The Schneider ruling, to the great displeasure of European money-makers
(Archives) The judgment delivered by the European Court of First Instance on July 11 is a first. A first in terms of its impact. A first in its consequences
Schneider has just won a legal battle. To everyone's surprise, the European Court of First Instance recognized, yesterday in Luxembourg, the responsibility of the European Commission in the exercise of its power as a competition authority, for the failed Schneider-Legrand merger. An unprecedented judgment!
A serious and manifest violation of the rights of the defense
Schneider et Legrand avaient vu leur projet de fusion, qui devait créer le numéro un mondial de l’appareillage électrique, bloqué par la Commission européenne. Si ce veto avait été annulé peu après par la justice européenne, Schneider avait payé le prix lourd. Entretemps, il avait dû le revendre aux fonds d’investissement Wendel et KKR pour 3,6 milliards d’euros une entreprise acquise pour 5,4 milliards d’euros. Perte sèche ! Piqué au vif, Henri Lachman, le PDG avait décidé d’attaquer l’exécutif européen en lui demandant … 1,6 milliard d’euros de dommages et intérêts.
The Tribunal did not mince its words. He considers that the Commission committed what could be called gross negligence. According to the judges, the serious and manifest disregard by the Commission of Schneider's rights of defense constitutes a sufficiently serious breach of Community law ».
A violation that cannot find neither justification nor explanation in the particular constraints weighing on the services of the Commission ". He recognizes that Schneider has two grounds for compensation: the resumption of control of the concentration operation after the first judgment of the Court and the reduction in the sale price that Schneider had to agree to Wendel/KKR to obtain a postponement of the effect of this sale.
The surprise is therefore considerable at Berlaymont, the headquarters of the European Commission, which should quickly attempt a last-ditch maneuver: to seize the Court of Justice to try to obtain an annulment of this judgment. The legal battle does not seem to be over.
A first in many respects
Cet arrêt est une première au sens juridique, tout d’abord. D’ordinaire, les juges sont en effet (très) réticents à admettre la responsabilité des institutions européennes dans leur tâche régalienne.
It's quite simple. In 50 years of case law, the Court's experts cite only one case where injured companies have obtained damages from the European courts because they were victims of an administrative error. It was a case of milk quotas (Mulder case). And in this role of supreme competition authority, there is no precedent.
Cet arrêt est aussi une première en termes économiques. Les sommes en jeu sont en effet considérables. Entre l’estimation de Schneider (plus 1,6 milliard d’euros) et l’évaluation de la Commission européenne (quelques millions d’euros), il y a un gouffre. Un expert indépendant devrait rapidement se mettre au travail pour évaluer le montant exact de la douloureuse. L’entreprise n’obtiendra pas le montant demandé mais sans nul doute plusieurs centaines millions d’euros.
An amount never considered in terms of damages and which should pose several problems for the European institutions. Start by knowing where to find this sum. When we know that the heads of government and Parliament have taken many months to agree on a few billion additional budget (under the next financial framework), we measure the difficulty of the problem.
Ceux qui se frottent les mains, ce sont les avocats d’affaire. Car cette décision pourrait faire des émules. Plusieurs autres entreprises — My Travel Group, Ryanair, Microsoft… — pourraient être tentées de suivre les traces de Schneider. Au grand dam des argentiers européens …
(Nicolas Gros-Verheyde)
Document : l’Judgment T-351/03 of the General Court of 11 July 2007
Article supplemented on the basis of two articles published in Ouest-France & France-Culture, July 2007
