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High Court refuses to refer to ECJ issue of a declaration of non-liability in ongoing Commission investigation

30/07/10

In unprecedented proceedings, not only in the High Court, but in any other EU Member State court, Floyd J has given an important ruling refusing to make a reference to the ECJ concerning the circumstances in which an English court can make a declaration of non-liability of a company for breach of Article 101 TFEU, where that company is, in fact, the subject of an ongoing European Commission investigation into the same potential breach.

The Commission is currently investigating Conex Banninger Limited ("Conex"), and, in particular, the circumstances in which it succeeded to the assets and liabilities of certain insolvent companies who were the addressees of the Commission's Article 101 infringement decision in respect of the Copper Fittings cartel.

Conex sought a reference to European Court of Justice on two questions. First, whether a national court could entertain a claim to a domestic declaratory remedy against the Commission where the declaration sought, which is to be based upon a preliminary ruling delivered by the Court of Justice under Article 267 TFEU, concerns the legality of an act that the Commission might take against the Claimant, purportedly in the exercise of its power as under the competition rules of the TFEU. Secondly, the circumstances in which the liability of an insolvent company could be imputed to the purchaser of assets in the insolvency.

Floyd J dismissed the application for a reference. The judge considered that there was no real prospect that the ECJ would rule in Conex's favour, and therefore no real prospect that a reference would obtain for Conex the protection sought. It was "unrealistic" to suppose the Court would embark on an investigation of preparatory acts of the Commission.

Permission to appeal has been granted.

The judgment is here.

Margaret Gray and Oliver Jones appeared on behalf of the European Commission.