European Court Of Justice Sets Broad Rules For Jurisdiction Over Damages Actions In Competition Cases

On 21 May 2015, the Court of Justice of the European Union ("ECJ") issued a judgment in Case C-352/13, CDC v. Akzo Nobel and Others, resolving questions on the three main bases for jurisdiction over private actions for damages arising from competition law infringements.

In 2009, Cartel Damage Claims ("CDC"), a so-called litigation funding vehicle - an entity to which many claimants assign their claims for a fee and which then pursues the claims in its own name - initiated an action for damages in Germany against the addressees of the European Commission's 2006 Hydrogen Peroxide cartel decision. Shortly after filing its lawsuit, CDC settled its claims against the only German defendant, Evonik Degussa, resulting in actions pending in German court against exclusively non-German defendants. These remaining defendants challenged the jurisdiction of the German court, which then issued a preliminary reference to the ECJ on the interpretation of Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I Regulation").

First, the ECJ addressed the validity of jurisdiction under rules on the joinder of related claims. Under Article 6(1) of the Brussels I Regulation (now Article 8(1) of the Brussels I bis Regulation), defendants may be sued in the court where any one of them is located if the claims against them are so closely connected to those against the so-called 'anchor defendant' that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments.

While this requirement can be met only where the defendants share the same situation of fact and law, the ECJ held that all addressees of a Commission decision finding a single and continuous infringement indeed share such a situation. Furthermore, the Court held that the fact that relevant Member State tort rules differ presents a risk of irreconcilable judgments. The findings of the Court effectively mean that claimants can sue all EU-domiciled addressees of a Commission decision finding a single and continuous infringement in the home jurisdiction of any one of these addressees.

Defendants had alleged that CDC and Evonik Degussa had in fact reached their settlement prior to the filing of the action and concealed the settlement in order to establish jurisdiction in Germany. The ECJ noted that, because jurisdiction is established at the time the action is filed, the subsequent withdrawal of the...