On 27 June 2018, the District Court of East-Brabant ruled on the limitation periods of a damages claim brought by Vestel in relation to the alleged cathode ray tubes (CRT) cartel. The District Court found that the damages claim is not time-barred under Turkish law.
In December 2012, the Commission fined eight CRT producers for participating in two separate infringements of Article 101 TFEU. The infringements related to colour picture tubes (CPTs) and colour display tubes (CDTs). In November 2014, the Turkish electronic-appliances company Vestel initiated damages proceedings in the Netherlands against several addressees of the Commission decision.
In deviation from the usual 'order of play' in Dutch civil proceedings, the District Court had decided to have the parties debate the proper application of limitation periods for damages claims under Turkish law, before getting to the merits of the case.
Under the governing Turkish law, a long-stop period of 10 years and a short-stop period of one year or two years apply: the relevant statutory short-stop period was extended from one year to two years as per 1 July 2012. According to the claimants, for the short-stop period to start running, actual knowledge of the damage and the identity of the liable person is required. That knowledge would only have been acquired after the Commission published a press release on 5 December 2012. The defendants argued that Vestel had or should have already had sufficient knowledge before November 2012, hence more than two years before the proceedings were initiated.
Referring to two expert opinions, the District Court sided with Vestel and held that under Turkish law the short-stop period only starts to run when the aggrieved person actually becomes aware of the damage and the identity of the liable person. According to the District Court, the defendants failed to demonstrate that Vestel had the relevant knowledge before 5 December 2012. The media statements to which the defendants referred did not provide sufficient information for Vestel to be able to bring a claim. The District Court concluded that the claims were not time-barred under the applicable short-stop limitation period of 2 years.
In determining the starting point of the long-stop period, the parties disagreed on what constitutes the 'tortious act'. Vestel argued that participating in the alleged cartel in itself was the tortious act and that therefore the limitation period started to run only after the alleged cartel was ended. The defendants argued that for purposes of statutory limitation under Turkish law, one needs to establish first when a right of action arises. The alleged cartel in itself does not constitute a "tortious act" vis-à-vis an individual customer like Vestel and, therefore, does not give rise to a right of action. Instead, a right of action arises if and when a (sales) transaction occurs, that is allegedly affected by the cartel. Therefore, in the view of the defendants it is the implementation of the cartel in relation to each separate sales transaction that constitutes a "tortious act". Consequently, the long-stop limitation period should be applied to every transaction separately, and starts running from every date of purchase.
However, the District Court again sided with Vestel on this issue, holding that the relevant (continuous) "tortious act" for purposes of applying the long-stop statutory limitation under Turkish law, is the participation in the alleged cartel. According to the District Court, the approach advocated by the defendants is inconsistent with the commonly accepted concept of joint and several liability of the cartelists and with the notion that cartelists may be liable to pay compensation for umbrella damages in follow-on cases. Consequently, the District Court concluded that the long-stop period did not start to run until the moment the alleged cartel had ended and that this limitation period therefore had not yet expired.
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
- Court of Appeal in the Netherlands decides to appoint independent economic experts in TenneT v ABB
- Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords