Confirmation of joint and several liability of parent companies by Court

On 22 June 2009 the European Commission (“Commission”) had imposed fines in total of EUR 61 Mio against manufacturers of calcium carbide and magnesium based reagents for their participation in the calcium carbide cartel. The manufacturers concerned agreed between April 2004 and January 2007 on prices, quota- and customer allocation and exchanged information regarding prices, customers and sales volumes. As a result the prices for calcium carbide powder, calcium carbide granulates and magnesium granulates, which are used for the production of steel and the welding gas Acetylene, were increased artificially.

Among other manufacturers fined, TDR-Metalurgija d.d. (“TDR”) was held jointly and severally liable with its Slovenian parent company Holding Slovenske elektrarne d.o.o. (“HSE”) and consequently fined EUR 9.1 Mio. HSE held only 74% of TDR’s shares. However, on 13 December 2013 the Court confirmed in T-399/09, HSE vs Commission, the previous assessment of the Commission regarding the joint and several liability of HSE due to its decisive influence over TDR.

The Commission had already concluded the joint and several liability of HSE for the alleged infringement for, inter alia, the following reasons:

  • TDR was presented as part of the HSE Group in the annual report;
  • HSE presented itself as a group in the annual report;
  • the turnover of TDR was included in the consolidated financial statements of HSE;
  • TDR was part of the multi-utility range of HSE;
  • the members of TDR’s supervisory board were mainly representatives of HSE;
  • HSE received regular reports from TDR. Such reports included data on the (actual and planned) revenues, volumes delivered by other providers, key customers and the (expected) price development on the market.

Thus, HSE exercised decisive influence over TDR, controlling its management for the relevant period.

However, HSE argued that it merely supervised the activities of TDR, but did not exercise control. The composition of the supervisory board of TDR should be seen as a normal business practice for a shareholding of 74%. It should be also noted that HSE, as a state-owned company, was forced to buy TDR for a short while. In addition, the business fields of HSE and TDR are so different that the HSE-Management would not even have the know-how to be able to exercise decisive influence over TDR. However, neither the Commission nor the Court was convinced by these arguments to exclude that HSE had exercised control over TDR.

Consequently the Court confirmed that in this specific case the Commission had not only assumed the exercise of decisive influence, but had proven it explicitly in detail. A reduction of the fine could not be justified. Hence, the court dismissed the appeal and confirmed the original decision of the Commission to its full extent.


Dr. Christina Hummer
Ori Kahn