Towards a ban on the US zeroing approach to anti-dumping policy, WT/DS382/R

After a number of contradictory adjudications (legal-illegal-legal, and a definite unknowability), the World Trade Organization (WTO) Panel made a more conclusive step towards prohibiting the US zeroing approach to anti-dumping policy in case USA - Orange juice, WT/DS382/R.

Zeroing is an administrative practice of punishing companies for dumping in a situation where this particular dumping could be compensated with a comparison of prices in other cases, with the picture taken as a whole.

The Panel interpreted that, on balance, zeroing is incompatible with the principle of fair comparison (§ 7.153). The US Administration argued that no legal provision had previewed how to aggregate multiple price comparisons (§ 7.137).

The EU, Japan and certain other WTO Members supported 2 Brazilian orange juice producers Cutrale SA and Fischer SA in this dispute.

Economic Court of the CIS imposes customs and quantity limits on returning defected goods to the producer, 01-1/07-09

Article 3(1) of the Agreement on the Creation of the Free Trade Area (ACFTA) of the Commonwealth of Independent States (CIS) regulates the freedom of trade without customs and quantity limits among the 10-12 CIS States.

The Economic Court of the CIS interpreted that the freedom of trade without customs and quantity limits is not applicable to a case of returning defected goods to the State of production, and gave the following reasons:

1) The freedom of trade without customs and quantity limits is applicable to goods transported from the State of production, not from the receiving State (page 3, § 4).
2) “Import and/or export” means a direction of goods from the producer to the consumer, and not vice versa (page 4, § 4).
3) Contrary to Article 1(1) GATT that previews certain advantages in respect of export and import or activities “related to them”, Article 3(1) ACFTA does not contain such words (page 4, § 6).
4) In 5 of 10-12 CIS States, the returned goods will not be subjected to customs and quantity limits (page 5, § 2).

The case 01-1/07-09 was started on the initiative of the Executive Committee of the CIS, and the Court agreed with the opinion of the Adviser General who, by the way, has a wonderful blog http://yukevich.blog.tut.by .

It is interesting to note that a number of Russians legal scholars consider the CIS law as “European law” (together with the EU law and the ECHR law).

Continuation of Köbler at the ECHR

Article 267(3) of the Treaty on the Functioning of the European Union requires the national court of last instance to make a preliminary reference to the ECJ on questions of interpretation of the Union law.

In case Köbler v Austria, C-224/01, the ECJ interpreted that if a national court of last instance refuses to make the preliminary reference, the interested party may sue the State before a respective national court of first instance.

This is exactly what has happened in case Tomas v Lithuania, 51226/09. When the national court of last instance refused to make the preliminary references, the State was sued for the violation of current Article 267(3) TFEU following the Köbler procedure. However the Lithuanian national courts declared the action inadmissible.

The next step was suing Lithuania for the violation of the Köbler procedure before the ECHR. On 12/04/2011 the single judge chamber (judge András Sajó) interpreted that the right to court (Article 6(1) of the European Convention of Human Rights) is not applicable to the Köbler procedure.

However, since this is a single judge chamber judgment, it is possible that this interpretation will not be applicable to future litigations.

ECHR gives second life to about 33 Russian political parties

In December 2004 the Russian State Duma amended the law and gave 1 year and 2 weeks to political parties to increase the number of their members until 50 000, as well as the number of regional branches with 500 members until 45. The registration of those unable to meet this requirement was annulled. This policy reduced the number of political parties from 48 to 15 (§ 117).

In case Republican Party of Russia v Russia, 12976/07, the ECHR found that this measure violated the freedom of association (Article 11 of the Convention). The Court gave the following reasons to overcome the formal requirement on 50 000 members:

1) Only those parties that get 3 % of votes receive State funding. Thus, the existence of small parties was not a considerable financial burden on the State treasury (§ 112).
2) Only those parties that get 5 % of votes obtain a parliamentary representation. Only a party that is represented in the State Duma or collected 150 000 signatures is permitted to present its candidates. Thus, according to the judges, the existence of those 33 parties could not provoke an excessive parliamentary fragmentation (§ 112).
3) Small minority groups have the right to a party (§ 113).
4) This reform was a manipulation of electoral laws to the advantage of the parties in power (§§ 35 and 116, Venice Commission).
5) The ban on the existence of the 33 parties affected pluralism (§ 117).
6) The Republican Party was established in 1990, and abolished in 2007 – it existed for too long to be banned due to its inability to get 50 000 members during the year.

The Court gave several arguments to overcome the formal requirement to have 45 regional branches:

1) There is a consensus on the right of regional parties to existence: only 6 of 47 Council of Europe States do not allow regional parties.
2) The Venice Commission is in favor of regions.
3) The requirement of a certain number of regional branches entered in force in 2001, and not in 1991 – too long waited.

The Russian judge joined other 6 colleagues and voted for the declaration of violation.

“Finding a business partner” as a criterion in competition law, Visa, T-461/07

The EU General Court confirmed the fine of EUR 10 200 000 imposed by the European Commission on Visa International and Visa Europe Ltd. for their refusal to allow their competitor Morgan Stanley Bank International Ltd. (UK) issuing Discover Cards to issue Visa and Master Cards.

Visa International argued that despite refusing to allow the Discover Card issuer to issue Visa and Master Cards, Morgan Stanley could find a fronting partner, i.e. an entity that had already been authorized to issue Visa, and enter into a relationship with that entity. The EU General Court applied the finding a business partner criterion and concluded that this option had been excluded for Morgan Stanley, since:

1) a fronting agreement does not allow a new competitor to enter the market but rather reinforces the already existing service providers (§ 91);
2) previously fronting arrangement granted the access to the market to processing companies only, and not to banks (§ 92);
3) other large international banks would not be interested in entering in such a relationship with Morgan Stanley (§ 93).

It is remarkable that Morgan Stanley was not required to prove any attempt to find a business partner.

It is also interesting how the European Commission defined the period of violation: not from the date of the refusal to enter into a relationship (22/03/2000, § 4) but from the date of statement of objection by the Commission (02/08/2004, § 28).

ECHR continues making direct orders to the States

In case Balasa v. Romania (just satisfaction), 21143/02, the Chamber of 7 judges of the ECHR made a direct order to the Government to restitute 5 hectares of land to the interested person (§ 64).

It is not that important that there was a violation of the right to property, but it is highly notable that the ECHR continues to give direct orders to the Governments – this is a step forward in the consolidation of powers of this Court.

ECJ allowed accountants (& attorneys?) to contact directly a potential client in order to propose their services (démarchage).

In case Société fiduciaire nationale d’expertise comptable, C-119/09, the Grand Chamber of the ECJ interpreted that the prohibition for accounting experts (and by extension, for attorneys) to address potential clients directly in order to propose their services is incompatible with the freedom of commercial communication (Article 24 of the directive 2006/123 on commercial communication of regulated professions).

The ECJ interpreted that such a total prohibition is incompatible with this kind of freedom even if it is necessary to guarantee the independence of the profession, is non-discriminatory, proportional, and based on public interest (§§ 44-45).

3 EU States, and the Commission submitted their observations. The ECJ rejected the opinion of the Advocate General, which happens very rarely.

ECJ closes trademark resale industry

Grand Chamber of 13 judges of the ECJ set aside the General Court judgment in case Anheuser-Busch Inc., C-96/09 P, in holding that the fact that a company has registered a trademark (“BUD”) in a number of States is not sufficient for prohibiting another company to use the same trademark. The holder of a previously registered trademark must prove its genuine use under two criteria:

1) duration, and
2) intensity

vis-à-vis consumers, suppliers and competitors (§ 160).

This judgment on appeal closes the business of companies that were registering trademarks with an intention to take money from other companies wishing to use it in practice, i.e. to put this trademark on a real article of trade. This decision also urges the trademark holders to extend their business continuously in order not to loose their right to a trademark.

The loosing party is a Czech beer producer, Budvar, that had the respective rights to “BUD” in Austria, Belgium, Netherlands, Luxembourg, France, Italy and Portugal (§§ 21-22).

The 4 instances (Opposition and the Appeal Boards of the OHIM, General Court, ECJ) already took 12 years of litigation. The case is sent back to the EU General Court.

ECHR supports an insolvent borrower attacked by his bank, and strikes "unless" judgements

Mr Félix Chatellier (case 34658/07) was a shareholder of company R. that faced certain difficulties in 1990s. Therefore, he borrowed under his personal name about EUR 762 000 (FRF 5 000 000) from the B. bank in 1993. However, due to the insolvency, the Bordeaux Tribunal of Commerce ordered him to pay EUR 625 654.10 under the annual interest of 10,4 % in 2004. The French fiscal authorities claimed EUR 292 926, and the monthly revenue of his household at the respective time was EUR 2 600 (§§ 7, 11, 14).

Mr Chatellier appealed the judgement, however the bank made an application for “unless judgement”, and the case preparing judge (conseiller de la mise en état) rejected the appeal due to non-payment of the sum ordered by the Bordeaux Tribunal of Commerce. The Bordeaux judges believed that the fact that he allegedly had not paid EUR 292 926 showed that he had certain savings or some hidden money (§ 15).

Why do I talk about this case?

1) The ECHR unanimously rejected this reasoning in declaring the coverage of civil/fiscal cases by the presumption of innocence, which plays a role here because Article 6(1) of the Convention implies it (§ 43).

2) The ECHR imposes the duty of formal proofs for adoption of an “unless” judgement (§ 42). Thus, Strasbourg reduces the scope of use of these judgements.

3) One may observe a political victory of a lower incomes person against a bank.