2.2.5.1. Evidence and information
A plaintiff having to produce evidence in a national action is clearly limited by what is allowed under the national law of the court, the lex fori. In some countries, it is difficult to obtain leave to get evidence. In civil law countries, there is usually no possibility of discovery. Under English law, it may not be possible to obtain information on discovery as there is privilege against disclosing information that may render a person liable to penalties such as those the Commission can impose under
In Bier v Mines de Potasse d' Alsace, case 21/76 [1976] E.C.R. 1735, [1977] 1 C.M.L.R. 284, the Community Court construed this as meaning either the place of the event causing damage or the place where the damage occurred.
Where the cause of action is breach of statutory duty (art 86) the only appropriate forum appears to be the court of the contracting State in which' the defendant is domiciled, unless a tort is alleged as a result of this breach in which case perhaps one could seize the court of the State where the harmful event occurred.
Regulation 17=*. The plaintiff may run the risk that whatever is produced as evidence may be dismissed as inadmissible, as hear say, or as evidence which was wrongfully obtained. In the UK, these problems exist and the rules governing evidence and discovery are inadequate to deal with EC competition law. Much of the evidence obtained may be regarded as hear-say.
Where evidence must be obtained from a country other than that of the forum, it is necessary to comply with the foreign procedural rules and ultimately this may involve separate judgments in several countries.
It is becoming increasingly common practice for one Member State to assist another in the enforcement of the letter's law within its jurisdiction. The Hague Convention on the Taking of Evidence Abroad^® also provides assistance in that it deals to a certain extent with evidence from other jurisdictions. However, even in cases of full cooperation, obtaining evidence may pose a major obstacle in national proceedings and may lead to a choice of forum applying the most flexible procedural rules, especially as regards discovery.
2.2.5.2. The effect of automatic nullity under Article 85 (2) and of infringement of Article 86
When a court considers an infringement of article 85 has taken place. Article 85 (2) renders the anti-competitive provisions in an agreement void and unenforceable^.
There is no provision similar to Article 85 (2) in Article 86. The reason may be that the provision is mainly directed at unilateral behaviour by a dominant firm as opposed to the bi-.
RTZ Westinohouse Electric Corporation Uranium Contract Litigation M.D.L. Docket 235 [1978] A.C. 547, [1978] 1 C.M.L.R. 100 (H.L.).
Cmnd 3991 (1968) .
Beouelin Import Co v GL Import-Export. case 22/71 [1971] E.C.R. 949, [1972] C.M.L.R. 81, Walt Wilhelm v. Bundeskartellambt. case 14/68, [1969] E.C.R. 1, [1969] C.M.L.R. 100 .
or multilateral practices addressed in Article 85. There may nevertheless be agreements involving dominant parties that abuse their dominance by excluding competitors and those should, in principle, be unenforceable under Article 86^^. Where the abuse constitutes, for example, a loyalty rebate or a restrictive contract clause, only the offending provision is void. Agreements exempted by a block exemption can subsequently be condemned by a national court under article 86.
The nullity of the restrictive provisions enshrined in Article 85 (2) means that these restrictions have no effect on the relationship between the contracting parties and cannot be
In BRT V Sabam and NV Fonior. case 127/73, [1974] E.C.R. 51, [1974] 2 C.M.L.R. 238 the Community Court condemned certain restrictions imposed by a performing rights society on its members (authors, composers and publishers). The restrictions that were considered to infringe Article 86 were those that could not be justified by the need for the society to strengthen its powers when negotiating with national radio and television stations, etc over copyright licenses.
The Commission has on some occasions attempted to condemn collective dominance where two or more firms acted under a cartel agreement. See Italian Flat Glass [1990] 4 C.M.L.R. 535, Appeal: cases T-68/89, 77/89 and 78/89 [1992] E.C.R. 11-1403. In this case the Commission condemned the conduct on the basis of both Articles 85 and 86. In appeal, the Court of First Instance held that the Commission could not recycle the facts from which it has established an agreement contrary to Article 85 (1) to establish a dominant position. The Court accepted, however, the possibility of collective dominance. It gave an example were two or more independent firms jointly have, through agreements or licenses, a technological lead affording them to behave independently on the market.
In Compagnie Maritime Belae SA and Others v Commission, cases T 24-26/93 and T 28/93, judgment of 8 October 1996, [1997] 4 C.M.L.R. 273, the Court of First Instance upheld a finding by the Commission of collective dominance on the basis of agreements, largely exempt for maritime transport, and on the basis of tight coordination in conference committees. The Court held:
"it is settled case law that Article 86 is capable of applying to situations in which several undertakings together hold a dominant position on the relevant market [...] [T]he Commission has sufficiently shown that is was necessary to assess the position of Cewal members on the relevant market collectively."
See also on collective dominance, 3.1.1.1. below, discussing oligopolistic markets and illustrating that Article 86 and the Merger Regulation might not be used to condemn collective dominance in the future.
pleaded in respect of third parties. Nullity under Article 85 (2) therefore means complete invalidity. It is absolute in nature, especially as anyone can invoke it” . It is also unlimited in time in that it catches all past and future effects of the agreements and decisions subject to it. It is not therefore subject to any statute of limitations and the right to invoke it cannot be forfeited” .
The further consequences are determined by national laws via the national conflict rules. In Technique Minière, the Community Court held that :
"the automatic nullity provided for in Article 85 (2) applies to all contractual provisions which are incompatible with Article 85 (1). The consequences of that nullity for all other elements in the agreement are not the concern of Community law” ".
Advocate General Roemer in the same case explained the issue more fully:
"the law of the Treaty on competition only touches with nullity those parts of the agreement which have a bearing from the point of competition law. For the rest it is not necessary in our opinion, to settle on the level of Community law, i.e. uniformly for all Member States, the question of the effects of the partial nullity of an agreement on the whole of the undertakings included in the contract. For that question it is the applicable national law which can claim precedence (it should be determined according to the rules of private international law)". The fact that the consequences of the nullity are governed by the proper national law, may result in contractual sanctions
” Béoruelin Import Co v GL Import - Export. case 22/71 [1971] E.C.R. 949, [1972] C.M.L.R. 81. See [1971] E.C.R. 962 at para 29. Société de Vente de Ciments et Bétons v Kerpen & Keroen. case 319/82 [1983] E.C.R. 4173 at 4183 ff para 11.
” Brasserie de Haecht v Wilkin & Janssen I I . case 48/72 [1973] E.C.R. 77 at 89. Braakman and Schroter at p 55 of the Introduction to: The Application of Article 85 and 86 of the EC Treaty by National Courts in the Member States. Compiled by Braakman, Publication of the Commission DG IV, July 1997.
” La Technique Minière v Maschinenbau Ulm G m b H , case 56/65. [1966] E.C.R. 235, [1966] C.M.L.R. 357.
differing in each Member State. The consequences are not confined to contract but may include delictual sanctions. They may affect transfers of property, give rise to tortious liability, or attract remedies appropriate to a breach of statutory duty. The consequences may also extend to other parts of the agreement, for example, for any orders or deliveries made and for resulting financial obligations^. The diversity in domestic laws governing these issues leads to a different outcome in different Member S t ates.
The most important consequence of the nullity of anti competitive restrictions in contracts may be the way in which the remnants of the agreement will be treated. The issue of severance is discussed at 2. 2. 5.4 below.
Finally, before applying Article 85 (2) it is important that national courts verify that the agreement in issue is not "old" or "exempt from notification". Such agreements enjoy provisional validity and national courts should treat them as valid and enforceable pending the Commission's decision.
National courts should also at all times observe the connection between Article 85 (1) and (3) when applying the nullity provision. This means that they have to be cautious in respect of new notified agreements or agreements that are the subject of Commission proceedings as the Commission might exempt the agreements retroactively under Article 85 (3).
These two aforementioned issues concern the substantive application of Article 85 and are discussed in part II below. See on the definition of old agreements and the doctrine of provisional validity 5.2.1. and on simultaneous involvement of the Commission 5.2. - 5.6 below. Suffice to state at this place that national courts should only hand down a ruling of nullity if they are convinced that Article 85 (1) is applicable but Article 85 (3) is not.
Société de Vente de Ciments et Bétons de L'Est SA v Kerpen & Kerpen GmbH & Co K G , case 319/82, [1983] E.C.R. 4173,
2.2.5.3. The issue of a national court applying Article 85 (2) of its own motion
An interesting issue is whether national courts must also apply Article 85 (1) and (2) where these provisions are not pleaded by the parties because of the automatic nullity of Article 85 (2). Does the duty of national courts to safeguard the rights and obligations derived from the direct effect of Articles 85 and 86 include mandatory application of these provisions where this is not requested?
In Van SchijndeV^, the Community Court considered the power of a national court to raise Article 85 or 86 of its own motion. The parties in cassation, physiotherapists disputing compulsory membership to an occupational pension scheme, applied to the Hoge Raad to have a judgment from the lower court quashed. For the first time in the proceedings, they contended that the lower court should have considered, if necessary of its own motion, the question of the compatibility of the compulsory membership with higher ranking rules of Community law, including Articles 85 and 86 of the EC Treaty. Three principles of Dutch
law applied:
First, Dutch procedural law provides that a plea in cassation by its nature excludes new arguments unless on pure points of law (which do not require an examination of the facts) . In their plea before the Hoge Raad, the parties relied on various facts and circumstances which had not been established by the lower courts, nor relied upon by the parties before the lower courts.
Secondly, Article 48 of the Netherlands Code of Civil Procedure requires courts to raise points of law, if necessary of their own motion.
Finally, Dutch law includes the principle of judicial passivity in cases involving civil rights and obligations freely
J. van Schiindel and J.N.C. van Veen v Stichting