House of Lords - European Union

Select Committee on European Union Written Evidence

Memorandum by the International Chamber of Commerce

This paper responds to the UK House of Lords call for evidence in the context of its inquiry into the need for an EU Competition Court.

This paper uses the following terminology:

— "Competition Court" means a new judicial panel established under Article 225a of the EC Treaty (which enables new tribunals to be established as courts of first instance for specific areas). The European Union Civil Service Tribunal, which came into existence last year, is an example of such a judicial panel. Like the EU Civil Service Tribunal, the Competition Court would be distinct from the CFI, although its decisions could be appealed to the CFI and, in exceptional cases, to the ECJ. This is explained more fully in section 3 below.

1. CURRENT POSITION

1.1 Appeals before the CFI take on average 32 months. Even the expedited procedure takes in excess of seven months. Neither is acceptable in merger cases. [54]The three issues which affect the duration of cases are the official working language of the CFI, caseload and judicial expertise.

1.2 Official working language of the CFI: Translation of judgments into the official languages of the EU is obviously necessary and does not affect the duration of cases. However, the requirement to translate documents used during the judicial procedure into French (as the official working language of the CFI) is time-consuming. Political issues are thought to prevent removal of this requirement. Parties to the case could provide translations of submissions/other materials up-front in an effort to speed up the process—but this would impose significant additional costs on business.

1.3 Caseload: It is not possible to say with certainty whether the caseload of the CFI will reduce or increase in coming years. On the one hand, civil service disputes have been moved to a judicial panel (the EU Civil Service Tribunal) and there is also a plan to transfer patent cases to a judicial panel, reducing the CFI's case load. On the other hand, the European courts may, in future, be given jurisdiction over police and criminal matters and be required to hear preliminary references from a broader range of sources in respect of asylum, immigration, civil and family justice matters.

1.4 Expertise: Judges who hear merger cases at the CFI are not specialised in competition law principles and may therefore take longer to reach an outcome. However, cross-fertilisation between knowledge in deciding general EU cases (including procedural issues) and competition cases is a real advantage. For example, experience of due process is a major benefit in the context of a merger appeal.

1.5 On a related point, it should also be noted that a lack of cooperation by the parties during the appeal process may have an adverse effect on timing. For example, the use of the expedited procedure may be frustrated when the volume of the submissions made by the parties exceeds the recommended norms for the expedited procedure. [55]A rigorous application of the rules may therefore ensure that more positive results flow from use of the expedited procedure.

1.6 Finally, the Annexes to this paper (not printed with this Report) provide a snapshot of the current position and how this may develop. In particular, Annexes 1 and 2 (not printed) contrast the EU position (as regards merger appeals) with the corresponding UK regime while Annex 3 (not printed) contains an estimate of how many merger appeals are likely to be brought per annum (by extrapolating from previous cases), whether to a Competition Court or to a Chamber. It will be seen that the maximum likely workload comprises 21-23 appeals per annum and an absolute amount of new appeals lies at around two per annum.

2. SPECIALIST COMPETITION CHAMBER WITHIN THE CFI

2.1 A specialist competition Chamber within the CFI could reduce the duration of cases as judges who sit regularly in the Chamber would develop a level of expertise which should enable them to handle merger/competition cases more quickly. This would avoid the inconsistencies in the judgments delivered by an ordinary judicial body within CFI, which may be composed by judges having a different level of ability in dealing with competition law. The Chamber would also be shielded from any increase in the non-competition caseload of the CFI. In so far as judges were able to sit in the specialist Chamber as well as in other Chambers of the CFI, the Chamber would also benefit from cross-fertilisation between knowledge in deciding general EU and competition cases.

2.2 Limiting the matters that the Chamber handled to merger cases would reduce its workload and therefore help reduce the duration of merger cases. However, the synergies between competition (ie Article 81 and 82 cases) and merger cases and the fact that the judges who regularly sat in the Chamber would develop an in-depth expertise in competition principles argue in favour of towards having the Chamber handle all merger/competition cases.

2.3 Arguably, there is merit in bringing preliminary rulings (involving competition issues) within the jurisdiction of the Specialist Chamber. However, such a development would not be without complication—since preliminary rulings often involve a number of closely-related legal issues (of which competition law may be only one). In addition, preliminary rulings are, generally speaking, unlikely to be a cause of delay to merger appeals (as the most time-sensitive of cases). These points, in our view, militate against the inclusion of preliminary rulings within the jurisdiction of a Specialist Chamber.

2.4 If the Chamber were dedicated to merger and competition cases (ie Article 81 and 82 cases), its caseload should be tailored so that urgent cases (typically merger appeals) are dealt with on a fast-track basis. The inclusion of Article 81 and 82 cases—which generally involve less urgency than merger cases—should therefore not prejudice the rapid review of merger cases. Given that the Chamber would be part of the existing CFI structure, it may be necessary to modify the existing Rules of Procedure to enable this type of active case-management.

2.5 The political issues that prevent the CFI translation issues being tackled wholesale (eg by giving the presiding judge the discretion to deal with cases in a working language other than the official working language of the CFI) remain with a specialist competition Chamber. As mentioned above, the parties could provide up-front translations of submissions etc This would speed up the judicial element of the process but would impose significant additional costs on business.

3. COMPETITION COURT (A NEW AND DISTINCT JUDICIAL PANEL)

3.1 A judicial panel for competition law cases (a "Competition Court") could be created using the mechanism already contained in Article 225a EC. (This mechanism was used to establish the Civil Service Tribunal for civil service cases.)

3.2 As regards the appointment of judges to the new Competition Court, Article 225a requires them to be appointed by the Council, acting unanimously, and to be "persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office". The nationality of judges should not be determinative; professional expertise is the key factor. However, as in the case of the EU Civil Service Tribunal, steps should be taken to ensure that a balanced composition is achieved with judges being drawn "on as broad a geographical basis as possible from among nationals of Member States and with respect to the national legal systems represented".[56] There does not need to be a requirement for judges to be experts in matters of economics or accountancy. Rather, expert evidence on these areas can be adduced.

3.3 Limiting the matters that the Competition Court handled to merger cases would reduce its workload and therefore help reduce the duration of merger cases. However, as is the case for the Chamber, the synergies between competition (ie Article 81 and 82 cases) and merger cases argue in favour of towards having the Competition Court handle all merger/competition cases.

3.4 As is the case for the Chamber, there are arguments in favour of the transfer of preliminary rulings to the Competition Court. However, for the reasons outlined above in paragraph 2.3, it is our view that the Competition Court should not hear preliminary rulings.

3.5 If the Chamber were dedicated to merger/competition cases, its caseload should be tailored so that urgent cases (typically merger appeals) are dealt with on a fast-track basis. The inclusion of Article 81 and 82 cases—which generally involve less urgency than merger cases—should therefore not prejudice the rapid review of merger cases. It would be possible to produce tailor-made rules of procedure to enable the Competition Court to engage in active case-management. [57]

3.6 Tailor-made procedural rules for the Competition Court could take a more pragmatic approach to the issues which arise in connection with the working language of the CFI. [58]While translation of the Competition Court's judgment into all official EU languages at the end of the appeal process is necessary, steps could be taken to streamline the linguistic arrangements during the process. One possibility would be to model the arrangements on those adopted by the International Criminal Court. This court has six official languages and two working languages. However, there is scope for the President of the court to authorise the use of an official language as the working language of the court when (i) that language is understood and spoken by the majority of those involved in a case before the Court and any of the participants in the proceedings so requests; or (ii) the Prosecutor and the defence request it. [59]Furthermore, the Presidency may authorise the use of an official language of the Court as a working language if it considers that it would facilitate the efficiency of the proceedings.

3.7 Specific rules for the Competition Court could also enable it to hear disputes on procedural points that arise in the context of the European Commission's initial investigation. Such disputes are currently dealt with by the Hearing Officer. However, specific rules enabling these disputes to be escalated to the Competition Court would enable "real time" judicial review of procedural issues. This would also be likely to reduce the length of the appeals on substance that ultimately end up in the Competition Court in their entirety (since the procedural aspects would already have been considered by the Competition Court).

3.8 Judges who regularly sat in the Competition Court would develop an in-depth level of expertise which should enable them to handle merger/competition cases more quickly. This would, however, be at the expense of cross-fertilisation between knowledge in deciding general EU and competition cases.

3.9 As is the case for the Chamber, any increase in the rest of the CFI's caseload would not impact on the merger/competition cases handled by the Competition Court.

3.10 Care would need to be taken to avoid adding an extra layer of appeal. While a judgment of the Competition Court (as a decision of a judicial panel) could be appealed to the CFI and then also to the ECJ, there are two important points to note:

3.11 It is likely to take a number of years to establish a Competition Court in concept and in detail—for example the need for the Council to appoint judges unanimously. For example, although the EU Civil Service Tribunal was proposed in a Declaration attached to the Treaty of Nice which came into force on 1 February 2003, it was only constituted into law in December 2005. It is also likely to be more expensive than establishing a specialist Chamber.

4. ICC VIEW

4.1 Given that it is likely to take some time to set up a Competition Court and that the Competition Court would be at the expense of cross-fertilisation between general EU cases (including procedural issues) and competition cases, ICC considers that a sensible interim solution to the issue of the length of CFI merger cases would be to establish a specialist Chamber within the CFI for competition (ie Article 81 and 82 cases) and merger cases.

4.2 Competition cases ought to be within the remit of the Chamber given the synergies between Article 81 and 82 cases and merger cases and the fact that the judges who regularly sat in the Chamber would develop an in-depth expertise in the competition principles which are applicable to both. However, preliminary rulings should not be heard by the Chamber, primarily because these matters often involve non-competition issues.

4.3 The option of a Competition Court capable of handling both merger and Article 81/82 cases should be further explored, given its ability to tackle the language issue which is recognised to be the major source of delay in these cases.

3 November 2006

http://eurlex.europa.eu/LexUriServ/site/en/oj/2005/c_205/c_20520050820en00150016.pdf

53 See the criteria published by the CFI in the Official Journal on the criteria for assigning cases to the CFI's chambers Back

54 Views on this point have been sought and received from those businesses which are represented on the UK ICC Competition Committee. Back

55 Case T-464/04 Impala v Commission. Back

56 Article 3 of the Annex to the Statute of the Court of Justice. Back

57 Any rules established by judicial panels must be approved by the Council, acting by a qualified majority. Back

58 Although the EU Civil Service Court adopted the same linguistic arrangements as the CFI, this does not appear to be obligatory. Back

59 Rule 41 of the Rules of Procedure and Evidence. Back

60 Under Article 225a EC, the decisions of judicial panels may be appealed on points of law only, or also on matters of fact depending on what is specified in the Council decision bringing the panel into existence. In the case of the EU Civil Service Tribunal, appeals to the CFI were limited by the Council decision to matters of law. Back

61 The Court of Justice then has one month in which to decide whether or not to review the CFI's judgment (Article 62 of the Statute of the Court of Justice). Back