1 Akehurst, M., “Jurisdiction in International Law” (1972–1973) B.Y.I.L. 145, at 190Google Scholar.

2 Some of the deterring power of this sanction can be attributed to the expansive construction given to Article 15 by the Court in Re Pioneer Hi-Fi Equipment (1980) 1 C.M.L.R. 457Google Scholar. The Court held that not only was the Commission entitled to change its policy and impose a fine far heavier than previously imposed without giving prior warning, but the basis of calculation of the upper limit of the fine is 10% of the entire turnover on all products of the group of companies world wide. A recent illustration of the significance of this sanction may be found in AKZO Chemie BV v. Commission of the European Communities (62/86) The Times, 7 Oct. 1991, p. 29 where AKZO was ordered to pay a fine of 7,500,000 ECUs.

3 (1984) A.C. 130.

4 This decision is not necessarily helpful to the plaintiff as recourse to damages might block his way to the more desired interlocutory relief.

5 M. Akehurst, supra n. 1, at 190.

6 Jennings, R., “Extra-Territorial Jurisdiction and the United States Anti-Trust Laws” (1957) B.Y.I.L. 146, at 177Google Scholar.

7 This classification seems all the more obvious bearing in mind that the internal nonpenal characterisation was motivated by constitutional problems of Member States which faced obstacles regarding the delegation of penal powers. See also Westinghouse Uranium Contract Litigation (1978) A.C. 547Google Scholar where it was held that the penalties of Articles 15 and 16 are clearly penal.

8 See, for instance, the classic case of Pronuptia de Paris GMBH v. Pronuptia de Paris Imugard Schillgalis (161/84) (1986) 1 C.M.L.R. 414.

9 M. Akehurst, supra n. 1, at 191.

10 This distinction was first propounded in Mann, F., “The Doctrine of Jurisdiction in International Law” (1964–I) Recueil de Cours 9Google Scholar. For a somewhat different distinction see Higgins, R., “The Legal Bases of Jurisdiction” in Extra-Territorial Application of Laws and Responses Thereto, Olmstead, C., ed. (International Law Association, 1984) 3, 4Google Scholar.

11 Enforcement jurisdiction consists of acquisition of evidence, service of process, discovery orders, enforcement measures, etc. See Barack, B., The Application of the Competition Rules of the European Economic Community (Kluwer, 1981) 219–413Google Scholar.

12 Jennings, R., “General Course on Principles of International Law” (1967–II) Recueil de Cours 327, at 522Google Scholar. It should be noted that although the ordinary situation is for a State to have prescriptive jurisdiction without enforcement jurisdiction, the reverse situation may occur as well. Enforcement by a Member State of a measure enacted on the Community level may serve as an example.

13 Beckett, E., “The Exercise of Criminal Jurisdiction over Foreigners” (1925) B.Y.I.L. 44Google Scholar.

14 F. Mann, supra n. 10, at 14.

15 Mann, F., “The Dyestuffs Case in the Court of Justice of the European Communities” (1973) 20 I.C.L.Q. 35, at 42Google Scholar.

16 Ibid., at 44.

17 Ibid., at 45.

18 Dinan, D. in Proceedings of 84th Annual Meeting, American Society of International Law (Washington D.C., March 28-31, 1990) 274Google Scholar.

19 This situation can be equated to the transfer of a property right by contract. The property right can be exercised against third parties, external to the contractual relationship, despite of the fact that only the parties to the contract are bound by it. Simply, the act of transfer does not curb the wings of the right.

20 Imperial Chemical Industries v. E. C. Commission (48/69) (1972) E.C.R. 619.

21 Ibid., at 693.

22 Ibid.

23 Stein, T. in Proceedings of 84th Annual Meeting, American Society of International Law (Washington D.C., March 28-31, 1990) 215Google Scholar.

24 Crawford, J., “The Criteria for Statehood in International Law” (1977) 48 B.Y.I.L. 142Google Scholar.

25 F. Mann, supra n. 10, at 30.

26 Henkin, L., “General Course of Public International Law” (1989–IV) Recueil de Cours 15, 282Google Scholar.

27 See, for instance, Friedmann, W., Antitrust Laws (London, 1956) 486Google Scholar; George, B., “Jurisdictional Bases for Criminal Legislation and Its Enforcement” in Transnational Aspects of Criminal Procedure (Michigan Yearbook of International Legal Studies, 1983) 3, at 4Google Scholar.

28 American Banana Co. v. United Fruit Company (1909) 213 U.S. 347, at 357.

29 Amsterdam v. Minister of Finance (1952) International Law Report 229, at 231.

30 R. Jennings, supra n. 6, at 156; Allen, N., “The Development of EEC Antitrust Jurisdiction” (1974) 2 Legal Issues of European Integration 35, at 37–41Google Scholar; Neale, A. & Stephens, M., International Business and National Jurisdiction (Oxford, 1988) 35Google Scholar.

31 Sometimes it is the overt policy of a State to encourage acts initiated in its territory and being consummated or having effects in another country. See, for instance, the Webb-Pomerene Act, 15 U.S.C. § 61, which authorizes U.S. exporters to form export cartels provided that such associations do not injure competitors who are not members of the association and do not artificially increase domestic prices; see W. Friedmann, supra n. 27, at 445; Victor, A., “Export Cartels : An Idea Whose Time Has Passed” (1992) 60 Antitrust.L.J. 571, at 572–574Google Scholar.

32 R. Higgins, supra n. 10, at 7.

33 M. Akehurst, supra n. 1, at 152-153; N. Allen, supra n. 30, at 39-43.

34 M. Akehurst, ibid., at 153.

35 van der Esch, B., “Some Aspects of “Extra-Territorial” Infringement of EEC Competition Rules” in 1985 Corporate Law Institute Antitrust and Trade Policy in the United States and the European Community, Hawk, B., ed. (Fordham University School of Law) 285, at 294Google Scholar.

36 Mann, F., “The Doctrine of International Jurisdiction Revisited after 20 Years” (1984–III) Recueil de Cours 1, at 87Google Scholar.

37 United States v. Aluminium Company of America (The ALCOA case) (1945) 148 F.2d 416, at 444.

38 M. Akehurst, supra n. 1, at 154.

39 Supra n. 20.

40 Ibid., at 694.

41 Ibid.

42 Ibid.

43 An illuminating demonstration of the vague distinction between the effects doctrine and objective territoriality can be found in A. Acevedo, “The EEC Dyestuffs Case : Territorial Jurisdiction” (1973) 36 M.L.R. 317, where the author refers to the formulation of the effects doctrine by the Advocate-General and then claims that “to say that the effects are substantial, foreseeable and directly caused by the conduct of the accused, and are a constituent element of the offence (that is, described in the offence — creating provision) is the same thing as saying that they are the ‘result’ of the offence … [and therefore] the territorial doctrine exactly fitted the facts of the case …”, ibid., at 319.

44 R. Jennings, supra n. 6, at 160.

45 F. Mann, supra n. 10, at 104; the classic illustration of the more extrovert approach to the effects doctrine is to be found in the Alcoa case, supra n. 37.

46 Apart from the territorial principle and its extensions and variations, four other principles have been held to found jurisdiction. These are the nationality principle; the universality principle; the passive personality principle and the security principle. Since the relevance of these principles to competition law matters is limited, they will not be discussed in this article.

47 M. Cutler, “US Concept” in Extra-Territorial Application of Laws and Responses Thereto, supra n. 10, at 73.

48 A. Neal & M. Stephens, supra n. 30, at 14-15.

49 Maier, H., “Extraterritorial Jurisdiction at a Crossroad : The Intersection between Public and Private International Law” (1982) 76 Am.J.Int.L. 280, at 284CrossRefGoogle Scholar; British Airways v. Laker Airways (1984) 1 Q.B. 142, at 185-186.

50 The American litigation is reported in many decisions. For complete reference see Bermann, G., “The Use of Anti-Suit Injunction in International Litigation” (1990) 28 Col.J.Int.L. 589, at 591Google Scholar at n. 6.

51 British Airways v. Laker Airways, supra n. 49.

52 British Airways v. Laker Airways (1985) A.C. 58.

53 Laker Airways v. Pan American World Airways (1983) 559 F.Supp. 1124.

54 Laker Airways v. Sabena (1984) 731 F.2d 909.

55 Ibid., at 937-938.

56 Meessen, K., “Antitrust Jurisdiction under Customary International Law” (1984) 78 Am.J.I.L. 783, at 787Google Scholar.

57 Supra n. 37.

58 (1976) 549 F.2d 597.

59 Ibid., at 611-612.

60 Atwood, J. & Brewster, K., Antitrust and American Business Abroad (McGraw-Hill, 2nd ed.) vol. 1, § 6.10Google Scholar.

61 Timberlane Lumber Co. v. Bank of America, supra n. 58, at 613.

62 Meessen, K. “Conflicts of Jurisdiction under the New Restatement” (1987) 50 Law & Contemp. Problems 47, at 54CrossRefGoogle Scholar.

63 Restatement of the Law, the Foreign Relations Law of the United States (American Law Institute, 1987) vol. 1, § 403(2)Google Scholar. For an analysis of the changes introduced to the new Restatement and its comparison to the list of factors to be considered as propounded by the Court in Timberlane Lumber Co. v. Bank of America, supra n. 58, see K. Meessen, ibid.

64 Neale, A., “Jurisdictional Conflicts Arising from Antitrust Enforcement” (1985) 54 Antitrust.L.J. 761, at 765Google Scholar; K. Meessen, supra n. 56, at 787-789.

65 Ordover, J., “Antitrust and Industrial Policy” (1987) 50 Law & Contemp. Problems 165, at 176CrossRefGoogle Scholar; Turner, D., “Application of Competition Laws to Foreign Conduct: Appropriate Resolution of Jurisdictional Issues” in 1985 Corporate Law Institute Antitrust and Trade Policy in the United States and the European Community, Hawk, B., ed. (Fordham University School of Law) 231, at 233Google Scholar.

66 J. Atwood & K. Brewster, supra n. 60, at 175.

67 See Maier, H., “Interest Balancing and Extraterritorial Jurisdiction” (1983) 31 Am.J.Comp.L. 579, at 590CrossRefGoogle Scholar: “the concept … leads to the assertion of the primacy of United States interests in the guise of applying an international jurisdictional rule of reason”.

68 L. Wildhaber, “The Continental Experience” in Extra-Territorial Application of Laws and Responses Thereto, supra n. 10, at 63, 68.

69 F. Mann, supra n. 36, at 87-88 rejects the approach the U.S. Courts have adopted since “if, construed in the light of international law, a statute applies the judge is not entitled to reject it. If the rules of international law preclude its application, the judge has no discretionary power to enforce it. Consequently the distinctions between the existence and the exercise of jurisdiction and, on the latter point, the reliance on discretion constitute a misleading approach …”. Mann's criticism cannot be sustained on three grounds. First, Mann assumes that an international law rule requiring some balancing of interests is non-existent and therefore an assertion of jurisdiction under international law and the balancing of interests are two separate stages. Such assumption is not axiomatic and demands further elaboration which Mann fails to give. See K. Meessen, supra n. 56, at 801. Second, assertion of jurisdiction under international law cannot be regarded as the mirror image of denial of jurisdiction under international law since, under the latter, considerations based on the forum's municipal law are inherently inapplicable and the layer of domestic considerations is not reached. Therefore, any attempt to formulate a general rule applicable to both cases is deemed to fail. Finally, and probably most important, the distinction between existence and exercise of jurisdiction is neither a revolutionary development of the U.S. Courts, nor a surprising one. Perhaps the classic example of the Court's discretion whether it will exercise jurisdiction in cases in which it is competently founded is the plea of forum non conveniens.

70 F. Mann, supra n. 15, at 50.

71 Supra n. 20.

72 Ibid., at 694-695.

73 F. Mann, supra n. 15, at 46.

74 Supra n. 20, at 662-663.

75 Europeemballage Corporation and Continental Can Company Inc. v. Commission (6/72) (1973) C.M.L.R. 199.

76 Ibid., at 221-222.

77 Commercial Solvents v. Commission (6,7/73) (1974) E.C.R. 223.

78 Ibid., at 254.

79 Supra n. 20, at 662.

80 Supra n. 75, at 221.

81 Supra n. 77, at 253-254.

82 F. Mann, supra n. 15, at 69.

83 Ibid., at 44.

84 For further discussion see Easterbrook, F. & Fischel, D., The Economic Structure of Corporate Law (Harvard University Press, 1991) 40–62Google Scholar; Clark, R., “Duties of the Corporate Debtor to Its Creditors” (1977) 90 Harv.L.R. 505CrossRefGoogle Scholar; Easterbrook, F. & Fischel, D., “Limited Liability and the Corporation” (1985) 52 U.Chi.L.R. 89CrossRefGoogle Scholar; Lander, J., “A Unified Approach to Parent, Subsidiary and Affiliate Questions in Bankruptcy” (1975) 42 U.Chi.L.R. 589CrossRefGoogle Scholar; Posner, R., “The Rights of Creditors of Affiliated Corporations” (1976) 43 U.Chi.L.R. 499CrossRefGoogle Scholar; Blumberg, P., The Law of Corporate Groups (Boston, 1987)Google Scholar; Leebron, D., “Limited Liability, Tort Victims, and Creditors” (1991) 91 Col.L.R. 1565CrossRefGoogle Scholar.

85 Hamilton, R., “The Corporate Entity” (1971) 49 Tex.L.R. 979, at 992Google Scholar; F. Easterbrook & D. Fischel, “Limited Liability …”, ibid., at 110-111.

86 Douglas, W. & Shanks, C., “Insulation From Liability Through Subsidiary Corporations” (1929) 39 Yale.L.J. 193, at 210–211CrossRefGoogle Scholar.

87 F. Easterbrook & D. Fischel, “Limited Liability …”, supra n. 84, at 112.

88 This is probably what the Advocate-General in the Commercial Solvents case meant when he argued that “to export [the doctrine that every company is a separate legal person] blindly into branches of the law where it has little relevance, could, in my opinion, serve only to divorce the law from reality”, supra n. 77, at 263.

89 Re Wood Pulp Cartel (116-117,125-129/88) (1988) 4 C.M.L.R. 901Google Scholar.

90 (1985) O.J. L85/1.

91 Supra n. 31.

92 Supra n. 90, at L85/15.

93 Supra n. 89, at 931.

94 Supra n. 20, at 694-695.

95 Supra n. 89, at 941 (emphasis added).

96 Ibid., at 940-941;. This paragraph serves as the foundation of the argument that the Court adopted an extraterritorial construction (effects doctrine) of Article 85. See Santos, J., “The Territorial Scope of Article 85 of the EEC Treaty” in 1989 Corporate Law Institute 1992 and EEC/U.S. Competition And Trade Law, Hawk, B., ed. (Fordham University School of Law) 571, at 575Google Scholar; Ferry, J., “Towards Completing the Charm: The Wood Pulp Judgement” (1989) 1 EIPR 19, at 22Google Scholar.

97 Supra n. 89, at 942.

98 Ibid., at 943.

99 See, for instance, Vereeninging Van Cementhandelaren v. Commission (8/72) (1972) E.C.R. 977.

100 Supra n. 90, at L85/22.

101 Christoforou, T. & Rockwell, D., “European Economic Community Law: The Territorial Scope of Application of EEC Antitrust Law” (1989) 30 Harv.Int.L.J. 195, at 203Google Scholar.

102 But see Mann, F., “The Public International Law of Restrictive Practices in the European Court of Justice” (1989) 38 I.C.L.Q. 375, at 377CrossRefGoogle Scholar who concluded, somewhat brutally, that the Wood Pulp judgment constitutes an excess of jurisdiction and “its reasoning so-called, like many of the edicts emanating at present from Brussels and Luxembourg, is liable to cause grave anxiety and requires the utmost caution and reticence … as a piece of legal reasoning the decision may not be in need of comment”. See also Van Gerven, W., “EC Jurisdiction in Antitrust Matters: The Wood Pulp Judgement” in 1989 Corporate and Institute 1992 EC/U.S. Competition and Trade Laws, Hawk, B., ed. (Fordham University School of Law) 459, at 466Google Scholar.

103 R. Jennings, supra n. 6, at 158.

104 J. Santos, supra n. 96, at 576.

105 Waelbroeck, M., “Annual Review of EEC Competition Cases 1988-1989” in 1989 Corporate Law Institute 1992 and EEC/U.S. Competition and Trade Law, Hawk, B., ed. (Fordham University School of Law) 181, at 182–183Google Scholar. Support for the inclusion of omissions within the notion of implementation can also be found in T. Christoforou & D. Rockwell, supra n. 101, at 204-205.

106 M. Akehurst, supra n. 1, at 156.

107 M. Waelbroeck, supra n. 105, at 185.

108 Council Regulation (EEC) 4064/89 O.J. L395/1.

109 Ibid., Art. 1(2).

110 In this situation some versions of the effects doctrine might also appear to be too restrictive. Thus, if the merger is between undertakings with a world-wide sales network the effect radiated into the Community might only be part of the “shockwave” created by the merger and not the primary effect.

111 A concentrative joint venture is defined as a joint venture performing on a lasting basis all the functions of an autonomous economic entity, which does not give rise to coordination of the competitive behaviour of the parties amongst themselves or between them and the joint venture. See supra n. 108, Art. 2(2).

112 Re Wood Pulp Cartel, supra n. 89 (per the Advocate-General).

113 Re the PVC Cartel (1990) 4 C.M.L.R. 345Google Scholar; Re the LdPE Cartel (1990) 4 C.M.L.R. 382Google Scholar.

114 Re the LdPE Cartel, ibid., at 409.

115 Re the PVC Cartel, supra n. 113, at 370.

116 Re Wood Pulp Cartel, supra n. 89, at 940.

117 W. Van Gerven, supra n. 102, at 466.

118 F. Mann, supra n. 36, at 80.

119 Picciotto, S., “Jurisdictionary Conflicts, International Law and the International State System” (1983) 11 Int. J. Soc. L. 11, at 14Google Scholar.

120 Schwarzenberger, G., The Frontiers of International Law (London, 1962) 43–49Google Scholar.

121 Anand, R., “Sovereign Equality of States in International Law” (1986–II) Recueil de Cours 1, at 25Google Scholar.

122 L. Henkin, supra n. 26, at 25.

123 It is dubious whether sovereignty has ever been an appropriate concept in the service of allocation of jurisdiction among States. Sovereignty was developed having in mind a single State and not a system of international law based on reciprocal rights and obligations. Sovereignty is therefore an appropriate description of a relationship between the rulers and their subjects and not between equal players in the international arena. See R. Anand, supra n. 121, at 26-27 and the sources cited by him.

124 J. Atwood & K. Brewster, supra n. 60, at § 4.02.

125 Ibid., at § 4.03.

126 See generally Hawk, B., United States Common Market and International Antitrust: A Comparative Guide (Prentice Hall Law and Business, 1990) vol. 2, chap. 10Google Scholar.

127 Posner, R., “The Next Step in the Antitrust Treatment of Restricted Distribution: Per Se Legality” (1981) 48 U.Chi.L.R. 6, at 23Google Scholar.

128 Telser, L., “Why Should Manufacturers Want Fair Trade?” (1960) J.L.& Eco. 86, at 97Google Scholar.

129 R. Jennings, supra n. 6, at 151.

130 J. Atwood & K. Brewster, supra n. 60, at § 4.04.

131 F. Mann, supra n. 10, at 105-106.

132 D. Turner, supra n. 65, at 239.

133 Grundman, R., “The New Imperialism : The Extraterritorial Application of United States Law” (1980) 14 International Lawyer 257Google Scholar.

134 Haight, G., “International Law and Extra-Territorial Application of Antitrust Laws” (1964) 63 Yale.L.J. 639, at 649Google Scholar.

135 J. Ferry, supra n. 96, at 21.

136 B. van der Esch, supra n. 35, at 291.

137 R. Jennings, supra n. 6, at 152.

138 B. van der Esch, supra n. 35, at 291.

139 J. Ordover, supra n. 65.

140 Ibid., at 169-170.

141 Ibid., at 173.

142 The same reasoning applies to the argument that the uncertain nature of competition law should have any bearing on its extraterritorial application. It is of course dubious whether competition law deserves this description more than any other field of law.

143 See “Competition Law : Its Importance to the European Community and to International Trade”, a speech delivered by Sir Leon Brittan, the Vice President of the Commission, at the University of Chicago Law School, 24 April 1992 (not published).