Arbitrability of Cartel Damages Claims in the European Union: Cdc, Kemira, and Microsoft Mobile

By Nazzini, Rhnato | University of Queensland Law Journal, June 2018 | Go to article overview

Arbitrability of Cartel Damages Claims in the European Union: Cdc, Kemira, and Microsoft Mobile


Nazzini, Rhnato, University of Queensland Law Journal


I INTRODUCTION

I dedicate this article to my late colleague and friend Laura Guttuso, with whom I had so many interesting discussions on competition law and policy when we were both at the Office of Fair Trading in the United Kingdom. Those conversations continued, by telephone or email, when she decided to pursue an academic career first in New Zealand and then in Australia. And, in a different way, they continue to this day through engagement with the topics of Laura's research in this special edition of the University of Queensland Law Journal, the editor of which should be congratulated on this initiative.

In this article, I decided to discuss the topical question of whether and, if so, in what circumstances, cartel damages claims can be arbitrated in the European Union. International arbitration plays a central role in resolving disputes in the international business community. It is often considered speedier and more cost-effective than litigation. It gives the parties a similarly final and enforceable award to litigation, but with considerable advantages in terms of the choice of the arbitrators, procedural flexibility and neutrality of the forum. As such, it is considered favourably by most legal systems. (1)

The question of whether competition disputes are arbitrable in this sense was the subject of extensive debate in the past. (2) This issue has significant practical implications given that, under Article V(2) of the New York Convention, recognition and enforcement of an award may be denied when the competent court in the country where recognition and enforcement are sought finds that the subject matter of the dispute is not capable of settlement by arbitration. In recent decades, however, jurisdictions in the United States and Europe have now made it clear that, at least in principle, competition disputes are capable of settlement by arbitration. (3)

Nonetheless, there remain areas of uncertainty. For example, as a matter of construction, any dispute relating to a breach of competition rules must still fall within the particular arbitration clause. The rules on contractual construction continue to evolve and may differ between jurisdictions. Although a restrictive construction of the scope of an arbitration clause does not preclude the arbitrability of competition disputes in principle, it may be used to the same affect.

Moreover, recent case law of the EU Court of Justice casts some doubt on the arbitrability of certain cartel claims. Indeed, the Advocate General's opinion in the Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV (CDC) case (4) lends some weight to the suggestion that such claims are unlikely to be within the scope of an arbitration clause as a matter of EU law. Although the Court of Justice did not rule on whether the damages claims were covered by arbitration agreements, it did decide that an exclusive jurisdiction clause does not cover damages claims for breach of Article 101(1) TFEU unless such claims are explicitly referred to in the clause. The Amsterdam Court of Appeal extended this ruling also to arbitration agreements. (5) Peter Smith J, in the Chancery Division of the High Court of England and Wales, came to the opposite conclusion that the arbitrability of cartel damages claims was a matter for the law applicable to the arbitration agreement and that EU law could only require the disapplication of an otherwise valid and effective arbitration clause if the arbitration of the dispute would run counter to the effectiveness of EU law. (6)

This article is structured as follows. Firstly, it discusses the general theme of arbitrability of competition disputes under EU law. Secondly, it goes on to examine the related theme of arbitrability of tortious claims. Thirdly, it analyses the CDC case in the Court of Justice. Fourthly, it considers whether the CDC case has implications for arbitration clauses and the different approaches adopted by the Dutch and English courts on the issue after CDC. …

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