CN01 - ECJ rules on jurisdiction over actions for cartel damages

On 15 July 2021, the European Court of Justice ("ECJ") handed down a preliminary ruling (C-30/20 – Volvo and Others) on the interpretation of the concept of "the place where the damage occurred" under Article 7(2) of Regulation 1215/2012 (the "Recast Brussels Regulation") for the purpose of ascertaining whether a court within a Member State has jurisdiction over a follow-on cartel damages claim.

Key takeaways

•  Article 7(2) of the Recast Brussels Regulation provides that a person domiciled in a Member State may be sued in another Member State "in the courts for the place where the harmful event occurred or may occur".
• The ECJ has confirmed that Article 7(2) confers both international and local territorial jurisdiction on the courts of the place where the damage occurred.
• In the absence of a specialised national court with exclusive jurisdiction, actions for cartel damages can be brought before either the court of the Member State in which the undertaking claiming to be harmed purchased the affected goods or, in the case of purchases made in several places, the court of the Member State in which that undertaking's registered office is situated.

Background

The request for a preliminary ruling on the interpretation of Article 7(2) of the Recast Brussels Regulation was made by the Madrid Commercial Court in the context of an action for damages brought by RH (domiciled in Cordoba, Spain) against several Volvo group entities.  The action was brought as a "follow-on" claim arising from the European Commission's Trucks decision (see our August 2016 newsletter).

RH claimed before the Madrid Commercial Court to have suffered loss by having paid an inflated price for five vehicles it purchased from a Volvo Group España dealer as a result of the collusive arrangements found by the European Commission. 

Under Article 7(2) of the Recast Brussels Regulation, a person domiciled in a Member State may be sued in another Member State "in the courts for the place where the harmful event occurred or may occur".  The European courts have previously held for the purpose of Article 7(2) that the place where the harmful event occurred includes both "the place where the damage occurred" and "the place of the event giving rise to it". 

In national proceedings, the Volvo group entities contested the international jurisdiction (but not the territorial jurisdiction) of the Madrid Commercial Court.  In this context, the Madrid Commercial Court considered it necessary to refer the question of whether Article 7(2) of the Recast Brussels Regulation exclusively governs the international jurisdiction of the courts of Member States, or both their international and local territorial jurisdiction, to the ECJ. 

The ECJ's preliminary ruling

The ECJ observed that the infringement of Article 101 TFEU established by the Trucks decision giving rise to the alleged damage covered the entire EEA market. Consequently, the place where the damage occurred (for the purposes of Article 7(2) of the Recast Brussels Regulation) is the EEA market, of which Spain forms a part. 

Moreover, the ECJ ruled that the wording of Article 7(2) makes clear that it confers directly and immediately both international and local territorial jurisdiction on the courts of the place where the damage occurred. This prevents Member States from applying different criteria for the conferral of jurisdiction, but does not preclude Member States from conferring jurisdiction for a particular type of dispute to a specialised court, which would have exclusive jurisdiction irrespective of where the damage occurred within that Member State.

In the absence of such a specialised court, the ECJ identified two options for the purpose of establishing jurisdiction: 

• the court of the Member State in which the undertaking claiming to be harmed purchased the goods affected by the arrangements; or
• in the case of purchases made by that undertaking in several places, the Member State in which that undertaking's registered office is situated.

Although the ECJ has already issued several judgments determining the Member State courts which can have international jurisdiction pursuant to Article 7(2) of the Recast Brussels Regulation, this is the first time that the ECJ has confirmed that this provision also applies to local territorial jurisdiction.

With thanks to Uliana Kovaleva of Ashurst for her contribution.