On 20 July 2018, the Court of Appeal of Gelderland published another interim judgment in the ongoing proceedings between TenneT, the grid operator in the Netherlands, and ABB in relation to the gas insulated switchgear (GIS) infringement. After the Dutch Supreme Court had confirmed in a judgment of 8 July 2016 [see our August 2016 Newsletter] that the passing-on defence is available under Dutch law, the Court of Appeal of Gelderland decided to appoint independent economic experts to provide input on the calculation of overcharge and the existence of pass-on.
The District Court had awarded an amount of EUR 23 million plus interest to TenneT. In its ruling, the District Court rejected ABB's attempt to invoke the passing-on defence, holding that it would not be reasonable to allow it considering the circumstances of the case [see our April 2017 Newsletter article which refers to the previous rulings]. On appeal, ABB argued that the District Court (i) incorrectly calculated the overcharge resulting from the GIS cartel and (ii) erred in law in ruling that it was not reasonable to allow the passing-on defence.
The Court of Appeal of Gelderland did not opine on the merits of these grounds of appeal in its judgment of 29 May 2018. It did, however, make clear that the Court of Appeal of Gelderland wishes to conduct a more in-depth investigation into the actual loss suffered by TenneT as a result of ABB's involvement in the GIS cartel by appointing economic experts to establish the resulting overcharge.
Regarding the passing-on defence, the Court of Appeal referred to the earlier Supreme Court judgment (noted above) establishing that a passing-on defence can be cognizable under Dutch law either as a factor affecting the loss suffered by a claimant (i.e. reducing any alleged loss associated with the payment of 'overcharges' to the extent that the overcharge was passed on), or under the doctrine of voordeelstoerekening, which holds that benefits enjoyed by a claimant as a result of alleged wrongdoing may under certain conditions be offset against the loss suffered by the claimant (cf. under German law: Vorteilsausgleichung).
The Supreme Court held that lower courts are free to decide which of the two approaches to adopt. The Court of Appeal opted for the first approach and decided that in order to fully assess the passing-on defence, it must first establish whether TenneT actually passed-on the overcharge to its customers.
As a final remark, it is perhaps worth noting that the Court of Appeal also confirmed that the District Court was right to reject ABB's request to submit the economic expert reports under a "confidentiality ring", considering that the interests in confidentiality of ABB did not outweigh the interests of third parties to obtain an unredacted judgment.
This article was published in the Competition Law Newsletter of August 2018. Other articles in this newsletter:
- European Court of Justice dismissed Orange Polska’s appeal in abuse of dominance case
- General Court underlines importance of Commission's duty to state reasons
- General Court dismisses appeals by investor against power cable cartel fine
- Google receives a second record fine of EUR 34 billion for imposing restrictions on Android device makers
- European Commission issues a new Best Practices Code for State aid control
- District Court in the Netherlands rules on limitation periods in CRT case
- Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords