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Cargolux et al cashback from cartel court

LUXEMBOURG: December 16, 2015. The General Court of the European Union has annulled fines of €790 million imposed in 2010 on 10 major airlines by the European Commission for alleged cartel behavior.

In addition to a €79.9 million refund for Cargolux, Air France-KLM is due €182.9 million, KLM a further €124.4 million, BA will get €104 million, Martinair €29.5 million and Cathay Pacific €57 million.

The decision to fine the carriers followed an investigation by the Commission into alleged air cargo collusion after a whistleblower move by Lufthansa Cargo and Swiss International Airlines in 2005.

Cargolux 45 yearsIn reaching its judgment the Court said the Commission had a responsibility to make the operative part of any decision "clear and precise" and a company subject to any penalties must be in a position to understand why.

According to the Commission, the operative part of its decision mentions four infringements relating to different periods and routes. Whereas some of the infringements were found to have been committed by all the carriers concerned, others were found to have been committed by a more limited group of airlines.

Despite this, the Commission concluded there was one single and continuous worldwide infringement covering all the routes by all the carriers and imposed fines on all of them with the exception of Lufthansa and Swiss that were granted immunity.

In appealing to the Court, the airlines fined by the Commission claimed the decision did not allow them to determine the nature and scope of their alleged infringements, and therefore there was a contradiction between the grounds and the operative part of the decision.

The Court agreed - noting the carriers were held liable for the entirety of the infringement with no distinction made between the routes they operated and those they didn't.

The Court added that the grounds for the Commission's decision "contain assessments which are difficult to reconcile with the existence of a single cartel covering all of the routes referred to in the operative part". The resultant inconsistencies, it declared, "were liable to infringe the applicant's rights of defense and prevent the Court from exercising its power of review".

The Court has ordered the Commission to pay the airlines' court costs and has given it two months to appeal the annulment decision.

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