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Wednesday, August 29, 2012

The European Court of Justice confirms denial of legal standing for intervention by single victims of an infringement

Is this the right decision ?
Would a more nuanced position of ECJ help proceedings in public and private enforcement ?

In a series of orders of the President of the Court in several related cases - C-589/11 P(I) - Schenker v Air France and Commission, C-590/11 P(I) - Schenker v Air France-KLM and Commission C-596/11 P(I) - Schenker v Koninklijke Luchtvaart Maatschappij and Commission, C-598/11 P(I) - Schenker v Cathay Pacific Airways and Commission, C-600/11 P(I) - Schenker v Lan Airlines and OthersC-602/11 P(I) - Schenker v Deutsche Lufthansa and Others - issued on 8 June 2012 (, ECJ rejected the applications lodged by a presumed victim of a cartel to join the proceedings before the Court for annulment of a European Commission decision sanctioning the cartel.  

The ECJ decision at stake refers to the air cargo cartel sanctioned in 2010 by the European Commission. The cartel involved Air Canada, Air France-KLM, British Airways, Cathay Pacific, Cargolux, Japan Airlines, LAN Chile, Martinair, SAS, Singapore Airlines and Qantas. 

These undertakings applied commonly agreed surcharges for fuel and security. For details see 

ECJ confirmed the decision of the General Court which found that Schenker, the applicant, did not have a direct and existing interest in the results of the case and, therefore, it could not benefit of article 40 of the Statute of the Court of Justice.  

Article 40 of the Statutes of the Court of Justice provide that any person may intervene in front of the Courts of the European Union if such a person can establish an interest in the result of a case submitted to one of those courts. The case-law defined this right to intervene in a restrictive way, as being open to undertakings closer to the matter of the case (members of the same legal entity, competitors of the company which committed an abuse of dominance) or to undertaking which were involved also in the administrative proceedings, as complainant or in any other form.  The legal standing as intervening party was also recognised to associations representing a large number of operators active in the sector concerned.

As it may be noticed, the right to intervene is open to undertakings which had something to do with the investigation (like a ”bonus”) or which may help establish the harm caused to specific markets by the illegal behavior of the cartelist.  The contours of the right to intervene seem to be limited to entities which have been active or might be useful to the public action or which liability may be invoked, with the exclusion of the private interest for damages by undertakings dealing with the authors of the infringement. The only 
The General Court, first and then ECJ decided to stick with the legal precedents, concerned of the fact that the courtroom might become much too crowded if anyone is allowed to jon. ”to recognise that each physical or legal person who could potentially bring a civil action for damages for loss resulting from the anti‑competitive conduct of an undertaking has a direct and existing interest in the result of a case for the purposes of Article 40 of the Statute of the Court of Justice would risk seriously undermining the effectiveness of the procedure before the Courts of the European Union”.
Schenker argument that it is, so far,”the only victim of the cartel in question which has filed an application for access to the documents of the administrative procedure carried out by the Commission could not move the heart of the judges either.  Hence, there is no such thing as ”prior tempore, potior jure”  applicable in such instances as the mentioned principle is an essential concept of the private law, not the public law. 
ECJ decision may be right and appropriate for efficiency reasons but the Court should have a more nuanced - and pragmatic - approach and apply a case-by-case assesment of the usefulness of an application for joining the proceedings.  Thus, the Court should check whether or not a single undertaking may bring any clarity to the European Commission decision which validity is discussed. This would mean that it will stick to the strict requirement applied in the case law without throwing away potential useful inputs from single companies, which were not involved in the administrative proceedings.  
If the aim for limiting the right to intervene is to avoid the undermining of the effectiveness of its procedure, then being a single company shuould not be regarded, ab initio and without further review, as a sin. 

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