Update on Gaches Chimie v. Univar Solutions: A Final Word on the French Competition Saga
In a recent development, the Court of Cassation, France’s supreme court for civil cases, upheld the earlier ruling by the Paris Court of Appeal from 17 May 2023 in the Gaches Chimie v. Univar Solutions case. This final judgment brings the proceedings against the two companies operating in the commodity chemical sector to a close and serves as a reminder to parties in competition disputes of the importance of obtaining robust economic evidence in support of their position.
Background of the case
In 2003, Gaches filed a complaint against its competitor Brenntag, alleging that the company had abused its dominant position in the distribution of commodity chemicals. The French Competition Authority (“Autorité de la Concurrence”) dismissed the complaint in 2006. 3 months later, Brenntag and other companies, including Univar Solutions, applied for leniency, acknowledging that they were members of a cartel whose aim was to restrict competition by allocating customers among the parties and coordinating prices. The French Competition Authority ultimately found that Brenntag, Univar Solutions, and the other cartelists had infringed competition law and imposed a fine of € 79 million, 10 years after Gaches’ first complaint. The French Competition Authority however noted that the Île-de-France and the South-West of France - where Gaches operated - were not affected by the cartel’s practices.
Following the French Competition Authority’s fining decision, Gaches filed two claims for damages shortly before the end of the limitation period, against Univar Solutions and Brenntag (see our previous article here).
In respect of its claim against Univar Solutions, Gaches was awarded at first instance €260,505 in damages as a victim of the anticompetitive practices and, in addition, €200,000 in moral damages. The judgment explained that moral damages had been awarded to reflect that the actions of the cartelists had shed a bad light on their competitors and that the additional pressure of the cartel had prevented Gaches’ executives from focusing on their essential task.[1] Gaches was also awarded €100,000 in costs. Gaches appealed the judgment.
On appeal from the judgment,[2] the Paris Court of Appeal confirmed the award of €200,000 for moral harm but dismissed Gaches’s claims for damages due to anticompetitive practices, citing insufficient evidence. The Court of Appeal found that Gaches did not operate in the regions impacted by the cartel and failed to provide sufficient proof that its business had been directly harmed by the cartel's activities, as Gaches had not substantiated the harm it had specifically suffered in this case.
The separate claim against Brenntag in Bordeaux was stayed, pending Brenntag’s own appeal in respect of the French Competition Authority underlying decision before the Court of Appeal, and remains ongoing at the time of publication.
The decision of the Court of Cassation
In a final attempt to obtain a more favourable outcome in its claim against Univar Solutions, Gaches appealed the Court of Appeal’s judgment and asked the Court of Cassation, France’s final civil appellate court, to overturn the Court of Appeal’s ruling and support its claim for compensation for the alleged harm caused by the cartel. It argued that Univar Solutions benefitted from an unfair advantage due to the cartel, allowing it to expand its business and harm competitors, and that – contrary to the French Competition Authority’s findings – the territorial scope of the cartel included the South-West of France.
However, the Court of Cassation upheld the Court of Appeal’s judgment. It reaffirmed that merely establishing the existence of an anti-competitive practice is insufficient; the claimant must also demonstrate actual harm: “the purpose of anti-competitive practices legislation is to protect free competition in the market and, therefore, the characterisation of such a practice does not necessarily imply that damage has been caused to operators active directly or indirectly in this market. […] [T]he party who claims that an anti-competitive practice has caused them harm must produce evidence of it.”[3]
The Court of Cassation found that Gaches had not demonstrated that its business had suffered a direct impact or that the profits generated by the cartel had unfairly distorted competition in its trading area.
First, the Court of Cassation noted that, in this industry, competition for sales occurs only within a 200km radius. Gaches had not provided sufficient evidence to show that the cartel’s practices extended beyond this range and affected its trade area.
Second, the Court of Cassation approved the reasoning of the Court of Appeal that the economic analysis submitted by Gaches was inadequate and unreliable. According to the Court of Cassation, the Court of Appeal was correct in its finding that the claimant had failed to demonstrate that the cartel members had benefited from cost savings in customer acquisition or retention that would have facilitated their expansion into the South-West of France.
The Court also found that the economic analysis submitted by Gaches seeking to demonstrate an inverse relationship between the investments and operating results of the cartel participants and those of Gaches during and after the cartel was too superficial. It noted that Gaches and the cartelists examined did not share the same business activities, which undermined the validity of the comparison. Finally, the financial data presented was considered insufficiently transparent, with unverifiable sources.
As a consequence, the Court rejected Gaches’ claim and ordered them to pay the defendant’s legal costs (€6,000). As it was not part of the appeal, the award for moral damages of €200,000 was unaffected.
Comment
The ruling by the Court of Cassation brings Gaches’ claim against Univar Solutions to a definitive close. While the award for moral harm granted by the Court of Appeal stands, this judgment underscores the importance for claimants in competition disputes to submit robust economic evidence of the harm suffered. It also serves as a reminder of the occasional creativity of the French courts in awarding damages to Claimants even where there are weaknesses in certain aspects of their claim. This is welcome when one considers the difficulty claimants may face in substantiating the losses suffered following a secret cartel, especially in the absence of disclosure from the cartelists.
With thanks to Paralegal Anne-Charlotte Gerbaud for her assistance with this piece.
Footnote
[1] T. Com. Paris, 10 Dec. 2020, no 2013037097
[2] CA Paris, 17 May 2023, no 21/01033
[3] Cass. com. 26-2-2025 n° 23-18.599, Gaches chimie v Univar solutions: "le droit des pratiques anticoncurrentielles a pour objet la protection du libre jeu de la concurrence sur le marché et, dès lors, la caractérisation d'une telle pratique n'induit pas nécessairement, qu'un préjudice ait été causé aux opérateurs actifs directement ou indirectement sur ce marché. […] [L]a partie qui soutient qu'une pratique anticoncurrentielle lui a causé un préjudice, doit en rapporter la preuve."