Private damages in EU competition law and judicial review of commercial arbitration rulings.

Author: Zia Akhtar [1]

Abstract

Mandatory antitrust law in the area of international arbitration is complex and tribunals are required to deal with the tension between party autonomy and conflict of laws in addressing competition law issues. In the European Union competition law is governed by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) 2007 which also forms the regulatory framework for antitrust laws. The alternative dispute resolution process requires a need to determine the choice of laws because multiparty arbitration has the potential to produce uncertainty, forum shopping, and inconsistent results. Having established the arbitrability of an antitrust issue arbitrators have to balance a number of considerations in determining which mandatory law should apply. The arbitration tribunals have to respect party autonomy, and also apply the governing law of the contract to antitrust claims that arise in connection with the agreement. The judicial review of arbitrational tribunal decisions can take place but the scope of review that is required is un certain and, as yet, unsettled. The issue is the extent to which a EU Member State’s court can determine the merits of the relevant competition law in order to decide whether an award infringes the antitrust framework ? This paper argues that because international arbitration depends on the broad enforceability of awards the states who have signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 have a responsibility under Article 3 to refer the issue to courts by a public policy framework, and the courts should apply an international standard in adjudging claims.

1. Introduction

The resolution of antitrust law disputes through arbitration presents one of the main challenges for the governance of the economic and commercial legal disputes. There have been various impediments which prevent successful claims of damages for harm caused by an infringement of the EU competition rules. Under the previous legal regime only a fraction of antitrust infringements were followed by civil actions and in a vast majority of cases the parties who suffered as a result of a violation of European competition law failed to enforce their right to compensation. [2] The enforcement of Directive 2014/104/EU on antitrust damages sets out minimum rules to promote the effective use of consensual dispute resolution as an alternative route to enabling the victims to obtain damages for breach. [3] This requires an examination of the competition law framework, suitability of arbitration in resolving antitrust claims, the choice of law issues in arbitration and the enforcement by means of judicial review in antitrust legal disputes.

Articles 101 and 102 of the TFEU Treaty that deal with competition law are mandatory and need to be applied regardless of the national law chosen by the parties as the governing law of the agreement. [4] Further, under Article 5(ii) b) of the New York Convention, enforcement of an award may be refused if it contravenes public policy. [5] Therefore, an award which conflicts with the EU competition law may be annulled or its enforcement by a national court may be denied (although enforcement can generally be refused only in exceptional circumstances). As arbitrators have a duty to render an enforceable award they may find themselves in a situation where they need to raise competition law issues ex officio, which in arbitration is particularly unusual, given the consensual nature of the procedure.

The arbitral tribunals have been dealing with disputes involving competition law issues for decades and these cases typically involve allegations that a counterpart has acted in breach of competition law, for example, by abusing its dominant position in the performance (or non-performance) of the agreement. The arbitral tribunals are also often required to determine whether a contractual provision should be invalidated on the basis that its terms allegedly contravene EU competition law. Under this scenario the allegation that the agreement in question has the object or an effect of distorting competition on a certain market is generally made as part of defending a claim or counterclaim. [6]

The reason for the lack of success in receiving compensation for private litigants is because in private claims arising out of violations of EU competition law there is an inaccessibility of evidence, the lack of harmonisation between the Member States’ respective legal systems, insufficient uniformity in respect of limitation periods, nature and scope of damages, and evidentiary value of previous liability decisions. The Directive 2014/104/EU provides for damages under national law for infringements of the competition law provisions of the Member States who have adopted it, [7] and is aimed at facilitating private enforcement of European competition law remedies by eliminating complications that victims face when considering compensation claims. [8] These disputes almost invariably arise in an international context, which makes arbitration the preferred means of resolving cross-border issues relating to the private enforcement of antitrust law and the only limitation to arbitration being matters concerning the public aspects of competition law. This is reserved to the European Commission or national competition authorities who can enforce penalties including imposing fines. [9]

The Directive offers improved prospects of recovery for victims of antitrust infringements and it will address the arbitration involving competition law in ordinary commercial arbitrations with the specific issues based on public policy considerations. [10] This is relevant for collective redress based on the Commission's 2013 Recommendations that are particularly important for consumers harmed by antitrust violations. The Directive applies to any damages actions by private litigants in the Member States of the EU and it provides victims of infringements of EU competition law the means of redress for the recovery of their loss regardless of whether the infringement were a result of a breach of merger clearance obligation or were subject of a decision by a competition authority. [11] The competition law regulators will estimate who have suffered from their financial investment as a result of these violations of EU competition law and will allow the compensation through arbitration for the recovery.

This paper will address the issue concerning the potential impact of the use of arbitration to obtain private law damages within the framework of the public and private enforcement of EU competition law, the possibility to arbitrate Article 101 and 102 infringements and its practical implications. This will involve the consideration of the suitability of arbitration in resolving antitrust claims in a discussion of (a) arbitrability; (b) choice of law; and (c) enforcement. It entails the examination of the consensual dispute resolution process and the conflict of laws issues, the recent case law in the judicial review of decisions and the potential expansion of its scope in the EU. This process encourages the national courts of the Member States to review claims from arbitration decisions which increases their apply the international Conventions and comity.

2. Arbitration in antitrust frameworks

The three principal competition law issues raised by arbitration clauses are (1) whether they might be unenforceable as in a violation of competition law, (2) whether the arbitration clause covers competition law questions and all matters relating to its framework, and (3) what might be done by drafters of an arbitration clause to increase or decrease competition law enforcement. [12] In international arbitration the choice of law can have a determinative effect not only on the outcome of a dispute, but also on whether a claim is even heard by a tribunal in the first place. Uncertainty surrounding the choice of law is a cost borne by the parties and makes alternate dispute resolution by arbitration less attractive. [13] The presumption is that the parties are free to select the governing law of the contract [14] and that of the arbitration agreement. [15] These choices are generally upheld under the concept of party autonomy. [16] Nevertheless, it has been argued that at least in the context of statutory claims and that “ the law that may govern the performance of the substantive terms of their bargain tells us everything we need to know about the merits of . . . extra-contractual causes of action.” [17]

The potential advantages of arbitrating competition issues have been recognised by the European Commission and arbitration is indeed the norm for private actions relating to an alleged breach of a commitment including a merger clearance decision by the Commission. Most of such commitments contain arbitration clauses which are drafted in a specific way and contained in bilateral investment treaties (BITs) [18] The arbitration clauses in merger clearance decisions are binding on the reformed entity and provide the ‘interested third parties’ with a right to arbitration. [19] These parties consent to arbitration by commencing arbitral proceedings pursuant to the breach of those arbitration clauses which provides a recourse for parties adversely affected by a merged company’s failure to comply with what are essentially conditions upon which the merger had been adopted. Nevertheless, despite the frequent insertion of these arbitration clauses in clearance decisions, in practice, these arbitrations remain infrequent. [20]

The claims for monetary award may be referred to arbitration in two main ways, firstly, parties may agree to have such claims resolved by way of a submission agreement because of confidentiality, but, depending on the other adjudicating mechanisms it may also be commenced pursuant to an arbitration clause included in an existing agreement. However, this is only possible where there is an existing relationship between the parties, such as in cases where the claimant purchased anti competitive products directly from a cartel member, and the purchase agreement or contract does not have an arbitration clause. In this case, the nature of a claim for damages would generally not prevent the use of arbitration provided that the breach is within the scope of the relevant arbitration agreement. However, the law applicable to the tort claim may be different than the governing law of the contract. [21]

However, because of the dispute’s contractual nature the arbitral awards can only have preclusive effect on the actual parties to the proceeding. [22] This is premised on consent, and should not intend to bind third parties [23] because the very nature of antitrust law concerns market effects. [24] The main difference must be premised on the role of an arbitral tribunal in the resolution of antitrust issues in contrast to a regulatory authority. The goals of private party actions are “to secure relief and end misconduct,” whereas a public regulator also seeks to “effectuate” enforcement policies, establish precedent, explain new learning, earn broad compliance, and reestablish competition in the market.” [25] The scope of the arbitral award is restricted to the issues presented by the parties, and cannot impose externalities on others who cannot take part in the arbitration. [26]

The global market and antitrust legal framework has led to business transactions becoming more complex and arbitrations increasingly involving more than two parties. [27] The antitrust cases in particular commonly involve multiple parties in part because any allegation of collusion necessarily involves more than one party and logically more than one potential defendant. When multiple parties are involved in a dispute they have an interest in efficiently resolving the issue in an individual arbitration that is binding on all of them. [28] If the tribunal stipulates that the parties arbitrate their claims separately it will be inefficient and could potentially lead to unpredictable and unbalanced results. [29] In multiparty arbitration a vital consideration is the requirement that all parties must receive equal treatment in resolving their dispute. [30]

The equal treatment also requires that the parties retain the same substantive rights and remedies in arbitration as would be available under national law. For example, the national courts and the European Commission have the ability to give individual exemptions to parties under existing competition laws for policy reasons. [31] If a party instead elects arbitration this must remain a condition, [32] and because not all parties may be subject to the same laws the exemptions may be available for some but not others. The implementation of a coherent antitrust law policy in the EU is an important goal of the Commission. [33]

The EU competition laws which are intended to advance harmonisation between Member States raise the economic competitiveness and promote the goods and services across borders. [34] Initially focused on private law issues the EU has only recently adopted a more regulatory function in the realm of competition law. [35] Article 101 that forms the legal framework of anti trust law requires a two-stage examination of the contract to annul the presence of a cartel. This is composed, firstly, of considering the ‘object’, and, secondly, the ‘effect’, and concluding whether the agreement has as its ‘object or effect the prevention, restriction or distortion of competition’. The ‘object’ of the agreement is to be found by an objective assessment of the aims of the agreement in question, [36] and it is unnecessary to investigate the parties’ subjective intentions. [37] If the object of an agreement is indisputably the distortion of competition, for example, by price-fixing it is unnecessary to show that price competition has in fact been affected in order to establish that an ‘effect’ of the agreement is to distort competition.

This restricted analysis was established by the Court of Justice of the European Union (CJEU) in Consten and Grundig v. Commission [38] which established that there is no need to take account of the concrete effects of an agreement once it appears that it has as its object the prevention, restriction or distortion of competition. The agreements of this kind are often referred to as per se infringements of Article 101(1) TFEU (formerly Article 81(1)EC). [39] In cases where it is not plain and obvious that the object of the agreement is to restrict competition it will be necessary to consider the effects of the agreement in considerable detail. [40] The effect of the agreement is to be judged by reference to the entire economic context in which competition would occur in the absence of the agreement in question. [41] This hypothetical position is often referred to as the ‘counterfactual’, and the correct determination of what this position would be is critical to a proper assessment of the effect of the agreement. [42]

When considering the European analysis, it should be noted that although it has been stated by the EU courts that per se infringements do not require an evaluation of the ‘effects’ of an agreement, in practice, even where the agreement obviously restricts competition, it is believed that some knowledge of its actual or potential effects will be necessary to determine the following: first, whether the agreement satisfies the requirement of appreciable effect; second, whether the agreement affects trade between Member States; third, in the case of an infringement, the level of the fine; and fourth, whether the conditions for the application of Article 101(3) (formerly Article 81(3) EC) apply. [43] Although not held always to be necessary, considerable discussion of the effects of the agreement is to be found in almost all the rulings of the Commission and European Union courts [44] based on the two-stage examination as detailed under Article 101(3).

3. Choice of law in arbitral selection

In antitrust agreements the choice of law applied to arbitrability and the law governing the substance of the dispute may be determinative of how the hearings are conducted. There are a considerable number of cases where the parties to an international dispute will not have agreed, either in their underlying contract or otherwise, upon the substantive law governing their relations. In these circumstances, an arbitral tribunal will be required to select the applicable substantive law, either applying a set of conflict of laws rules or “directly” applying a substantive law. 9

The lex arbitri governing the procedural issues (e.g. whether the dispute is arbitrable) is likely to be governed by a body of law that is different from that applied to the merits (e.g. the standard for evaluating a substantive claim). [45] There is a need to focus on the latter because it will address the conflict of laws rules that are applied to arbitration. [46] The issues concerning the arbitrability of a claim may itself be reviewable in an arbitral proceeding and irrespective of the merits of a case an arbitral tribunal may not be permitted by law in a jurisdiction to decide antitrust matters, but if the tribunal issues an award the losing party can challenge it on grounds of non-arbitrability. [47] The first prerequisite for an arbitrable claim is the existence of a private right of action. The European jurisdictions primarily have national laws that provide for private enforcement in economic and commercial matters governed by competition law to encourage the government to adopt measures because the antitrust laws create irreconcilable conflicts. [48]

The scope of the choice of law problems are also more readily apparent in multiparty arbitration, though many of the same issues apply equally to mutual arbitration but the conflicting mandatory antitrust laws are important given the rise of multi-national corporations within the jurisdiction of the EU. In determining the choice of law where it is available the issue of preclusion in arbitration is much debated [49] because of the general claims decided in arbitration that are given effect in any subsequent litigation between the same parties such as pending a judgment by a court. [50] Unlike a court ruling ,however, arbitral awards are not subject to appeal and are afforded much greater respect by foreign courts. [51] The New York Convention states that arbitral awards can only be reviewed for procedural fairness and may not be challenged on the merits of the decision. [52]

The choice of law is important because jurisdictions differ substantially in their approach to antitrust policy. [53] The antitrust laws in the US which focus on consumer protection are inimical to highly concentrated markets, and are less focused on regulating efficiency. [54] In contrast the EU competition laws which are intended to advance economic integration between member states raise the economic competitiveness and promote the goods and services across borders. [55] Initially focused on private law issues the EU has only recently adopted a more regulatory framework in the realm of competition law. [56]

It is often difficult to confirm what disputes come under a contractual choice of forum or arbitration clause, particularly, in the case of civil claims based on breach of competition law. Under Dutch law, breach of competition law constitutes a wrongful act because in the case of non-contractual claims, reliance on a contractual choice of forum or arbitration clause usually does not stand to reason. However, there is often a contractual relationship between parties in competition law disputes and claims based on breach of competition law are in fact often related to an agreement, e.g. in cases in which a supplier was involved in a cartel and its customer wishes to reclaim the amount overpaid. The courts are often requested to rule on the question whether a choice of forum or arbitration clause applies in such a case.

In HA ZA 15-1064 [57] the Rotterdam Court had to decide whether the designation of the Court of Nuremberg, Germany, in the choice of law clause governed a claim based on breach of competition law. [58] The case involved the termination of a distribution relationship where a clothing company sued had agreed with a third party to open a clothing store in Rotterdam. It therefore no longer supplied clothing to the claimant, which also had a store in Rotterdam. That party then instituted proceedings before the Rotterdam Court, relying on the cartel prohibition. The defendant in its turn referred to a choice of forum in its general conditions. That choice of forum was widely formulated as follows: “If both parties are businessmen, then the place of jurisdiction […] is Nuremberg, Germany”. [59]

This provision was so broadly formulated that it might also apply to claims based on competition law offences. The Court also reviewed other clauses in order to clarify the scope of the general conditions and it found that they governed agreements between a party acting as the seller on the one hand, and a party acting as the buyer on the other hand. [60] This was a different type of contractual relation than a wrongful anticompetitive agreement and the claims did not come under the choice of forum clause. It therefore decided that it had no jurisdiction to hear the dispute and this outcome appears to be correct on the facts, but could have been ruled by reference to the agreement about the choice of law.

This stipulation about choice of law was reviewed in the Court of Justice of the European Union in CDC HP [61] on the preliminary questions posed by the Landgericht Dortmund (District Court) about the rules governing jurisdiction to hear antitrust damages claims. This involved multiple defendants and were initiated by commercial "claims vehicles" who brought claims from the individual injured parties. This case was initiated by claim vehicle Cartel Damage Claims ("CDC") which pursued 32 individual purchasers of hydrogen peroxide domiciled in 13 different EU and EEA Member States and only one of the defendants, Evonik Degussa, was domiciled in Germany. Prior to the litigation after serving its writ of summons on Evonik Degussa and the other defendants, CDC withdrew its action against Evonik Degussa following a settlement between them. The supply contracts between the defendants and their purchasers contained arbitration and jurisdiction clauses and the action against the other defendants non-domiciled in Germany was still pending.

The Court of Justice confirmed that there is a sufficiently close connection between antitrust damages claims against the various addressees of one decision to allow them to be sued jointly in the Member State where any one of them is domiciled (the "anchor defendant"). However, the court may determine it has no jurisdiction to hear the case if it can be proven that CDC and Evonik Degussa had intentionally delayed the formal conclusion of the settlement until proceedings had been launched.

If the jurisdiction cannot be based on a close connection with the case against an anchor defendant, the German court may still have jurisdiction if Germany is the place where the harm occurred. It is settled case law that the place where the harmful event occurred covers both the place where the damage occurs and the place of the event giving rise to it. The Court of Justice ruled that the latter criterion "depends upon the identification, in [...] jurisdiction [...], of a specific event during which either that cartel was definitively concluded or one agreement in particular was made which was the sole causal event giving rise to the loss allegedly inflicted on a buyer". [62] The place where the damage occurs, on the other hand, is generally each individual injured party's registered office and a claim vehicle such as CDC, who has consolidated several injured parties' potential claims for damages, would therefore need to bring separate actions for every individual injured party to the extent their registered offices are not in one and the same jurisdiction. [63]

The Court went on to define the choice of law clause as concerning " 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. The purpose of that requirement is to avoid a party being taken by surprise by the assignment of jurisdiction to a given forum as regards all disputes which may arise out of its relationship with the other party to the contract and stem from a relationship other than that in connection with which the agreement conferring jurisdiction was made ". [64] (In this regard the Court followed the judgment in Powell Duffryn, C-214/89, (1992) paragraph 31).

The ruling concluded that jurisdiction or arbitration clauses may validly derogate from EU jurisdictional rules, "provided that those clauses refer to disputes concerning liability as a result of an infringement of competition law". [65] The choice of forum clause in an agreement can be applied only if it is apparent that it also relates to disputes in connection with liability incurred as a result of an infringement of competition law. [66]

The principle is that where the circumstances must be avoided in which a party is taken by surprise by the designation of a certain court to hear and decide on all disputes between the contracting parties. [67] The party to a contract will generally not be aware that the other party is involved in a wrongful anticompetitive agreement which implies that if parties wish to ensure that a choice of forum or arbitration clause also applies to competition law claims, that must be expressly recorded, and it was possible to agree on a choice of forum or on arbitration after a dispute has arisen.

Initially, both in the EU and US the national courts refrained from the perceived incursion of arbitral tribunals into the sphere of market regulation, [68] and were reluctant that arbitral tribunals would reduce the deterrent effect by incorrectly adjudicating claims on the merits more favourably to potential defendants than if a claim were raised in court. [69] This invokes requirements under institutional rules to make “best efforts” to render enforceable awards [70] when tribunals transferred their choice of law evaluation to account for possible public policy objections of the jurisdictions where enforcement is most likely to occur. [71] These are generally alluded to as the “mandatory law” because of its perceived unavoidability and it does not in fact refer to any uniform body, law or method of interpretation. The different jurisdictions apply varying levels of scrutiny to the application of mandatory law. [72]

In general, European courts have been most favourable to the concept of mandatory law, [73] but the arbitration forums in the US has also required that federal antitrust principles to be considered where “the effects of the underlying agreement [is] felt in the United States.” [74] Those who have evaluated the federal anti trust law argue that the practice ignores the intention and explicit choice of the parties. [75] There are others who have suggested that applying mandatory law is unprincipled and that they bring the concept of the arbitration into disrepute, [76] but the system continues to facilitate this form of arbitral process. [77]

4. Enforcement of Arbitration rulings

The framework of competition law is a system of mandatory rules and its regulations are concerned with the governmental apparatus of supervision over market practices purporting to prevent and/or sanction abusive actions in the form of antitrust agreements and of dominant position in broad terms. The enforcement of competition law is primarily carried out by designated regulatory bodies, and the complexity and effect of anticompetitive practices are most appropriately managed by governmental bodies on national or supranational level as it is the case with the European Commission. [78]

It is confirmed both by the doctrine and case law that competition law may be subject to private enforcement, and this has come before the Supreme Court in Mitsubishi Motors Corp. v Soler Chrysler-Plymouth, Inc a Japanese corporation and Chrysler International entered into a Joint Venture (called Mitsubishi Motors) for the distribution of cars through the Respondent’s dealers outside the continental US. However, owing to a reduction in the market for cars, the Respondent sought permission to trans ship the cars to the US and Latin America which was denied. The petitioner brought an action in a US District Court seeking an order compelling the parties to arbitration in pursuance of the sales agreement and the respondent alleged that the dispute involved antitrust claims because of the division of markets resulted in restraint of trade, which are not arbitrable.

The District Court referred the matter to arbitration which went to the appeal hearing and the Court of Appeals reversed the part relating to arbitration of the antitrust claims but upheld the remaining order. The Respondent went to the Supreme Court which ruled that concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that the parties’ agreement be enforced, even assuming that a contrary result would be forthcoming in a domestic context. The mere appearance of an antitrust dispute does not alone warrant invalidation of the selected forum on the assumption that the arbitration clause is tainted. [79]

The majority also opined that there is no reason to assume at the outset of the dispute that international arbitration will not provide an adequate mechanism. The international arbitral tribunal owe no prior allegiance to the legal norms of particular states; hence, it has no direct obligation to vindicate their statutory dictates. The tribunal, however, is bound to effectuate the intentions of the parties where they have agreed that the arbitral body is to decide a defined set of claims which includes, as in these cases, those arising from the application of federal antitrust law, the tribunal therefore should be bound to decide that dispute in accordance with the national law giving rise to the claim. [80]

The ruling means that the national courts of the US have the opportunity at the arbitration stage when the award is enforced the legitimate interest in the enforcement of the antitrust laws is also addressed. The outcome may not be enforceable in all situations of antitrust claims because this case endorses arbitration of a claim based on law other than the governing law of the contract that deviates from the party’s choice of law and moves away from the benefits of arbitration by introducing uncertainty and also impinges on party autonomy. [81]

However, this was affirmation that obligations arising out of statutory rules would be arbitrable to the same extent as contractual duties. [82] This constitutes enforcement of competition law since private claims are allowed to seek sanctions for breaches of statutory competition rules (though private enforcement may lead only to a single remedy of compensation). The most common manner of private enforcement would be in tortuous claims for damages that is caused by anticompetitive behaviour. Therefore, the arbitration process does not seem suitable since it is a contractually devised mechanism and if the aggrieved party would seek damages for a tort claim in competition law it will not be able to reach an agreement with the other party to arbitrate this claim.

There is a lack of consensus among arbitration practitioners and scholars about the degree and scope of review of awards deciding EU competition law issues. The jurisdictions of Member States in EU may treat the same award in fundamentally different ways when reviewing its compliance with international public policy principles, especially with respect to Article 101. The competition law framework would be within the scope of public policy, and more specifically, the EU regime on competition law constitutes part of the public policy of the EU Member States. Therefore, even if the arbitral tribunal has erred (by application or non-application of competition law), it would still be possible to correct this at the enforcement stage.

The principles of review are derived from case law and originate in the judgment of the Court of Justice of the European Union (CJEU) inEco Swiss China Time Ltd v Benetton International [83] where the dispute arose out of licensing agreement between the parties. It was an issue relating to the contravention of the Belgium law that endorsed the EU policy to annul an arbitral award which infringes Article 101. [84] Article 1704(2)(a) of the Belgian Judicial Code provides that “An arbitral award may be set aside if it is contrary to ordre public.” It is worth noting that, as a matter of Belgian law, the reviewing court is entitled to carry out a detailed review where annulment is sought on grounds of national public policy by way of exception to the general rule that the reviewing court should not consider the merits of an award.

The Court held: “ Where the domestic rules of procedure require a national court to grant an application for annulment of an arbitration award when such an application is forwarded on failure to observe national rules of public policy it must also grant such an application where it is founded on failure to comply with the prohibition laid down in Article 85 of the Treaty (now Article 101). This provision should be open to examination by national courts when they are asked to determine the validity of an arbitration award and that it should be possible for the question to be referred if necessary to the CJEU for a preliminary ruling ”. [85]

Community law does not require a national court to refrain from applying domestic rules of procedure according to which an interim arbitration award which is in the nature of a final award and in respect of which no application for annulment has been made within the prescribed time-limit acquires the force of res judicata and may no longer be called in question by a subsequent arbitration award, even if this is necessary in order to examine, in proceedings for annulment of a subsequent arbitration award, whether an agreement which the interim award held to be valid in law is nevertheless void under Article 85 of the Treaty (now Article 101) where the time-limit prescribed does not render excessively difficult or virtually impossible the exercise of rights conferred by Community law ”. [86]

It was affirmation that there will be judicial review of arbitrational tribunal decisions by the national court which can ascertain the merits of a relevant competition ruling in order to decide whether it infringes Articles 101 and 102. [87] The subsequent cases in the national courts of European countries have examined the issue and established that they will decide based on the relevant conditions before them even if it contradicts the EU law.

In SNF v. Cytec Industries BV [88] the dispute arose when SNF unilaterally rescinded its contract with Cytec and claimed that the contract breached Article 81 of the EC Treaty (now Article 101) prohibiting anti-competitive agreements), and Article 82 (now Article 102) regarding abuse of a dominant position. In response, Cytec brought ICC arbitration proceedings in Brussels and rendered an award by determining that the contract was void for breach of Article 101, for which SNF and Cytec shared responsibility but that Cytec's actions did not constitute abuse of a dominant position. There were two awards the first award in 2002 [89] and the second award of 2004, [90] the tribunal ordered damages against SNF only as it was found not to have suffered loss.

This led to SNF challenging the award both in Belgium (the seat of the arbitration) and France (where enforcement was sought) alleging that the arbitrators had misapplied EC law. The award was set aside in Belgium, but enforcement was granted in the Paris Court of Appeal, on the basis of the Hilmarton jurisprudence by which French courts are not prohibited from enforcing awards which have been invalidated in the jurisdiction of their seat. [91] The Cour de Cassation ruled that a French court may not review a tribunal's application of community competition rules in refusing to enforce an arbitral award unless the enforcement would amount to a 'flagrant, real and concrete violation of international public policy' (Thales v GIE Euromissile) This is an interpretation of the CJEU's Ecoswiss ruling where the Court found that the non-application or misapplication of community competition law may give rise to a public policy defence in enforcement proceedings. [92]

In the SNF case the Cour d’Appel ruled that on an application to annul an award on public policy grounds, the court’s review “ could only be extrinsic since only the recognition or the enforcement [of the award] is examined with respect to compatibility with international public policy” , thereby confirming the principles set forth in its previous decision. Subsequently, the Cour de Cassation held much more clearly:

“Concerning the violation of international public policy, only the recognition or the enforcement of the arbitral award has to be examined by the judge [hearing the application to set the award aside] with respect to its compatibility with public policy, with control being limited to the flagrant, effective and concrete character of the alleged violation”.

The Cour de Cassation concluded that having exercised its power “within the limits of its power of control that is without an examination of the substance of the arbitral award” was appropriate in terms of recognition and enforcement of the award. Thus, the French Court confirmed that while the EC competition laws do form part of the country’s international public policy, the review of arbitral awards in annulment or challenge proceedings is strictly limited. In other words, the Court will decline to review the effect of the contract and will only set aside the award if it contains a flagrant, effective and concrete violation of EC competition law.

In May 2000, Cytec started an ICC arbitration in Brussels, pursuant to the arbitration clause of the 1993 Contract, which provided for the arbitrators to “apply the lex mercatoria and in addition where necessary the appropriate law”. [93] The Belgian SNF Case was based on the partial award in 1993 contravention of article 81 (Article 101) from the origin as its purpose was to prevent SNF from entering the AMD market for 8 years. Therefore, and with a certain reluctance on the majority’s side who considers that an unfair advantage may have been obtained by SNF in complaining about the said agreement at a time when it did not need to be supplied by CYTEC any more, the Tribunal considers that the 1993 agreement is forbidden by article 81 (1) and has not been subject to an exemption pursuant to article 81 (3) (Article 101-3). The agreement was therefore null and void based on article 81 (2) (Article 101-20. The nullity deriving from contracts made under French law that had a retroactive effect and the agreement was therefore “void ab initio”. [94] The judicial review reasoning in awards by Belgian courts is by adopting a traditional approach in an interpretation of Article 1704(2)(a) of the Belgian Judicial Code, and therefore the TPI’s approach only reflects its own national policy perspective in review of international awards.

This decision reaffirms France's pro-enforcement stance in relation to arbitration and the reluctance of the courts to reopen issues considered by an arbitral tribunal or to review the merits of an award. In the court's view it is not sitting in judgment of the trial but in adjudicating on the result of the award. It also demonstrates the strength of the principle of procedural autonomy of the Member States, as compared to the principle of effectiveness of EC Competition law or harmonisation of arbitration law within the EU. The result was that the Cour de Cassation enforces an award without reviewing the merits of the tribunal's decision despite an alleged misapplication of EC competition law.

The ruling of the national court showed in the French SNF case that it is the recognition and enforcement of the award, not the reasoning on the merits contained in the award itself, which must be reviewed to see whether it is contrary to public policy principles. This formalistic interpretation of Article V.2 (b) of the 1958 New York Convention is also in accordance with the more general principle that arbitral awards cannot and should not be reviewed on their merits, including for an alleged erroneous application of the law to the facts. Moreover, it is not at all apparent that the Paris Court of Appeal’s judgment is contradictory to the CJEU’s judgment in Eco Swiss than the Brussels TPI’s judgment.

The CJEU's judgment makes clear that EC law only requires the reviewing court to annul an arbitral award for breach of Article 101 where the court’s “domestic rules of procedure require it to grant an application for annulment founded on failure to observe national rules of public policy.” This implies that in Eco Swiss the Court did not require national courts to undertake a higher level of review concerning EC competition law than they would where other public policy arguments are made. In the Belgian law the reviewing court is entitled to carry out a detailed review where annulment is sought on grounds of national public policy, by way of exception to the general rule that the reviewing court should not undertake a review of the merits of an award. [95]

5. Public policy and action for damages

The issue arises of the ways in which joint and several liability in the interpretation of the two key public policy issues: firstly, European and national laws implementing competition law, and the facilitation of the European Union’s single market arises. This has been influenced by the enforcement of the Damages Directive, as “a matter of public policy” in private competition enforcement. It has raised the ‘arbitrability’ of competition law which had been affirmatively decided through case law and underscored by the tension between arbitration as a private system of dispute resolution and laws which are regarded as fundamental to the operation of the European economy. This has been described as raising a potential threat of litigation in the Member states of the EU. [96]

The anti-competitive effects of this multi layered jurisdiction within the European Economic Area (EEA) could raise problems from conflicting approaches to antitrust problems. The different jurisdictions have reviewed the same market behaviour and come to diametrically opposed views on whether that market behaviour raises a competition law problem. In Europe, the parties have not had the opportunity to challenge an arbitration award concerning European competition law.

In Genentech v Hoechst and Sanofi-Aventis [97] the CJEU (on referral from the Court of Appeal in Paris) has upheld the Attorney General’s opinion that an arbitral award giving effect to a license agreement obliges the licensee to pay royalties for the entire duration of the license agreement, but does not violate Article 101 in cases where the patents protecting the technology are revoked or non-infringed, provided that (1) the commercial purpose of the license agreement is to avert (patent) litigation; (2) the licensee can terminate the license agreement by giving reasonable notice; (3) the licensee can challenge the validity or infringement of the patents; and (4) the licensee retains his freedom of action after termination. Furthermore, the Attorney General Wathelet’s view was that national courts have the power to review whether arbitral awards comply with European competition law regardless of whether or not a violation of European competition law was raised before the arbitral tribunal, and that such review should not be limited to flagrant or manifest violations.

There were three partial awards granted and in the hearing for the Third Partial Award, the Sole Arbitrator held that Genentech had manufactured one of its blockbuster drugs, Rituxan®, using the enhancer, ‘rightly or wrongly patented for some time in [EP 177] and later in [US patents 522 and 140 ]’ and concluded that Genentech was required to pay Hoechst running royalties on the sale of Rituxan®. The Arbitrator decided that Genentech entered into the license agreement to avert litigation as long as the agreement was in place and the payments made under the license could therefore not be reclaimed, and those due remained pending regardless of whether the patent was later revoked or found to be non-infringed.

Genentech then brought an annulment action before the Paris Court of Appeal seeking annulment of this Partial Award, invoking, among others, that the Sole Arbitrator’s interpretation of the license agreement violated French international public policy, more in particular Article 101. The Paris Court of Appeal subsequently submitted the following request for a preliminary ruling :

‘Should the provisions of Article 101 be interpreted as depriving of any effect a licence agreement requiring the licensee to pay royalties for the mere use of the rights attached to the licensed patents, in case said patents are annulled?

The AG held that the response was it is not payable by reference to the determination in the Ottung case (320/87, EU:C:1989:195), it is possible that license agreements may include clauses imposing a royalty obligation for reasons that are unconnected with a patent. [98] Regarding the power of national courts to review arbitral awards, the AG considered that the courts of the Member States should not be obliged to limit their review to flagrant violations of Article 101 TFEU, as required pursuant to French law. [99] Article 101 does not establish a scale of infringements and is therefore an ‘all or nothing’ provision.

The principle of mutual trust has also been held by AG as not applicable to arbitrators (Gazprom case, Case C-536/13, ECLI:EU:C:2015:316), and the courts of the Member States are not bound to comply with the findings of arbitral tribunals with respect to EU competition law. According to the AG ‘ the responsibility for reviewing compliance with European public policy rules lies with the courts of the Member States and not with arbitrators, whether in the context of an action for annulment or proceedings for recognition and enforcement. The AG concluded that ‘ the review by a court of a Member State of whether international arbitral awards are contrary to European public policy rules cannot be conditioned by whether or not this question was raised or debated during the arbitration proceedings, nor can it be limited by the prohibition under national law preventing the substance of the award in issue from being reconsidered. [100]

From an international arbitration perspective the opinion implies that the French courts will have to abandon the reasoning established in the Thalès case which determined that only flagrant violations of French international public policy (including European competition law) could lead to the annulment of awards. [101] It also makes a case for allowing national courts to review questions of European competition law within the framework of both annulment and exequatur proceedings, even if these questions had already been debated before and decided by arbitral tribunals. In particular this last feature would not enhance the finality of arbitral awards.

The national a rbitration tribunals do not currently enjoy this power and the law of Member States prevents a tribunal decision relating to mandatory EU laws from being appealed to a national court, which can then raise an issue at the European level because the supervision of European law does not exist. The European courts have confirmed that arbitration tribunals are not “courts” within the meaning of EU legal framework and treaties which means that they cannot themselves refer a question. [102] Although arbitration is not a substitute for regulatory action the adjudicators have the expertise and can deal with issues which raise damages claims.

The Organisation for Economic Co-operation and Development (OECD) Competition Committee has issued its findings after conducting a review of the role of arbitration in competition policy and practice and published its report which establishes where it may be appropriate to use arbitration in a competition law proceedings. This was in stand-alone contractual claims where one party alleges that an exclusive supply agreement or restrictive covenant illegally restricts competition in breach of Article 101 but there is no underlying regulatory finding that supports the allegation; follow-on damages claims that rely on an infringement finding by a competition authority in order to establish the liability of the defendant (meaning that the claimant need only establish the measure of damages); in respect of merger remedies, where parties have been asked to make certain commitments in order to remedy competition concerns in order to conduct the transaction. [103]

The findings highlights several advantages of the arbitral route which are confidentiality; choice of law in EU national courts which have been distinguished by jurisdictional arguments can be remedied by an arbitration clause that does not allow a defendant to plead their domicile or force claimants to draw innocent subsidiaries of a company into a claim to anchor it in their chosen jurisdiction; flexibility over the process which allows the parties to choose specialist arbitrators and the legal rules for the arbitration; speed of the process over litigation; and the enforceability of the arbitral award which may be recognised in several jurisdictions because of the international conventions that govern arbitration, unlike court judgements (which often must be recognised and subject to further proceedings for enforcement such as the New York Convention Article 1.1 which requires courts of the 145 contracting states to recognise and enforce arbitration in other states ). [104]

The OECD has concluded that arbitration in competition law claims can be a particularly useful method in resolving private claims and the choice of law available and "this detachment from a particular legal order can also be useful by separating the arbitral proceedings from any investigation by competition authorities in particular jurisdictions". [105] The courts should then be able to reason that the judges is not bound by the statements in the summons when assessing their international jurisdiction.

6. Conclusion

The courts of the Member States of the EU may treat the same award in fundamentally different ways when reviewing its compliance with international public policy principles, especially with respect to Article 101 EC. While it is legitimate to question the principle of an absolute arbitral finality of awards without any control, the finality of awards remains the central feature of international arbitration. More generally, an overwhelming majority of arbitration practitioners agree that the review of arbitral awards by national courts should not become a broad and unlimited review on the merits of the case just because there is an allegation that international public policy has been infringed.

Article 101 does not contemplate that the contracting party intend to invalidate a contract under its framework (after having allowed its performance for a duration), be automatically rewarded if indeed a tribunal finds that both parties concluded an agreement effectively restricting competition. More generally, if the assessment of damages following a violation of Article 101 becomes part of international public policy and the parties may be encouraged to wait until the arbitrators award damages against them before raising the provision as a defence at the enforcement stage. This was the action of the respondents in both the Eco Swiss and Thalès cases, who claimed that the remedy awarded eventually in the final award were not consistent with Article 101.

The review by the courts has to take into account the fact that the competition cases in general are very complex and beyond hard core cartels raise issues that are challenging to solve. This is because it is less obvious what the geographical or product markets are or whether the conduct is really anti-competitive. It is necessary that the arbitral decisions are referred to the court in such circumstances and that they are able to make their determinations guided by precedent and the European Commission policy on antitrust law.

The EU Directive 2014/104/EU encourages settlement of claims prior to litigation and guides towards less adversarial court process. However, it is intended to prevent the harm by the cartels by a presumption that a monopoly causes loss or damage. This seeks to alleviate the evidentiary burden on claimants in bringing proceedings. While it has simplified by means of Article 5 that Member States are to ensure that courts are able to order both the defendant and third parties, in practice often other members of a cartel are bound to disclose evidence which lies in their control to the claimant. The claimant has merely to present to the court a reasoned justification containing reasonably available facts and evidence sufficient to support the plausibility of its claim for damages.

The rules have to be simplified by the courts being more decisive and willing to rule on choice of law issues by reviewing the arbitral decisions that gives to certainty in the law. This is because of the legal rules that encompass the Article 101 in the EU framework that have the goal of promoting competition. It is assumed that arbitration clauses that may validly derogate from EU jurisdictional rules may still be valid if they refer to disputes concerning liability from a breach of an infringement of competition law. The party who has been wronged will be able to gain enforcement before the judges by the full disclosure available in these cases.


[1] LLB (Lon), LLM (Lon), Gray's Inn

[2] The ineffective enforcement meant that consumer and business victims had to forego up to an estimated 23 billion pounds compensation every year. See the impact assessment report accompanying the 2013 Commission proposal for the Directive. http://ec.europa.eu/competition/antitrust/ actionsdamages/summary_impact_assessment_en.pdf. Accessed 2/2/18

[3] Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.349.01

[4] Article 101 of the Treaty prohibits agreements between two or more independent market operators which restrict competition. This provision covers both horizontal agreements (between actual or potential competitors operating at the same level of the supply chain) and vertical agreements (between firms operating at different levels, i.e. agreement between a manufacturer and its distributor). Only limited exceptions are provided for in the general prohibition. Article 101 deals with the most flagrant examples of illegal conduct infringing in the creation of a cartel between competitors, which may involve price-fixing and/or market sharing. Article 102 of the Treaty prohibits firms that hold a dominant position on a given market to abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers. Anti trust overview, European Commission. http://ec.europa.eu/competition/antitrust/overview_en.html

[5] New York Convention, art. 5(2)(a) (“Recognition and enforcement of an arbitral award may be refused if [the] subject matter of the difference is not capable of settlement by arbitration. . .”).

[6] In Case T471/13, (16/6/16) Xellia Pharmaceuticals ApS, and Alpharma LLC, formerly Zoetis Products LLC, v European Commission the CJEU General Court held that “potential competition is protected by Article 101 TFEU. If it were possible, without infringing competition law, to pay undertakings taking the necessary steps to prepare for the launch of a generic medicinal product, including obtaining an MA, and which have made significant investments to that end, to cease or merely slow that process, effective competition would never take place, or would suffer significant delays, at the expense of consumers, that is to say, in the present case, patients or health insurance schemes”. Para 147

[7] On 9 March 2017, the “Claims in respect of Loss or Damage arising from Competition Infringements(Competition Act 1998 and Other Enactments (Amendment) Regulations 2017” came into force in the UK and the UK Damages Implementation Act formally implemented the Directive 2014/104/EU.https://www.legislation.gov.uk/ukdsi/2017/9780111152805

[8] “This Directive sets out certain rules necessary to ensure that anyone who has suffered harm caused by an infringement of competition law by an undertaking or by an association of undertakings can effectively exercise the right to claim full compensation for that harm from that undertaking or association. It sets out rules fostering undistorted competition in the internal market and removing obstacles to its proper functioning, by ensuring equivalent protection throughout the Union for anyone who has suffered such harm”, Directive 2014/104/EU, Article 1,1. Subject Matter and Scope. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.349.01.0001.01.ENG

[9] Article 8

[10] http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1398263020823&uri=OJ:JOL_2013_201_R_NS0013 Accessed on 15/1/18.

[11] “Member States shall ensure that any natural or legal person who has suffered harm caused by an infringement of competition law is able to claim and to obtain full compensation for that harm”. Article 3.1 Right to full compensation. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=uriserv:OJ.L_.2014.349.01.0001.01.ENG

[12] Gordon Blanke and Phillip Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners,(2015) pp. 69–89

[13] See Gary Born, International Arbitration: Law and Practice, 2012, (“The choice-of-law complexities that arise in international arbitration do not comport with the ideals of predictability and efficiency of the arbitral process.”) at 900-01; Charles Brower II, Arbitration and Antitrust: Navigating the Contours of Mandatory Law , 59 Buffalo Law. REV. 1172, 1132, 1140 (2011) (Whether through continued application by tribunals, or continued enforcement by national courts, “the pursuit of expediency outside the normal bounds of party autonomy seems likely to harm the integrity of the arbitral process”). Accessed on 12/8/17.

[14] Also referred to as the lex contractus.

[15] Also referred to as the lex arbitri.

[16] Nigel Blackaby , Constantine Partasides, Alan Redfern , Redfern and Hunter on International Arbitration, edited by Alan Redfern, (2015) , Also see LCIA Arbitration Rules, London Court of International Arbitration, (2014 Amendments) art. 22.3 available at http://www.lcia.org/Dispute_Resolution_Services/lcia-arbitra-tion-rules-2014.aspx [perma.cc/GXK3-CQJB] (“The Arbitral Tribunal shall decide the parties' dispute in accordance with the law(s) or rules of law chosen by the par-ties as applicable to the merits of their dispute”.). at 195-96

[17] Allen Scott Rau, The Arbitrator and Mandatory Rules of Law , 18 American Rev. International Arbitration 51, 58 (2007) (agreeing that a decision on the merits on a statutory claim should and is intended to give “res judicata” effect to statutory claims under the holding in Mitsubishi at 65.

[18] An instance of a BIT was the ‘Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments’ , Adopted on July 1, 1996 at Caracas, Entry into force on January 28, 1998. www.sice.oas.org/Investment/BITSbyCountry/BITs/CAN_Venezuela_e.asp Accessed on20/1/18

[19] Section 10 (2) of the Norwegian Arbitration Act 2004 provides that "arbitration clauses apply to third parties in the case of transfer of the legal relationship to which the arbitration agreement applies. The arbitration agreement is considered as included in the transfer and can be invoked by and towards the successor, unless otherwise agreed between the parties to the agreement". Wikborg Stein, Arbitration clauses and third parties in bills of lading and other agreements. 1/2/17 https://www.lexology.com/library/detail.aspx?g=adb4ec0c-5c98-437c-a7f5-a3ea47ab22f8 Accessed on 11/12/17

[20] The first (and to date only) reported case decided in February 2012 arose out of the acquisition of sole control by Newscorp over two Italian pay-TV broadcasters (Reti Televisive Italiane v. Sky Italia, ICC Case No. 16974/FM/GZ).

[21] Article 6(3) of Rome II Regulation – which an arbitral tribunal may or may not choose to apply to designate the applicable substantive law – provides that the law applicable to a non-contractual obligation arising out of a restriction of competition, shall be the law of the country where the market is, or is likely to be, affected. Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32007R0864

[22] See , Born, supra at 17,26, 27, 28, 29 at 3751 (“An award will have preclusive effects only if the subsequent proceedings involved the ‘parties’ to the arbitration or their ‘privies’”); See also, New York Convention, art. 2(1) (“Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractua1 or not, concerning a subject matter capable of settlement by arbitration.”) (emphasis added).

[23] See Born, supra at 17,26, 27, 28, 29 ,30 at 1407-08 (describing the nature of consent to arbitration); Granite Rock v. Int’l Brotherhood of Teamsters, 561 U.S. 287 (2010) (re-fusing to compel arbitration upon finding defendant did not consent to submit specific issue to arbitration).

[24] William Blumenthal and James D. Hurwitz, Chapter 42: Alternative Dispute Resolution and Federal Trade Commission Antitrust Enforcement in EU and US Antitrust Arbitration: A Handbook for Practitioners (Kluwer Law International 2011). 1503-1525

[25] Id.

[26] Regulatory agencies often allow public comment or the submission of amicus briefs by third-parties that might potentially be affected by an impending regulatory decision. This type of participation generally is not possible in the arbitration context. See Bernard Hanotiau , Complex Arbitration: Multi party, Multi contract, Multi Issue and Class Actions 192 (Kluwer Law International 2006) (noting that briefs amicus curiae generally are not allowed in arbitrations other than under NAFTA, ICSID, or the WTO).But see Jeff Waincymer, The Process of an Arbitration: Complex Arbitration, Procedure and Evidence in International Arbitration (2012), p 602.

(“[A]micus submissions have been accepted in disputes which have a strong public interest dimension, in particular investor-state and competition law disputes . . . .”).

[27] Julian D. M. Lew et al., Comparative International Commercial Arbitration 376 (Kluwer Law International 2003) (About 40% of arbitration cases worldwide involve more than two parties, and that number has been rapidly increasing for twenty years.) Nathalie Voser, Multiparty Disputes and Joinder of Third Parties, in Albert Jan van den Berg (ed.), 50 years of the New York Convention: ICCA International Arbitration Conference, Vol 14, (2009) pp. 343-410 at 342

[28] Id. This analysis assumes that there is a valid arbitration agreement binding on all parties. In the absence of a pre-dispute agreement to arbitrate, parties may conclude an arbitration agreement after a dispute has arisen. Alternatively, some jurisdictions at least in the U.S. have been willing to extend jurisdiction of an arbitral tribunal over parties who are accused of colluding with a party to an arbitration agreement. See JLM Indus. V. Stolt-Nielsen SA. 387 F .3d 163, 178 (2d Cir. 2004) which decided that the restriction of an arbitration clause to a domestic law does not restrict adjudication under the international rules of arbitration. At 470. Accessed on 10/1/18.

[29] MS Dealer Serv. Corp. v. Franklin , 177 F .3d 942, 947 (11th Cir. 1999); Fujian Pac. Elec. Co. v. Bechtel Power Corp., 2004 WL 2645974, (N.D. Cal. Nov. 19, 2004) at 5-6

[30] Id. at 408.

[31] For a description of various country’s approaches to arbitration, see Alexis Mourre, Arbitrability of Antitrust Law from European and US Perspectives, in EU and US Anti trust Arbitration: A Handbook for Practitioners (Gordon Blanke & Phillip Landolt eds., 2011) 6-8. Arbitral tribunals can order the civil consequences of a violation of antitrust laws by enjoining a party to cease violating the other's rights, awarding damages, or invalidating the contract. Mourre, at 46 (noting that equal treatment is implicated by the availability of an exemption under Article 101)Accessed on 12/1/18.

[32] Id.

[33] As a non member state of the EU, Switzerland has taken a contrary position on the subject of mandatory law, and conceptualised that antitrust law is not a matter of international public policy. Brower, at 1159 (noting that “parties wishing to avoid European competition law reportedly provided for Swiss arbitration” but were unsuccessful as the Swiss Federal Tribunal later held EU competition laws nevertheless applicable); see Tribunale federale [DTF] [Federal Supreme Court] Nov. 13, 1998, X SA v. Y SA, Judgment of Nov. 13, 1998, 25 Y.B. Comm. Arb. 511, 513 (Switz.) (holding that arbitrators must consider EU competition law when the parties are from the EU and one party invokes its provisions). EU competition law may still apply in cases where the parties have sufficient ties to the member states under Swiss law “an award rendered in Switzerland may not be set aside due to an incorrect application of EU competition law by the arbitrators. Klaus Peter Berger, Correction, Interpretation and Setting Aside of the Award, in Private Dispute Resolution in International Business : Negotiation, Mediation, Arbitration 665 (3rd ed. 2015). Accessed on 15/1/17.

[34] Fox, Id , at 339, 340-341; see also, Treaty of Rome, European Com-munity, art. 85(3) (1957) (Mergers that would otherwise be voidable may be ex-empted if they “[contribute] to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit”) available at http://ec.europa.eu/ com-petition/legislation/treaties/ec/art81_en.html [perma.cc/W89Q-5JDD]

[35] Hannah L. Buxbaum, The Private Attorney General in a Global Age: Public Interests in Private International Antitrust Litigation , 26 Yale Journal of International Law (2001). 219, 226

[36] Cases 29 and 30/83 Compagnie Royale Asturienne des Mines SA and Rheinzink GmbH v Commission of the European Communities. [1984] ECR 1679.

[37] Case 56/65 Socie´te´ Techinque Minie`re v. Mashinenbau Ulm [1966] ECR 235, 249.

[38] [1966] ECR 299

[39] P. Roth and V. Rose (eds), Bellamy & Child: European Community Law of Competition, 6th edn (Oxford: Oxford University Press, 2008), 164

[40] Case C-238/05 Asnef-Equifax v. Ausbanc [2006] ECR I-11125

[41] Case 31/80 L’Oreal v. De Nieuwe AMCK [1980] ECR 3775

[42] See Roth & Rose, supra 52 at 166

[43] Ibid. 165

[44] Ibid.

[45] Redfern and Hunter , supra 20 (noting that since arbitration is often seated in a “neutral” jurisdiction, the procedural law will generally be different from the law that governs the substantive matters in the dispute). Ibid at 173

[46] For example, many of the arguments made regarding the multiplicity of conflicting mandatory substantive laws may also arise with respect to questions of arbitrability. A national court could potentially refuse to enforce an award with respect to antitrust issues on either the arbitrability ground or the public policy ground. See New York Convention, note 7, art. 5(2) (enforcement of an award may be refused if “[t]he subject matter of the difference is not capable of settlement by arbitration under the law of that country, or [. . .] enforcement of the award would be contrary to public policy.”).Accessed on 20/12/17.

[47] New York Convention, art. 5(2)(a) (“Recognition and enforcement of an arbitral award may be refused if [the] subject matter of the difference is not capable of settlement by arbitration. . .”).

[48] Alexandra Theobald, Mandatory Anti trust law and International Arbitration, Penn Law: Legal Scholarship Repository, (2016) 1059-1089

[49] See, Born, supra at 17, at 1112 (“Although it is widely recognized that arbitral awards have binding, res judicata effects, the precise nature of those effects . . . is debated.”); Gretta Walters, Fitting a Square Peg into a Round Hole: Do Res Judicata Challenges in International Arbitration Constitute Jurisdictional or Admissibility Problems? 29 J. Int’l Arb. 6, (2012) (“pp. 651-680. At 651 (While the legal principle of res judicata is widely recognized in domestic laws and by international tribunals, its scope and meaning are unsettled topics.”); Compare Nathalie Voser & Julie Raneda, Recent Developments on the Doctrine of Res Judicata in International Arbitration from a Swiss Perspective: A Call for a Harmonized Solution , 33 ASA Bulletin Vol. 4, (2015) pp. 749-779 (discussing various recent decisions in Switzerland on the preclusive effect of prior proceedings and setting a high bar for preclusion) with Katherine Jonckheere, Avoiding Re-litigation of Identical Issues at the Enforcement Stage: A Deferential Approach , Kluwer Arbitration Blog, February 3, 2016 (advocating a deferential approach) available at http://kluwerarbitrationblog.com/ 2016/02/03/avoiding-re-litigation-of-identical-issues-at-the-enforcement-stage-a-deferential-approach/ [https://perma.cc/B5F3-AHGZ]. Accessed on 17/11/17.

[50] Born, supra 17 and 26, at 3738-3739 (preclusion is a matter of international law.)

[51] Born, supra at 17, 26 and 27 at 3185 (“An annulment court does not review the arbitral tribunal’s decision in the nature of an appellate proceeding, but instead considers only whether one of a specified number of defined statutory grounds for annulment is present.”).

[52] Born, supra at 17,26, 27, 28 at 3185 citing New York Convention, art. 7.

[53] Kyle Robertson, One Law to Control Them All: International Merger Analysis in the Wake of GE/Honeywell, 31 B. C. International & Comparative Law Review 153 (2008) (noting that U.S. and E.U. antitrust regulators came to opposite conclusions concerning the pro-posed GE-Honeywell merger); Dianne P. Wood, International Harmonization of Antitrust Law: The Tortoise or the Hare ?, 3 CHI. J. INT’L L. 391, (2002) 405-406 (comparing differing approaches in OECD countries versus developing countries to questions of national treatment in antitrust laws, and suggesting that developing countries are motivated by different policy objectives of spreading economic wealth among locals). Accessed on 10/1/17.

[54] Eleanor Fox, US and EU Competition Law: A Comparison, in Global Competition Policy (Edward Montgomery Graham & J. David Richardson eds., 1997). 339, 340-341 See also Sherman Act, 15 U.S.C. §§ 1, 2 (banning actual or at-tempted monopolization and the restraint of trade).

[55] Fox, Id , at 339, 340-341; see also, Treaty of Rome, European Community, art. 85(3) (1957) (Mergers that would otherwise be voidable may be ex-empted if they “[contribute] to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit”) available at http://ec.europa.eu/ com-petition/legislation/treaties/ec/art81_en.html [perma.cc/W89Q-5JDD]

[56] Hannah L. Buxbaum, The Private Attorney General in a Global Age: Public Interests in Private International Antitrust Litigation , 26 Yale Journal of International Law (2001). 219, 226

[57] C/10/486958 (2016)

[58] Artikel 23 EVEX 2007 luidt - aangehaald voor zover relevant - als volgt: Article 23 (Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) EVEX 2007 reads as follows:

1. Wanneer de partijen van wie er ten minst één woonplaats heeft op het grondgebied van door dit verdrag gebonden staat, een gerecht of de gerechten van een door dit verdrag gebonden staat hebben aangewezen voor de kennisneming van geschillen die naar aanleiding van een bepaalde rechtsbetrekking zijn ontstaan of zullen ontstaan, is dit gerecht of zijn de gerechten van die staat bevoegd. 1. Where the parties at least one domiciled in the territory of a State bound by this Convention designate a court or the courts of a State bound by this Convention for the purpose of acquiring disputes arising from a particular legal relationship arise or arise, is this court or are the courts of that state competent. Deze bevoegdheid is exclusief, tenzij de partijen anders zijn overeengekomen. This authority is exclusive unless the parties have agreed otherwise. Deze overeenkomst tot aanwijzing van een bevoegd gerecht wordt gesloten: This agreement to designate a competent court is closed:

a. hetzij bij een schriftelijke overeenkomst of bij een schriftelijk bevestigde mondelinge overeenkomst; either by a written agreement or by a written agreement confirmed verbally;

b. hetzij in een vorm die wordt toegelaten door de handelwijzen die tussen de partijen gebruikelijk zijn geworden; or in a form allowed by the practices that have become customary between the parties;

c. hetzij, in de internationale handel, in een vorm die overeenstemt met een gewoonte waarvan de partijen op de hoogte zijn of hadden behoren te zijn en die in de internationale handel algemeen bekend is en door partijen bij dergelijke overeenkomsten in de betrokken handelsbranche doorgaans in acht wordt genomen. or, in international trade, in a form consistent with a custom which the parties are aware of or should have known and which are generally known in international trade and which are generally observed by the parties to such agreements in the relevant trade sector taken. (Para 6.7)

[59] Para 6.8

[60] Para 6.9

[61] C-352/13 (2015)

[62] Para 33

[63] Para 50

[64] Para 68

[65] Para 70

[66] "The General Court strengthened the right of undertakings affected by anticompetitive behaviour to obtain access to the file of the European Commission in cartel cases on the basis of the Transparency Regulation 1049/2001 and confirmed the importance of private damage actions for the maintenance of effective competition in the EU". Till Schreiber, A Short Analysis of the Judgment of the General Court in the CaseCDC HP v Commission Journal of European Competition Law & Practice, Volume 3, Issue 3, 1 June 2012, Pages 268–270, https://doi.org/10.1093/jeclap/lps007

[67] In Powell Duffryn v Wolfgang Peterit [1992] ECR 1745 CJEU interpreted the Brussels I Regulation that any other interpretation of its Article 17 "would lead to a multiplication of a heads of jurisdiction for disputes arising from the same legal and factual relationship between the company and shareholders and would run counter to the principle of legal certainty”. Para 20

[68] Damjan Kukovec, Anti Trust- What Law in Action ? Indiana International and Comparative Law Review, (2004); 15.1 (describing the European Commission and the United States Federal Trade Commission’s blocking of the General Electric/Honeywell and Boeing/McDonnell Douglas mergers as “almost escalat[ing] into a trade war)at 1. Accessed on 15/10/17.

[69] Mark Lee, Antitrust and Commercial Arbitration: An Economic Analysis, 62 St. John L. Rev. (2012) 1, 4

[70] See, e.g., ICC Arbitration Rules art. 41 (“[T]he arbitral tribunal shall act in the spirit of the Rules and shall make every effort to make sure that the award is enforceable at law”). But see, LCIA Arbitration Rules, London Court of International Arbitration, art. 32.2 (2014 Amendments) available at http://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2014. aspx [perma.cc/H7NC-7MA9] ("[T]he Arbitral Tribunal [. . .] shall make every reasonable effort to ensure that any award is legally recognised and enforceable at the arbitral seat. . . .”) (emphasis added).

[71] Stavros Brekoulakis, On Arbitrability: Persisting Misconceptions and New Areas of Concern, in Arbitrability And Comparative Perspectives, International Arbitration Law Library, Vol. 19, at 2-36 (Loukas Mistelis & Stavros Brekoulakis eds., 2009) (noting that arbitral tribunals can consider the mandatory rules of a country other than the governing law chosen by the parties, and “[u]ltimately, it is upon the arbitrator deciding the particular case whether to take the enforcement factor into account or not”).Accessed on 30/7/17.

[72] Brower, , supra at 17,26, 27, 28, 29 ,30 at 1129-30 (“Given the vast differences in approach by national courts, tribunals may devote more or less attention to local mandatory laws depending on the anticipated level of judicial review at the seat of arbitration.”).

[73] Id. at 1148-52.

[74] Thomas H. Webster and Michael Buhler, Handbook of ICC Arbitration: Commentary, Precedents, Materials 314 (Sweet & Maxwell eds., 2014). 21-58

[75] Brower, supra at 17,26, 27, 28, 29 ,30 at 1147 (mandatory laws . . . enable adjudicators to apply important regulatory norms enacted by the place of adjudication . . . with-out regard to (and often in contravention to) private agreements about the governing law.”).

[76] Brower Id at 1138 citing Phillip Landolt, Modernised EC Competition Law in International Arbitration at 108 (2006) (“[The failure to apply mandatory laws] brings arbitration into disrepute and thus jeopardizes it as an institution”).

[77] Brower Id. at 1128 (quoting leading commentators on the increasing application of mandatory law to antirust issues); REDFERN & HUNTER, supra at 20,22,41 at 205-07 (“[P]erhaps the most frequently encountered instance of the application of mandatory law is competition or anti-trust law”).

[78] Deyan Draguiev, ‘Arbitrability of Competition Law Issues Reinforced’, Kluwer Arbitration Blog, January 10 2014, http://arbitrationblog.kluwerarbitration.com/2014/01/10/arbitrability-of-competition-law-issues-reinforced/

[79] Para 624-628

[80] Para 628-640

[81] The US Supreme Court(upholding arbitrability of antitrust claims under arbitration agreement requiring American plaintiff to arbitrate against Japanese defendant in Japan) held that an agreement to arbitrate was enforceable with respect to antitrust claims under foreign law, but only if the alternative forum would allow an opportunity to present its statutory antitrust law claim. Id. at 637.

[82] If the arbitration agreement involves the US then careful consideration needs be given to specific issues under US competition law where the claimants must not be deprived of their statutory rights to claim damages, including the right to claim treble damages and initiate opt-out class actions. Laura Guttiso, Leniency and 2 faces of the Janus. Where Public and Private Enforcement Merge and Converge, edited by Caron Beaton-Wells, Christopher Tran - Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion (2015). Also see the Federal Rule of Civil Procedure 23(a) requires that (1) the class be “so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. Rule 23(a)(1)-(4) (2014). These latter claims will be precluded from arbitration in the US if the agreement to arbitrate is silent on the issue.

[83] Case C-126/97, 1 June 1999

[84] Para 37

[85] Para 47

[86] Para 48

[87] See Stockholm Arbitration Report 2000:1 (“the Eco Swiss v Benetton decision”) p 23; See also P. Senkovic and P. Lastenouse, International Arbitration and Antitrust Law : Eco Swiss Judgment Revisited by the Paris Court of Appeal, Mealeys Int’l Arb. Rep. Vol 20, 2 (February 2005).

[88] Cour de Cassation judgment no. 680 of 4 June 2008

[89] Court Decisions on Arbitration p. 79.

[90] Court Decisions on Arbitration p. 99

[91] The concept has been developed in French case law by which the courts have consistently taken the view that, where an award has been set aside in the country where it was rendered, it can nonetheless be recognized and enforced in France if it meets the requirements of French law (see, in particular, the decisions in Norsolor, Cour de cassation, decision of Oct. 9, 1984, Revue Dd L’arbitrage, 1985, at 431 and, in the English version, International Legal Materials, 1985, at 360-364; Hilmarton, Cour de cassation, decision of March 23, 1994, Revue Dd L’Arbitrage, 1994, at 327 and, in the English version, Mealey’s International Arbitration Report, vol. 9, Issue 5, May 1994, section E and commentaries at 6-7; and Chromalloy, Paris Court of Appeals, decision of Jan. 14, 1997, Revue de L’Arbitrage, 1997, at 395 and, in the English version, Mealey’s International Arbitration Report, vol. 12, Issue 4, April 1997, section B and commentaries at 5-6). Landmark ‘Putrabali’ Case The two decisions rendered on June 29, 2007 by the French Cour de cassation in PT Putrabali Adyamulia v. Rena Holding are no exception to this consistent case law.

[92] In Thalès Air Defence vs. GIE Euromissile and SA EIDS France and La Societe EADS Deutschland Gambh,Case 2002/ 19606 , decision of 18/11/04, (“Thalès”) rendered by the Paris Court of Appeal, it was held for the first time by the French courts held that while EC competition law did form part of French international public policy, a violation must be “flagrant, effective and concrete ” in order to justify setting aside an arbitral award. It was challenge to an international arbitration award on the grounds that a breach of EC competition law rendered it unenforceable on public policy grounds. The Court found that Thales had not presented sufficient evidence to demonstrate a violation of EC competition law upon the above standard. The law of arbitration in France needed more concrete evidence than was “sketched out” by the parties which did not form a sufficient basis upon which the Court could determine whether an agreement had an anti competitive effect. Journal de Droit International, April –May-June, 2005, p 362-364.

[93] Page 37

[94] Page 38

[95] See Keutgen and Dal, L’Arbitrage en Droit Belge et International (2nd ed., Brussels, 2006), at 566 (citing Civ. Liège, 6 March 1984, Jur. Liège, 1984, p. 197). For examples of Belgian decisions reviewing the reasoning of awards with respect to the compliance with ordre public, see B. Hanotiau and O. Caprasse, L’annulation des sentences arbitrales, J.T. 2004, p. 418, at §43, p.419

[96] “A new threat has recently emerged to the consistent application of EU law, namely, interpretation of EU law by the ever growing range of international tribunals that sit outside the domestic legal order of any particular state. International courts may be called upon to interpret or decide upon the applicability of EU law even though those tribunals are formally outside the EU institutional system. Matthew Parish International Courts and the European Legal Order”. European Journal of International Law, 23.1 (2012) Pages 141–153

[97] (2016) C-567/14

[98] Para 39

[99] Cour d’appel de Paris , 18 November 2004, Thalès, RG no. 2002/19606. Also see Cour de Cassation, chambre civile, 4 June 2008, Cytec, no. 06-15320.

[100] Para 26

[101] Recent cases of the Cour d’appel de Paris suggest that it might already be moving in the direction of solely requiring that the violation of French international public policy is ‘effective and concrete’ instead of ‘flagrant, effective and concrete’.

[102] Section 45 of the UK’s Arbitration Act 1996 does permit an arbitration tribunal to refer a question to the English court, which can itself then refer a question to the CJEU. Secretary of State for Defence v Turner Estate Solutions Limited [2015] EWHC 1150 (TCC).

[103] OCED Hearings Arbitration & Competition, DAF/Group(2010)40, 13/12/11. http://www.oecd.org/dataoecd/58/40/49294392.pdf

[104] Article 44 confirms this rule. "Pursuant to the first sentence of article I (1), the New York Convention applies to awards “made in the territory of a State other than the State where the recognition and enforcement of such awards are sought”. Unless a State has made a reciprocity reservation pursuant to article I (3), the Convention applies to awards made in any State, whether or not a Contracting State". Ibid 7-8

[105] Ibid