Courage Ltd v Crehan
A party to an agreement that breaches EU competition law can claim damages from the other party, and English law could not prevent this merely because the claimant was a party to the illegal agreement.
Facts
Mr Crehan leased two pubs from a company owned jointly by Courage, a brewery, and Grand Metropolitan. The leases required him to buy his beer from Courage, at prices higher than those charged to free houses. When Courage sued him for unpaid beer bills, he argued that the beer tie was contrary to what is now article 101 of the Treaty on the Functioning of the European Union, and claimed damages. Under English law, a party to an illegal agreement could not claim damages from the other party. The Court of Appeal referred questions to the Court of Justice.
Legal principle
The Court of Justice held that the full effectiveness of article 101 would be put at risk if it were not open to any individual to claim damages for loss caused by a contract or by conduct liable to restrict or distort competition. National law could not impose an absolute bar on a claim by a party to the agreement merely because he was a party to it. However, a national court may deny a claim where the claimant bears significant responsibility for the distortion of competition, taking into account the parties' bargaining positions.
Related cases on direct effect of Treaty articles and regulations
- Angonese v Cassa di Risparmio di Bolzano SpA Case C-281/98, [2000] ECR I-4139
- Commission v Italy (Premiums for slaughtering cows) Case 39/72, [1973] ECR 101
- Defrenne v Sabena (No 2) Case 43/75, [1976] ECR 455
- Grad v Finanzamt Traunstein Case 9/70, [1970] ECR 825
- Leonesio v Italian Ministry of Agriculture and Forestry Case 93/71, [1972] ECR 287
- Muñoz y Cia SA v Frumar Ltd Case C-253/00, [2002] ECR I-7289
- Politi SAS v Ministry for Finance of the Italian Republic Case 43/71, [1971] ECR 1039
- Reyners v Belgium Case 2/74, [1974] ECR 631
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