The Role of International Arbitration in EC Merger Control
| Autor | Gordon Blanke |
| Cargo del Autor | Abogado. SJ Berwin, Madrid |
| Páginas | 337-374 |
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At the dawn of the 21st century, international arbitration has moved to the forefront of alternative dispute resolution world-wide. This breathtaking development has also not passed unnoticed by the European Commission, which has seized the opportunity to appropriate international arbitral mechanisms for its own purposes, especially with a view to the judicial monitoring of behavioural remedies in EC merger control. Thus, the Commission has made use of arbitration clauses in a total of thirty-nine merger clearance decisions since 1992, when it employed international arbitration within the context of EC merger control for the first time1.
Against this background, the following article seeks to illuminate the role which international arbitration has come to play as a quasi-judicial monitoring mechanism of behavioural remedies in EC merger control over the past fourteen odd years. Given the strategic influence arbitration can exert to ensure a clearance decision from the European Commission2, this
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novel development - which, it is argued, heralds the arrival of a new species of arbitration which is "supranational" in nature to the extent that it meets the peculiar substantive and procedural needs of EC merger control -should be taken seriously both by the international arbitral profession and by the EC competition law establishment in Brussels and other EC-antitrust law centers across Europe. For the very same reason, both EC competition law practitioners and international arbitrators are well advised to become more familiar with the workings of each other’s discipline and further develop the interdisciplinary nature of what is bound to evolve into a highly specialised field of practice.
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By way of introduction, it is worth recalling that under the Merger Regulation3, the European Commission is, generally speaking, mandated to prevent certain merger activities which are likely to have a significant anticompetitive impact on the internal market4. Thus, the Commission will only clear merger proposals to the extent that they are unlikely significantly to restrict competition within the internal market or provided that the merging parties are willing to undertake certain commitments sufficient to lay the Commission’s competition concerns to rest.
With this aim in mind, the European Commission essentially seeks to protect the Community public interest by maintaining effective competition in the internal market, which is ultimately supposed to lead to a low price level and higher living standards for the individual European consumer5.
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International arbitration - on par with domestic jurisdiction through State courts - has come to be recognised and respected as an institution for the administration of justice in its own right6. Essentially, international arbitration proceedings thus constitute an alternative to litigious proceedings before national State courts. Most importantly, as opposed to these latter, arbitrations offer a private mechanism for the resolution of disputes and are, hence, conducted outside the public domain. Thus, at the risk of over-simplification, the international arbitrator is a private judge rendering an award, which is a private judgment7.
As anticipated above, the following article discusses the European Commission’s recent use of arbitration clauses as a mechanism for the judicial monitoring of especially behavioural remedies in the context of EC merger control. As the discussion will show, despite the partially "pathological" nature of some of those clauses, international arbitration
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appears to be an ideal tool to provide for the merging parties’ medium- to long-term compliance with the remedies they have undertaken in order to obtain clearance of their proposed merger from the Commission. The Commission has taken this opportunity to try to tailor international arbitral mechanisms to its specific needs in controlling the correct implementation by the merging parties of the remedies in question.
Arbitration offers the Commission a wind-fall opportunity to feed back into the market its legally-binding conditional decisions, subject to the adjudication by a quasi-judicial body of any further issues arising with regard to the performance of the respectively envisaged remedies. In short, the Commission is effectively outsourcing the monitoring of the correct implementation of the remedy packages it requires, thus avoiding any further administrative strains upon its own tight public resources, whilst at the same time not having to compromise on the major advantages of judicial decision-making, such as enforceability and legal certainty.
Furthermore, competition law decisions are characterised by their intimate link to the business world, in which time is money and therefore speed of the essence. With this in mind, arbitration again seems to offer ideal services for conflict resolution of the kind discussed here given its aptitude to tight procedural timing8. Last but not least, arbitrators tend to be subject to strict precepts of confidentiality, which makes arbitral procedures especially attractive to the third-party beneficiaries of the remedies in question9.
The above-indicated pre-requisites of international arbitration serve well the particular context of EC merger control, which has increasingly become
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subject to the use of behavioural remedies10 ever since the Court of First Instance’s seminal ruling in Gencor v Commission11. As is well known, these
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latter, as opposed to structural remedies, require, by definition, medium- to long-term supervision to ensure their correct implementation and for that purpose depend on the behaviour of the notifying parties, to whom the remedies are addressed. Behavioural remedies are particularly susceptible to incorrect, or even non-, implementation by the parties concerned, thereby running the risk of frustrating the individual rights that such remedies are meant to confer upon third-party beneficiaries. Hence, disputes with regard to the performance of remedies are most likely to arise in the context of behavioural remedies. For this reason, in recent years the European Commission has developed an extensive practice of incorporating arbitration clauses into behavioural remedy packages as an integral part of its merger clearance decisions.
In the following, this article will discuss in somewhat greater detail12 the
peculiar characteristics of the arbitration clauses the Commission has come to approve within the course of its merger-related decision-making practice to date.
In the interests of maintaining effective competition in the common market, third parties lie at the heart of merger-related arbitration clauses and constitute their main beneficiaries. By way of arbitration, third parties can, thus, enforce the rights they derive from the commitments entered by the notifying parties under the merger clearance decision and claim compensation for the civil law damages caused to them by the notifying parties’ incorrect or non-performance of the relevant commitments
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concerned. Alternatively and additionally, third-party beneficiaries may sue before the arbitral tribunal for specific performance of the agreement they have concluded with the merged entity in implementation of the rights they derive from the commitments, such as licensing agreements or agreements providing access to essential facilities controlled by the merged entity.
The overall usefulness of such a "standing offer" to arbitrate inserted into a merger-related remedy provision to the third-party beneficiary’s benefit obviously depends, to a large extent, on that party’s awareness of the existence of the underlying arbitration clause. Absent such awareness, the unilateral promise given by the notifying party is bound to remain unreciprocated and the potential instigation of beneficial arbitration proceedings will hence be frustrated.
Thus, most recently, in Alcatel/Finmeccanica/Alcatel Alenia Space & Telespazio13 the parties were required to make express mention of the possibility to refer any disputes to arbitration in the general terms and conditions relating to the sale of certain equipment for...
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