In its interim judgment of 21 April 2023 in the 'Greek beer case' (ECLI:NL:HR:2023:660 in Dutch), the Dutch Supreme Court referred the case to the Court of Justice of the EU ('CJEU') for a preliminary ruling.
The questions drafted by the Supreme Court were (i) whether a national court in assessing its jurisdiction based on a 'close connection' under Article 8(1) Regulation (EU) No 1215/2012 ('Brussels I Recast') can rely on the competition law concept of 'parental liability' and corresponding presumption of a parent company's decisive influence over the economic activity of its subsidiary that is the subject of the dispute, and if so, (ii) where it is disputed that the parent company exercised such decisive influence, whether it is sufficient to assume jurisdiction to hear the claim against the subsidiary if it cannot be ruled out a priori that such decisive influence was exercised.
The Greek beer brewery Macedonian Thrace Brewery ('MTB') brought claims against another Greek beer brewery, Athenian Brewery ('AB'). MTB allegedly suffered harm due to AB's abusive conduct in the Greek beer market. MTB grounded its claims on the Hellenic Competition Commission ('HCC') decision. The HCC found that AB abused its dominant position from September 1998 to 14 September 2014. AB's conduct qualified as a single and continuous infringement of Article 102 TFEU and Article 2 of the Greek Competition Act. The HCC decision has been addressed only to AB and is still not final. MTB also brought claims against AB's ultimate Dutch parent company, Heineken NV ('Heineken'). Heineken indirectly holds almost 99% of the shares in AB. MTB argued that AB and Heineken are jointly and severally liable because they constitute a single undertaking under Article 102 TFEU, on the presumption that Heineken exercised decisive influence over AB's activities in the Greek beer market given Heineken's shareholders interest. However, Heineken contested that it exercised such decisive influence over AB since the HCC had not involved Heineken in its investigation. Moreover, Heineken had not itself, directly, engaged in actual transactions in the Greek beer market.
ARTICLE 8(1) BRUSSELS I RECAST
According to settled CJEU case law, jurisdiction can be assumed under Article 8(1) Brussels I Recast if there is such a close connection between the claims against the anchor defendant (in this case Heineken) and the co-defendant (AB) that there is a risk of 'irreconcilable judgments' if those claims are tried separately. The concept of 'irreconcilable judgments' should be interpreted broadly as 'conflicting judgments', where the conflict must arise in the same factual and legal situation. If the claims have a different legal basis, the defendants must be able to foresee that they could be sued in the Member State where at least one of them is domiciled. In its assessment, the court must consider all facts available to it, including the defendant's statements but without conducting a comprehensive taking of evidence in relation to the disputed facts.
JUDGMENTS IN THE MOTION TO CONTEST JURISDICTION IN FIRST INSTANCE AND APPEAL
The Amsterdam District Court assumed jurisdiction over the claims brought against Heineken, as Heineken is domiciled in the Netherlands. However, the court declined jurisdiction over the claims against AB. The claims against AB and Heineken are not so closely connected that Heineken can serve as an anchor defendant within the meaning of Article 8(1) Brussels I Recast.
The Amsterdam Court of Appeal reversed the decision concerning AB. The Court of Appeal found that Heineken's position is the same as AB's because the allegations made against Heineken, like those made against AB, relate purely to acts in the Greek market. Moreover, in assessing Heineken's alleged unlawful conduct, the court will inevitably first need to assess AB's alleged unlawful conduct. The Court of Appeal also saw a risk of 'irreconcilable judgments', since the Dutch court must decide on the claims against Heineken. If the claims against AB are to be brought in Greece, the Greek court might decide differently. Moreover, AB could have foreseen that it could be sued in a Dutch court, because AB is part of the Heineken group and committed the alleged competition law infringement partly in relation to Heineken beer. Finally, the Court of Appeal ruled that MTB did not abuse Article 8(1) Brussels I Recast to withdraw AB from the court of its domicile. It cannot be ruled out with certainty that Heineken and AB constitute a single undertaking within the meaning of Article 102 TFEU, nor can it be concluded from the HCC decision that Heineken did not abuse its dominant position. Therefore, the Court of Appeal could not rule out the possibility that MTB's claims will be awarded. AB and Heineken appealed this judgment at the Supreme Court.
SUPREME COURT INTERIM JUDGMENT
The Supreme Court pointed out that the close connection within Article 8(1) Brussels I Recast can only be established on the ground that Heineken and AB constitute a single undertaking, as Heineken did not itself, directly act in the Greek beer market. As Heineken disputed having exercised decisive influence over AB's economic activities, the Supreme Court questioned if the court – in this context – may rely on the presumption that the parent company has exercised decisive influence if it holds all or almost all the shares or voting rights in the subsidiary. If that is the case, the court must assume jurisdiction unless the parent company can rebut this presumption without producing further evidence. If the court may not rely on this presumption, it must instead assess whether or not it can assume that the parent company exercised decisive influence over the relevant economic activities of its subsidiary.
The Supreme Court found that the answer to this question is subject to reasonable doubt. On the one hand, EU competition law enforcement must be realised to the full extent and the presumption of decisive influence is hard to rebut. On the other hand, Article 8(1) Brussel I Recast must be interpreted narrowly and applying this EU competition law presumption may broaden its scope considerably in competition damages litigation matters. Lower courts decided differently on this matter. Therefore, the Supreme Court intended to refer two questions to the CJEU, after hearing the parties to the proceedings: (i) whether a national court in assessing its jurisdiction based on a 'close connection' under Article 8(1) Regulation (EU) No 1215/2012 ('Brussels I Recast') can rely on the competition law concept of 'parental liability' and corresponding presumption of decisive influence of a parent company over the economic activity of its subsidiary that is the subject of the dispute; and if so, (ii) where it is disputed that the parent company exercised such decisive influence, whether it is sufficient to assume jurisdiction to hear the claim against the subsidiary that if it cannot be ruled out a priori that such decisive influence was exercised.
On 26 May 2023, MTB, AB and Heineken can comment on the Supreme Court's proposed questions, which could still lead to amendments.
DOWNWARD ATTRIBUTION OF PARENT COMPANY'S CONDUCT TO ITS SUBSIDIARY
The Greek beer case and the preliminary questions clearly relate only to the concept of parental liability – i.e. upward attribution of subsidiary's infringing conduct to a parent company. However, there is another relevant question in a dispute on jurisdiction in relation to a damages claim against a non-Dutch parent company and its Dutch subsidiary; if and to what extent a Dutch court should assess whether those entities constitute a single undertaking when the infringing conduct of the non-Dutch parent company is the subject of the dispute and the Dutch subsidiary has not been involved in such conduct. The question is to what extent the Sumal test for the downward attribution of liability must be applied when assessing a possible 'close connection' within the meaning of article 8(1) Brussels Recast.
JUDGMENT IN THE MOTION TO CONTEST JURISDICTION IN THE FOREX CASE
Dutch case law already provides for a recent example of such a case where the Amsterdam District Court assessed its jurisdiction under Article 8(1) Brussels I Recast, but did not apply that provision (judgment of 29 March 2023, ECLI:NL:RBAMS:2023:1789 (Forex) in Dutch). The case concerns a competition law infringement in the foreign currency market, in which the European Commission established that several banking groups participated. The proposed anchor defendant was a Netherlands-based subsidiary of one of the infringing banks. However, this subsidiary was not, contrary to the infringing banks, an addressee of the European Commission's decisions. The court thought that the subsidiary might be summoned solely for the purpose of creating jurisdiction over the banks in a Dutch court. It also considered that the alleged liability of the anchor defendant is dependent on a legal assessment based on the Sumal test(downward attribution of liability), whereas the unlawful conduct of the infringing banks addressed in the European Commission's decision is a given. The court therefore found that the factual and legal situation of the anchor defendant and the infringing banks are not the same, which is also immediately apparent from the grounds of the claims brought against the infringing banks. According to the court, this means that the claims lack a close connection within the meaning of Article 8(1) Brussels I Recast.
Similar and related questions have been raised in an appeal in the jurisdiction motion in the power cables competition damages case. An interim judgment is expected to be rendered shortly.
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