# C_2006261EN.01000501.xml

| 28.10.2006 | EN | Official Journal of the European Union | C 261/5 |
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28.10.2006

EN

Official Journal of the European Union

C 261/5

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Judgment of the Court (Third Chamber) of 7 September 2006 (reference for a preliminary ruling from the Østre Landsret, Denmark) — VW-Audi Forhandlerforeningen, acting on behalf of Vulcan Silkeborg A/S v Skandinavisk Motor Co. A/S

(Case C-125/05) (1)

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(Competition - Distribution agreement relating to motor vehicles - Block exemption - Regulation (EC) No 1475/95 - Article 5(3) - Termination by the supplier - Entry into force of Regulation (EC) No 1400/2002 - Requirement to reorganise the distribution network - Period of notice - Statement of reasons - Burden of proof)

(2006/C 261/08)

Language of the case: Danish

Referring court

Østre Landsret

Parties to the main proceedings

Applicant: VW-Audi Forhandlerforeningen, acting on behalf of Vulcan Silkeborg A/S

Applicant:

Defendant: Skandinavisk Motor Co. A/S

Defendant:

Re:

Reference for a preliminary ruling — Østre Landsret — Interpretation of Article 5(3) of Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article 85(3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements (OJ 1995 L 145, p. 25) — Termination of the agreement by the supplier in a case where it is necessary to reorganise the whole or a substantial part of the network — Obligation to state reasons and extent of such an obligation

Operative part of the judgment

The Court rules:

The first indent of Article 5(3) of Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article [81](3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements is to be interpreted as meaning that:

| — | in order for it to be ‘necessary to reorganise the whole or a substantial part of the network’ there must be a significant change, both substantively and geographically, to the distribution structures of the supplier concerned, which must be convincingly justified on grounds of economic effectiveness based on objective circumstances internal or external to the supplier's undertaking which, failing a swift reorganisation of the distribution network, would be liable, having regard to the competitive environment in which the supplier carries on business, to prejudice the effectiveness of the existing structures of the network. Any adverse economic consequences which would be liable to affect a supplier in the event that it were to terminate the distribution agreement with a two years' notice period are relevant in that regard. It is for the national courts and arbitrators to determine, having regard to all the evidence in the case before them, whether those conditions are satisfied. |
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in order for it to be ‘necessary to reorganise the whole or a substantial part of the network’ there must be a significant change, both substantively and geographically, to the distribution structures of the supplier concerned, which must be convincingly justified on grounds of economic effectiveness based on objective circumstances internal or external to the supplier's undertaking which, failing a swift reorganisation of the distribution network, would be liable, having regard to the competitive environment in which the supplier carries on business, to prejudice the effectiveness of the existing structures of the network. Any adverse economic consequences which would be liable to affect a supplier in the event that it were to terminate the distribution agreement with a two years' notice period are relevant in that regard. It is for the national courts and arbitrators to determine, having regard to all the evidence in the case before them, whether those conditions are satisfied.

| — | where the validity of a termination with one year's notice is challenged before the national courts or arbitrators, it is for the supplier to prove that the conditions laid down under that provision for the exercise of the right to terminate on one year's notice are satisfied. The procedure for establishing such proof is a matter for national law. |
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where the validity of a termination with one year's notice is challenged before the national courts or arbitrators, it is for the supplier to prove that the conditions laid down under that provision for the exercise of the right to terminate on one year's notice are satisfied. The procedure for establishing such proof is a matter for national law.

| — | it does not require a supplier which terminates a distribution agreement pursuant to that provision to provide a formal statement of the reasons for the decision to terminate nor does it require the supplier to draw up a reorganisation plan prior to taking such a decision. |
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it does not require a supplier which terminates a distribution agreement pursuant to that provision to provide a formal statement of the reasons for the decision to terminate nor does it require the supplier to draw up a reorganisation plan prior to taking such a decision.

| — | the entry into force of Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector did not, of itself, require the reorganisation of the distribution network of a supplier within the meaning of the first indent of Article 5(3) of Regulation No 1475/95. However, that entry into force may, in the light of the particular nature of the distribution network of each supplier, have required changes that were so significant that they must be truly considered as representing a reorganisation within the meaning of that provision. It is for the national courts or arbitrators to determine, in the light of all the evidence in the case before them, whether that is the position. |
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the entry into force of Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector did not, of itself, require the reorganisation of the distribution network of a supplier within the meaning of the first indent of Article 5(3) of Regulation No 1475/95. However, that entry into force may, in the light of the particular nature of the distribution network of each supplier, have required changes that were so significant that they must be truly considered as representing a reorganisation within the meaning of that provision. It is for the national courts or arbitrators to determine, in the light of all the evidence in the case before them, whether that is the position.

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(1)  OJ C 143, 11.6.2005.

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