European Court of Justice clarifies the application of choice of forum clauses in competition damages claims
On 24 October 2018, the European Court of Justice ruled that a choice of forum clause in a contract between Apple and eBizcuss, a former reseller of Apple products, may apply to abuse of dominance claims, even when the clause does not explicitly refer to disputes relating to liability resulting from a competition law infringement.
In 2012, eBizcuss brought damages proceedings against Apple in France claiming that Apple had abused its dominant position. Apple, however, argued that the French courts had no jurisdiction in this matter as the choice of forum clause included in the contract between Apple and eBizcuss conferred exclusive jurisdiction on the Irish courts. After lengthy proceedings before several French courts, the country's highest court – the Cour de Cassation – referred a request for a preliminary ruling from the European Court of Justice (ECJ) asking whether a party can rely on a choice of forum clause in the context of claims seeking damages for an abuse of dominance where that clause does not explicitly cover competition law infringements.
In an earlier judgment of 21 May 2015 in the case of CDC Hydrogen Peroxide, the ECJ ruled that under Article 23 Brussels I Regulation (44/2001), choice of forum clauses can only be upheld in the context of actions for damages based on Article 101 of the Treaty on the Functioning of the European Union (TFEU), if they explicitly refer to competition law infringements. The purpose of that requirement is to avoid a party who has no knowledge of an unlawful cartel at the time of the conclusion of the contract being surprised by the other party invoking a choice of forum clause to shield himself against damages claims relating to the cartel infringement.
In its recent judgment in the case of Apple v eBizcuss, the ECJ draws a distinction between damages claims based on the infringement of Article 101 and 102 TFEU. The ECJ confirms that conduct covered by Article 101 TFEU is in principle not directly linked to the contractual relationship between a cartel member and a third party affected by the cartel. Contrary to Article 101 TFEU, the anti-competitive conduct covered by Article 102 TFEU can materialise in contractual relations that an undertaking in a dominant position establishes and thus makes it foreseeable. The Court considers that "while the anti‑competitive conduct covered by Article 101 TFEU, namely an unlawful cartel, is in principle not directly linked to the contractual relationship between a member of that cartel and a third party which is affected by the cartel, the anti‑competitive conduct covered by Article 102 TFEU, namely the abuse of a dominant position, can materialise in contractual relations that an undertaking in a dominant position establishes and by means of contractual terms." In the present case, reliance on a choice of forum clause in the context of an action for damages based on Article 102 TFEU, where the clause refers to the contract and 'the corresponding relationship', should not come as a surprise to any of the parties. As a consequence, eBizcuss should have expected that the choice of forum clause also covered future claims related to an alleged abuse of dominance.
The Cour de Cassation also sought to ascertain whether the prerequisite of finding an infringement of competition law by a national or European authority according to Article 23 Brussels I Regulation still stands in order for the choice of forum clause to apply. Unsurprisingly, the ECJ ruled that the existence or absence of a prior finding of an infringement is not relevant in determining whether a choice-of-forum clause is applicable in a case concerning an action for damages allegedly suffered as a result of an infringement of the competition rules. Going forward, such clauses may therefore apply to both 'follow-on' actions and 'stand-alone' actions for damages based on an infringement of Article 102 TFEU.
This article was published in the Competition Law Newsletter of November 2018. Other articles in this newsletter: