The joined cases concerned the termination of distribution contracts by BMW, with a period of notice of one year, on the assumption that there was for the supplier the necessity of restructuring its distribution network.
In fact, Regulation 1475/95 allowed the supplier to terminate the distribution agreement subject to at least one year’s notice in a case where it was necessary to reorganise the whole or a substantial part of the network (as an exception to the minimum notice period of two years, generally provided by the same Regulation). Regulation 1475/95 was then replaced by Regulation 1400/02, which contained more stringent rules than the previous Regulation. In order to permit the suppliers to adapt their existing agreements to the new provisions, Regulation 1400/02 provided for a transitional period (from 1 October 2002 to 30 September 2003) during which the agreements already in force on 30 September 2002 which did not satisfy the conditions for exemption provided for in Regulation 1400/02, but which satisfied the conditions for exemption provided for in Regulation 1475/95, would not fall under the prohibition laid down in Article 81(1) of the EC Treaty.
The German Bundesgerichtshof asked the Court of Justice to decide if the entry into force of Regulation 1400/02 could justify the need for a supplier to reorganise the whole or a substantial part of the network and the resulting right of the manufacturer to terminate agreements with dealers in its distribution network, on one year’s notice. In case of negative answer, the Bundesgerichtshof asked what would be the consequences of an agreement in compliance with Regulation 1475/95, but not with the hardcore restrictions provided by Regulation 1400/02, after the transitional period.
The Court, referring to the previous Case C-125/05 (Vulcan Silkeborg), stated that the entry into force of Regulation 1400/02 did not, of itself, entail the reorganisation of the supplier’s distribution network within the meaning of Article 5(3) of Regulation 1475/95. Nevertheless, due to the particular nature of the distribution network of each supplier, the new Regulation might require so significant changes, to be regarded as a real reorganisation within the scope of those provisions. The national courts or arbitrators shall determine whether such changes constitute a necessary reorganisation of the whole or a substantial part of the supplier’s distribution network.
Answering to the second question, the Court decided that agreements which, after the transitional period, were in compliance with Regulation 1475/95, but not with the hardcore restrictions provided by Regulation 1400/02, would fall under the prohibition laid down in Article 81 (1) of the EC Treaty, if the conditions for exemption under Article 81(3) EC were not satisfied.
The text of this judgment, as well as of the Vulcan Silkeborg case quoted above, can be found in the database of the European decisions, in the EU section of the IDI website. An analysis of the European case-law on antitrust rules applicable to agency and distribution contracts is contained in the IDI Antitrust report, that can be downloaded from the Reports sectionof the website.
IDI Editorial Board
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