Article 7(2) allows a cartelist to be sued within the EU in, amongst others, “the place where the damage occurred.” The issue in Tibor-Trans was whether Hungary, described by the CJEU as “the place where the victim claims to have suffered […] damage,” was “the place where the damage occurred” for these jurisdictional purposes despite the victim being an indirect purchaser.
Previous case law
In Hydrogen Peroxide, the CJEU found that when damages are in the form of additional costs incurred due to artificially high prices - as is the case for victims of the Trucks cartel - “the place where the damage occurred” is, for jurisdictional purposes, “in general, at the victim’s registered office.” However, as DAF Trucks pointed out, the victims in Hydrogen Peroxide were direct purchasers. Given Tibor-Trans’ position as an indirect trucks-purchaser, the Hungarian court was therefore uncertain it could apply the Hydrogen Peroxide reasoning and referred the question to the CJEU.
The CJEU had also held that only initial damage - and not indirect consequences subsequent to initial damage - can provide a basis for jurisdiction under Article 7(2). For example, loss of income resulting from lost sales due to predatory pricing qualifies as initial damage and can in principle provide a basis for jurisdiction (flyLAL II), whereas financial loss suffered by parent companies as a result of the insolvency of their subsidiaries caused by alleged unlawful conduct of financial institutions providing loans to these subsidiaries is an example of damage that is too indirect to provide a basis for jurisdiction (Dumez France).
Where, therefore, did the previous jurisprudence leave indirect purchasers? Could their damages be regarded as “initial” and provide a basis for jurisdiction? Or might these damages be “indirect consequences”? These questions were at the heart of the issue before the CJEU in Tibor-Trans.
In short, the CJEU found that the damage suffered by Tibor-Trans, i.e. the additional costs incurred due to artificially high prices, was not just a financial consequence of damage that could have been suffered by direct purchasers and that this damage “appears to be the immediate consequence of [the] infringement ... [and] direct damage which, in principle, provides a basis for the jurisdiction of the courts of the Member State in which it occurred.”
The CJEU added that because the factual place where the damage was alleged to have occurred (Hungary) was also affected by the anticompetitive conduct (the Commission found that the Trucks cartel affected the entire EEA), that place was indeed “the place where the damage occurred” for purposes of applying Article 7(2). The CJEU explained that this approach is consistent with the objective of predictability in the sense that a cartelist can reasonably expect to be sued in the place where its conduct distorted the market. It therefore appears that, on this basis, indirect purchasers can sue where they incurred their damages only when this place is within the market that is affected by the anticompetitive conduct.
This aspect of the decision raises questions. Most importantly, whilst this might be the position for indirect purchasers, will the CJEU apply this same reasoning to direct purchasers? Arguably, this reasoning would not apply to direct purchasers, as cartelists can reasonably expect to be sued in the home Member State of customers they have established contractual relations with.
Additionally, for indirect purchasers, uncertainty remains as to the factual determination of where their damages occur. The fact pattern was rather straightforward in Tibor-Trans, but more complex scenarios are likely to crop up. What if a Hungarian indirect purchaser acquired trucks from an Austrian dealer? Would Austria (where the trucks were acquired) or Hungary (the place of the victim’s registered office) be the place where the damages occurred? Would the CJEU apply its logic as to registered offices as cited in Hydrogen Peroxide in such a scenario?
All judicial decisions are of course limited to the facts of each individual case and some uncertainty therefore remains, both for indirect purchasers that are situated differently from Tibor-Trans as well as for direct purchasers. Nonetheless, this is a fascinating decision from the CJEU as to jurisdiction and will likely be studied further in the months and years ahead, particularly as the courts continue to deal with further claims arising from the Trucks cartel.