Monday, February 18, 2019
Should Jurisdictional Clauses Be Interpreted Differently in Competition Law Cases? A Comment on Case C-595/17 Apple
Pedro Caro de Sousa, Organization for Economic Co-Operation and Development (OECD) asks Should Jurisdictional Clauses Be Interpreted Differently in Competition Law Cases? A Comment on Case C-595/17 Apple.
ABSTRACT: Does a widely worded jurisdictional clause encompass competition law disputes? In Europe, the starting point for this analysis is Article 23 of Regulation No 44/2001 – i.e. the Brussels I Regulation – which allows parties to agree on the jurisdiction where to settle any disputes which have arisen or which may arise in connection with a particular legal relationship.
In CDC Hydrogen Peroxide, the ECJ held that a generally worded jurisdiction clause “can concern only disputes which have arisen or which may arise in connection with a particular legal relationship, which limits the scope of an agreement conferring jurisdiction solely to disputes which arise from the legal relationship in connection with which the agreement was entered into.” It follows that generally worded jurisdiction clauses cannot extend to a dispute relating to the tortious liability that one party allegedly incurred as a result of its participation in an unlawful cartel because a cartel could not have been reasonably foreseen by the parties when they entered into such a clause, and such litigation cannot be regarded as stemming from a contractual relationship.
What if one party in a contract brings a claim against the other on the basis of another competition infringement, such as an abuse of a dominant position under Article 102 TFEU? This question arose in the recent Apple case reviewed in this note. It is argued that this decision creates a presumption that abuses by a supplier who holds a dominant position which have caused losses to its distributor will usually be sufficiently linked to the contractual relationship and would, in the context of distribution contracts, normally be in the reasonable contemplation of the parties. It is further argued that such a presumption merely specifies how the general principles governing the interpretation of jurisdictional clauses apply to competition law claims in the context of distribution – and potentially, other vertical – relationships.