Court applies Dutch law to all air freight cartel damages claims
This decision shows that courts are willing to take a pragmatic approach to the complicated question of determining the applicable law to international follow-on damages claims. The claimant-friendly judgment will be subject to direct appeal.
The decisions were rendered in proceedings initiated by indirect purchasers of air freight services against the airlines that are alleged to have participated in a price-fixing cartel between 1999 and 2006.
The Court had to decide which legal system (or systems) would govern the civil law damages claims of these indirect purchasers. Since the anticompetitive conduct occurred before the Rome II Regulation entered into force in January 2009, this question had to be adjudicated under the Dutch private international law rule which provides that claims arising out of an infringement of competition law are "governed by the law of the state where the competitive act affected the competitive relationships".
Therefore, the core question with regard to every individual claimant's claim was in which state the air freight cartel had allegedly produced anticompetitive effects. In this regard, the court noted that the alleged cartel involved an agreement which affected prices and competitive conditions in the global air freight market. According to the court, this worldwide impact on competitive relationships made the rule, which attempts to precisely identify the affected market, difficult and impractical to apply.
Therefore, the Court decided to adopt a more practical approach. Remarkably, it ruled that since the cartel had a worldwide impact, including in the Netherlands, Dutch law could be, and in fact had to be, applied to all individual claims. The court justified this approach with reference to the principles of due process ("goede procesorde") and the European law principle of effectiveness.
The Court's claimant-friendly approach favours pragmatic considerations over the applicable rules.
The potential impact of this judgment is limited to situations in which the Rome II Regulation does not apply. For claims resulting from anticompetitive conduct that took place after 11 January 2009, the Rome II Regulation already allows claimants to apply the law of the country in which they bring their claims, provided that this country's market was "directly and substantially" affected by the relevant anticompetitive conduct. The approach adopted by the court in Amsterdam somewhat reflects this possibility.
The Court was aware of its pioneering approach, and granted parties the right to directly appeal its decision. The Court of Appeal will have to decide whether the pragmatic approach adopted by the Court can be upheld on appeal.
This article was published in the Competition Law Newsletter of June 2019. Other articles in this newsletter:
- Still standing: annulled Commission decision remains in force for non-appellant
- Low prices, high fines: Commission's creative purchase cartel fine upheld
- Successful challenges to merger decisions seem to be the exception
- Cheaper beer ahead? AB InBev fined for cross-border sales restrictions
- Dutch court: insufficient substantiation? No follow-on cartel damages action
- Commission decision used as point of reference in cartel damages case
- Regulate tech giants and create European champions, says Dutch government