In a decision dated July 24, 2024,[1] the Paris Court of Appeals granted a stay of execution in relation to a €2,700,000 fine imposed on the Association Nationale des Industries Alimentaires (“ANIA”) by the French Competition Authority (“FCA”) in the Bisphenol A case only considering the manifestly excessive consequences of such sanction in view of ANIA’s financial situation and without examining its merits.
Background
On December 29, 2023,[2] in decision 23-D-15 (“Decision”), the FCA fined four professional organizations, including ANIA, three can manufacturers and eight canned food suppliers a total of €19,543,400 for having coordinated their behaviour between 2011 and 2015 to limit the competition risks associated with the “BPA-free” transition.
Following the decision, ANIA filed an appeal on March 18, 2024 against the French Competition Authority’s decision and subsequently, on May 2, 2024, requested a stay of execution from the President of the Court of Appeals on the basis of Article L. 464-2, L.464-8 and R.464-22 to R.464-24 of the French Commercial Code, citing manifestly excessive consequences for its operations.
Indeed, the introduction of an appeal for annulment or reform before the Paris Court of Appeals is not suspensive, and under Article L. 464-8, the First President of the Paris Court of Appeals can order that the execution of the decision be suspended if “it is likely to result in manifestly excessive consequences” or if new facts of exceptional seriousness have occurred after its notification.
Rationale for the stay of execution
In its appeal, ANIA argued that the FCA’s Decision could have a disproportionate financial impact given its current precarious financial state. Indeed, ANIA stated that as an association primarily representing individuals and food industry representatives, it had limited resources, primarily allocated to maintaining its staff, and that the imposed fine would significantly jeopardize its ability to operate effectively. ANIA’s balance sheet revealed a net loss, low operating surplus, and limited assets, making it particularly vulnerable to the financial consequences of the fine. Its lack of substantial equity holdings and real estate further exacerbated this vulnerability.
In addition, ANIA argued that the fine was excessive and disproportionate and further criticized the FCA’s lack of justification for determining the fine, indicating that this posed a serious risk of an annulment of the FCA decision.
In its decision, the Paris Court of Appeals considered that when applying Article L. 464-8, the manifestly excessive nature of the consequences of the provisional enforcement of such a decision should be assessed in relation to the situation of the sanctioned person, without any need to analyse the chances of success of the appeal for annulment or modification of this decision. The Paris Court of Appeals acknowledged that in the present case, ANIA’s financial position could be severely impacted by the payment of the fine and, for this reason, granted ANIA a stay of execution.
The Paris Court of Appeals thus decided to align with the approach taken by the French Cour de cassation regarding stay of execution cases based on Article L.621-30 of the French Monetary and Financial Code[3] (explicitly referring to this precedent in its decision) focusing solely on the company’s specific financial situation when evaluating the excessive consequences of the fine – and dismissing without examination arguments according to which manifestly excessive consequences could result from procedural irregularities or a disproportionate amount of the fine.
In so doing, it is revisiting a practice it has followed in certain past decisions,[4] clearly reserving questions relating to the case’s merits, including procedural irregularities, for the appeal process.
Key Takeaways
This ruling establishes a clear standard for future stay of execution cases, ensuring that procedural irregularities will no longer be considered in stay of execution decisions. The merits are part of the discussion in ANIA’s ongoing appeal.
The Court’s decision grants ANIA temporary relief from the FCA’s fine while the appeal process unfolds. The final outcome of the appeal will determine whether the fine is upheld or overturned.
[1] Paris Court of Appeals, ruling no.24/07473 of July 24, 2024
[2] See the Antitrust Watchblog post on the decision here
[3] See French Cour de cassation ruling, no. 12-24.401 of February 15, 2023
[4] The practical application of Article L.464-8 of the French Commercial Code has been subject to different interpretations. The Paris Court of Appeals occasionally focused exclusively on the manifestly excessive consequences of the sanctions (see for example the Paris Court of Appeals ruling no.12/09395 of July 3, 2012) but also considered a broader responsibility of the Court to ensure that when a serious procedural irregularity is raised, the decision is not at serious risk of annulment on that basis (see, for example, the Paris Court of Appeals ruling no. 12/08906 of June 26, 2012).