Court of Appeal overturns first instance judgment and establishes that several prestressing steel producers are liable for the potential loss alleged by Deutsche Bahn

The European Commission (“Commission”) ruled in a decision of 30 June 2010 (amount of fines corrected in a decision of 2011) that 17 producers of prestressing steel (steel wires and strands used in prestressed and post-tensioned concrete) infringed competition law rules and imposed fines totaling to approx. €269 million.

Following the decision of the Commission, several entities of Deutsche Bahn  (“DB”) sued Nedri, Arcelormittal, DWK Drahtwerk and Saarstahl for loss allegedly suffered as a result of the infringement. The District Court of Limburg had ruled in a judgment of 16 November 2016 that German law applies to the claims and that the claims were time barred under German law. As the parties did not contest that German law applies to the claims, the Court of Appeal also ruled on the basis of German law. Following a 2018 judgment by the German Federal Court (Bundesgerichtshof) on the matter, the Court of Appeal decided, however, in an interim judgment of 28 January 2020, that the claims were not time barred under German law. In its final judgment of 30 January 2024 the Court of Appeal now ruled on the merits of the case, confirming liability to pay damages to the defendants. 

The judgment is interesting inter alia because the Court of Appeal first ruled on the legal standard that should be applied under German law to establish liability. For that assessment it based itself on case law of the German Federal Court (Bundesgerichtshof). Furthermore, in the judgment, it ruled on the assignment of claims by suppliers  to DB and ruled on the statutory interest rules that should be applied in this case.

The legal standard used to establish liability under German law

The Court of Appeal concluded that the German Federal Court distinguishes between (i) establishing liability (Betroffenheit), and (ii) establishing the scope of the liability (Kartellbefangenheit). According to the Appellate Court, it is sufficient for establishing Betroffenheit that the infringing conduct could have directly or indirectly caused the alleged loss. In that regard it is not necessary at this stage of the proceedings to establish whether the conduct caused concrete and actual loss to the claimant (i.e. Kartellbefangenheit). For Betroffenheit, it is sufficient, according to the Court of Appeal, that the claimant demonstrates that it purchased prestressing steel during the infringement. The question as to whether the claimant suffered concrete and actual loss will have to be assessed in separate quantum of damages proceedings for which a separate case has to be initiated before the (lower) district court.

For its liability assessment, the Court of Appeal relied mostly on the Commission decision. In particular the conclusion of the Commission that the addressees of the decision covered over 80% of twelve EU markets (and Norway) seems to have been decisive for the Court. On that basis, the Appellate Court ruled that it is likely that the conduct may have directly or indirectly caused loss. In addition, DB had submitted economic reports as evidence to substantiate its claims. The defendants had contested the reports with rebuttal economic reports. The Appellate Court considered nevertheless that the reports submitted by DB are ‘generally’ meaningful as they can provide contributing evidence that an infringement as in the present case leads to price increases. The reports submitted by the defendants did not alter that conclusion.

The Court of Appeal also assessed whether DB had purchased prestressing steel in the relevant period. DB alleged that it bought prestressing steel for railway sleepers and other railway infrastructure in the relevant period and had submitted invoices as substantiation. On that basis the Court of Appeal concluded that the transaction details submitted by DB were sufficient to establish that DB acquired the litigious goods in the relevant period and concluded that there was sufficient ground to establish Betroffenheit (i.e. liability).

Assignment of claims

Regarding the assignment of claims to DB, the Court of Appeal previously established in an interim judgment of 27 July 2021 that DB can claim compensation for loss suffered by parties (suppliers of DB) that have validly transferred their claims. It now established that suppliers such as Moll, Rail.One, Durtreck and Norddeutsche Logistiek und Baustoff had validly assigned their claims to DB. In addition, the Court of Appeal ruled that DB can pursue an assigned claim for loss that was allegedly suffered by the German State, as an investor in railway infrastructure projects.

Statutory interest

Lastly, on statutory interest, the Court of Appeal ruled that if any loss can be established in the quantum of damages proceedings, DB will also be entitled to claim statutory interest in accordance with German law. According to the Appellate Court, such statutory interest should be calculated from the moment the claimants paid for the prestressing steel (and thus for the alleged overcharge). The Court of Appeal, therefore, dismissed the arguments of the defendants (on the basis of a ruling by the German Federal Court of 2018) that Article § 33(3) GWB could not apply retroactively to facts dating from before July 2005 (the date on which amendments to Article § 33(3) GWB entered into force).

This article was published in the Competition Newsletter of March 2024. Other articles in this newsletter: