Short Reads

General Court rejects Trioplast's action for annulment of a Commission notice to pay interest

General Court rejects Trioplast's action for annulment of a Commission notice to pay interest

General Court rejects Trioplast's action for annulment of a Commission notice to pay interest

02.06.2016 EU law

On 12 May 2016, the General Court (“GC”) dismissed an action for annulment brought by Trioplast Industrier AB (“Trioplast”) against a letter from the European Commission putting Trioplast on notice to pay interest on a fine imposed following an infringement of the cartel prohibition. The GC confirmed that interest accrues from the moment that the Commission initially imposes a fine, even if during subsequent appeal proceedings the amount of the fine is reduced.

The GC also ruled that a court order giving due effect to the outcome of related proceedings does not affect the Commission's ability to impose default interest.

In November 2005, the Commission imposed a fine on one of Trioplast's subsidiaries, Trioplast Wittenheim, for its participation in anticompetitive practices in the industrial bag sector. As Trioplast Wittenheim's parent company, Trioplast was held jointly and severally liable for an amount of EUR 7.73 million. Trioplast Wittenheim's former parent companies, FLSmidth and FLS Plast (“FLS”), were also held liable for part of the fine. Trioplast decided not pay the fine at once and provided a bank guarantee instead.

Trioplast and FLS separately appealed the decision of the Commission. In September 2010,  the GC reduced the fine imposed on Trioplast to EUR 2.73 million. In addition, the  GC pointed out that the outcome of FLS's appeal might warrant a further adjustment of the fine imposed on Trioplast, and that it would fall to the Commission to do so.

In August 2012, Trioplast made a provisional payment of EUR 2.73 million. However, it refused to pay interest over that amount as it was of the opinion that the GC had annulled the 2005 decision and that interest could only start to accrue after the Commission made a new decision. When  the Commission sent Trioplast a final notice to pay interest, Trioplast brought an action for annulment before the GC. In the alternative, Trioplast claimed damages from the Commission in the amount of the default interest and charges it had incurred in providing a bank guarantee.

The GC, however, declared Trioplast's action for annulment to be inadmissible. It found that by sending the final notice, the Commission did not adopt an act producing binding legal effects capable of affecting Trioplast's interests, but "merely confirmed the conditions to which the Commission made the suspension of payment of the fine subject during the [FLS] legal proceedings". After the Court of Justice delivered its judgment in the FLS proceedings, the original Commission decision also became binding on Trioplast. This ended the suspension of payment of the fine, thereby obliging Trioplast to pay the fine immediately.

With regard to the action for damages, the GC ruled that it was Trioplast's own choice to provide a bank guarantee. If it had paid the fine immediately, Trioplast would not have had to pay the default interest. The GC ruled that there was therefore no causal link and rejected Trioplast's claim for damages, thereby following its long-standing case law on the non-contractual liability of EU institutions.

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

  1. Commission blocked Hutchison's proposed acquisition of Telefónica UK
  2. General Court confirmed that German law on renewable energy amounts to State aid
  3. European Commission publishes guidance on the notion of State aid
  4. District Court of Rotterdam upheld the ACM's unconditional clearance decision in telecoms merger KPN/Reggefiber
  5. Rotterdam District Court considered "franchise agreements" in breach of competition law in launderette cartel case
  6. UK High Court held that territorial limits apply to EU cartel damages claims

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