CDC is widely known for its activities in relation to the German and European cement cartel cases. Damage actions were launched before the Regional Court of Düsseldorf, Germany in 2005 and before the Regional Court Mannheim, Germany in 2015. The actions concern antitrust damage claims purchased from companies affected by the German Cement Cartel.
Background and facts
In the spring of 2002, the German Federal Cartel Office (FCO) uncovered a hardcore cartel in the cement sector. Numerous cement producers had entered into illegal quota and cartel agreements since the beginning of the 1990s at the latest.
Readymix AG disclosed the cartel agreements to the FCO and applied for leniency under the German leniency programme. In April 2003, the FCO imposed a fine totalling €702 million on 12 companies and their representatives, €660 million thereof on the six largest German producers:
On 29 June 2009, the Higher Regional Court (Oberlandesgericht) of Düsseldorf confirmed the findings of competition law infringements by the cement producers (ref. no.: VI-2a Kart 2-6/08 OWi). However, it reduced the fines imposed by the FCO to just below €330 million because of incomplete data for setting the fines. The Court, with the assistance of a renowned expert, established that the activities of the cartel had resulted in illegal profits.
On 26 February 2013 the Federal Court of Justice (Bundesgerichtshof) ultimately confirmed the findings of the Higher Regional Court and rebutted the further appeals brought by some of the cartel members (Case KRB 20/12 Grauzementkartell).
The courts concluded that the cartel arrangements covered the whole area of Germany. These arrangements had been triggered by a meeting of the cement producers represented in the Presidium of the Federal Association of the German Cement Industry (BDI Bundesverband der Deutschen Zementindustrie) in March 1990. However, the courts did not find a nationwide umbrella, because the four individual sales regions within Germany amounted to different regional markets.
The European Commission had already referred to the continuation of a single European-wide cement cartel on 30 November 1994. This cartel mainly involved the protection of home markets and the traditional or structural cement trade throughout Europe. Again, Dyckerhoff, HeidelbergCement, Lafarge and Alsen belonged to the participants. The Commission therefore imposed record fines itself (IV/33.126 and 33.322 Cement). The European Courts have confirmed this decision on the merits (judgment of 15 March 2000 and judgment of 7 January 2004, Aalborg Portland).
In 2013, a court also confirmed the finding of the Polish cartel authority that a cement cartel was in operation in Poland from the 1990s to 2009. Lafarge, Cemex, HeidelbergCement and Dyckerhoff, or their respective affiliates, were again among the participants. According to the Polish cartel authority, an essential goal of this cartel was the prevention of cement exports to Germany.
Further information on the different administrative proceedings
- FCO, Activity Report 2001-2002 (GER) p. 147
- FCO, press release dated 14/04/2003 (GER)
- FCO , Activity Report 2003/04 (GER) p. 110
- Higher Regional Court of Düsseldorf, judgment of 26/06/2009 (VI-2a Kart 2-6/08 OWi) (GER), together with accompanying press release dated 29/06/2009 (GER)
- Federal Court of Justice, decision of 26/02/2013 (KRB 20/12 Grauzementkartell) (GER), together with accompanying press release dated 10/04/2013 (GER)
- European Commission, decision of 30/11/1994 (Cases IV/33.126 and 33.322 Cement)
- European Court of First Instance, judgment of 15/03/2000 (ECLI:EU:T:2000:77)
- European Court of Justice, judgment of 07/01/2004 (ECLI:EU:C:2004:6 Aalborg Portland)
- Polish competition authority, press releases dated 10/12/2009 (EN) and 31/12/2013 (EN)
Civil proceedings 2005
In August 2005, after a comprehensive analysis of the damages sustained, CDC brought an action for damages against three (later each of the six) cartel members mentioned above before the Regional Court (Landgericht) of Düsseldorf (ref. no. 34 O (Kart) 147/05). The action was extended twice in order to include additional claims purchased by CDC from additional companies. The antitrust damages claimed finally amounted to approximately €176 million (plus interest).
The substantiation of the claim was based on both findings in the administrative proceedings and information received from the damaged companies. Included were nearly 300,000 documents on cement transactions (e.g., invoices and credit notes). The analysis by CDC in conjunction with external economists shows clear price effects of the German Cement Cartel. Correspondingly, an external research conducted by the Centre for European Economic Research (ZEW Zentrum für Europäische Wirtschaftsforschung) in Mannheim, Germany, found that the cartel managed to implement price increases in a range from 20.3% to 26.5%.
The attempts by the defendants to obtain a suspension of the damage proceedings until the end of their appeals against the fining decision of the FCO were unsuccessful. The Regional Court (Decision of 9 March 2006, ref. no. 34 O (Kart) 147/05) and the Higher Regional Court of Düsseldorf (decision of 3 May 2006, ref. no. VI-W (Kart) 6/06) rejected the applications by the defendants.
By interlocutory judgment of 21 February 2007, the Regional Court of Düsseldorf confirmed the admissibility of the action. On 14 May 2008, the Higher Regional Court of Düsseldorf upheld this decision on appeal, without allowing a further appeal (ref. no. VI U (Kart) 14/07). Dyckerhoff contested the latter decision nonetheless, but the Federal Court of Justice rejected this attempt on 7 April 2009 (Case KZR 42/08) and therefore finally confirmed that the action was admissible.
The Regional Court of Düsseldorf continued proceedings albeit almost three years later. It then dismissed the action in its entirety on 17 December 2013 (ref. no. 37 O 200/09). In essence, it based its decision on the alleged invalidity of the assignments of claims by the 36 damaged companies to CDC. Furthermore, it held that limitation of the damage claims had commenced in 2003 already, as victims of the cartels had had sufficient knowledge of the facts in order to bring an action against the cartelists in a reasonable way due to the media coverage on the fining decisions taken by the FCO in April 2003. By contrast in the administrative proceedings on the imposition of fines, the Düsseldorf Higher Regional Court heard about 40 witnesses on 36 days of the trial since 11 December 2008 in order to shed light upon the facts.
CDC’s appeal against the judgment of the Regional Court was dismissed by the 1st Cartel Senate of the Higher Regional Court of Düsseldorf by judgment of 18 February 2015 (ref. no. VI-U (Kart) 3/14). The Senate shared the view that the assignments were invalid; it further relied heavily on procedural arguments. For further details on both judgments please see our press releases dated 19 December 2013 and 25 February 2015.
The main reason for declaring the assignments invalid was an alleged collusive shift of the cost risk from the damaged companies to CDC which in turn did not have the financial means to bear the adverse costs. However, CDC has not only made advance payment of court fees totaling more than €713,000, but has also made full cost reimbursements to all opposing parties, totaling more than € 3.5 million. The Higher Regional Court of Düsseldorf has not permitted a further appeal against its appeal judgment of 18 February 2015 so it has become final.
- Regional Court of Düsseldorf, decision of 27/09/2005 (34 O (KART) 147/05) on the adjustment of the value in dispute (GER)
- Regional Court of Düsseldorf, decision of 09/03/2006 (34 O (Kart) 147/05) (GER), and Higher Regional Court of Düsseldorf, decision of 03/05/2006 (VI-W (Kart) 6/06) (GER) on suspension of proceedings
- Higher Regional Court of on the admissibility of the action, together with the accompanying press release (GER)
- Federal Court of Justice, decision of 07/04/2009 (KZR 42/08) (GER) on the admissibility of the action, together with the accompanying press release dated 17/04/2009 (GER)
- Regional Court of Düsseldorf, judgment of 17/12/2013 (37 O 200/09 (Kart)) (GER) dismissing the action, together with CDC SA’s accompanying press release dated 19/12/2013
- CDC SA’s application to the Regional Court of Düsseldorf for correction of facts in the judgment, dated 27/12/2013 (GER), together with the following decision of the Court of 14/04/2014 (37 O 200/09 [Kart]) (GER)
- Higher Regional Court of Düsseldorf, appeal judgment of 18/02/2015 (VI-U (Kart) 3/14) (GER), together with CDC SA’s accompanying press release dated 25/02/2015
- CDC SA’s application to the Higher Regional Court of Düsseldorf for correction of facts in the appeal judgment, dated 12/03/2015 (GER), together with the relevant chapter titled ‘Streitwertanpassung’ (adjustment of the value in dispute) of CDC SA’s statement of claim dated 5 August 2005 (GER), and the following decision of the Higher Regional Court of 30/03/2015 (VI-U (Kart) 3/14) (GER)
- Higher Regional Court of Düsseldorf, decision of 18/02/2015 (VI-W (Kart) 1/15) (GER) on the value in dispute for third-party interveners as regards the main proceedings in first instance
- Higher Regional Court of Düsseldorf, decision of 30/03/2015 (VI-U (Kart) 3/14) (GER) on the value in dispute for third-party interveners as regards the main proceedings in second instance
Civil Proceedings 2015
On 16 September 2015 CDC filed a new damage action relating to the German cement cartel before the Regional Court Mannheim against HeidelbergCement AG. With this action CDC claims more than € 138 million in damages resulting from cartel agreements in South and Eastern Germany (reference 2 O 195/15).
HeidelbergCement AG had participated in illegal agreements on the division of markets and sales quotas regarding the East and the South of Germany since the beginning of the 1990s until at least spring 2002.
The action concerns damage claims of 23 mostly medium-sized purchasers of cement. Against the background of the judgment of the Higher Regional Court Düsseldorf of 18 February 2015 and in order to secure the adverse legal costs for three instances, a precautionary security of € 2.3 million was provided to the benefit of the defendant and the court cashier.
Bringing a new action in the German cement case shows the dedication and persistence of CDC when it comes to the enforcement of antitrust damage claims.
On 24 January 2017 the Regional Court of Mannheim rejected the claim in its entirety as time barred. The Court thereby followed its appeal court, the Higher Regional Court of Karlsruhe, which had decided in a judgment of 9 November 2016 that section 33(5) of the German Act on Restraints of Competition (ARC), a provision suspending limitation periods, is not applicable to claims which arose prior to the entry into force of the provision. This judgment of the Higher Regional Court of Karlsruhe is a minority opinion and diverges from judgments of the Higher Regional Courts in Düsseldorf and Jena, as well as from many recent first instance judgments throughout Germany.
CDC has filed an appeal against the judgment of the Regional Court of Mannheim. The Higher Regional Court of Karlsruhe will now have the opportunity to reconsider its interpretation of section 33(5) ARC. It is likely that this key issue for private enforcement in Germany will ultimately have to be decided upon by the Federal Court of Justice.