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European Court Clarifies ‘Rules Of The Road’ (Or Rails) In Litigating Abuse Of Dominance Claims In Regulated Sectors – Arbitration & Dispute Resolution

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In its ruling of 27 October in DB Station & Service
AG v. ODEG Ostdeutsche Eisenbahn GmbH 
the European Court
of Justice has clarified the appropriate ‘choreography’ to
be applied by national courts and economic regulators when both
have competence in relation to competition law claims.

Background

The request to the ECJ for a preliminary ruling in this case
concerned the interpretation of Article 102 TFEU and provisions of
Directive 2001/14/EC (the Directive) on the
allocation of railway infrastructure capacity and the levying of
charges for the use of railway infrastructure.

The Directive provides that such charges must, amongst other
things, be non-discriminatory and also that the levying of charges
is to be subject to review by an independent regulatory body
established in each Member State. Article 30(2) of the Directive
provides that an applicant for use of the relevant infrastructure
should have a right to appeal to the regulatory body if it believes
that it has been unfairly treated, discriminated against or is in
any other way aggrieved, and in particular against decisions
adopted by the infrastructure manager concerning, among other
things, access charges.

The reference arose in proceedings between DB Station &
Service AG (DBSS) (a subsidiary of Deutsche Bahn
AG) and ODEG Ostdeutsche Eisenbahn GmbH (ODEG)
concerning the amount of the charges to be paid by ODEG for the use
of the stations operated by DBSS.

The conditions of use for DBSS stations are laid down in
framework contracts which conclude with railway undertakings such
as ODEG. The charges payable under such contracts are determined on
the basis of a scale established by DBSS. The dispute in this case
related to the charges levied under the scale introduced in 2005,
known as SPS 05.

In 2009 the Federal Network Agency (FNA) (the
German agency tasked with reviewing railway infrastructure charges
under the Directive and hearing Article 30(2) appeals) declared SPS
05 invalid but maintained its effects until 1 May 2010 so that a
new scale of charges could be applied from that date. The FNA also
invited complainants to bring proceedings before the civil courts
in order to obtain reimbursement of the additional amounts already
paid in the 2006-10 period.

ODEG raised an action in the German civil courts for
reimbursement of the 2006-10 charges it had paid under SPS 05 in so
far as they exceeded the (lower) charges payable under the previous
DBSS charges scale on the basis that the imposition of those
charges amounted, among other things, to an abuse by DBSS of its
dominant position contrary to Article 102 TFEU.

In the meantime, following a request for a preliminary ruling
and in the context of a similar dispute before the civil courts,
the ECJ ruled in 2017, in the judgment in CTL Logistics, that a review of the
fairness of railway infrastructure charges by the ordinary courts
cannot be carried out independently of the monitoring carried out
by the competent regulatory body, in so far as monitoring of the
calculation methods and the amount of the charges under the
Directive lie within the exclusive competences of the regulatory
body.

Following that judgment, claims for reimbursement for the
2006-10 charges were again lodged with the FNA, but in a decision
of 2019, it rejected those claims as inadmissible (a decision still
under appeal at the time of the present ECJ reference) on the basis
that national law did not permit it to rule on those claims.

In 2020, the civil court dealing with the ODEG claim for
reimbursement referred further questions to the ECJ, asking in
essence whether, and if so, in what circumstances, the civil courts
may review the amount of access charges (such as those levied by
DBSS in 2006-10 period) by reference to Article 102 TFEU. As the
Advocate General put it in her opinion, the case concerned, the clash
between, on the one hand, the CTL Logistics ruling
regarding the exclusive competence of the regulatory body and, on
the other hand, the doctrine of the direct effect of Article 102
TFEU and the role of the courts in enforcing that Article.

Judgment

The ECJ noted that the remedy provided for in Article 30(2) of
the Directive makes it possible to ensure compliance with Article
102 TFEU prohibiting the abuse of a dominant position. According to
the ECJ, it follows from the very objectives of the Directive
(which are to ensure non-discriminatory access to infrastructure
under conditions of fair competition and from the relevant duties
imposed on infrastructure managers), that users should be able to
allege, before the regulatory body, an infringement of Article 102
TFEU.

Consequently, the ECJ found that, when exercising its Article
30(2) jurisdiction, the competent national regulatory body cannot
validly deny its competence to deal with an alleged infringement of
Article 102 TFEU (notwithstanding any inconsistent provision of
national law, which does not allow it to rule on the legality of
infrastructure charges already levied).

At the same time, the ECJ held that, in order to preserve the
full effectiveness of Article 102 TFEU (and, in particular, to
ensure that users are effectively protected against the harmful
consequences of an infringement of competition law), the exclusive
jurisdiction conferred on the regulatory body by Article 30(2)
cannot prevent the competent national courts from hearing claims
for reimbursement of an alleged overpayment of infrastructure
charges. Based on Article 102 TFEU.

Having said that, the ECJ held that this in no way precludes
(having regard to the requirements of coherent management of the
rail network), the preservation of the exclusive competence of the
regulatory body to hear all aspects of disputes brought before it
pursuant to Article 30(2).

Thus, where a user seeks to obtain, on the basis of Article 102
TFEU, reimbursement of an alleged overpayment of infrastructure
charges, it must, before bringing any action before the competent
national courts, refer the question of their legality to the
national regulatory body.

For their part, national courts dealing with claims for
reimbursement are under an obligation to cooperate in good faith
with the national regulatory bodies. It follows that, even if those
courts are not bound by the decisions of those bodies, they are
required to take them into consideration (without being required to
await the outcome of judicial review of such decisions), in
particular as regards the application of the relevant
sector-specific legislation.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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