Right to sue for damages for a breach of article 81

Font22

Hi guys,

Anyone have any info on the above? Sitting EU FE1 and noticed that the examiner has made reference to the decision in Courage but I cant find any info on it and what the right to sue actually entails. Any help would be really appreciated!

Font 22

johnnyskeleton

Judgment of the Court of 20 September 2001

Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and Others.

Reference for a preliminary ruling: Court of Appeal (England and Wales) (Civil Division) - United Kingdom. Article 85 of the EC Treaty (now Article 81 EC) - Beer tie - Leasing of public houses - Restrictive agreement - Right to damages of a party to the contract.

Case C-453/99.

1. A party to a contract liable to restrict or distort competition within the meaning of Article 85 of the Treaty (now Article 81 EC) can rely on the breach of that provision to obtain relief from the other contracting party.

2. The full effectiveness of Article 85 of the Treaty (now Article 81 EC) and, in particular, the practical effect of the prohibition laid down in Article 85(1) would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition. Indeed, the existence of such a right strengthens the working of the Community competition rules and discourages agreements or practices, which are frequently covert, which are liable to restrict or distort competition.

Article 85 of the Treaty therefore precludes a rule of national law under which a party to a contract liable to restrict or distort competition within the meaning of that provision is barred from claiming damages for loss caused by performance of that contract on the sole ground that the claimant is a party to that contract.

However, in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive directly from Community law, provided that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and that they do not render practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness).

Under those conditions, Community law does not preclude national law from denying a party who is found to bear significant responsibility for the distortion of competition the right to obtain damages from the other contracting party. Under a principle which is recognised in most of the legal systems of the Member States and which the Court has applied in the past, a litigant should not profit from his own unlawful conduct, where this is proven.

In particular, it is for the national court to ascertain whether the party who claims to have suffered loss through concluding a contract that is liable to restrict or distort competition found himself in a markedly weaker position than the other party, such as seriously to compromise or even eliminate his freedom to negotiate the terms of the contract and his capacity to avoid the loss or reduce its extent, in particular by availing himself in good time of all the legal remedies available to him.

It basically means, from my understanding, that if you are forced to enter into a contract which breaches competition law because you do not have sufficient bargaining power to overcome it, then you can sue the other party for damages on that basis. So take for example a car dealership and one car manufacturer says to you that you can either sell their cars only or not at all. Because most of their revenue comes from the sale of that type of car, the dealer enters a contract with the manufacturer to sell only that car. Now if the manufacturer did this across the country and it was found to be an anti-competitive agreement, the car dealership would be entitled to sue the manufacturer for damages. The level of damages is up for grabs as far as I know, but I imagine it would have to be directly related to the loss of revenue arising from the anti-competitive agreement.

Font22

thats brilliant, exactly what i needed! thanks johnnyskeleton!!!