11 February 2016

Italian High Administrative Court denies non-appellant leniency applicant fine recovery

After the Consiglio di Stato (CdS), the Italian highest administrative court, overturned a cartel decision of the Italian Competition Authority’s (AGCM), Hapag Lloyd tried to recover the reduced fine it had paid as a leniency applicant. On 29 January 2016, the CdS rejected this request because Hapag Lloyd was trying to benefit from the result of the fellow cartelists' appeals without having itself participated in the appeal proceedings.

In February 2012, the AGCM fined 15 shipping companies and two industry associations for participating in a cartel. Hapag Lloyd, as a leniency applicant, benefited from a 50% reduction of the final fine.

While Hapag Lloyd did not appeal the AGCM's final decision, its fellow alleged cartelists did. The Administrative Tribunal of Rome first, and the CdS thereafter, annulled the AGCM’s decision. Following the annulment, Hapag Lloyd submitted to the AGCM a request to recover the fine. The company claimed that it was entitled to restitution since the annulment decision stated that the parties had not entered in a cartel agreement, and hence there was no breach of competition law. Hapag Lloyd stated that it had not appealed the decision because, as a leniency applicant, it had no legal standing. However, it claimed that it was still entitled to benefit from the effect of the annulment because the decision was a "unitary act" affecting all the parties to the proceedings equally.

The CdS rejected this argument and held that even a leniency applicant has legal standing to challenge the AGCM's final decision on the basis that even though a whistle-blower has the duty to cooperate with the authority and provide the relevant information, the AGCM remains independent in its decision. Indeed, the whistle-blower can disagree with the way the AGCM has qualified the conduct in question and its duty to cooperate expires at the end of the investigation. It is this independence which enables the leniency applicant to challenge the final decision. Legal standing to appeal a decision also follows from the possibility of being exposed to potential damages claims. Finally, the court rejected the “unitary act” assertion made by Hapag Lloyd, holding that a decision addresses each of the cartelists individually rather than treating them as a unified group.

To this end, the Court concluded that Hapag Lloyd could not benefit from the annulment decision because the company had not participated in the appeal in spite of having legal standing, and the decision, in this regard, had therefore become final against it.


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