Newsletter: New ruling from the Norwegian Supreme Court regarding the conditions for bringing proceedings against foreign companies in Norway

On 27 November 2019, the Norwegian Supreme Court issued a ruling (HR-2019-2206-A) that is of interest to both Norwegian and foreign companies that want to bring legal proceedings against foreign companies in Norway and to foreign companies that have had such proceedings brought against them by a Norwegian or foreign company, in Norway.

In the case the plaintiffs, Posten Norge AS and twelve subsidiaries (five Norwegian plaintiffs and seven foreign) in the Posten Group had claimed damages from the defendants, which were MAN, Volvo / Renault, DAF, Daimler and Iveco, all of which are selling trucks. Of the defendants, only Volvo Norge AS had its ordinary place of venue in Norway. The others had their ordinary place of venue in other countries within the Lugano Convention area (EU countries, Switzerland and Iceland).

The background for the claim of damages, was that the European Commission made a decision in 2016 whereby the defendants were fined for unlawful price cooperation over a long period of time. Volvo Norge AS was not included in the decision and was therefore not fined. The Posten companies had purchased a significant number of trucks from the defendants and believed that the price they had paid had been inflated due to the price cooperation.

The Posten companies argued that the truck companies were jointly responsible for the Posten companies’ losses and brought proceedings against them in Norway, at Volvo Norge AS’s general venue (Oslo District Court). While Volvo Norge AS did not object, the foreign defendants objected to being sued in Norway, stating that the terms of Article 6.1 of the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters were not fulfilled. The District Court allowed the lawsuit but it was partially rejected and partially upheld by the Borgarting Court of Appeal. Both the seven foreign Post companies and the foreign defendants appealed the Court of Appeal’s ruling to the Supreme Court.

The question before the Supreme Court, was whether the claim that the Posten companies had made against Volvo Norge AS was “so closely connected” to the claims that the Posten companies had made against the foreign defendants, that the lawsuits against the foreign defendants could also be heard in Oslo District Court. Article 6.1 of the Lugano Convention provides for an exception to the main rule of legal venue, in that lawsuits may be brought against several defendants in the place where one of the defendants resides, provided that the claims are sufficiently connected.

On the terms for when this exemption applies, the Supreme Court stated that the same legal and factual situation must trigger a risk of divergent judgments of the closely connected claims due to the claims being split up and handled separately. That the lawsuit against the Norwegian subsidiary was brought to bring the foreign defendants to Norway, was not an absolute obstacle as long as there was sufficient connection between the claims. Accordingly, the rules in the Convention article 6.1 leave no room for a doctrine of abuse if the conditions of affiliation are fulfilled.

The Supreme Court also issued statements on the norm for testing whether the conditions of affiliation in Article 6.1 are fulfilled. The plaintiff has the burden of proof that the conditions for joinder are fulfilled, but it is sufficient that the plaintiff demonstrates a certain likelihood that the conditions of affiliation are fulfilled. Thus, the plaintiffs claim regarding the said conditions are  tested. In the specific case, it was probable that the requirements were so closely connected that they should be united for joint treatment. The Supreme Court also considered the relevance of the fact that Volvo Norge AS was not included in the EU Commission’s decision. The Supreme Court did not see this as an absolute obstacle, and thus accepted the use of the single Norwegian truck company as an “anchor” for the lawsuit against other, foreign truck companies. Nor could it be required that the company should have participated in the price cooperation on an equal footing with the addressees of the decision.

It was not necessary for the Supreme Court to decide on whether Volvo Norge AS had committed acts that could lead to joint and several liability. The Supreme Court’s conclusion was thus that all of the plaintiffs (both the Norwegian and the foreign Posten Group companies) could sue both Volvo Norge AS and the foreign defendants in Norway. The ruling illustrates that there is little room for reasonableness in the application of the Lugano Convention. What matters is whether the conditions are met, objectively speaking.

The Supreme Court ruling can be read here.

Kvale regularly works on questions of legal venue in international affairs. Attorneys Andreas Stang Lund, Kristian Lindhartsen and Lilly Kathrin Relling can be contacted for questions regarding this.