The Higher Regional Court in Düsseldorf on 14 May 2008 affirmed the intermediate judgment of the Düsseldorf Regional Court (dated 21 February 2007) and decided that the cartel action of a Belgian damage claims corporation was admissible.
The claimant Cartel Damage Claims AG (“CDC”) is a Belgian corporation which, among other things, concerns itself with national and international cartel infringement. In doing so the corporation bundles claims in order to challenge them in and outside court.
The present claim is in relation to compensation payments amounting to over €100 million from six large cement companies. The cement companies, between 1993 and 2002, allegedly discussed their organisation of distribution, quotas and prices.
In February 2007 the Düsseldorf Regional Court decided that the Belgian corporations’ claim was acceptable. The defendants appealed this decision claiming that the Düsseldorf Regional Court had no jurisdiction in the matter and that the claim was not sufficiently specified.
On 14 May 2008 the Higher Regional Court in Düsseldorf handed down its decision stating that the Düsseldorf Regional Court had jurisdiction in this matter in accordance with Sec. 32 German Code of Civil Procedure (“ZPO”), whereby in relation to claims for unlawful actions that court is responsible where the unlawful action took place. The law states that it is sufficient if the claimant has evidence that the unlawful action also took place within the jurisdiction in question.
The claim was also held to be specified in accordance with Sec. 253 para. 2 No. 2 ZPO. The court held that even though the claimant initially asked for the unspecified indemnity costs from all six defendants, such a claim is admissible according to the ZPO if the specified amount is dependent on the assessment of the court. This was considered to be the case in the present proceedings. The necessary certainty would result when the claimant shows the parameters for calculation and the minimum damage, as the Belgian corporation has done. The claimant established a basis upon which the amount payable by each cement company is calculable.
Another question raised was the locus standi of the claimant. The court ruled that the claimant is also permitted to lead these proceedings. The claims against the members of the cartel had been transferred to CDC and the Belgium corporation is making a claim in its own right and in its own name.
The decision concluded that an appeal to the German Federal Court is not allowed. However, the defendants can make a claim for non-admission (Sec. 544 ZPO). The Regional Court will now continue the proceedings and make its final judgment.
This decision demonstrates that private enforcement by corporations is receiving more awareness. However, as class actions are still forbidden in Germany, CDC’s approach shows a possible way to initiate successful “class actions” in Germany. However, the consequences of this judgment shouldn’t be overestimated as it will probably take years until the German Federal Court of Justice makes a final decision on the general acceptability and reasoning of the above model in relation to the possibility of private enforcement of class actions. But even if the above model is not implemented in Germany the Higher Regional Court’s judgment has shown that indemnity class actions are no longer mere theory in Germany and there could well be other models for the successful prosecution of cartels and the enforcement of indemnity payments. This judgment clearly underlines the importance of cartel audits and cartel compliance.