On 27 February 2014, the Paris Court of Appeal awarded the
poultry breeder Doux € 1.66 million in damages against
Ajinomoto Eurolysine, a lysine producer, and its exclusive
distributor, CEVA Santé Animale.
Back in 2000, the European Commission found that Ajinomoto
participated in a cartel among lysine producers. Doux argued that
the cartel resulted in higher prices for lysine, a feed additive
which it bought from Ajinomoto's exclusive distributor, and
demanded financial compensation. In 2009, the Court of Appeal
allowed Doux's action for damages, but its judgment was
subsequently quashed by the French Supreme Court in 2010 on the
grounds that it had not responded to Ajinomoto's claim that
Doux had passed-on the overcharge to its customers.
In the current proceedings, the main issue before the Court of
Appeal was whether Ajinomoto could escape liability on the basis of
the passing-on defense. The passing-on defense allows undertakings
to escape, or at least reduce, their liability for the harm caused
by anticompetitive conducts by claiming that the overcharge was
passed-on by their direct customers to their own customers.
The Court of Appeal held that Doux sufficiently established that
it had not passed-on the overcharge to its customers on two
grounds. First, it was established that large retailers, which
represented 80% of Doux's customers, had strong bargaining
power and had consistently refused to accept any price increase.
Second, the cost of lysine as feedstock represented only 1% of the
total cost of the final product, the amount of which was not
sufficient for Doux to request a higher price to its customers. As
a result, the Court of Appeal dismissed Ajinomoto's claim that
it was not liable for damages on the grounds that the price
increases stemming from the cartel were passed-on from Doux to its
This rare judgment on damages is of interest as its finding
appears to differ from the European Commission's draft
Directive on actions for damages, which provides that the burden of
proof that the overcharge was passed-on rests on the cartelist. In
the present case, the Court of Appeal appears to consider that the
burden of proof rests on the direct customer of the cartelist (the
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