Wednesday, September 29, 2010

More Punishment Likely For Air Freight Carriers In Cartel Scandal

Anti Trust Cases Roll On and On
Shipping News Feature

EUROPE - After our story earlier this month telling how Argos is taking legal action against Maersk Line for alleged breach of contract over pre agreed shipping container prices, and tales of collective anti trust suits against air freight companies and forwarders involved in various price fixing allegations, comes a report that some big European hitters are about to launch their own legal campaign against the air cargo carriers.

According to reports Dublin based company Claims Funding International (CFI)are to launch a class action for around half a billion dollars on behalf of various manufacturing leviathans such as Ericsson and Philips against the sixteen airline cartel on an upmarket ‘no win – no fee’ basis. Air cargo carriers in the legal sights include Air France-KLM and Martinair and the case is likely to prove the biggest such action of its type in Europe.

Documents are due to be lodged with an Amsterdam Court tomorrow and the outome may prove to be a heavy burden to bear for some of the companies involved. Air France-KLM for example are already almost $440 million adrift in penalties and compensation after US legislators ruled against the company (or companies in legal terms as the two are considered separate entities by the Courts)in July.

Spokesmen say several hundred companies are lining up to join the action with numerous European countries involved in the case. The litigation is hardly surprising, only two weeks ago CFI bemoaned the fact that the SAS Cargo Group and Scandinavian Airline System agreed to compensate US freight forwarders to the tune of almost $14 million for their breach of anti competition laws yet offered little to the European victims of the scam. Whilst forwarders are to be paid (and it seems unlikely they would be the ones to suffer directly having passed on all freight charges), their indirect clients are set to receive nothing.

The claims arise out of a global cartel in international air freight services which is believed to have occurred between January 2000 and late 2006. SAS have pleaded guilty to price fixing to the regulatory authority in the US and was fined $52m. The SAS case followed US settlements with Lufthansa, Air France-KLM, Martinair, JAL and American Airlines.

CFI, in partnership with London lawyers Hausfeld and BarentsKrans in the Netherlands are pursuing the cases across the continent. Hausfeld & CFI have signed a formal co-operation agreement to co-ordinate the pursuit of claims for shippers within the EU. British Airways plc faces an action brought by flower importers and a growing group of other shippers in the English High Court by Hausfeld & Co. LLP. Other shipper actions are pending in Australia, Canada, New Zealand and South Korea. The European Commission has still not delivered a decision on the cartel despite having investigated it since December 2007.

European freight forwarders should not all be too happy about possible compensatory remuneration as they face anti competition accusations of their own both in their own individual states and across the EU.