European Court of Justice rules on cartel damages claims and arbitration and jurisdiction clauses

By King & Wood Mallesons

Introduction

Arbitration clauses contained in commercial contracts typically derogate the jurisdiction of the otherwise competent state courts by providing that the parties to the contract will arbitrate all disputes which arise under or in connection with the contract. Similarly, jurisdiction clauses typically limit all disputes which arise under or in connection with the contract to the courts of one jurisdiction. The answer to the question of whether such clauses would also cover cartel damages claims of one party against the other party is often unclear, but becomes increasingly important given the growing number of private enforcement activities resulting from cartel infringements.

In its decision of 21 May 2015, the European Court of Justice (the “ECJ”) found that disputes concerning cartel damages claims between cartel members and the cartel’s victims are generally not covered by any jurisdiction clause contained in supply agreements unless the cartel’s victim has consented thereto[1].  This follows the rationale that cartel claims have their basis not in the sales contract between the cartelist and its customer, but in the infringement of competition law. Unfortunately, the ECJ did not expressly decide on arbitration clauses, but – presumably – the same reasoning would apply.

Read full article, please click here.