Short Reads

General Court awards damages for failure to adjudicate within a reasonable time

General Court awards damages for failure to adjudicate within a reasonable time

General Court awards damages for failure to adjudicate within a reasonable time

01.02.2017 NL law

On 10 January 2017, the General Court ("ruled on the non-contractual liability of EU institutions in an action for damages brought by Gascogne Sack Deutschland GmbH ("Gascogne Sack") and Gascogne. The GC ordered the EU to compensate Gascogne Sack and Gascogne for the damage that they had suffered as a result of the GC's failure to adjudicate within a reasonable time.

The European Commission had fined Gascogne Sack and Gascogne in November 2005 for a cartel on the industrial bags market. The companies subsequently appealed to the GC, which delivered its judgment in November 2011, i.e. after a period of almost 5 years and 9 months. In their appeal before the Court of Justice, Gascogne Sack and Gascogne sought, among other things, to have the judgment of the GC set aside or a reduction of the fine imposed due to the excessive length of the GC's procedure. The Court dismissed their appeal and ruled that the sanction for a failure to adjudicate within a reasonable time "must be an action for damages brought before the General Court, since such an action constitutes an effective remedy" [see our December 2013 Newsletter]. Following this ruling, Gascogne Sack and Gascogne started the current action for damages against the EU at the GC. 

In the judgment, the GC first of all assessed whether there had been a failure to adjudicate within a reasonable time and whether this qualifies as a sufficiently serious breach of EU law. It noted that in the GC proceedings, approximately 3 years and 10 months had passed between the end of the written stage of the proceedings and the opening of the oral stage. After considering the factual, legal and procedural complexity of the proceedings, the GC ruled that the reasonable time for adjudication had been exceeded by 20 months. According to the GC, this constitutes a sufficiently serious violation of EU law.

The GC subsequently examined whether Gascogne Sack and Gascogne had suffered damage as a result of this violation. Instead of paying the fine immediately, Gascogne had provided a bank guarantee to the Commission. The GC ruled that Gascogne suffered material damage resulting from having to pay the costs for the bank guarantee during the period in which the reasonable time for adjudication had been exceeded. Furthermore, the GC held that the companies were placed in a prolonged state of uncertainty because of the excessive length of the procedure. Since this necessarily had an influence on the planning of the decisions to be taken and on the management of the companies, Gascogne Sack and Gascogne had also suffered immaterial damages. The GC ruled that the EU was liable for both the material and immaterial damage and ordered the EU to pay damages to Gascogne Sack and Gascogne, which amounted to approximately EUR 57,000 in total. 

This article was published in the Competition Law Newsletter of February 2017. Other articles in this newsletter:

1. Court of Justice confirms Commission's approach in its first hybrid settlement case
2. Court of Justice clarifies rules on evidence in bathroom fittings cartel judgments
3. Court of Justice confirms the fine imposed on Toshiba and Panasonic in the cathode ray tubes cartel
4. District Court of Rotterdam confirms that investment firms may be held liable for conduct of portfolio companies

Team

Related news

01.08.2019 NL law
General court dismisses all five appeals in the optical disk drives cartel

Short Reads - The General Court recently upheld a Commission decision finding that suppliers of optical disk drives colluded in bids for sales to Dell and HP by engaging in a network of parallel bilateral contacts over a multi-year period. The General Court rejected applicants' arguments regarding the Commission's fining methodology, including that the Commission ought to have provided reasons for not departing from the general methodology set out in its 2006 Guidelines.

Read more

14.08.2019 BE law
Verklaring van openbaar nut is geen "project" in de zin van de MER-regelgeving

Articles - In een recent arrest bevestigt de Raad van State dat "verklaringen van openbaar nut", bedoeld in artikel 10 van de wet van 12 april 1965 betreffende het vervoer van gasachtige produkten en andere door middel van leidingen niet onder het begrip "project" uit de project-MER-regelgeving valt. Of hetzelfde geldt voor elk type gelijkaardige administratieve toelating, is daarmee evenwel nog niet gezegd. Niettemin geeft de Raad met zijn arrest een belangrijk signaal dat niet elke mogelijke toelating onder de project-MER-regelgeving valt.

Read more

01.08.2019 NL law
Brand owners beware: Commission tough on cross-border sales restrictions

Short Reads - The European Commission recently imposed a EUR 6.2 million fine on Hello Kitty owner Sanrio for preventing its licensees from selling licensed merchandising products across the entire EEA. Sanrio is the second licensor (after Nike) to be fined for imposing territorial sales restrictions on its non-exclusive licensees for licensed merchandise. A third investigation into allegedly similar practices by Universal Studios is ongoing. The case confirms the Commission's determination to tackle these practices, regardless of type or form.

Read more

08.08.2019 BE law
Regulating online platforms: piece of the puzzle

Articles - The new Regulation no. 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services, applicable as of 12 July 2020, is another piece of the puzzle regulating online platforms, this time focussing on the supply side of the platforms.

Read more

01.08.2019 NL law
Call of duty: Commission must state reasons when straying from its guidelines

Short Reads - The European Commission has lost a second battle concerning its EUR 15 million fine imposed upon interdealer broker ICAP, this time before the European Court of Justice. The Court upheld the previous judgment of the General Court on the basis of the Commission's failure to state reasons concerning its fining methodology of cartel facilitator ICAP. This may lead to more reasoned Commission decisions in the future - deterrence of cartel behaviour does not justify keeping the methodology for setting the fines as a 'black box'.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring