District Court ruled on the recognition of the res judicata effect of a Turkish judgment and dismissed an antitrust follow on damages claim regarding the cathode-ray tube markets

The proceedings followed a 2012 decision of the European Commission imposing fines totalling 1.47 billion euro on seven manufacturers of cathode-ray tubes (“CRT”) for two separate competition law infringements. The Turkish Competition Authority had investigated the CRT markets in parallel, but concluded in 2009 that it found insufficient evidence of an infringement of Turkish competition law rules. That decision was not appealed and is therefore final.

Vestel, a manufacturer of CRT television sets and computer monitors, alleged that it had suffered significant loss as a result of the infringements and initiated proceedings against Philips, Samsung, LGE, Technicolor TTD and TDP before the Istanbul Commercial Court of First Instance and similar proceedings in parallel in the District Court of Oost-Brabant.

On 16 January 2019, the Istanbul Commercial Court of First Instance ruled that Vestel was inadmissible due to a lack of legal interest and dismissed the claims. On appeal, the Civil Chamber of the Istanbul Regional Court of Justice confirmed the ruling in 2020. The Regional Court of Justice, however, improved the Commercial Court’s reasoning by ruling that the claim should be dismissed on procedural grounds because the Turkish Competition Authority had not established a breach of Turkish competition law, which is a prerequisite for follow-on damages claims under Turkish law. Vestel requested leave to appeal the judgment to the Turkish Supreme Court, but that request was denied in February 2021. 

Res judicata

In the Dutch litigation, Vestel had initiated substantially the same claims as in the Turkish case against the same parties. Samsung, LGE and Technicolor therefore argued that the claims were already adjudicated in final instance in Turkey, which ruling should recognized by the Dutch courts. Vestel, by contrast, argued that the judgment of the Turkish Regional Court of Justice does not have res judicata effect under Turkish law and should not be recognized in the Netherlands. Both Vestel and the aforementioned defendants submitted Turkish law expert opinions on this matter. Although the experts provided contradicting opinions, the District Court of Oost-Brabant felt sufficiently informed and ruled that the judgment of the Regional Court of Justice does have res judicata effect and is therefore binding for the parties under Turkish law.

Recognition of the judgment of the Regional Court of Justice under Dutch law

On recognition, the District Court of Oost-Brabant noted that there is no treaty on the mutual recognition of judgments between The Netherlands and Turkey. Therefore, the District Court applied the criteria developed in Supreme Court case law to assess whether the judgment of the Turkish Regional Court of Justice should be recognised in the Netherlands. Those criteria are that (i) the foreign court assumed jurisdiction on grounds that are compatible with international standards, (ii) the ruling was subject to due process, (iii) there is no conflict with Dutch public policy, and (iv) there is no incompatibility with previous judgments concerning the same parties.

Vestel argued that criterion (ii) had not been met, because the Commercial Court and the Regional Court of Justice had not granted it a sufficient opportunity to argue its case and, therefore, had violated the right to a fair trial (Article 6 ECHR). In addition, Vestel argued that also criterion (iii) had not been met, because the judgment of the Regional Court of Justice would be incompatible with Article 101 TFEU.

However, the District Court of Oost-Brabant ruled that Vestel had been granted sufficient opportunity to present its case in the Turkish proceedings. In this context, the District Court considered that Article 6 ECHR leaves room for certain restrictions to the admissibility of parties in court. Specifically, the Turkish admissibility rule for follow on damages claim cases, requiring an infringement decision by the Turkish Competition Authority, is not incompatible with Article 6 ECHR.

Regarding criterion (iii), the District Court ruled that the judgment of the Turkish Regional Court of Justice is not incompatible with Dutch public policy. The District Court also considered (referring to the judgments of the European Court of Justice Eco Swiss and Kapferer), that European law does not require the reversal of judgments that are not in line with Article 101 TFEU if they have acquired force of res judicata.

In conclusion, the District Court of Oost-Brabant held that the judgment of the Turkish Regional Court of Justice meets the criteria for recognition in the Netherlands and that its res judicata effect, therefore, results in the dismissal of Vestel’s claims against Samsung, LGE and Technicolor. 

Of the other defendants, Philips was removed from the case in 2019, following a settlement between Philips and Vestel. The two remaining defendants, TTD and TDP, initially appeared in the proceedings, but their counsels withdrew themselves shortly after the commencement of the case in 2015. Since TTD and TDP did not defend themselves against Vestel’s claims, the District Court decided to grant Vestel’s claims against these defendants, provisionally awarding almost EUR 685 million in damages. However, the ‘proportionate share’ of Philips in the overall liability – which share still needs to be established – will be deducted from that amount. The practical relevance of this part of the judgment is unclear, as both TTD and TDP appear to have been dissolved. 

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