The EU General Court awards damages to a company for the excessive length of time taken to deal with its appeal

Judgment
T-673/15
07.06.2017
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityGuardian Europe S.à r.l.General CourtThird Chamber, Extended CompositionE. Bieliūnas/Non-contractual liability
KeywordsNon-contractual liability — Representation of the European Union — Barring of actions — Nullification of the legal effects of a decision which has become final — Precision of the application — Admissibility — Article 47 of the Charter of Fundamental Rights — Obligation to adjudicate within a reasonable time — Equal treatment — Material damage — Losses sustained — Loss of profit — Non-material damage — Causal link
Significant pointsIn its judgement, the GC ordered the EU, represented by the institution of the Court of Justice, to pay compensation to Guardian Europe Sàrl for the material damage sustained by that company because of the infringement by the EU General Court of its obligation to adjudicate within a reasonable time.

In the case at issue, Guardian Europe Sàrl, a Luxemburgish company, was fined € 148 million by the EC for its participation in a cartel in 2007. The company brought an action for annulment before the GC against the Commission’s decision. However, the ruling was only rendered in 2012 (Case T-82/08), more than four years after Guardian Europe Sàrl introduced its appeal. The company decided to bring an action before the CJ for liability under Article 340 TFEU on the part of the EU in order to seek compensation for the damages which it allegedly sustained. It pleaded, first, a sufficiently serious infringement of the principle of equal treatment in the Commission’s decision and in the 2012 GC’s judgment and secondly that there was an infringement of the obligation to adjudicate within a reasonable time as regards the 2012 judgement. The CJ rendered its judgment in 2014 finding the table and sent EU the case back to the GC/

The GC recalled that, according to settled case law, Article 340(2), TFEU required the satisfaction of three cumulative conditions in order to create a right of compensation. These conditions are the unlawfulness of the conduct of which the institutions are accused, the fact of damages incurred and the existence of a causal link between that conduct and the damages complained of.

As regards the GC’s judgment, the applicant alleged that the length of the proceedings at first instance infringed the obligation to adjudicate within a reasonable time and thus that the infringement caused Guardian Europe damage, which had to be compensated.

The GC found that the procedure Case T-82/08 infringed Article 47(2) of the Charter of Fundamental Rights of the European Union by holding that the length of the proceedings, which took four years and seven months, could not be justified. Notably, the judges pointed out that three years and five months (forty-one months) elapsed between the end of the written part and the opening of the oral part of the procedure (the hearing). According to case law, the GC recalled that a period of 15 months between the end of the written part of the procedure and the opening of the oral part of the procedure is, in principle, an appropriate length of time for cases dealing with the application of competition law. In the present case, the GC found that, during the period of forty-one months, a period of 26 months of inactivity was thereby unjustified. Consequently, the GC judged that Case T-82/08 infringed Article 47(2) of the Charter by exceeding the reasonable time for adjudicating in that case and that constituted a sufficiently serious breach of a rule of EU law intended to confer rights on individuals.

On the alleged damages and the alleged causal link, the GC only accepted to acknowledge the existing link between the infringement of the obligation to adjudicate within a reasonable time in Case T 82/08 and the occurrence of the damages sustained by the applicant as a result of its having paid bank guarantee costs during the period in which the reasonable time for adjudication was exceeded. The damages were estimated at EUR 654 523.43, which was adjusted for compensatory interest. However, the GC did not accept the non-material damages invoked by the applicant since the latter did not prove that the infringement of the obligation to adjudicate within a reasonable time in Case T 82/08 was such as to damage its reputation.
NoteworthyThe present case follows the ruling in Gascogne (T-577/14) and Kendrion (T-479/14) where the GC also ordered the EU to pay compensation because of the excessive length of the proceedings before the ECJ. Although the sum of damages accorded is significant and shows the material impact that long judicial proceedings can have on undertakings, the amount obviously pales in comparison to the fine of € 148 million imposed by the European Commission (0.4%). The comparison offers a reminder of how high fines for competition law infringements can be, their calculation being based on the companies’ turnover on the market concerned. Nonetheless, the award of damages demonstrates that the General Court must process cases within a reasonable time.