With its judgment of 29 July 2019 in Case C-451/18, Tibor-Trans (‘Judgment’), the EU Court of Justice (‘CJEU’) clarified the competence of national courts to hear damage actions relating to pan-European infringements of Art. 101 TFEU under Regulation 1215/2012 Brussels I bis (in short ‘Brussels I bis’). The CJEU specified that victims of illegal cartels can lodge an action for damages against each and any cartel member before the courts of the Member State where the market has been affected by the infringement, provided the damage occurred in the respective Member State. This also holds true for actions directed against cartelists with whom the victims had not established contractual relations.
In the reasoning leading to the above conclusion, the CJEU (i) stated that the action for non-contractual damages falls within the scope of civil and commercial matters under the meaning of Brussels I bis, (ii) recalled the joint and several liability of the undertaking for the single and continuous infringement of competition law as whole, (iii) pointed out that solely the place of the damage resulting directly from the event giving rise to it can serve as ground for an alternative jurisdiction, and (iv) confirmed the right of a legal successor of the initial victim to claim for damages.
The case concerns a request for a preliminary ruling from Gyor Regional Court of Appeal, Hungary (‘Referring court’) in the context of an action for damages by the Hungarian company Tibor-Trans (‘Claimant’) against the Dutch company DAF Trucks NV (‘Defendant’) following the Decision of the European Commission (AT.39824 – Trucks) of 19 July 2016 in the European Trucks Cartel Case (‘Decision’). In its Decision the European Commission found that several truck manufacturers infringed Art. 101 TFEU between at least 1997 and 2011 (‘LKW Cartel’). The Trucks Cartel, in the form of a single and continuous infringement, consisted of collusive agreements on the coordination of prices throughout the EEA for medium and heavy-duty trucks as well as the timing and passing on of costs for the introduction of new emission technologies.
On 20 July 2017, the Claimant brought an action for damages against the Defendant, an addressee of the Decision, before the Gyor Regional Court of First Instance (‘Court’), that is the court of the place where the Claimant has its registered office. Tibor-Trans claimed damages for the artificially higher prices of the trucks paid to dealers and finance leasing companies in Hungary as a result of the distortion of the market caused by the Cartel in which DAF Trucks participated. The Defendant contested the Court’s international jurisdiction by arguing that none of the collusive meetings took place in Hungary and that it had never entered a direct contractual relationship with the Claimant. The Court found that it did not have jurisdiction to hear the case as no event giving rise to the damage occurred in Hungary.
On appeal, the Referring court was uncertain whether it could base its international jurisdiction on the place where the damage occurred, that is the domicile or principal place of economic activity or financial interest of the Claimant, given that Tibor-Trans and DAF Trucks had not established contractual relations. It was specified that the Claimant only purchased trucks manufactured by other undertakings involved in the Cartel. The national proceedings were stayed and a reference for a preliminary ruling was sent to the CJEU regarding the interpretation of Article 7(2) Brussels I bis in the context of Article 101 TFEU damages cases.
The CJEU started its legal assessment by recalling that actions for antitrust damages come within the definition of “civil and commercial matters” for the purpose of applying Brussels I bis (para 24). The CJEU then referred to its well-established case law concerning the interpretation of the EU rules on special jurisdiction according to which “the place where the harmful event occurred is intended to cover both the place where the damage occurred and the place of the event giving rise to it, so that the defendant may be sued, at the option of the applicant, in the courts for either of two places” (para 25). It should be stressed that the outcome of the Judgement relates exclusively to the determination of the place where the alleged damage occurred, not the place of the event giving rise to it. Furthermore, the CJEU specified that solely the place where the initial damage resulting directly from the event giving rise to it provides a basis for a special jurisdiction under Article 7(2) Brussels I bis (para 28).
Importantly, the CJEU considered that the artificially high prices, including overcharge, paid by Tibor-Trans to its truck dealers and leasing companies in Hungary resulted directly from the distortion of the market price caused by the Trucks Cartel (para 31). Furthermore, the CJEU recalled the joint and several liability of each and any undertaking – in the case at hand DAF Trucks – for the single and continuous infringement of the EU cartel prohibition, independent of whether or not they had direct contractual relations with the Claimant (para 36). Finally, the Court concluded, that the place where “the harmful event occurred” covers cumulatively the territory of the Member State where the market is affected and where the Claimant has suffered damage due to distortion of market prices (paras 33 and 37).
The CJEU found that such an approach was not only consistent with the objectives of proximity and predictability of the rules governing jurisdiction but also in line with recital 7 and Article 6(3)(a) of Rome II Regulation according to which “the law applicable to actions for damages based on an act restricting competition is that of the country where the market is, or is likely, to be affected” (para 35). Thus, the CJEU considered, that the courts of the Member State in which the affected market is located and where the harm occurred are best placed to assess the actions for damages, and that the cartelist can reasonably expect to be sued in the Member State where its anticompetitive conduct has distorted the competitive market conditions (para 34).
This Judgment is important not at least because it puts emphasis on the fact that EEA-wide infringements of competition law entail per se a distortion of competition in each and all national markets of the EEA Member States. The CJEU clarified that higher costs imposed and/or passed on to purchasers of a cartelised good are immediate consequences of the infringement and should therefore be considered as direct damage, not an indirect consequence of the damage initially suffered. Therefore, the place of the damage suffered by direct as well as indirect purchasers can serve as basis for the establishment of the special jurisdiction under Article 7(2) of Brussels I bis.
Although not specified in the Judgment, it is relevant to recall that in line with the judgment of the CJEU of 21 May 2015 in Fall C-352/13, CDC HP, (i) “the place where the damage occurred is the place where the alleged damage actually manifests itself” (para 52, CDC HP), and (ii) “the jurisdiction of the court seised of the matter by virtue of the place where the loss occurred is limited to the loss suffered by the undertaking whose registered office is located in this jurisdiction” (para 55, CDC HP).
By Vasil Savov and Juraj Siska