Action brought on 21 January 2011 - Cathay Pacific Airways v Commission
(Case T-38/11)
Language of the case: English
Parties
Applicant: Cathay Pacific Airways Ltd (represented by: D. Vaughan, QC, R. Kreisberger, Barrister, B. Bär-Bouyssière, lawyer, and M. Rees, Solicitor)
Defendant: European Commission
Form of order sought
annul Article 2 of the Commission's decision insofar as it relates to the applicant;
annul Article 3 of the Commission's decision insofar as it relates to the applicant;
annul Article 5 of the Commission's decision insofar as it imposes a fine on Cathay Pacific of EUR 57 120 000 or, in the alternative, reduce the amount of that fine;
and order the Commission to pay the applicant's costs of making this application.
Pleas in law and main arguments
The applicant seeks the annulment of the Commission Decision C(201O) 7694 final of 9 November 2010 in Case COMP/39258 - Airfreight in so far as the Commission found the applicant liable for an infringement of Article 101 TFEU and 53 EEA by coordinating various elements of price to be charged for airfreight services in respect of (i) fuel surcharges, (ii) security surcharges, and (iii) the non-payment of commissions on surcharges, on routes (i) between airports within the EEA and airports outside the EEA and (ii) between airports in countries that are Contracting Parties of the EEA Agreement but not Member States and third countries. Alternatively, the applicant seeks an annulment or a substantial reduction of its fine.
In support of the action, the applicant relies on eight pleas in law:
First plea in law, alleging that the Commission erred in law and made a manifest error of assessment in finding that the applicant was party to a single and continuous global infringement. The vast majority of events reported in the decision against the applicant:
- do not amount to an infringement as they relate to the exchange of publicly available information, or;
- are part of a mandated collective regulatory approval process, or;
- took place outside the period of infringement, or, fall outside of the Commission's jurisdiction.
Moreover, the Commission has failed to establish that the applicant's activities reported in the decision establish that it adhered to any common plan in pursuit of a common objective.
Second plea in law, alleging that the Commission erred in law and made a manifest error of assessment in finding that the applicant was not required to participate in the collective application process in seeking the approval of surcharges by the Civil Aviation Department (CAD) of the Hong Kong Special Administrative Region (HKSAR) of the People's Republic of China (PRC). As is made clear by the Hong Kong CAD in its letter to the President of the European Commission dated 3 September 2009, carriers were required to agree on the details of the collective applications, including the amount of the surcharge for which approval was sought and were bound to charge the surcharges fixed by the CAD.
Third plea in law, alleging that the Commission erred in law in finding that the state compulsion defence does not apply to the applicant's conduct in Hong Kong (and India, Sri Lanka. Japan, the Philippines and Singapore) and the finding that the applicant's conduct amounted to an infringement of Article 101 TFEU is manifestly vitiated.
Fourth plea in law, alleging that the Commission's finding of infringement amounts to a manifest error of law because it comprises a direct interference in the domestic administration of Hong Kong, thereby:
- offending the public international law principle of non-interference or comity between nations and;
- it gives rise to a direct conflict of jurisdictions which infringes the principle of legal certainty.
Fifth plea in law, alleging that the Commission erred in law in its treatment of the regulatory regime in Hong Kong in comparison with the relevant equivalent regulatory regime in Dubai. It should have excluded Cathay Pacific and Hong Kong on a similar basis as it excluded Dubai from the scope of the infringement.
Sixth plea in law, alleging that the Commission erred in law in finding that the applicant's activities in Hong Kong, and the other regulated non-EU jurisdictions, could have had the object of preventing, restricting or distorting competition in the EU/EEA. The Commission also did not allege that the infringement had anti-competitive effects.
Seventh plea in law, in relation to inbound flights from Hong Kong and other third country jurisdictions to the EEA, alleging that the Commission had no jurisdiction to find an infringement of Article 101 TFEU and to impose fines. As there was no effect on competition within the EU or inter-Member State trade.
Eighth plea in law, alleging that even if the alleged infringement with regard to the applicant is not annulled, the fine should nonetheless be annulled, or, reduced. The value of sales taken by the Commission was grossly excessive and the Commission failed to take into consideration the applicant's individual level of involvement. The applicant invites the General Court to exercise its unlimited jurisdiction under Article 261 TFEU to impose a symbolic fine or to reduce the fine substantially.
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