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12 October 2006
The Supreme Court has confirmed(1) a Cartel Court decision dismissing a case brought by an overseas customer against a well-known producer of pharmaceutical products. The customer alleged that the producer had abused its dominant position by failing to conclude a supply contract and requested interim measures.
The customer asked the producer to supply certain semi-finished goods so that it could develop, produce and market its products. These semi-finished products can be produced freely by any company willing and able to do so, as they are no longer protected by patent. However, the producer and the customer were unable to agree on the conditions under which the producer would supply the products to the customer. Additionally, supply of goods to the customer was difficult in the short term due to limited production capacities. The negotiations thus became increasingly problematic.
The Cartel Court and the Supreme Court discussed at length the issues of the relevant market definition and (potentially) dominant position. However, the Supreme Court concluded that a final position on these issues was not needed, as such an abuse of a (potentially) dominant position could be excluded for several reasons.
It is clear from many Austrian and European decisions that, in general, a dominant undertaking must conclude contracts indiscriminately and may refuse to do so only on reasonable grounds (eg, production capacities problems, as invoked by the producer in the case at hand). The Cartel Court found that, in the final stages of the negotiations (when draft contracts had already been exchanged), a representative of the customer threatened the producer's representatives with unfounded criminal prosecution in order to be granted additional contractual benefits. Following a heated discussion, the customer's representative instructed his lawyers to order the producer's representative and lawyers out of the meeting room and prohibited his lawyers to have further contact with the producer's lawyers. Based on these facts, both courts concluded that the producer had legally refused to conclude a contract with the customer. This excluded any possibility of a finding of abuse of a dominant position.
The behaviour of the customer not only resulted in the termination of negotiations on a possible contract, but also was one of the main reasons why the customer lost a long and complex court action.
For further information on this topic please contact Dieter Hauck or Rainer Knyrim at Preslmayr Attorneys at Law by telephone (+431 533 16 95) or by fax (+431 535 56 86) or by email (email@example.com or firstname.lastname@example.org).
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