C-352/13 Cartel Damage Claims (CDC) Hydrogen Peroxide was the CJEU’s first judgment on the application of the Brussels I Regulation (44/2001) to competition damages claims. The case fell to be decided in the context of the EU’s various new measures to encourage private enforcement. The Advocate General was not convinced that this policy focus could be reflected in Brussels I – he considered that the Regulation was “not fully geared towards ensuring effective private implementation of the Union’s competition law” (at ). However, the CJEU embraced the challenge, and provided an interpretation of Brussels I that will do much to encourage private enforcement.
The essential background was the Commission’s Decision that several companies supplying hydrogen peroxide and sodium perborate had participated in a cartel contrary to Art 101 TFEU. The claimant, CDC, brought a claim in Germany against six cartelists established in various Member States. It then settled its claim against the only one of the companies with its registered office in Germany.
The general rule of jurisdiction, in Article 2 of Brussels I, is that a defendant shall be sued in the Member State of his or her domicile. Given that CDC did not wish to bring separate actions in each Member State against each defendant, it relied on provisions of special jurisdiction in Articles 5 and 6.
First, Article 6(1) grants jurisdiction in respect of co-defendants, provided that an ‘anchor defendant’ is domiciled in the Member State and that there would otherwise be a risk of irreconcilable judgments. The potential difficulty for CDC was that it no longer pursued its case against the anchor defendant.
The CJEU held that this did not hinder the application of Article 6(1). It was sufficient that there was an anchor defendant at the time the proceedings were instituted. The only ground on which the settlement with the anchor defendant would have prevented the application of Article 6(1) was if the parties had “colluded to artificially fulfil, or prolong the fulfilment of, that provision’s applicability” (at ). This is a very narrow basis on which to oppose the applicability of Article 6(1), and sits uncomfortably with the requirement (to which the Court paid lip service at ) that any jurisdiction granted by that Article must be strictly interpreted.
The Court then turned to Article 5(3), which provides jurisdiction to the courts for the place where the harmful event occurred (either where the events which gave rise to the damage happened, or where the damage occurred). Advocate General Jääskinen had decided that the case law on Article 5(3) could not apply to competition law damages actions “due to the considerable geographical dispersal of the causes and effects of the harm invoked” (at ). In his view, identifying the location of a pan-European cartel of long duration would lead to “over-generous, too diffuse and fortuitous grounds of jurisdiction” (at ).
However, the CJEU was content for Article 5(3) to apply. The ‘place of the events which gave rise to the damage’ was held to be the location where a cartel agreement was entered into, provided that this agreement was the sole causal event that gave rise to the loss suffered by the claimant (at ). On the facts, the Court was unable to identify such an agreement. Given that many cartels consist of a series of pan-European meetings, about which it is difficult to establish detailed evidence, the prospects of ever finding an agreement fulfilling this criterion must be low.
In respect of the ‘place where the damage occurred’, the Court held (with remarkably little discussion) that, where loss consists in additional costs incurred because of artificially high prices, the relevant place is the claimant’s registered office (at ). The result is that jurisdiction can be easily tied to the claimant’s domicile, directly contrary to the general rule under the Regulation.
The Advocate General had suggested (at ) that, following the case of 68/93 Shevill v Presse Alliance SA, jurisdiction based on the place where the harmful event occurred should be limited to the damage sustained in the court’s particular territory. Without discussing the point, the Court held that the domestic court where the claimant’s registered office was located could hear an action ‘for the whole of the loss inflicted upon that undertaking‘ (at ). (However, CDC would need to bring multiple claims, one in each jurisdiction where each individual undertaking’s registered office was located.)
Finally, the Court addressed the defendants’ arguments that jurisdiction should be governed by jurisdiction agreements pursuant to Article 23 of Brussels I. It held that there was no principle preventing a jurisdiction agreement from having effect in a competition damages action, but that the clause must “refer to disputes concerning liability incurred as a result of an infringement of competition law” (in ). A clause which “abstractly refers to all disputes arising from contractual relationships” (at ) will not cut the mustard.
In overview, CDC relied on Articles 5 and 6 of Brussels I to permit consolidated private enforcement actions, and the CJEU gave these Articles a broad interpretation. The cartel participants relied on Article 23 to separate the damages actions, and the CJEU interpreted this Article narrowly. The result: the focus on facilitating private enforcement in substantive EU law has been mirrored in procedural EU law.