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Dutch Supreme Court ruled against statutory conversion of anticompetitive effect clauses

Dutch Supreme Court ruled against statutory conversion of anticompetitive effect clauses

Dutch Supreme Court ruled against statutory conversion of anticompetitive effect clauses

07.01.2014

 

 
On 20 December 2013, the Dutch Supreme Court ruled that the "statutory conversion" provision in the Dutch Civil Code does not apply to clauses that have the effect of restricting competition (HR 20 December 2013 (BP/Benschop)). Typically, this provisions converts invalid clauses into valid ones, but clauses that violate competition law are null and void and are not converted by this provision.

The case involves a clause in an agreement between the petrol company BP and petrol station holder Benschop, which provides Benschop with exclusive purchasing rights of petrol from BP for twenty years. According to Benschop, this exclusive purchasing clause is in violation of competition law and therefore null and void. Benschop states it has, as a result, suffered harm up to an amount of € 0.06 per litre of petrol purchased from BP. BP argued that, inter alia, if the duration of twenty years is in violation of competition law, this provision should be converted to a contract duration in line with competition law on the basis of statutory conversion (conversie) as stipulated in Article 3:44 Dutch Civil Code.

In an earlier case, the Supreme Court had ruled that for agreements with the object to restrict competition, the conversion provision does not apply in order to safeguard the effectiveness of the cartel prohibition and deter infringements (HR 18 December 2009 (Prisma)). In the present case, the Supreme Court decided that the same applies for agreements that have the effect of restricting competition. Furthermore, the Supreme Court decided that notwithstanding the anticompetitive exclusivity clause, the agreement remains in force, as the remaining provisions are not intrinsically linked to the void clause.

Benschop may now start separate damages proceedings before the Court of Appeal of Amsterdam. This Court had earlier awarded Benschop an advance payment on damages of € 0.02 per litre of petrol it had purchased from BP. In relation to these damages proceedings, the Supreme Court already considered obiter dictum that a right to damages may be withheld from a party that is to a considerable extent responsible for the restriction of competition on the basis of the own fault doctrine (eigen schuld) in the Dutch Civil Code.

This case clarifies the civil enforcement risks of non-hardcore infringements of competition law, such as certain exclusive purchasing clauses. However, the case does not clarify whether contractual conversion would be possible, that is, explicitly agreeing in advance to convert clauses that turn out to be in violation of competition law. In the Prisma case, referred to above, the Supreme Court explicitly left this question unanswered.

 

This information is only a broad outline of the subject matters discussed herein. Stibbe N.V. and all the entities, partnerships, persons and practices trading under the name 'Stibbe' do not accept any liability for the consequences of making use of this issue without their consent. Please contact Stibbe for specific legal advice tailored to your particular circumstances.

 

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