbour case 302–3 Switzerland 122, 199, 201–2 Taking of Evidence Regulation 7, 265–9, 272, 382–3, 429, 431 Tampere European Council 382 targeting 5, 228–31 tax 248 technology transfer 217 tenancy agreements 55–6 territoriality   access to evidence and files of NCAs 264    connecting factors 144    European Competition Network 362, 395, 402, 440   extraterritoriality 264, 272, 280    non-competition clauses, reach of 4    recognition of foreign decisions 5, 362, 395, 402, 440    Regulation 1/2003 374    tort/non-contractual matters 144    United States 227, 232 torpedo actions 57–8, 412 tort/non-contractual liability see also contractual and non-contractual issues, delimitation between; Rome II Regulation   applicable law 140   arbitration 194    Brussels I Regulation 19, 21, 23, 28, 54, 151, 405–6    cartels 32, 35, 37–8, 143–5, 150   causation 32    characterisation 89, 149, 151, 155, 406    choice of law 153    concentration rule 125–6    connecting factors 144   definition 96–7    delict, definition of 133–4    dissociation rule 28, 406   electio fori clause 150    jurisdiction agreements 54    localisation 38, 406    place of harmful event 28, 140, 406    private enforcement 2, 19, 21, 23, 28, 405–6    Rome II Regulation 96–7, 99    seat of defendant as place of acting 35

460  Index tort/non-contractual liability (cont.):    selective distribution 140    territorial connection 144    United States 228–9, 232 trade associations 36, 39, 166–7, 171, 174, 178, 180 transparency 308–10, 434 triple damages 231, 279, 336 trust, principle of mutual 386–7 Unfair Commercial Practices Directive 68 United Kingdom    access to evidence and files of NCAs 272   arbitration 210–11    collective redress 167–8    European Competition Network 354–6    Office of Fair Trading 354–6, 377, 379    Regulation 1/2003 377–8    representative actions 166, 175–6    sectoral regulation 355–6 United States see also discovery in United States    absent plaintiffs 255    access to files and evidence 280–6    aggregation of claims 244    applicable law 8, 231–44    arbitration 217, 219, 238    blocking statutes 280–3    Brussels I Regulation 228, 229–30, 244    cartels 226, 234–5   causation 234–5    characterisation of contract 232    choice of law 8, 225–44    class actions 8, 182–3, 227, 240–4    Clayton Act 230, 237   collective redress 161, 182–3, 185–6, 189, 255   collusion 233    comity 233–7, 242–3, 246, 282–4, 323–7, 331, 337    concentration of applicable law 233–5    conflict of laws 225–7, 240   conspiracy 229–30    contingency fees 254    contract 231–40, 244   cooperation 280–1    criminal penalties 286   cy près doctrine 181    damages 226, 231–7, 240–1, 244, 283    data protection 286   decentralisation 225–6   déceçage 238–9   discovery 268    diversity jurisdiction 227–8, 237, 239, 246–7    doctrinal matters 227–8    domicile 230, 233, 244    due process 228, 230, 241, 255    effects doctrine 8, 225–6, 229, 232–3    enforcement 225–6, 231, 238–40    EU law, comparison with 225–44, 249–50    European Competition Network 360   evidence 280–6   extraterritoriality 280    failure to state a claim 227    federal law 8, 227–8, 238–9, 246–9    Federal Rules of Civil Procedure 8

   foreign law 226, 235–7, 239–40, 242–3    foreign regulatory interests 226, 233   forum non conveniens 8, 228, 230–1, 236–7, 240–3    Full Faith and Credit Clause 386    foreign tax judgments 248    Germany 183, 252–3    globally indivisible market theory 235   Greece 237    Hague Convention on the Choice of Court 247    Hague Evidence Convention 281–2    interstate commerce 360    jurisdiction 8, 225–44    leniency programme 354    letters rogatory 281    market focus 226    model law 247    mosaic principle 233   multinationals 230    multiple defendants 226, 244    mutual assistance treaties 286–7    National Conference of Commissioners on Uniform State Laws 247   obstacles 248–9    penal rule 239–40    personal jurisdiction 5, 228–31, 240–1, 243–4    preclusion 243–4, 248   price-fixing 229    private enforcement 226, 235–7    procedural efficiency 235    public interest 230    public law taboo 226, 237, 239, 242–3    public policy 240, 248    punitive damages 251–4   reciprocity 248    recognition and enforcement of rulings 7, 185–6, 243–51, 255    Regulation 1/2003 386, 391    representative actions 181    Rome I Regulation 232    Rome II Regulation 227, 230, 232, 235, 242, 244    sectoral regulation 360   Sherman Act 109, 115, 122, 231, 235–9, 334 state law 238–40, 247–9    subject matter jurisdiction 227–8, 241    substantive law 225, 232    superiority or predominance requirement 182–3, 186, 242    supplemental jurisdiction 236–7    targeting 5, 228–31    territorial jurisdiction 227, 232    third countries 280    time limits 248    tort/non-contractual matters 228–9, 232    triple damages 231, 279, 336    two-party focus 226    Uniform Foreign Money Judgments Recognition Act 247    unilateral application, development of 281–3    use in foreign proceedings of documents located in US 283–4    value of US perspective 225–6 unjust enrichment 89–90, 96, 99