Emerald Supplies Ltd & Ors v British Airways Plc

Before 1 May 2004, a national court could not determine whether an air-transport agreement involving routes between the European Union and third countries infringed Article 85(1) EEC, now Article 101(1) TFEU, unless implementing measures were in force or a prior decision had been made under the transitional regime. The doctrine of direct effect did not remove that limitation because Article 85(3) could still require an exemption assessment. Regulation 1/2003 made the relevant jurisdictional change for the future, but its substantive provisions could not be applied retrospectively to confer jurisdiction over earlier conduct. The same conclusion applied to EEA-to-third-country routes before 19 May 2005.

Shippers claimed damages from British Airways and other airlines for alleged cartel surcharges on air-freight services. The claims covered intra-European routes and routes between the EU or EEA and third countries. The Airlines argued that national courts lacked jurisdiction to determine Article 101 infringements concerning EU-to-third-country flights before 1 May 2004, and EEA-to-third-country flights before 19 May 2005, because those sectors were not then covered by the applicable implementing regime.

The claimants argued that the High Court had jurisdiction under the transitional Treaty provisions, that Article 101 had direct effect, or that Regulation 1/2003 applied retrospectively. The court determined those preliminary issues and declined a reference under Article 267 TFEU.

1. The preliminary issues were answered against the Emerald, Allston, La Gaitana and Kodak Claimants. They had no reasonable grounds, and no real prospect of succeeding, on claims based on Article 101 TFEU or Article 53 EEA concerning the specified pre-implementation periods.

2. The High Court was not one of the United Kingdom authorities empowered under Article 88 EEC to rule on the admissibility of agreements. The UK 1996 Regulations and UK 2001 Regulations exhaustively identified the institutions exercising that function, and did not confer it on national courts with general competition jurisdiction.

3. The principles in Bosch v van Rijn, Asjes and Ahmed Saeed remained applicable. Direct effect did not empower a national court, before implementing measures under Article 87 EEC or a prior decision under Article 88 or 89 EEC, to determine that an agreement in an excluded air-transport sector infringed Article 85(1). The possibility that Article 85(3) might apply remained decisive, even for a hardcore price-fixing cartel.

4. Regulation 1/2003 contained both procedural and substantive provisions. Its provisions changing the extent to which agreements could be condemned and damages claimed were substantive. They could not be applied retrospectively to confer jurisdiction over conduct which the national court could not have condemned before 1 May 2004. The same reasoning applied to EEA-to-third-country transport before 19 May 2005.

5. The Commission’s later air-freight decision did not alter the conclusion. Its dispositif treated the relevant periods separately and did not condemn the pre-1 May 2004 or pre-19 May 2005 conduct. The Damages Directive did not expand the categories of conduct giving rise to damages.

6. No reference under Article 267 TFEU was appropriate. The European Court had already addressed the relationship between the transitional provisions, national authorities and national courts, and no material development suggested a different answer.