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JCB has reacted with anger after the European Court of Justice dismissed its appeal against a £20m fine for breaching EU competition arrangements.

The company said that judgement was unfair and expressed “extreme disappointment that the court ignored 20 years of bureaucratic errors”.

The case dates back to 1973 when the UK entered the common market and JCB registered its dealer agreements with the European Commission (EC). In 1975 the EC raised concerns over the agreement that JCB believed it addressed over the following six months, in 1980 and 1995 JCB notified the EC of updated agreements (although it did do so on specified form A/B).

A complaint by a non-franchised French parts supply company. Central Parts, led the Commission to investigate JCB’s operations and in 2000 it decided the dealer agreements involved “Market partitioning between several member states, through absolute territorial protection and price fixing”.

The £26.6m fine was reduced to £20.7m on appeal.

However JCB maintains that it had done everything possible to ensure its agreements met EU regulations including registering the agreements with the Commission.

JCB managing director John Patterson said “We are very frustrated that the European Court of Justice has ignored the failings of the Commission”.

JCB will also have to pay the Commission’s legal cost for the six-year battle.

[Contract Journal, 4 October 2006, p17]