On 29 July 2019, the CJEU handed down its ruling in Case C-451/18 Tibor-Trans Fuvarozó és Kereskedelmi Kft-v- DAF Trucks NV, which deals with the important question of where is the “place where the harmful event occurred” for the purposes of the special tort / delict jurisdiction under Article 7(2) of the Brussels I (Recast) Regulation (1215/2012) in a claim for compensation arising from by a cartel’s anticompetitive price fixing, in circumstances where there was no contract between the claimant and the cartel member.
On 19 July 2016, the European Commission published a decision which found that a cartel existed among 15 international truck manufacturers, including DAF Trucks. The cartel took the form of a single and continuous infringement of Article 101 TFEU and Article 53 of the EEA Agreement, which involved collusive agreements on pricing and gross price increases in the EEA for certain categories of trucks, as well as the passing on of costs for the introduction of emission technologies. The Commission held that this infringement of Article 101 TFEU extended to the whole of the EEA and lasted from 17 January 1997 until 18 January 2011. Consequently, it imposed fines on all participating entities, including DAF Trucks, with the exception of one entity which was granted immunity.
The claimant, Tibor-Trans, is a national and international freight transport company. From 2000 and until 2008, it had increasingly invested in the purchase of new DAF trucks. As an end user, Tibor-Trans could not make a direct purchase from the manufacturers, as it was obliged to use DAF dealerships established in Hungary. It received financing from leasing companies, also established in Hungary, by means of financial leasing agreements. The right of ownership over the vehicles was usually transferred to Tibor-Trans upon expiry of the leasing agreement. Other Hungarian companies also made purchases during the period referred to by the Commission’s decision. On 4 April 2007, those companies were taken over by Tibor-Trans which became the successor to those companies’ rights and obligations.
On 20 July 2017, Tibor-Trans brought an action before the Győr Court, Hungary for non-contractual damages against DAF Trucks resulting from their acquiring trucks at a price distorted by the collusive arrangements in which DAF Trucks had participated. No contractual claim was brought because either Tibor-Trans or any of the other Hungarian companies it had acquired, because none of these parties had ever purchased trucks directly from DAT Trucks.
Tibor-Trans claimed the Hungarian courts had international jurisdiction to hear the case by virtue of the provisions of Article 7(2) of the Brussels I (Recast) Regulation No 1215/2012, as interpreted in the case-law of the Court, in particular in Case C-352/13 CDC Hydrogen Peroxide. According to the Court’s ruling in CDC, in the case of an action for damages brought against defendants domiciled in various Member States as a result of a single and continuous infringement of Article 101 TFEU and of Article 53 of the EEA Agreement, involving the participation of the defendants in several Member States, at different times and in different places, each alleged victim can choose to bring an action before the courts of the place where its own registered office is located.
DAF Trucks challenged the jurisdiction arguing that the decision in CDC Hydrogen Peroxide was not relevant. DAF Trucks argued that as the collusive meetings took place in Germany this conferred jurisdiction on the German courts, and as it had never entered into a direct contractual relationship with Tibor-Trans the result was that it could not reasonably expect to be sued in the Hungarian courts.
The Győr Court declined jurisdiction, holding that for the purposes of Article 7(2) “place of the events giving rise to the damage” was the place where the collusive arrangements were put in place was in Germany. On appeal to the Győr Regional Court of Appeal made a reference to the CJEU.
The CJEU considered that the Hungarian court was asking, in essence, whether in an action seeking compensation for damage caused by an infringement of Article 101 TFEU, consisting, inter alia, of collusive arrangements on pricing and gross price increases for trucks, Article 7(2) must be interpreted as meaning that the place where the victim claims to have suffered that damage may be considered to be ‘the place where the harmful event occurred’, even where the action is directed against a participant in the cartel with whom that victim had not established contractual relations.
In their previous decision in Case C-27/17 flyLAL-Lithuanian Airlines, the Court had considered a claim by flyLAL for the loss of income allegedly incurred due to the difficulties in operating flights to and from Vilnius Airport, in a profitable manner, following Air Baltic’s predatory pricing, which was allegedly financed by discounts on airport fees granted to Air Baltic on the basis of an anticompetitive agreement concluded with Riga Airport. That included, in particular, loss of sales in relation to routes to and from Vilnius Airport which were affected by such conduct. This had resulted in a distortion of competition in the market. The Court in that case had also concluded that a loss of sales incurred as a result of such anticompetitive conduct could be regarded as “damage” for the purposes of what is now Article 7(2).
In the present case, the Court decided on the materials before it, that the damage alleged by Tibor-Trans consisted of additional costs incurred because of artificially high prices applied to trucks following the collusive arrangements. Such damage was not limited to that suffered by direct purchasers, such as Hungarian vehicle dealerships (which could have consisted of a loss of sales following the price increase). As the infringement established in the Commission’s decision extended to the whole of the EEA, it entailed a distortion of the market of which Hungary was a member since 1 May 2004.
The Court confirmed in Tibor-Trans, by reference to their earlier decision in Case C-27/17 flyLAL-Lithuanian Airlines (and not their CDC Hydrogen Peroxide ruling), that where the market affected by the anticompetitive conduct is in the Member State on whose territory the alleged damage is purported to have occurred, that Member State must be regarded as the place where the damage occurred for the purposes of applying Article 7(2) This approach was said to consistent with the objectives of proximity and predictability of the rules governing jurisdiction, since, firstly, the courts of the Member State in which the affected market is located are best placed to assess such actions for damages and, secondly, an economic operator engaging in anticompetitive conduct can reasonably expect to be sued in the courts having jurisdiction over the place where its conduct distorted the rules governing healthy competition. It also satisfied the requirement of consistency laid down in recital 7 of the Rome II Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations, in so far as, under Article 6(3)(a) of Rome II, the law applicable to actions for damages based on an act restricting competition is that of the country where the market is, or is likely to be, affected.
The Court also held that fact that Tibor-Trans had only brought an action against one of the companies involved in the cartel made no difference, as a single and continuous infringement of competition law involves the joint and several liability of all of the undertakings that committed the infringement.
In the light of those findings, the Court concluded that Article 7(2) must be interpreted as meaning that, in an action for compensation for damage caused by an infringement of Article 101 TFEU, consisting, inter alia, of collusive arrangements on pricing and gross price increases for trucks, ‘the place where the harmful event occurred’ covers the place where the market which is affected by that infringement is located, that is to say, the place where the market prices were distorted and in which the victim claims to have suffered that damage, even where the action is directed against a participant in the cartel at issue with whom that victim had not established contractual relations.