Yesterday, 6 July 2021, the Amsterdam Court of Appeal (the Court of Appeal) rendered an important judgment on the law applicable to cartel damages claims in the Air Cargo case. The Court of Appeal concurs with the judgment of the Amsterdam District Court (the District Court) and confirms that Dutch law applies to all damages claims that relate to flights from, to and within the EEA and Switzerland (follow-on damages claims).
The Air Cargo case is about a worldwide cartel that caused an increase in the prices for airfreight services. Due to the worldwide nature of the cartel the applicable law could not be easily determined and three distinct theories were advanced before the District Court and the Court of Appeal.
The cartel members advanced the theory that the applicable law should be determined in respect of each transaction separately, and that the place of departure of the relevant flight would be the connecting factor. In the case of SCC that would have resulted in the applicability of 136 laws.
SCC has taken the position that not an individual transaction, but the cartel as a whole is the event giving rise to the damage. Hence, each injured party has one single claim on each cartel member, which comprises all damages caused by the cartel. Because there was a worldwide cartel, there is not a single country in which the cartel affected the competitive relations. However, it is impossible that one single claim is governed by more than one law. Therefore, SCC had made a choice for Dutch law when initiating the proceedings.
Another claimant advanced a variation on the theory of the cartel members, with the place of departure or the place of arrival of the relevant flight as the connecting factor. On appeal, this party also made a choice for Dutch law. From the judgment of the Court of Appeal it appears implicitly that a unilateral choice of law is still possible on appeal.
Like the District Court, the Court of Appeal adopts the theory of SCC. The Court of Appeal holds that the unlawful act of competition as established by the European Commission in its decision (a single and continuous infringement) is also under Dutch law a single and continuous unlawful act.
Under Dutch law, this single unlawful act – in any event – causes damage to an injured party when it enters into a transaction of which the price has been affected by the cartel, which damage increases with every further transaction. A further transaction is therefore not a distinct unlawful act. Hence, each injured party has one single damages claim.
If the cartel has affected the competitive relations in more than one country, there is a gap, as the Dutch conflict of laws legislation as applicable before the entry into force of the Rome II Regulation does then not point to a single law that should be applied. The Court of Appeal fills this legislative gap along the lines of article 6 paragraph 3 sub b of the Rome II Regulation: the possibility for the injured party to make a choice of law. According to the Court of Appeal, the choice of SCC for Dutch law meets the requirements. The fact that the choice of law was made by SCC and not by the injured parties themselves is irrelevant, said the Court of Appeal. If the damages claims have been validly assigned to SCC (on which the Court of Appeal ruled before), the possibility to make such a choice of law has also passed to SCC. Hence, the conclusion is that all follow-on damages claims are governed by Dutch law.
For damages claims that relate to flights that do not have a place of departure or arrival within the EEA or Switzerland, this is more complicated. The District Court will have to rule again on the law applicable to those claims.
Jeroen van den Brande and Theodoor Verheij, who represent SCC, see the judgment as another confirmation of the essence of cartel damages law: all damage that has been caused by a cartel should be compensated and one must be able to claim such damages as effective as possible. There is no room for legal approaches that unnecessarily complicate this – whether it concerns theories on applicable law or other defences. This also follows clearly from the case law of the European Court of Justice which also underpins the judgment of the Court of Appeal.
For more information, please contact Theodoor Verheij.