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International Law

 

Table of Contents

Background. 3

Importance of the case. 3

Implications for hybrid settlements. 4

Consequences of a breach of the presumption of innocence. 5

Possible solutions for hybrid cases. 6

Interpretation of AC-Treuhand and the legality principle. 7

Assessment of evidence. 8

Interpretation of Single and repeated/ Single and continuous infringement 8

Statement of reasoning and fines. 9

By Object Infringements. 10

Practical Implications. 10

Conclusion. 12

Bibliography. 13

 


 

Background

This case was concerned with a certain case of the European Commission, which was related to manipulating scales/benchmarks. The benchmarks spoken of are related to the Japanese Yen Interest Rate derivatives. Previously in 2013, a settlement based decision of the European Commission ended up declaring and sanctioning six bilateral based agreements between banks, mentioning that ICAP itself had acted as the architect of the entire endeavour. It was also mentioned that facts, which were agreed upon by the parties who were settling, did not have the capability to establish fault on the part of ICAP itself. The commission had alleged that ICAP was in breach of Article 101 Treaty on the Functioning of the European Union (2007)[1]and Article 53 of the EEA Agreement (1994)[2]. As of 2015, specifically in February, the European Commission provided a separate judgment for ICAP, as it was an alleged facilitator who had refused to settle the case. ICAP itself ended up being fined close to 14 million Euros who further appealed to the General Court, who has delivered its judgment, which will be highlighted.

Importance of the case

The Judgment rendered in this case is particularly important for 5 different reasons. Firstly, due to the fact that the judgment has implications for settlements which are hybrid based and the notion of the presumption of innocence. Secondly, how the case of AC-Treuhand v Commission[3]was interpreted and what role legality plays in cases concerning competition. Thirdly, the conducting of an assessment of evidence in a practical fashion. Fourth, how the terms ofsingle and repeated along with single and continuous infringement are interpreted. Lastly, the reasoning behind how fines were calculated. This assignment will attempt to cover each of the 5 reasons of importance in detail and will attempt to critically analyse them. The assignment will also cover the practical implications of the decision and describe other aspects as well.

Implications for hybrid settlements

The notable section of the Judgment is present at its end. ICAP had stated that the European Commission had engaged in the breach of the notion of the presumption of innocence by mentioning how ICAP had engaged in infringement and facilitated the infringement as well. If the European Commission had taken certain precaution based measures to ensure that they did not legally speaking qualify such behaviour on ICAP’s part, the General Court mentions that this is an exhibition of a certain stance which was embraced by the European Commission. This allowed the General Court to form the view that if the commission did adopt this stance, it is easy for a legalbased classification to be inferred. This was reiterated in the 2013 decision as a virtue of AC-Treuhand v Commission (2015)[4].

The European Commission’s stance was to use ICAP’s participation in order to understand the guilt of those who had chosen to settle. In addition, where decisions in reference to settlements were stalled until the usual procedure came to an end using parties which were non-settling would be against the aims of quickness and efficiency of the procedure of settlement itself. The General Court has stated that although the aims are praiseworthy in nature, they cannot be allowed to tower over the notion of the presumption of innocence. The reason for this is because the notion of the presumption of innocence is considered to be a greater good.

The Judgment, which was handed down mentions that decisions in regards to settlements have to adhere to the requirements, which are attached to the presumption of innocence. It also mentions a solution to be able to ensure that this occurs. In certain cases where the European Commission has to refer to the behaviour of a party, which is non-settling in nature, they should adopt both decisions simultaneously the way they did in the case ofTimab Industries and CFPR v Commission[5], which was supported by the decision in Animal Feed Phosphates[6].

Consequences of a breach of the presumption of innocence

It must be understood that the requirements, which arise out of the presumption of innocence itself, are of the utmost importance. These requirements are not functional requirements, which may be fixed by utilizing judicial review. Whether or not the breach has an effect upon the outcome of the case should not be a consideration, it should be considered unrelated in nature.  The reason for this being that the solution which was adopted by the General Court which states that breaches may not matter if scrutiny exhibits that the decision was made for the right reasoning or corrects any errors means that the breach itself will not have repercussions at any point (Bronckers & Vallery)[7].

A breach will only be of some significance if the European Commission makes an error in coming to a conclusion or a decision. If this were the case, the case itself would be void. It is for this reason that the solution provided has the effect of creating incentives, which are perverse in nature. An example that can be taken into consideration is that what possible incentives could the European Commission have to ensure the presumption itself is not breached. An interpretation of this may be that the General Court is stating that it will be thorough and detail oriented in the process of review. It is important that the court be strict in relation to matters of evidence as the notion of the presumption of innocence needs it and the evidence review should not defer depending on factors, which are unrelated to the body of evidence.

Possible solutions for hybrid cases          

For certain cases, the use of specific evidence and utilizing third parties may be considered to be an adequate solution to hybrid cases. With the current case, which concerns infringements of a bilateral nature, where the declaration of infringement or breach requires that something is said about a party which is non-settling, there are certain avenues to take. The main solution, which can be adopted, is the simultaneous use of two decisions at the same time as was mentioned before by the General Court. However, it may be mentioned that the European Commission may not want to take that stance as it would allow non-settling parties to postpone the decision of settlement that may have an effect on certain actions. This may cause the Commission to become aggressive towards companies who may not want to settle, which indirectly may create enticements for the companies to accept settlements (Thomas)[1].

Furthermore, a section of the problem may be solved by using drafting which is transparent in nature. Where the Commission is describing the facts and background they may choose to knowingly recognize the special conditions in relation to hybrid cases and mention that the facts are under contestation by different parties. This may occur if non-settling parties make their comments on the assessment sent to parties who are settling in the initial phases and to ensure that their views are mirrored in the decision which is taken…..