Freshfields Bruckhaus Deringer has represented ABB, a global leader in power and automation technologies, before the Court of Appeals of Arnhem-Leeuwarden (the Netherlands) in a successful appeal concerning the ‘passing-on defence’ in follow-on damage claim proceedings.

In its judgment of 2nd September 2014, the Court of Appeals of Arnhem-Leeuwarden (the Netherlands) ruled that it clearly follows from EU case law, EU declared policy and Dutch civil law that claimants in cartel damages proceedings should not be overcompensated.

Courts must take into account and allow defendants to submit that any possible overcharge resulting from a competition law infringement has been (fully or partially) ‘passed-on’ to the next level in the distribution chain. The indirect purchaser at that level must also be allowed to claim damages.

Consequently, not only the moment of actual supply but also later circumstances leading to such ‘passing-on’ should be taken into account when quantifying damages. This avoids defendants having to pay ‘twice’ (first to direct purchasers and subsequently to ‘indirect purchasers’). Whether indirect purchasers actually file claims for damages is irrelevant in this context. This is the first time the application of this defence is accepted by a Dutch court.

Freshfields partners Hub. Harmeling and Onno Brouwer represented ABB.

Onno Brouwer, commented, ‘This judgment illustrates that the core principles of civil compensation and EU case law and policy to which the judgment extensively refers are not in conflict but aligned. It provides important guidance for claimants, defendants and other courts.’
Hub. Harmeling, added: ‘The passing-on defence fits straight into the Dutch law primary legal concept of assessing damages. Where the German Bundesgerichthof applies this defence as if it were a benefit to be deducted from the damages incurred, this decision confirms that under Dutch law it is an integral part of the assessment of damages itself; including the (actual) passing on thereof to purchasers in the future.’