Brussels Court of Appeal Confirms Suspension of Exclusivity Clause in International Show-Jumping Rules
14/06/2016

On 28 April 2016, the Brussels Court of Appeal (the “Court”) confirmed the decision of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence) (“BCA”) concerning the suspension of an exclusivity clause contained in the rules of the Fédération Equestre Internationale (“FEI”) preventing horse riders from participating in show-jumping competitions which were not approved by the FEI.

At the request of Global Champions League (“GCL”) and Tops Trading Belgium (“TTB”), the Competition College (Mededingingscollege / Collège de la concurrence) of the BCA decided on 27 July 2015 to suspend the exclusivity clause contained in FEI’s international show-jumping rules until the BCA had taken a decision on the merits of the case. This clause prevents horses and athletes from competing in FEI approved events if they participated in a non-approved event over the previous six months. The BCA considered that this suspension was necessary in order to make it possible to organise the 2016 Global Champions League (See, VBB on Business Law, Volume 2015, No. 7, p. 4, available at www.vbb.com ).

FEI sought both the suspension and the annulment of this decision before the Brussels Court of Appeal. In its judgment of 22 October 2015, the Court dismissed FEI’s request for suspension on the basis that it had not been established that the interim measures adopted by the BCA would cause “serious prejudice which would be difficult to remedy” to FEI (See, VBB on Business Law, Volume 2015, No. 11, p. 6, available at www.vbb.com).

The judgment of 28 April 2016 was given further to FEI's request for the annulment of the interim measures. In this judgment, the Court confirmed the validity of the suspension decided by the BCA.

First, the Court dismissed FEI's claim that the European Commission should have been informed earlier of the investigation, since Article 11 of EC Regulation 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 TFEU Treaty does not impose any strict deadline. The Court also rejected FEI's argument that the BCA did not have jurisdiction to impose interim measures whose scope extends to 8 EU Member States and 5 non-EU countries. The Court recalled that national competition authorities apply not only national competition laws but also European competition law. In addition, the exclusivity clause suspended by the BCA is sufficiently linked to the Belgian territory for the BCA to consider itself "well placed" to act, pursuant to the European Commission Notice on the cooperation within the network of competition authorities of 2004.

The Court furthermore rejected FEI's allegation that its rights of defence had been breached. Notably, the Court recalled that the European Convention on Human Rights does not apply to this case, since the decision contested by FEI does not impose any administrative sanction of a criminal nature.

On the substance of the case, the Court found that the BCA rightly considered that the exclusivity clause had, prima facie, anticompetitive effects as it excluded horse riders from FEI competitions for a duration of at least six months (sometimes even longer in practice). The Court found that this anticompetitive effect is, prima facie, contrary to Articles 101 and 102 TFEU and Articles IV.1 and IV.2 of the Code of Economic Law (Wetboek van Economisch Recht / Code de droit économique). While the Court considered that FEI's alleged objective to protect the health of horses and the integrity of show-jumping could be legitimate, the Court noted that FEI is in a conflict of interest situation, as it both regulates international show-jumping and promotes commercial show-jumping events. The Court also underlined that the exclusivity clause had restrictive effects and could only be lifted under exceptional circumstances and at the discretion of FEI, which does not have to base its decision on any objective criterion.

In addition, the Court considered that the BCA had adequately explained the seriousness of the injury suffered by the GCL and TTB, noting that GCL events had to be cancelled in 2014 and 2015. The Court also confirmed that such injury was imminent, linked to the exclusivity clause, and would be difficult to compensate, in accordance with Article IV.64(1) of the Code of Economic Law.

Finally, the Court considered that the suspension of the exclusivity clause decided by the BCA met the urgency requirement set out in Article IV.64(1) of the Code of Economic Law. The Court found that the fact that GCL and TTB only requested the suspension of the exclusivity clause in June 2015 did not infer that their request was not urgent, since they were trying to organise GCL in 2016. The Court also noted that the fact that GCL and TTB had first tried to find common ground with FEI, instead of immediately attacking the exclusivity clause when it entered into force in 2012, could not be criticised.

As a result of this judgment, the suspension of FEI's exclusivity clause will remain in force until the BCA decides otherwise (or until the BCA adopts a final decision on the substance of the case). FEI can still decide to appeal the judgment of the Court to the Supreme Court (Hof van Cassatie / Cour de cassation) on points of law.

Related : Van Bael & Bellis ( Mr. Martin Favart ,  Mrs. ValĂ©rie Lefever )

Mr. Martin Favart Mr. Martin Favart
[email protected]
Mrs. Valérie Lefever Mrs. Valérie Lefever
Associate
[email protected]

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