• In the case of Case C-453/99 Courage Ltd v Crehan [2001] ECR I-6297, it was established that the party of a contract liable to restrict or distort competition within Article 101 TFEU (previously Article 85 EC) can rely on the breach of such to be able to seek relief from the other party to the contract in a self-standing action.

Facts of Case C-453/99 Courage Ltd v Crehan [2001] ECR I-6297

  • Courage, a brewery, and leased a public house to Crehan
  • This lease was subject to a tie whereby Crehan purchased supplies from Courage
  • The company sued for the price of the beer supplied
  • Crehan argued that the tie agreement was unlawful as the company sold the beer to non-tied house for lower prices – this was anti-competitive
  • Crehan sought declaration that the agreement was made void, and claimed damages
  • Under the English Common law, a party to an illegal agreement cannot claim damages from the other party
  • The court hearing the case (The Court of Appeal) referred the case to the European Court of Justice for a preliminary hearing as to whether Community law precluded such

Issues in Case C-453/99 Courage Ltd v Crehan [2001] ECR I-6297

  • Can a party to an illegal agreement claim damages seek relief from the courts from the other contracting party?
  • If so, is the party able to recover damages that arose from his adherence of the agreement clause which is not allowed under Article 101?
  • In other words, was the agreement void, and was the C entitled to damages?

Held by the European Court of Justice

  • The agreement was automatically void under the article, and a party under such can rely on the breach to obtain relief from the other party. The Article precludes the national law in respect of barring the C from seeking relief as a party to the illegal agreement. However, Community law will not preclude the barred party under national law seeking damages where he bears significant liability to restrict or distort competition.

Findings of the Court

Parties to the contract can rely upon the Article

  • “any individual can rely on a breach of Article 85(1) of the Treaty before a national court even where he is a party to a contract that is liable to restrict or distort competition within the meaning of that provision.” [24]

However, this will not apply where the claiming party to the contract played a significant role:

  • “the Court has held that Community law does not prevent national courts from taking steps to ensure that the protection of the rights guaranteed by Community law does not entail the unjust enrichment of those who enjoy them” [30]
  • “Community law does not preclude national law from denying a party who is found to bear significant responsibility for the distortion of competition the right to obtain damages from the other contracting party. Under a principle which is recognised in most of the legal systems of the Member States and which the Court has applied in the past” [31]