Damages for competition law infringements in Montenegro: a new legislative framework inspired by EU Law

The law applies to proceedings for damages initiated after 26 December 2014 which have not been concluded by the time the law enters into force. Certain provisions related to the application of EU law shall apply from the date of Montenegro's accession to the EU.

Competition infringement and initiation of proceedings

A competition infringement is an infringement under the Competition Act of Montenegro, as well as a violation of the provisions of Articles 101 and 102 of the Treaty on the Functioning of the European Union.

A natural or legal person who has suffered harm has the right to claim full compensation for actual loss and loss of profit, including the right to default interest.

Proceedings may be initiated within five years from the date the injured party became aware of the infringement, damage suffered and identity of the infringer. The right expires ten years after the infringement ceased.

Follow-on damages actions only

The competent court is bound by the finding of a competition law infringement in a final decision of the Montenegrin Agency for Protection of Competition or a final decision of a competition authority of an EU Member State.

Any natural or legal person who has allegedly suffered damage caused by a competition infringement has the right to initiate proceedings.

Liability for damages

The liability of multiple infringers is joint and several. The injured party has the right to claim full compensation from any of them until the damage has been fully compensated. Exceptionally, if the infringer is a micro, small, or medium-sized enterprise, it shall be liable only to its direct or indirect purchasers if: (i) its share on the relevant market was less than 5% at any time during the infringement; and (ii) the application of joint and several liability would irretrievably jeopardise its economic viability and cause a total loss of the value of its assets. 

The exception does not apply if a micro, small, or medium-sized enterprise was the initiator of the infringement or repeated offender.

Quantification of damage

If the damage cannot be determined or could only be determined with disproportionate difficulty, the competent court is authorised to estimate the amount of damage at its discretion.

In the case of a cartel, there is a rebuttable presumption that damage has occurred.

Consensual settlement and its effect on proceedings

If the injured party settles with one or more infringers, the total damages are reduced by the share caused by those infringers, and the injured party may claim the remaining damages from the infringers who did not participate in the settlement. Infringers who did not participate in the settlement have no right to seek recourse from an infringer who did.

Application of EU Law

The Proposal also contains provisions related to the application of EU law. Among other things, access to the files is subject to EU rules on public access to documents and the protection of internal or confidential documents, including correspondence with other competition authorities. 

Additionally, the competent court in proceedings for damages in Montenegro may also apply the procedure under Article 267 of the Treaty on the Functioning of the European Union, which regulates the preliminary ruling mechanism allowing national courts to request the Court of Justice of the EU to give interpretations of EU law or to rule on the validity of acts of EU institutions.

Conclusion

The Proposal represents an important step in the development of Montenegrin competition law. It introduces a comprehensive framework for private enforcement of the right to damages for competition infringements, aligned with EU Directive 2014/104/EU.

The Proposal will be presented to the Parliament in the coming days. Some modifications of the text of the Proposal are possible, although not likely. We will continue to monitor developments and report on the final rules governing private enforcement of the right to damages arising from competition law infringements in Montenegro in the upcoming period.

authors: Srdjana Petronijevic, Danijel Stevanovic, Marija Vranic