The Benetton Judgment and its Practical Implications on Arbitration. - (SAR) 2000 -1
by Carl Michael von Quitzow, Jur. Dr., Jean Monnet Professor of European Law, Faculty of Law, Lund University
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[For a background to the case, see the preceding article by Karl Johan Dhunér.]
It follows from the judgment that the intention of the ECJ is that national courts shall exercise a control function over arbitration tribunals insofar that an arbitration award may be appealed against on the ground that EC competition rules have not been observed or applied correctly. The aforementioned means, it is submitted, that wrongful application or the plain disregarding of EC-competition law is a ground for appealing against the arbitration award, thereby arguing that this is to be regarded as null and void since it then infringes "ordre public". The national court concerned is then, consequently, obliged to examine an arbitration award which has been appealed against and if necessary co-operate with the Commission or request a preliminary ruling from the ECJ. In this respect co-operation with the Commission shall take place according to what is envisaged by the notice on co-operation between the Commission and national courts in the field of competition law. Requests for preliminary rulings shall be made when issues of law are raised which have not been settled by the ECJ in a materially identical case.
The judgment is of major importance for corporations operating on the European and global markets using arbitration to resolve disputes. It also puts the requirement of knowledge in competition law in arbitration proceedings and the choice of arbitration clauses in agreements in quite new perspectives. According to earlier case law of the ECJ since Nordsee, it is settled that arbitration tribunals do not constitute courts in the meaning of Article 234 of the Treaty. However, the ECJ decided in Almelo that a national court handling a case regarding an arbitration award which has been appealed against shall be regarded as a court enjoying the right to refer a case according to Article 234. It was in this case that the ECJ paved the way for the control function that later was introduced in Benetton.