Arbitration and Competition Law: the Potential of Ireland in the Privatisation of Competition Law

• Date: 01 January 2014

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Arbitration and Competition Law:

The Potential Role of Ireland in the

Privatisation of Competition Law

CONOR TALBOT*

Introduction

Arbitration and competition law are strange bedfellows. In some ways they

are inherently contradictory and incompatible, but equally they can greatly

complement one another in certain situations. They are contradictory

because arbitration creates and enhances private autonomy while com-

petition law is a method used by the state to restrain inappropriate private

conduct in the market with the aim of maximising the benets of economic

activity for the public good. However, arbitration ourishes in a free

market economy system with freedom of commerce and competition, and

it could well make a lasting contribution to the common market attaining

its full potential. The ability to conclude arbitration agreements and to

enforce arbitral awards across borders has always been considered a great

incentive for the development of trade in goods and services and for the

mobility of persons among different nations. Europe has seen a great rise

in the levels of businesses opting for arbitration to solve their disputes, so

the integration of national arbitral bodies with their European and global

counterparts is becoming ever more important and, in the Irish context, this

will be a key element to ensure that this jurisdiction remains an open and

viable alternative for investment.1

With these issues in mind, this article will examine the use of arbitration

in competition law from an Irish perspective, with a focus on the challenges

faced by arbitrators operating in a jurisdiction where infringements of the

competition rules can carry the weight of the criminal law and potentially

lead to custodial sentences. Competition issues in arbitration proceedings

usually arise in the case of a breach of contract where the defendant

claims the nullity of the contract or of certain parts of it because it is anti-

* B. Corp Law International (NUI), LLB (NUI), LLM (EUI), PhD Candidate at European

University Institute, Florence; Associate Researcher at Department of Economics,

Trinity College Dublin; Trainee Solicitor at LK Shields Solicitors, Dublin. Author can

be contacted at conor.talbot@eui.eu.

1 For more on arbitration law in Ireland, see e.g. B. Manseld, Arbitration Act 2010 and

Model Law: A Commentary (Dublin: Clarus Press, 2012); for arbitration law in the

UK and global context, see e.g. Francis Russell, Russell on Arbitration (London: Sweet

& Maxwell, 2007)

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competitive. It could also be the case that a co-contractor claims damages

because of harm incurred through his counter-party’s violation of the

competition rules. After setting the scene by examining the key issues in

the debate around the suitability of deciding competition law issues in an

arbitration setting, this article will examine the peculiar problems faced by

arbitrators where criminal sanctions are at stake.

Part 1. Relationship between Competition and Arbitration

Arbitration as a Tool for Competition Law Enforcement

Broadly speaking, competition is used as the basic mechanism of the market

economy on both sides of the Atlantic in order to encourage companies

to offer goods and services to consumers on the most favourable terms.

It thereby encourages efciency and innovation and reduces prices while

also seeking to promote fair competition on the merits by protecting

consumers and wronged competitor businesses from anti-competitive

business practices. While the doctrines and systems on either side of the

Atlantic share the core elements mentioned above, in practice there are

some key differences—not least in terminology where the term “antitrust”

is widely used in the US for matters that would be encompassed in the

term “competition law” in the EU.2 For the purposes of this discussion,

“competition law” and “antitrust” shall be understood in the narrow sense,

so as to exclude the notion of unfair competition. Similarly, no reference

shall be made to branches of law related to competition law but specic to

EU Law, such as the control of State aids.

The competition enforcement system in the EU has played a role in

the development of arbitration as a tool for competition authorities.

As enforcement has focused on public enforcement by the European

Commission, private litigation is unlikely to rise to the same level it occupies

in the U.S. due to the absence of, or limitations on, procedural incentives.

Class actions do not play the same prominent role, and the innovative new

representative actions that have been introduced in the UK and Germany

remain underutilised. Signicantly, there are limited procedures for enabling

individuals to access relevant proofs, such as whistleblower reports.3 Thus,

2 For general comparative studies on EU/US competition law, see e.g. Eleanor M. Fox,

U.S. Antitrust Law in Comparative Context, Cases and Materials, 3rd edn (Rochester,

NY: West Academic, 2012)

3 There has been some progress in this regard in Ireland with the publication of the

Protected Disclosures Bill 2013. See further, Transparency International Ireland

welcomes publication of Irish ‘Whistleblower’ Bill, Transparency International Ireland, 3

July 2013 (available at: http://transparency.ie/news_events/transparency-international-

ireland-welcomes-publication-irish-%E2%80%98whistleblower%E2%80%99-bill

[Accessed 27 April 2014])

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