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Request for damages in the event that the EU’s General Court fails to rule within a reasonable time.

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Request for damages in the event that the EU’s General Court fails to rule within a reasonable time.

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The European Court of Justice (ECJ), the EU’s highest court, has confirmed that companies should seek damages in the event that the EU’s General Court (GC) fails to adjudicate their appeals within a reasonable time. The ECJ said that a damages action, which will need to be brought before the GC itself, will provide an effective remedy in competition appeals, as opposed to a reduction in fine.

In a ruling handed down on 30 April 2014, the ECJ agreed with the appellant, engineering company FLSmidth, that the GC had not determined FLSmidth’s appeal within a reasonable period (infringing Article 47 of the Charter of Fundamental Rights).

In this instance, the proceedings before the GC had taken more than six years. In particular, the period between the end of the written procedure (February 2007) and the opening of the oral procedure (June 2011) lasted four years and four months. This, the ECJ said, could not be explained either by the complexity of the dispute, the conduct of the parties, or supervening procedural matters.

However, the ECJ refused FLSmidth’s request that the court reduce its cartel fine. The ECJ stated that it cannot allow an appellant to reopen the question of the amount of a fine on the sole ground of failure to adjudicate within time, when all other pleas against the GC’s findings have been dismissed.

The ECJ upheld the Groupe Gascogne ruling from November 2013 in which it recommended that parties should seek compensation instead of reduced fines where there has been excessive delay by the GC. The GC can then examine, on a case-by-case basis, whether the principle was indeed observed and whether the parties have actually suffered harm.

The ruling comes despite recent criticism by Advocate General Melchior Wathelet in the Guardian flat glass appeal. The AG argued that “it would be paradoxical if the only way to obtain redress for excessively lengthy legal proceedings were to bring another legal action, which would necessarily entail additional costs (both for the parties and for the company) and further delay”.

FLSmidth’s appeal relates to a European Commission decision of November 2005, fining 16 firms €290 million for a 20-year cartel in the European plastic industrial bags market. FLSmidth was held jointly and severally liable for €15.3 million and appealed the decision in 2006.

It is now for FLSmidth to bring a claim for damages under Article 340 of the TFEU before the GC, where issues of liability and quantification of loss will be considered in more detail.

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