The question whether arbitration agreements cover cartel damages claims is highly disputed. Recently, the Regional Court Dortmund took an arbitration-friendly approach by dismissing an action as inadmissible and referring the dispute to arbitration.[1]
The dispute arose between a joint venture of construction companies (“Claimant”) and a rail manufacturer (“Respondent”). In 2003, Claimant and Respondent concluded two contracts under which Respondent was obliged to deliver rails as well as to perform certain construction duties. Additionally, the parties concluded two arbitration clauses. While the first clause stated that “all disputes arising out of the contract […] shall be dealt with in arbitration”, the second clause provided that “all disputes arising out of the contract, potential additional agreements as well as all disputes in connection with the contract […] shall be settled by arbitration”. Hence, the parties concluded an arbitration clause with a relatively narrow wording and another arbitration clause with a broad wording.
After the German Federal Cartel Office (Bundeskartellamt) found that Respondent was part of an illegal “rail cartel”, Claimant filed a cartel damages claim action against Respondent before the Regional Court Dortmund. Claimant argued that the scope of the arbitration agreements did not cover cartel damages claims and referred to a decision of the ECJ regarding choice-of-court agreements rendered in 2015.[2] According to the ECJ, choice-of-court agreements only applied to cartel damages claims if it was foreseeable for the aggrieved party that such claims could fall within the scope of the choice-of-court agreement at the time the party agreed to the clause. The ECJ interpreted the “foreseeability” requirement restrictively: The ECJ ruled that if the dispute does not directly arise out of the contract it is not foreseeable that such dispute is covered by the choice-of-court agreement unless the parties – at the time of the conclusion of the agreement – consciously decided that the choice-of-court agreement shall apply also to such disputes. At the time of the conclusion of the contract, the aggrieved party will usually not know about the other party’s participation in an illegal cartel. Therefore, the choice-of-court agreement would not cover cartel damages.
The Regional Court Dortmund did not follow this reasoning for arbitration agreements.
First, the Court noted that cartel damages claims are arbitrable under German law. Whether arbitration clauses cover cartel damages claims is a question of interpretation. The Court further noted that it was settled case law to interpret arbitration agreements in an arbitration-friendly manner. This holds true for broad-worded clauses – i.e. clauses referring to disputes “in connection with the contract” as well as for a narrow-worded clauses – i.e. clauses referring to disputes “arising out of the contract”. It is generally accepted that tort claims can fall within the scope of broad-worded arbitration clauses. Even the scope of narrow-worded clauses is not necessarily restricted to contractual claims; it is generally accepted that tort claims fall within the scope of narrow-worded clauses if they are based on a behavior of the opposing party amounting to a breach of contract. Since cartel damages claims are of tortious nature, the Court concluded that they could fall within the scope of arbitration clauses – even narrow-worded clauses. According to the Regional Court Dortmund, both arbitration clauses covered potential cartel damages claims of the claimant.
Second, the Court disagreed with several voices in literature and stated that the ECJ’s decision made in 2015 did not change this result. The Court was not convinced by the ECJ’s main argument that it will rarely be foreseeable for the aggrieved party that cartel damages claims could fall within the scope of jurisdictional clauses. Contractual breaches and intentional deception are also rarely foreseeable for the aggrieved party, but nonetheless fall within the scope of arbitration clauses. Furthermore, the Court emphasized that the ECJ’s decision dealt with choice-of-court clauses and not with arbitration clauses. While choice-of-court clauses have to be interpreted based on the European Union’s law, arbitration clauses are subject to national law.[3] Therefore, the ECJ’s reasoning should not be applied to arbitration clauses.
This conclusion is certainly not the last word; it remains to be seen whether the ECJ’s reasoning will prevail on appeal.
[1] Regional Court Dortmund, 13 September 2017.
[2] CDS v Evonik, 21 May 2015.
[3] Cf. Maximilian Sattler, Abandon Ship? West Tankers, Gazprom, and Anti-Suit Injunctions under “Brussels Ia”, ASA Bulletin 2/2016 pp. 342-354.
