Memorandum by Peter Roth QC, Monckton
Chambers
INTRODUCTION
1. The CBI proposal for the establishment
of a distinct Competition Court has been provoked by the length
of time taken by the Court of First Instance ("CFI")
to decide merger cases: see the CBI Brief dated 15 June 2006.
There is no doubt that the duration of such cases is profoundly
unsatisfactory, even under the "fast track procedure"
introduced by the CFI in 2001. The time taken to decide seven
fast track proceedings is set out below:
| Case Name | Date of Application
| Date of Judgment | Duration: months
|
| T-310/01 Schneider Electric | 13.12.01
| 22.10.02 | 10 |
| T-5/02Tetra Laval | 15.1.02
| 25.10.02 | 9 |
| T-114/02 and T-119/02 | |
| |
| BaByliss and / Royal Philips |
15.4.02 /17.4.02 | 3.4.03 | 12
|
| T-346 and 347/02 Cableuropa and Or |
22.11.02 | 30.9.03 | 10
|
| T-87/05 EDP—Energias de Portugal
| 25.2.05 | 21.9.05 | 7
|
| T-464/04 IMPALA | 3.12.04
| 13.7.06 | 19 |
| T-417/05 Endesa | 29.11.05
| 14.7.06 | 7½ |
2. In no case was the duration less than 6 months, the
period stated by the CBI to be the maximum duration for effective
judicial review (ie, before the lapse of time in effect determines
the outcome). And it should be noted that the Cableuropa
and Endesa cases did not involve review of a full Commission
decision to clear or block a merger, but in the former case of
a decision to refer to the national authorities under Article
9 of the EC Merger Regulation ("ECMR") and in the latter
case of a decision that the merger lacked a "Community dimension"
and so fell outside the scope of the ECMR: the scope of inquiry
in those appeals was therefore more limited. However, the recent
Impala case (concerning the Sony/BMG merger) should not
be regarded as typical: it was the conduct of the applicant that
contributed significantly to the extended duration of the proceedings.
[82]
3. It should be recalled that this nonetheless represents
a very substantial improvement on the duration of merger appeals
under the normal (ie, non-expedited) procedure. Case T-342/99
Airtours took 18 months to judgment in 2002; the more recent
appeals against the blocking of the GE/Honeywell merger
(Cases T-209 and 210/01) took no less than 51 months to judgment
in December 2005!
4. Against this background, something needs to be done.
The CBI Brief appears to suggest that delay is significantly caused
by the need for translation. Although undoubtedly a contributing
factor, I doubt it is the main factor. I think the real problem
is the case-load of the CFI. The CFI has c 500 new cases lodged
each year, and at the end of 2005 had 1,033 cases pending. [83]While
the number of staff cases handled by the CFI will greatly decline
with the creation of the Civil Service Tribunal, that is made
up by the substantial increase in intellectual property ("IP")
cases—up from 40-50 new cases a year in 2000-01 to some
190-200 new cases a year in 2004-05. The assistance to the CFI
derived from the arrival of 10 additional judges in 2005 is likely
to be counter-balanced over the next few years by the increased
case-load deriving from the corresponding 10 new Member States.
A NEW COMPETITION
COURT?
5. The advantage of a specialist court concentrated on
hearing merger appeals is that it would undoubtedly be quicker:
it would be free from the many other demands on the CFI and could
develop its own tailored procedures. However, as against that,
I consider that there are serious disadvantages:
(a) If it were purely dealing with mergers, I doubt there
is a need for full-time judges, even allowing for the fact that
quicker resolution would undoubtedly lead to more such appeals.
[84]However, to have
only part-time judges seems wholly unsatisfactory for what can
be very high profile, politically charged cases: eg, GE/Honeywell;
Endesa. The position is not remotely comparable to staff
cases of the kind being heard by the new Civil Service Tribunal.
(b) If, on the other hand, the specialist court dealt
with all competition appeals, I think it would rapidly encounter
the same problems as the CFI: it is the mulit-party appeals against
the Commission's cartel decisions that are the heaviest, most
document-intensive cases before the CFI today.
(c) As an Art 225a judicial panel, there would be the
prospect of appeal from its decision to the CFI; and although
such an appeal may be brought only with permission on a point
of fact, it is often not difficult in practice to identify a point
of law which would found an appeal as of right. That creates the
prospect of yet further delay. This factor is of particular relevance
when a third party competitor has standing to bring an appeal
in the EU jurisdiction against a merger clearance (by contrast
with the position in the US), and may pursue an appeal specifically
to create such delay as may effectively frustrate the transaction.
With the amounts at stake, merger appeals are often "money
no object" cases. Creation of a new court therefore introduces
an additional level of potential appeal. [85]
(d) The establishment of a new institution, with the sophistication
of judicial expertise and administrative assistance that these
cases require, would undoubtedly be expensive.
6. Furthermore, if there is to be a new Art 225a tribunal
to relieve the CFI's case-load, it is not at all clear to me that
this should be for mergers, or still less, for competition cases.
The most numerous category of cases now before the CFI is IP cases:
see below. I do not practise in that field, but the Sub-Committee
may wish to inquire of those giving evidence with wider experience
of the CFI whether, for example, trade mark appeals may not be
a more suitable candidate for devolution to a specialist court
if such a court were to be created.
| Subject matter | % of total claims[86]
|
| Intellectual property | 33.7
|
| Competition | 13.7 |
| Law governing the institutions | 9.6
|
| State aid | 8.6 |
REFORM OF
THE CFI
7. The Sub-Committee significantly raise this as an alternative.
There are two changes that would in my view go a long way towards
resolving the problem:
(a) a reform of procedures enabling tighter case management.
There is no reason why, with appropriate sanctions, the kind of
prolongation of the proceedings displayed in Impala should
be permitted.
(b) the appointment of additional judges. With the increase
of the EU to 27 Member States on 1 January 2007, there could be
the potential for the appointment of nine additional judges, with
nomination rotating each six years between the Member States.
I note that is the number of judges suggested by the CBI for its
proposed new Competition Court.
8. The reform referred to in 9(b) above, in particular,
would do more than anything else to address the problem. While
I believe this has always been resisted in the past by the Member
States, if the alternative is the creation of a separate court,
it seems a more economical and satisfactory solution. And it would
have the inestimable benefit that it would address delays in CFI
cases more generally, not just in merger appeals.
9. I doubt that changing the CFI's working language,
although much canvassed in particular by Anglophones, would really
make such a significant difference. Nonetheless, it may be possible
to seek a rule that, where the Judges constituting the Chamber
hearing a fast track case so decide, the documents need not be
translated out of the language of the case.
OTHER POINTS
10. I address briefly two other points on which the Sub-Committee
seeks comments.
11. Composition of Competition Court: I do not
favour "national competition judges" being appointed
ad hoc. For a start, while some Member States have specialist
competition judges (eg, the UK and Sweden), others do not. In
cases raising questions of national interest (as merger cases
can), national judges owe their allegiance to, and form part of,
the national system. Judges of the Community courts form part
of a distinct judiciary with its own institutional loyalty. Avoidance
of any national identification of judges on the case has been
one of the notable achievements of the Community Courts and I
think it is vital that this is preserved. I see no reason to depart
from the framework for appointment that presently applies to the
CFI, with the addition of a preference (but not a requirement)
for experience of competition law. I am not aware of criticism
of the general quality of the CFI's judgments in competition cases,
as opposed to the time that those cases take.
12. Although economists can be of assistance as additional
judges (as in the CAT), I do not see the need for such appointment.
The Community Courts have power if necessary to appoint their
own expert, as the ECJ did in Woodpulp II. [87]
13. Future role of the CFI: The question of whether
the CFI rather than the ECJ should hear references of competition
cases under Art 234 is difficult. There is something artificial
and discordant in the present structure, whereby appeals from
Commission decisions are primarily determined by the CFI whereas
references from national courts are determined by the ECJ, when
these different procedural routes are common strands in the development
of competition law jurisprudence. Post-modernisation (which increased
the jurisdiction of national courts to determine issues of EC
competition law), there are likely to be more such references.
And the time taken for the ECJ to determine references under Art
234 is itself a separate cause for concern. On balance, if either
a specialist, lower lever Competition Court were created, or alternatively
the judicial resources of the CFI were expanded as suggested above,
I would favour those references going to the CFI. It should be
noted that Art 225(3) EC, as amended by the Nice Treaty, provides:
"Where the [CFI] considers that the case requires a decision
of principle likely to affect the unity or consistency of Community
law, it may refer the case to the [ECJ] for a ruling"
14. This creates a mechanism whereby particularly significant
Art 234 references could still be dealt with by the ECJ. It may
be that Courage v Crehan would have been such a case. And
I think it is important not to underestimate the role that some
Advocate General opinions have played in the development and clarification
of competition law, eg the Opinion of Jacobs AG on the issue of
"essential facilities" in Bronner. [88]
4 November 2006
82
See the judgment at paragraphs 546-553. In consequence, although
successful in the proceedings the applicant had to bear of 25
per cent of its costs. Back
83
Court of Justice, Annual Report, 2005. The figures referred to
in this document are all derived from that source. Back
84
It is impossible to determine how many decisions have not been
appealed only because the time involved renders an appeal otiose. Back
85
It is notable that of the "fast track" cases, both Tetra
Laval and now Impala were appealed further to the ECJ. Back
86
Excluding staff cases and "special forms of procedure"
cases. Back
87
Cases C-114/85, etc Ahlstom Oy v Commission [1993] ECR
I-1307. Back
88
Case C-7/97 Bronner v Mediaprint [1998] ECR I-7791. Back
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