[Opinión] Letters from London: Damages, milk and competition infringements (and IV)

Josep Galvez | 08/06/2021 6:47 | Updated: 06/08/2021 9:38 AM

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You will surely remember that we are in 1999 and we left the Courage Brewing Company and Mr. Crehan before the British court of appeal and its particular legal crossroads.

Essentially, the “Court of Appeal” had to decide whether to follow the English precedent in the case “Bourgoin“, Rejecting the claim for damages for an alleged infringement of Community law or, on the contrary, attending to the latest decisions of the Community Court of Justice (case”Francovich”, Among others) and get to know the matter.

In fact, in the first instance, the London “High Court” had already previously rejected Crehan’s claim against Courage, agreeing with the brewery, so that everything seemed to paint clubs for the tenant of the pubs.

In addition to the “Bourgoin” case, there was an additional legal problem and that is that, according to English law, a part of a illegal agreement You cannot claim damages from the other for the loss caused by that same agreement.

So much so that, just a year earlier, the “Court of Appeal” had already rejected a similar claim in “Gibbs Mew plc v Gemmell [1998] EWCA Civ 1262”.

On that occasion, the English court of appeal warned that community regulation in competition matter protected third-party competitors and not the parties to the illicit agreement, since these they were the cause of the restriction of competition, not the victims.

OH, THIS I DIDN’T EXPECT IT!

And that’s when, to the surprise of many, the English judges changed the course of history and raised a question for a preliminary ruling before the Court of Justice of the European Communities, what in football terms we would call “throw the ball on the roof of the European court”.

Indeed, it must be borne in mind that the Community Court of Justice had not yet clarified whether the parties to a contract damages could be claimed in the context of article 81 of the treaty Constitutive Treaty of the European Union, which prohibits agreements that have the object or effect of preventing, restricting or distorting competition in the common market.

In addition, to this was added the expressed interest of the European Commission in establishing a homogeneous system of claim by individuals for damages derived from infringements of competition law, the “private enforcement”So fashionable lately in Spain.

But What was the reason for the Court of Appeal to change its position and decide to raise the issue with the Court of Justice of the European Communities?

Perhaps an outbreak of unexpected Europeanism? Well, it’s not going to be.

Quite the contrary, apparently the change came from an old issue on the other side of the Atlantic, more specifically of the Supreme Court of the United States:

DEDICATE YOURSELF TO COMPETITION LAW AND YOU WILL TRAVEL

He said Sax Gordon what about with a sax you will travel and something similar happens with competition law, since the consequences of these cases extend beyond the borders of a country or even a legal system.

The case “Perma Life Mufflers Inc V International Parts Corp” is a good example of this.

So let’s get on a plane and now go to the United States of… 1968.

You can imagine it, when we get off the PanAm plane, you will see that Lyndon B. Johnson he is still the president of the country, Elvis is about to return to the stage with the famous “Comeback especial”And the Vietnam War is at one of its highest points.

After arriving at the headquarters of the US Supreme Court, after the rituals “Hear! Hear! Hear!“The hearing begins with the allegations of the lawyers in the case” Perma Life Mufflers “that, by the way, you can hear here.

Indeed, this is a classic affair of the North American antitrust law in which essentially the same thing that many years later would have to decide the British “Court of Appeal” was resolved.

EL CASO “PERMA LIFE MUFFLERS V INTERNATIONAL PARTS CORPS”

Far from milk, chickens or beer, this issue – as it could not be otherwise in the United States – is about cars and more specifically about franchises in dealerships dedicated to selling mufflers on the exhaust pipes (“mufflers”).

In this case, the plaintiffs were the company “Perma Life Mufflers, Inc.”, as well as other dealers who had signed agreements with the well-known “Midas, Inc. ”, and that they gave them the exclusive right to market and sell silencers of the Midas brand.

However, the contracts included clauses that prevented these dealers from buying or selling silencers. from any other manufacturer other than Midas and, furthermore, they should always have a complete line of Midas products in your stores and buy the parts of the exhaust system only to Midas.

Well, since we know that the United States is the land of cowboys and lawsuits, the matter ended up in court since the dealers claimed that the agreements were illegal restrictions under US antitrust law, and They requested triple the damages to compensate for the loss of profits resulting from the restrictions.

After the claim is rejected by the lower courts for the same reasons as in traditional English law, the case ended up before the Supreme Court of the United States on his classic 1968 line-up and that, by the way, the country’s law students recite by their surnames as if they were soccer players.

I challenge you to do the same in Spain and you will see what a surprise.

In short, the matter was resolved in the famous sentence Perma Life Mufflers Inc. v. Int’l Parts Corp. [392 US 134 (1968)], in which it came to say that, when a party to an anti-competition law agreement is “innocent”, for example, when it is in an economically weaker position, You can claim against the other contracting party for damages suffered, since your claim serves important public interests in competition matters.

This same idea is the one taken into account by the British Court of Appeal in the Courage case, since also existed a public interest in the claim for damages by the tenant who has been a party to a unlawful contract in the eyes of competition law.

LAST STOP, LUXEMBOURG

Back in 1999 and the preliminary ruling had been raised before the Community Court of Justice, as was to be expected, the European judges did not miss the opportunity and firmly established that “there is no prohibition absolute that prevents a party to a restrictive agreement from claim for damages to the other party ”, in a similar way to how the US Supreme Court had ruled thirty three years before.

Indeed, on September 20, 2001, the European Court of Justice in the ruling of the case Courage Ltd versus Bernard Crehan, C-453/99, interpreting the aforementioned Article 81 of the Community Treaty, it expressly stated that “a part of a contract that may restrict or distort competition within the meaning of Article 81 of the EC Treaty can invoke the infringement of said article to obtain redress from the other contracting party«.

Similarly, he also made it clear that the aforementioned article excludes any national rule that prevents a party of an anti-competitive contract “claim the damages caused for the performance of that contract for the sole reason that the plaintiff is a party to said agreement ”.

Although the matter “Courage” I would not solve all the doubts Regarding the “private” claim for damages in competition law, the judgment represents a crucial change both for Community law and especially in English law, allowing for the first time that those “weaker” parties in the illicit contract for being anti-competitive could claim against the other contractual party.

And next week, more.

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