MERGERS : COMMISSION CONTESTS COURT JUDGEMENT ON SCHNEIDER ELECTRIC.

The European Commission has decided to lodge an appeal before the EU Court of Justice in the two months that it has at its disposal for this matter, against the judgment of the Court of First Instance of 10 July 2007 ordering the Commission to compensate Schneider Electric for the damage sustained as a result of the infringement of its right to be heard during the investigation into its planned acquisition of Legrand in 2001 (see Europolitics 3346).

The in-depth analysis of the judgement carried out by the Commission concluded that the Court's reasoning is marred by several errors. In particular, the Commission disputes the finding that the infringement of Schneider's rights of defence during the examination of its acquisition of Legrand in 2001 can be considered a "sufficiently serious breach" - such a breach alone being capable, according to the case law, of giving riseto the Community's non-contractual liability.

Furthermore, the Commission considers that the main head of damages identified by the CFI, namely the selling by Schneider of Legrand to Wendel-KKR at a loss, has no direct causal link with the fault that the Commission allegedly committed. It was Schneider itself that put an end to the re-examination of its proposed acquisition of Legrand by selling that company to Wendel-KKR before the Commission had had an opportunity to state its official position on the compatibility of the merger. The identified loss was therefore incurred as a result of Schneider's move.

Background

On 10 July 2007, the Court of First Instance delivered a...