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From Antitrust Law Daily, January 10, 2017

EU must pay damages for excessive length of proceedings in plastic bag cartel case

By Linda O’Brien, J.D., LL.M.

In the first case to be adjudicated on the issue, the European Union (EU) has been ordered to pay more than €50,000 in damages to two companies in a case concerning a cartel in the industrial plastic bags sector as a result of the excessive length of the proceedings before the General Court of the European Union, according to an announcement today (Gascogne Sack Deutschland and Gascogne, Case T-577/14).

Packaging manufacturers Gascogne Sack Deutschland (formerly Sachsa Verpackung) and Gascogne (formerly Groupe Gascogne) brought actions before the General Court in February 2006, seeking to annul a decision adopted by the European Commission (EC) in a case alleging that the companies engaged in a conspiracy in the industrial bags market in Belgium, the Netherlands, Luxembourg, Germany, France, and Spain. In November 2011, the General Court dismissed those actions but upheld the €13.2 million in fines imposed on the companies. On appeal, the Court of Justice upheld the judgment of the General Court and imposition of the fines. However, the Court of Justice noted that the two companies could bring actions for damages suffered as a result of the excessive length of the proceedings before the General Court.

In today’s judgment, the General Court awarded damages of €47,000 to Gascogne for material harm suffered (the payment of bank guarantee costs) and €5,000 to each of the companies for non-material harm (the state of uncertainty caused by litigation). The EU may incur non-contractual liability when the institution’s conduct was unlawful, actual damage was suffered, and there was a causal link between the conduct and damages claimed, the court explained.

Here, the court noted, the right to adjudication within a reasonable period was breached as a result of the excessive length of the proceedings. The proceedings last for more than five years and nine months, and the delay could not be justified by any of the specific circumstances of the cases. In addition, Gascogne suffered actual material harm during an unjustified period of inactivity of 20 months due to costs it had to pay in relation to the bank guarantee provided by the EC.

Finally, the General Court recognized that Gascogne Sack Deutschland and Gascogne suffered non-material harm for the failure to adjudicate within a reasonable period, which placed the two companies in a situation of uncertainty that went beyond the degree of uncertainty usually caused by the litigation. The state of prolonged uncertainty necessarily had an influence on the planning decisions and management of the two companies. Thus, an award of €5,000 to each company was deemed appropriate as compensation for non-material harm.

Companies: Gascogne Sack Deutschland; Gascogne

MainStory: TopStory Antitrust

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