CJEU finds abuse of dominance claims may come within jurisdiction clause

The European Court of Justice (CJEU) has ruled that a jurisdiction clause could apply to claims alleging abuse of a dominant position, contrary to article 102 TFEU, even if the clause did not expressly refer to claims based on competition law: Apple Sales International and others v MJA acting as liquidator of eBizcuss.com, Case C-595/17.

This decision contrasts with the decision in CDC Hydrogen Peroxide SA (Case C-352/13), a follow-on damages claim relating to a cartel. The CJEU in that case held that a jurisdiction clause would only apply to competition law claims arising out of a cartel if the clause made express reference to such claims.

According to the CJEU, the key in deciding whether competition claims are within a jurisdiction clause (absent express reference) is to consider whether the anticompetitive conduct has a connection with the contractual relationship. While an unlawful cartel is in principle not directly linked to the contractual relationship between a cartel member and a third party affected by it, the abuse of a dominant position may be connected to a contractual relationship, in which case the clause may cover the claim regardless of whether there is an express reference.

Amel Fenghour, an associate in our disputes team, considers the decision further below.

Background

Article 23 of the Brussels I Regulation (Regulation 44/2001) provides that, where the parties have agreed that a court of a member state is to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court shall have jurisdiction, which shall be exclusive unless the parties have agreed otherwise. Article 25 of the recast Brussels Regulation (Regulation 1215/2012) is in similar terms.

In the present case, a distribution agreement was entered into between Apple's Irish subsidiary, Apple Sales, and a French reseller, eBizcuss. It provided that, in relation to any disputes about "this agreement and the corresponding relationship between the parties", the reseller was required to submit disputes to the Irish courts, whereas Apple could bring a claim in the Irish courts, the reseller's home courts (France, in this case), or any jurisdiction where Apple suffered harm.

The reseller (in liquidation) sued Apple Sales and two other Apple companies in France for abuse of a dominant position, arguing that Apple gave better conditions to its own network without justification and thereby discriminated against the reseller. The Paris Commercial Court and Paris Court of Appeal rejected the claim and held that the jurisdiction clause was valid and the Irish courts had exclusive competence to hear the claim.

On further appeal, the Cour de Cassation invoked the CJEU's judgment in CDC Hydrogen Peroxide and quashed the finding of the lower courts. The case was referred back to the lower courts but ultimately made its way, through further hearings and appeals, back to the Cour de Cassation which referred the case to the CJEU for a preliminary ruling.

Decision

The CJEU held that a jurisdiction clause which refers, in abstract terms, to disputes arising from the contractual relationship may apply to an action for damages for abuse of a dominant position, even if it does not expressly refer to competition law claims.

The CJEU recognised the contrast with its decision in CDC Hydrogen Peroxide, where it held that a general jurisdiction clause of this sort would not apply to cartel claims; such claims would only be covered if the clause referred to competition law claims.

The CJEU noted that a jurisdiction clause can only concern disputes which arise in connection with the particular legal relationship in connection with which the agreement was entered into. The purpose of that requirement is to avoid a party being taken by surprise by the chosen court having jurisdiction over disputes which stem from a different relationship.

Key to the CJEU's decisions in the two cases was whether the litigation was in contemplation at the time of the contract. In a cartel claim, a claimant would have no prior knowledge of the unlawful cartel and could not reasonably have foreseen that type of litigation when it agreed to the jurisdiction clause. Accordingly, the litigation could not be regarded as stemming from the contractual relationship between the parties, and  (as decided in CDC Hydrogen Peroxide) a jurisdiction clause would not apply in the absence of an explicit reference to disputes arising from a competition law infringement.

By contrast, abuse of dominance claims can flow from contractual relationships and contractual terms themselves. Therefore, the CJEU held, the application of a jurisdiction clause “is not excluded on the sole ground that that clause does not expressly refer to" competition law infringements. In that context, the application of the jurisdiction clause would not come as a surprise to the contracting parties.