Jurisdiction approved by Court of Appeal in a complex private competition enforcement case against AirBaltic and RIX

After the European Court of Justice (ECJ) confirmed our client’s right to claim damages from AirBaltic and RIX in Lithuania (C-27/17), so did the Court of Appeal.

The defendants, both Latvian undertakings, for a number of years in this dispute challenged the jurisdiction of Lithuanian courts to decide the case on competition damages brought by Lithuanian Airlines. The preliminary ruling addressed the interpretation of Brussels I Regulation’s special jurisdiction clauses. The Court of Appeal found that Lithuanian courts have jurisdiction to decide the case as courts for (i) the place where the harmful event occurred (Art 5(3) of the Regulation) and (ii) place in which a branch is situated (Art 5(5) of the Regulation).

The Court of Appeal followed the preliminary ruling of the ECJ and our team’s arguments establishing that the place where the damaged occurred is Lithuania – the main market affected. As the claimant has a right to bring proceedings in either the courts for the place where the damage occurred, or the courts for the place where the event giving rise to the damage, the fact that Latvian airport performed disputed actions in Latvia would matter only in the latter case, but the claim was brought in the place where the damage occurred. Thus, the jurisdiction of Lithuanian courts was found over both defendants Latvian Airlines and Latvian airport.

Finding the jurisdiction under Art 5(3) of the Regulation was sufficient to establish the jurisdiction of the Lithuanian courts. However, the Court of Appeal also ruled on the Art 5(5) of the Regulation and confirmed the jurisdiction of Lithuanian courts for a place where the branch is established. It ruled that the defendant, Latvian Airlines, has not proved that their branch in Lithuania has not participated in the actions constituting the infringement. The ECJ doubted if there is evidence to establish that the branch participated in such actions. But the Court of Appeal took a different approach on the evidence existing in the case and the burden of proof. It relied on the ECJ interpretation of laws but went on saying, that a mere fact that the branch had no separate accounting from the parent company is not sufficient for assumptions that the branch had no active role in the activities under dispute. It was up to the defendant, Latvian Airlines, to prove that their branch in Lithuania had no power to enter into or perform economic activities constituting the infringement.

Jurisdiction approved by Court of Appeal in a complex private competition enforcement case against AirBaltic and RIX.

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