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Dutch Court assumes jurisdiction on follow-on damages claims air cargo cartel

Air France/KLM successfully launch Dutch torpedo in dispute with Deutsche Bahn and win race to the court

13/08/2015

On 22 July 2015, the Amsterdam District Court (the "Court") ruled upon a so-called 'Dutch torpedo', launched in 2011 by Air France/KLM/Martinair (together: "AF/KLM") against Deutsche Bahn and its group companies. It decided that this was a legitimate legal action. Consequently, the Court considers itself competent to decide on AF/KLM's request for a declaration of non-liability.



The acceptance of KLM/AF's request is a novelty. Never before has such a request successfully been filed in the Netherlands. It proves that Dutch courts are not afraid to actively engage in the increasing amount of follow-on damages litigation. It shows that the Netherlands remains one of the most relevant jurisdictions for this type of litigation.



Legal warfare



At the end of the 20th century, the Italian lawyer Franzosi became the first to describe the phenomenon of the 'Italian torpedo' that emerged in the context of patent litigation. Since then, it became synonymous for an attempt to hijack legal proceedings by starting these before a slow working court. It basically consists of a legal action started by a party, being accused of some wrongdoing, in its home country against the (alleged) injured party, thereby asking for a declaration of non-infringement or non-liability. Due to the lis pendens principle, other courts have to wait at least until the court first seised has ruled whether it may decide on the matter. In a slow moving legal system, this may take years.



Dutch torpedo



The Dutch legal system is not notoriously slow. Nevertheless, AF/KLM decided to start a legal action in the Netherlands, shortly after the European Commission imposed a fine of almost EUR 340 million for its participation in the alleged airfreight cartel. AF/KLM demand a declaratory decision of non-liability against Deutsche Bahn in relation to cartel infringements. As such, AF/KLM seek to obtain a judgment from a court which they possibly deem more favourable than another (e.g. German) court. It is not uncommon that claims are settled in a relatively favourable way to the party that successfully fired a torpedo.



The Court



The Court expressly stated that the request for a 'negative' declaration cannot be considered as abuse of procedural law. According to the Court, the request fulfils a legitimate function and allowed in cartel damages litigation. It deems AF/KLM's interest clear: clarity regarding its legal position. The fact that subsequently other cases were filed in New York and Germany (Cologne) is not relevant.

Law-Now: Dutch Court assumes jurisdiction on follow-on damages claims air cargo cartel