Dutch court narrowly applies ECJ’s Skanska ruling: forum-shopping in cartel damages cases is not always an option

In a private enforcement case brought by four public utility companies from the Gulf states, the Amsterdam District Court (the Court) recently declined jurisdiction over claims against non-Dutch defendants.

The proceedings were initiated on the back of the European Commission’s 2014 Power Cables decision, in which the Commission had found violations of Article 101 of the Treaty on the Functioning of the European Union in the European market for high-voltage power cables consisting of market sharing and customer allocation.

The judgment indicates that the Dutch courts are critical of questions on jurisdiction and forum-shopping in the context of private enforcement cases. The judgment also provides a narrow application of the European Court of Justice’s (ECJ) Skanska ruling, as the Court held that the scope of this ruling is limited to cases of economic continuity.

The claimants had brought the claims against several addressees of the Commission decision, all of which are non-Dutch, as well as several Dutch ‘anchor defendants’ within the corporate groups of the addressees.

The non-Dutch addressees of the Commission decision successfully argued against the claimants’ assertions that jurisdiction of the Dutch courts over the non-Dutch defendants could be based on Article 8(1) of Brussels I Regulation (recast), which determines that claims with a close connection can be brought together before one court.

In the judgment, the Court ruled that there was, on the face of it, no basis for claims against the Dutch defendants because none of them were addressees of the Commission decision and there was no evidence of their involvement in the infringement.

Background

The claimants alleged they had suffered losses as a result of power cables purchases in their home states and brought claims against several Dutch and non-Dutch group entities of ABB, Prysmian and Nexans, as well as Goldman Sachs and Pirelli (as shareholders of Prysmian).

According to the claimants, each of the defendants could be held jointly and severally liable for the losses resulting from the infringement.

The claim was in principle based on the Commission’s decision, which found that several entities directly participated in the cartel and that this conduct could be attributed to several parent companies under the Akzo presumption formulated in case law by the ECJ. Neither the direct participants nor any of the parent companies were Dutch. The Dutch defendants were either ‘sister companies’ or subsidiaries of the addressees of the decision, but had not been found to be involved or liable in the Commission decision themselves.

The claimants argued that the Court had jurisdiction over the claims against the non-Dutch defendants under Article 8(1) of Brussels I Regulation (recast), which establishes jurisdiction over defendants based in other member states if the claims against the domestic defendants (the ‘anchor defendants’, in this case Dutch) and the foreign defendants are so closely connected that it is expedient to hear and determine these claims together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

The Court’s judgment: no jurisdiction over non-Dutch defendants

The Court rejected jurisdiction over the non-Dutch defendants, as it held that there was no sufficiently close connection between the claims against the Dutch and non-Dutch defendants.

The Court also considered that any participation of the Dutch defendants in the violations could not be established on the basis of the Commission decision, nor on the basis of the limited evidence adduced by the claimants.

Moreover, the Court found that none of the non-Dutch defendants exercised decisive influence over the Dutch entities in relation to any relevant conduct.

In this respect, the Court emphasised the importance of the concept of personal responsibility under EU competition law, which provides that responsibility for committing infringements is personal in nature. Even if specific entities belong to the same corporate group as an entity that has been fined it does not mean that they are involved in the infringement.

Narrow application of Skanska judgment

The Court further applied a narrow interpretation of the ECJ’s 2019 Skanska judgment, in which the ECJ ruled that the concept of an undertaking cannot be applied differently for the purposes of imposing fines (public enforcement) and lodging actions for damages (private enforcement).

The claimants argued that the ‘undertaking’ captures all entities that fall under common control of the same parent and that any entity within a corporate group can be held liable for conduct committed by another group entity, regardless of whether it was involved in the violation or satisfies the Akzo criteria.

The Court rejected this argument and confirmed that this constitutes an overly extensive interpretation of the Skanska ruling. The Court held that the ECJ’s considerations relate specifically to the preliminary questions referred and the concrete facts and circumstances of the case.

The relevance of the Skanska judgement is therefore limited to situations of successor liability, i.e. where a company could avoid liabilities through restructuring. As none of the addressees of the Commission decision has ceased to exist, there is no support for the claimants’ view that claims for damages can be addressed to any (Dutch) entity within the ABB, Prysmian and/or Nexans groups of companies.

Implications

The judgment suggests that the Dutch courts closely scrutinise questions on jurisdiction in the context of private enforcement cases. The judgment further confirms that the Skanska judgement may only be relevant to situations of economic continuity and cannot be stretched to mean that all entities within an undertaking are liable in private enforcement actions.

The judgment is subject to appeal by the claimants.

The authors of this blog post acted as defence counsel in these proceedings.