Various private railway undertakings and their public clients are in dispute with Deutsche Bahn over the reimbursement of charges for access to railway tracks and stations. Lawyer Eckhard Bremer already reported on this dispute in this blog in November 2020. Bremer is one of the plaintiffs’ representatives. The legal issue at the heart of the dispute concerns the relationship between cartel damages law and the public law regulatory regime for the rail sector. After several rulings of the German Bundesgerichtshof, the Federal Supreme Court, the ECJ will now rule on the issue upon referral by a Berlin court, the Kammergericht (Case C-721/20, DB Station & Service). Time for an update.
The dispute over DB’s track access and station charges continues. A good six months ago, a first blog post on the subject appeared here. At that time, the parties involved were waiting for the Bundesgerichtshofs (BGH) reasons for its decision in Stationspreissystem II (“Station Pricing System II”) case (Case No. KZR 12/15). The BGH’s reasons for decision are now available. The Kammergericht disagrees with the BGH and has therefore appealed to the ECJ. In addition, the Cartel Senate of the BGH has meanwhile ruled on the issue two more times and consolidated its line (Ref. KZR 60/16; KZR 103/19).
I. In a nutshell: What has happened so far
Private railway undertakings (RUs) and their public clients (public authorities) are still in dispute with DB and its subsidiaries over the recovery of infrastructure usage charges (regional factors, station charges). They are called “old charges” because DB had still levied them under the regime of the old version of the General Railway Law (AEG), which was replaced by another law, the ERegG on 2 September 2016. The old version of the AEG did not contain a legal basis on which aggrieved parties could obtain a refund of the charges. At the time, however, legal protection against such infrastructure usage charges was granted by the civil courts. RUs and public authorities could sue directly for repayment, whereby the civil courts examined the charges on the basis of Section 315 (3) of the German Civil Code (BGB) and, when interpreting the legal term “equity”, also examined the legality of disputed charges under railway law.
The ECJ ended this practice in 2017 with its ruling in the CTL Logistics case. The ECJ feared that the civil court equity review would undermine the substantive criteria of regulatory law and the exclusive competence of the regulator, the Bundesnetzagentur (BNetzA), to apply them. Since then, according to Section 315 (3) of the German Civil Code, civil courts may only decide if the BNetzA has already established the unlawfulness of the charges in a final and binding manner. In the wake of the ECJ’s CTL Logistics decision, many plaintiffs filed applications with the BNetzA requesting a review of the charges. (Unlike the old version of the AEG, the ERegG, which came into force in 2016, recognises such rights of application). However, the BNetzA does not consider itself authorised to carry out such a retrospective review of charges, which the ECJ has called upon it to do. The BNetzA therefore does not want to make use of the ball for the penalty kick that the ECJ has placed at its feet. This has led to further litigation.
At the moment, two disputes are therefore at the forefront: before the Cologne Administrative Court, the plaintiffs are arguing about the BNetzA’s authority to review charges, even retroactively. The civil courts are dealing with the consequences of the ECJ ruling for abuse control under competition law. Many plaintiffs claim that DB levied the charges in abuse of its dominant position (Article 102 TFEU, Section 19 (1) GWB) and that the civil courts are entitled to make this finding independently of the BNetzA’s assessment under railway law. DB is of the opinion – with reference to CTL Logistics – that civil courts may also only decide on cartel damage claims if the BNetzA has already declared the charges to be contrary to railway law with final effect. However, the BNetzA does not see itself in a position to make exactly such a determination.
In the meantime, the BGH has supported the opposite position in four rulings. A decision by the BNetzA is not a prerequisite for courts to be able to measure railway infrastructure use charges against Article 102 TFEU.
For the details, reference can again be made to the blog post from November 2020. This update will deal with the current status of the dispute. Specifically, it is about the BGH’s reasons for judgement in the “Station Price System II” case and the reference for a preliminary ruling from the Kammergericht, on which the ECJ must decide (Case C-721/20, DB Station & Service).
II. “Station price system II”: No conflict of norms between regulatory law and cartel law
With the “Stationspreissystem II” ruling (Case No. KZR 12/15), the BGH brought to a conclusion an appeal procedure that it had initially suspended in response to CTL Logistics (the suspension decision of 29 January 2019 is discussed in detail in the original article). At the time, the BGH wanted to give the BNetzA the opportunity to examine the disputed charges in order to take account of the ECJ’s requirement that the regulatory authority must decide on the compatibility of the charges with railway law before a civil court decision. Following a decision by the BNetzA, the BGH could have decided on the basis of Section 315 (3) BGB. The BNetzA declared a subsequent review of charges, which the BGH had suggested to it, to be inadmissible, so that the path via section 315 (3) BGB was blocked in accordance with the principles from the CTL Logistics case. The BGH therefore allowed the plaintiff’s appeal on the basis of Article 102 TFEU and referred the case back to the Dresden Higher Regional Court (OLG Dresden). This court must now examine whether the disputed station charges were levied in an abusive manner (on the regional factors already OLG Dresden, judgment of 13 January 2021, Case U 8/15Kart).
In the reasons for the judgement, the BGH elaborates on its argumentation from the earlier charges judgement (Ref. KZR 39/19). As Heike Schweitzer in the paper (click here for the German and English version) referred to by the BGH in a later ruling (ruling “Stornierungsentgelt II” of 8 December 2020, ref. KZR 60/16), the BGH also assumes that there is no conflict between regulatory law and cartel law in the specific case. Therefore, the conflict rule (primacy of primary law) is not even relevant.
On a substantive level, the Cartel Senate sees no conflict of objectives between regulatory law and cartel law. Both areas of law serve fair and undistorted competition on the railways. They protect non-discriminatory access to the network (paras 24-27).
In terms of competence law, there is also no conflict between the civil courts and the BNetzA when civil courts decide on compensation claims under competition law. The compensation claims were based on past infringemenst, whereas the BNetzA had to monitor the current market conditions. Competition at present is not impaired if courts award individual competitors damages or claims under enrichment law for the past. Such rulings therefore do not affect the prohibition of discrimination under regulation law, nor is the BNetzA forced after such a ruling to adjust the charges for all competitors (paras 28-34).
With these reasons, the BGH not only again rejects its own referral to the ECJ, but also directly addresses the two Berlin courts (Landgericht and Kammergericht). Both Berlin courts had already announced preliminary references at the time of the BGH ruling. For the Cartel Senate, however, this was no reason to suspend its proceedings.
III. Opposition from Berlin: The reference for a preliminary ruling from the Kammergericht (Case C-721/20)
A few days after the reasons for the judgment were served on the parties, the Kammergericht decided to refer the case to the ECJ for a preliminary ruling (order of 10 December 2020, ref. 2 U 4/12Kart). Unlike the BGH, the Kammergericht intends to extend the ECJ’s reasoning to antitrust law. Damages for abusively levied track access charges would then only be conceivable if the BNetzA had previously declared the charges to be contrary to railway law; an assessment under competition law by civil courts would depend on the BNetzA having previously declared the charges to be incompatible with railway law with final effect.
The reasoning of the Kammergericht is brief. Although the Senate reproduces the reasons for the judgment in the CTL Logistics case in relative detail (paras 20-28), it then only briefly states that these arguments can be “transferred without significant restrictions to the review of user charges under cartel law” (para. 29).
To see that the Kammergericht is making things very easy for itself, it is sufficient to look at the operative part of the judgment in the CTL Logistics case. The ECJ has prohibited the application of a national regulation according to which track charges can be reviewed for fairness by the ordinary courts in individual cases and, if necessary, amended independently of the regulatory body. The abuse control is neither meant nor covered by this:
Firstly, charges under Art. 102 TFEU are not “reviewed for fairness in individual cases”. Whereas the review under Section 315 (3) of the German Civil Code “is directed at the establishment of a relationship corresponding to equity in the individual case” (para. 69 of the CTL Logistics judgment) and its criteria differ from case to case (para. 73 loc. cit.), competition law is market order law (like regulatory law). It looks at the overall competitive situation on the basis of uniform criteria, not at the fairness of the interests of individual contracts.
Secondly, under Art. 102 TFEU, the charges are not “independently modified” by the regulatory body. Whereas a court determines the equitable charges itself when applying Section 315 (3) of the German Civil Code, a civil court does not act to shape the law when deciding on cartel damages for charges levied in the past. It therefore remains the responsibility of the infrastructure manager to set charges in accordance with competition law (on this aspect see para. 77 f. of the CTL Logistics judgment). The regulatory procedures before the BNetzA apply to the setting of these new charges. A civil court does not set charges that may be levied or are to be levied in the future.
Thirdly, the reference for a preliminary ruling by the Kammergericht must be countered with the fact that EU antitrust law is also not a “national regulation”. Article 102 TFEU is directly applicable primary law. Due to the primacy of primary law, the Railway Directives cannot restrict the prohibition of abuse. The Kammergericht counters the reference to the legal nature of Art. 102 TFEU with the succinct (and incorrect) reference that the ECJ has not yet decided “whether this also applies when the setting of charges is supervised by a regulatory authority” (paras. 30 f.; the Kammergericht overlooks ECJ, Judgment of 10 July 2014, Case ‑C295/12 P, Telefónica, para. 128; ECJ, Judgment of 29 March 2012, Case T398/07, Spain v. Commission, para. 55).
Finally, at the end of its reasoning, the Kammergericht briefly deals with the BGH’s argument on competence law (discussed above) from the “Station Price System II” ruling (para. 32 f.). The Kammergericht refers to the fact that the control of abuse under cartel law can also be directed at the future instead of the past (e.g. the claims for injunctive relief and removal under Section 33 (1) GWB). The comment is correct, but misses the point. The BGH (just like Schweitzer) never claimed that the abuse control “exclusively refers to the past” (so para. 32 of the order for reference). The BGH distinguishes (on the contrary) precisely according to the temporal dimension of various civil antitrust claims. If claims are directed at the future, complicated conflicts with the regulatory regime may arise (in which case primary law prevails in an emergency). However, if abuse control is only directed at the past (as in the case of the decision on compensation claims), no conflict of jurisdiction between the regulatory regime and antitrust law can arise.
IV. Outlook: The implementation of the ECJ ruling
With the submission of the Kammergericht, the dispute about the repayment of track access and station charges takes another diversion. Even if the ECJ ultimately confirms the position of the BGH, which in the opinion of the author is likely, the preliminary ruling unfortunately delays the legal dispute once again (in the initial proceedings of the Kammergericht, an action was filed in 2011!).
If, contrary to expectations, the position of the Kammergericht should prevail in Luxembourg, it will once again be exciting before the German courts: the Kammergericht will then have to deal with the question of how it will take the ECJ’s requirements into account in its decision. The BGH has already pointed out that neither an interpretation of the basis for the claim in conformity with the Directive is possible contra legem nor a direct application of the Directive to the detriment of private parties is possible. The Kammergericht disregarded this objection wordlessly in its discussion of the relevance of the decision (para. 15 of the order for reference). Because the relevance of the decision is to be assessed by the court of the Member State, the ECJ cannot intervene to correct the situation. It is quite possible that in the end the BGH will have the last word.
Dr. Eckhard Bremer, LL.M. (Harvard) is a partner at Hyazinth in Berlin and represents the State of Saxony-Anhalt in parallel proceedings.