Short Reads

District Court rejects the applicability of arbitration clauses in antitrust damages litigation

District Court rejects the applicability of arbitration clauses in antitrust damages litigation

District Court rejects the applicability of arbitration clauses in antitrust damages litigation

01.07.2016 NL law

On 25 May 2016, the District Court of Rotterdam ("the Court") ruled that it had jurisdiction to hear one of the elevator follow-on damages litigation claims. The Court declined to apply the arbitration clauses relied upon by the defendants, taking the view that those clauses did not cover antitrust damages claims.

 

The case has its origins in a 2007 infringement decision, in which the Commission fined several elevator manufacturers for participating in anticompetitive practices. Following that decision, 41 housing associations joined forces and established Stichting De Glazen Lift ("DGL"), to which they assigned their alleged antitrust damages claims. DGL subsequently initiated damages proceedings before the Court. In turn, defendants Kone B.V., ThyssenKrupp Liften B.V., Otis B.V. and Mitsubishi Elevator Europe B.V. ("the elevator manufacturers") contested the jurisdiction of the Court. The elevator manufacturers based this motion on the arbitration clauses contained in the supply and service agreements that they had concluded with the housing associations during the relevant period.

Referring to the Court of Justice's judgment in CDC HP the Court dismissed the motion. In CDC HP, the Court of Justice had ruled that jurisdiction clauses can only validly derogate from the EU jurisdictional rules if the clause clearly refers to disputes concerning liability incurred as a result of an infringement of competition law. The Court applied this reasoning by analogy to the arbitration clauses invoked by the elevator manufacturers. Given that these clauses broadly subjected "every dispute arising between parties" to arbitration, the housing associations could not reasonably foresee antitrust damages claims falling within their scope. Therefore, according to the Court, the arbitration clauses did not apply.

The Court further considered that even if DGL's claims were to fall within the scope of the arbitration clauses, their application would nevertheless be unacceptable according to the reasonableness and fairness principle under Dutch law.  According to the Court, application of the arbitration clauses would be contrary to the principle of effectiveness of EU law, since the housing associations would have to verify for thousands of elevators whether claims should be brought before a district court or an arbitration panel.

Several Dutch courts have already rejected the applicability of arbitration clauses in follow-on damages proceedings (e.g. ECLI:NL:RBAMS:2014:3190 and ECLI:NL:GHAMS:2015:3006) [see also our January 2014 newsletter]. The judgment of the District Court of Rotterdam shows that (i) the phrasing of the arbitration clauses needs to specifically cover antitrust damages claims, but (ii) even then Dutch courts may decline to refer the dispute to arbitration due to reasonableness and fairness considerations, depending on the specifics of the case.

This article was published in the Competition Law Newsletter of July 2016. Other articles in this newsletter:

1. Court of Justice dismisses appeals in the Calcium Carbide Cartel
2.
General Court confirms that the financial position of shareholders and the possibility to increase credit facilities are relevant when assessing an inability to pay request
3. General Court confirms illegality of non-compete clause in telecoms transaction
4. Update on changes in antitrust damages claims legislation in the Netherlands
5. New maximum fines for competition law infringements in the Netherlands as of 1 July 2016
6. General Court rules that an implicit and unlimited guarantee does not necessarily constitute State aid

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