La demanderesse, société des Etats-Unis, a conclu un contrat de licence avec la défenderesse, société allemande. Le contrat concerne des brevets et le savoir-faire pour l'assemblage, par la défenderesse, d'un équipement utilisant des composants fabriqués par la demanderesse. Le contrat de licence contient des dispositions de non-concurrence faisant interdiction à la défenderesse de fabriquer un équipement similaire ou concurrent au cours des cinq années suivant la cessation du contrat. La demanderesse affirme que la défenderesse a utilisé le savoir-faire et la technologie brevetée faisant l'objet de sa licence pour développer et fabriquer un équipement de rechange, qu'elle a commercialisé à la place des produits de la demanderesse. La défenderesse soutient que le contrat est nul au regard du droit de New York (qui est le droit applicable en vertu du contrat) et en raison des incidences de la législation européenne. En particulier, la défenderesse affirme que le contrat viole la législation de la Communauté européenne en matière de concurrence, en prétendant que les articles 85 et 86 du traité de Rome instituant la Communauté européenne (devenus articles 81 et 82 CE) s'appliquent lorsqu'un contrat est susceptible d'affecter le commerce entre des Etats membres et a pour objet ou pour effet d'empêcher, de restreindre ou de fausser le jeu de la concurrence au sein du marché commun. Elle soutient d'autre part que les dispositions communautaires en matière de concurrence sont également applicables, du fait que l'une des parties au contrat de licence est une société établie dans l'Union européenne. Le tribunal arbitral statue de la manière suivante en ce qui concerne l'application de la législation communautaire.

'(8) Clause 14 of the Agreement is to the following effect:

In the event this Agreement is terminated for any reason by either party, [Defendant] agrees not to manufacture the Product or a product competitive with the Product for a period of five (5) years following the effective date of such termination.

(9) For the reasons set out . . . above . . . we hold that the Defendant's product was "a product competitive with the product" in terms of Clause 14 d

(10) We also hold, following upon our Finding in Fact . . . that the Agreement, in law, was terminated on 10 May 1995.

(11) While the evidence was not precise on this point, it is not contested that the manufacture of the Defendant's products began in 1994 and we consider that there is a reasonable inference that it was completed during the first half of 1995, i.e. during the currency of the Agreement.

(12) The Defendant takes the preliminary point that such a clause is contrary to the law of New York and Article 85 of the Treaty establishing the European Economic Community ("Treaty of Rome"), entered into by Germany on 25 March 1957. It is accordingly appropriate that we take this contention first.

(13) As regards the law of New York, in our opinion, noncompetition covenants made as part of an ordinary commercial contract (employment contracts present certain specialities) fall to be "analyzed under a simple rule of reason, the courts balancing the competing public policies of robust competition and freedom of contract. A covenant is reasonable if it is not excessive as to time, scope and area and is not unduly burdensome." (104 N.Y. Jur. 2d, Trade Regulation, para. 112).

(14) While we accept that New York is a "liberal" jurisdiction in the sense that it recognises the court's power to enforce an overbroad restriction to the extent reasonable for the parties' protection rather than to hold it void (Trade Regulation, supra, para. 115), if the non competition clause has not reason to exist this approach has no place. Given the difficulties encountered with the Claimant's original 44 units, the taking of only 5th place in the 1992 test, the apparent refusal of European customers to purchase the product, the failure to pursue any contractual activity during the latter years of the Agreement, and the advance in technology between the late 1980s and 1996, we have difficulty in seeing any business interest on the part of the Claimant which needed the protection of Clause 14 d of the Agreement. However, in view of what we hold concerning the application of Article 85 of the Treaty of Rome, we do not find it necessary to express a concluded view on the effect of the law of New York.

(15) As regards Article 85 of the Treaty of Rome we are of the opinion that we must take it into account and this for several reasons.

(16) The law of New York includes the doctrine embodied in the United States Supreme Court judgment in Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, 105 S. Ct. 3346 (1985). In that judgment the Court held that an arbitral tribunal (Japanese) in considering a contract expressly governed by Swiss law had to take into account, on the grounds of international public policy, the anti-trust law of the United States. "We conclude that concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties' agreement [to arbitrate] even assuming that a contrary result would be forthcoming in a domestic context." (p. 3355) By the same reasoning it appears to us that the law of New York requires that an arbitral tribunal wherever situated should take into account the anti-competition provisions of the Treaty of Rome and the relevant Regulations made thereunder. (See, also, Daniel Hochstrasser, 'Choice of Law and "Foreign" Mandatory Rules in International Arbitration', 11 Journal of International Arbitration (1994) pp. 57-86; Redfern and Hunter, Law and Practice of International Commercial Arbitration, Second Edition, London, Sweet & Maxwell, 1991, pp. 139-142.)

(17) If it is the lex arbitri which applies, the same result is reached. We here refer to the decision of the Swiss Federal Supreme Court of 28 April 1992 (G.S.A. contre V.S.p.A., ATF 118 II 193 E.5c bb.), which held that "an arbitral tribunal which has to decide a dispute regarding the proper execution or non-execution of a contract is competent to examine whether this contract is valid within the meaning of Article 85 of the Treaty of 25 March 1957 instituting the European Economic Community (the Treaty of Rome), notwithstanding that arbitral tribunals do not have the powers of state authorities of the Member States of the Union".

(18) Furthermore, we are of the opinion that an arbitral tribunal should always be concerned with the effectiveness of its decisions. This is expressly provided for in Article 262of the ICC Rules of Conciliation and Arbitration which requires that the arbitrator "shall make every effort to make sure that the award is enforceable at law". In the present arbitration the enforcement of any award in the Claimant's favour would, in all probability, be sought by the Claimant in Germany and would, in our opinion, be refused by all German courts in Germany if this resulted in giving effect to a contract which was in breach of Article 85 of the Treaty of Rome. (Dr Wolfgang Kühn, "Arbitrability of Antitrust Disputes in the Federal Republic of Germany", Arbitration International, Vol. 3 No. 3, July 1987, p. 226.)

(19) Accordingly we consider that we are bound to consider the applicability of Article 85 of the Treaty of Rome to the anti-competitive provisions of the Agreement. Courts in the United States (including the Supreme Court) and, in the European Union, national courts and the Court of Justice of the European Communities have applied the rules of competition law, irrespective of the domicile of the parties, where the contract in question has had a direct effect on commerce within their respective jurisdictions. (For an analysis of the case law of both the United States and the European Union see European Law Review, Vol. 21 No. 4, August 1996, Paul Torremans, "Extraterritorial Application of E.C. and U.S. Competition Law".) In the present case the product is designed to be incorporated in [machines] manufactured and used by at least three of the Member States of the European Union. Limitations on the manufacture of competing products such as those imposed by Clause 14 d have a direct effect in the European Union and are potentially capable of restricting trade between Member States and are accordingly prohibited by Article 85(1) of the Treaty of Rome which prohibits agreements "which may affect trade between Member States . . . in particular those which . . . (b) limit or control production, markets, technical development, or investment". Such agreements are by Article 85(2) automatically void.

(20) Certain exemptions are possible under Article 85(3) but this requires an application to the Commission for exemption. It is agreed that the Claimant made no such application. Patent and licence agreements have been the subject of certain "block exemptions" as described and defined in three Commission Regulations, (1) that relating to Patent Licence Agreements, Regulation No. 2349/84 dated 23 July 1984, (2) that relating to Know-How Agreements, Regulation No. 556/89 dated 30 November 1989, and (3), the most recent, in Commission Regulation 240/96, dated 31 January 1996, relating to certain categories of Technology Transfer Agreements. Neither party invokes the latter. The Claimant, however, contends that Clause 14 d of the Agreement is covered by Regulation 556/89. We reject this argument. Article 3, sub-para. 5, of the Regulation provides that the exemptions granted by Articles 1 and 2 are not to apply, inter alia, where "the licensee is charged royalties on goods and services which are not entirely or partially produced by means of the licensed technology". We have already rejected the claim that the Defendant's product made use of the Claimant's technology. We also refer to Article 3, sub-para. 9, of the same Regulation.

(21) We accordingly hold Clause 14 d of the Agreement to be void.

(22) In support of this view we refer to the case law of the Court of Justice of the European Communities and to the opinion of Advocate General Tesauro in Case 320/87, Ottung v. Klee & Weilback A/S, [1998] 1 E.C.R. 1177; [1990] 4 C.M.L.R. 915 at p. 917. "During the validity of a patent a fair reward for the inventor can be guaranteed, as the Court has emphasised in previous decisions, . . . only by ensuring that no one can manufacture or market the product without the consent of the proprietor of the patent. Conversely, after the expiry of the patent there is no longer any justification for such a prohibition and an inventor who forearms himself against that inevitable development by including a prohibitory clause in the licence contract is in fact exploiting the protection available for an intellectual property right to secure a further reward which is no longer due to him, and is therefore creating an unjustified restriction of competition." The same reasoning, in our view, applies to a licence agreement of limited duration. The case of L.C. Nungesser KG v. European Commission, [1983] 1 C.M.L.R. 278, relied upon by the Claimant, does not seem to us to be pertinent. The issue in that case turned on the correctness of the Commission in partly refusing an exemption under Article 85(3) for a series of contracts imposing territorial exclusivity and related to complex issues concerning the protection of property in cereal species, and not, as in the present case, a limitation of production and sale. None of the principles enunciated in that case affect the validity of the above statement of Advocate General Tesauro. In our view Clause 14 d of the Agreement falls squarely under Article 85(1)b of the Treaty of Rome.

(23) The Claimant further contends that, in any event, Article 85 does not apply since Article 223(1)b of the Treaty of Rome provides that,

This Treaty shall not preclude . . . any Member State [from taking] such measures as it considers necessary for the protection of essential interests of its security which are connected with the production of or trade in arms, ammunition or war material.

(24) We are not persuaded that the introduction of Clause 14 d of the Agreement can properly be described as necessary to protect an "essential interest" of the German Government. Be that as it may, Article 223(1) grants to Member States a power or liberty which is for the Member State alone to exercise. It cannot, in our view, create in private individuals a right to breach other provisions of the Treaty of Rome.

(25) The Claimant's claims, and in particular those for an accounting and injunction, and which relate to the period after the termination of the Agreement, so far as based on Clause 14 d, are accordingly rejected.

(26) The Claimant, however, maintains that Clause 14 d, which relates to the period after the termination of the Agreement, can be severed from the remainder of the Agreement. The Defendant asserts that Clause 14 d is so fundamental that the entire Agreement must fall. While we are attracted by the latter argument we have to deal with the Claimant's demand that it be compensated for loss of royalties and profits arising out of the Defendant's manufacture and sale of 25 units for incorporation in Italian [machines] in 1994 and 1995, that is to say during the currency of the Agreement. We assume in the Claimant's favour that such a claim can be separated from the void provisions of the Agreement and that the pleadings in this arbitration are wide enough to cover such a claim.

(27) The Agreement contains no express provision dealing with the manufacture and sale of a competitive product by the Defendant during the currency of the Agreement. We are accordingly left to infer the respective rights and obligations of the parties.

(28) We accept that it can be deduced from Article 2 c of the Agreement, which gives the Defendant an exclusive right to the Claimant's know-how, that, in return, the Defendant should not promote a competitive product of its own design. The end result of such an inference would be that the Defendant would be required to pay a royalty for a licence it did not use or else forego market opportunities to sell its own product which was, unlike the Claimant's, what the market wanted. That is to say, were we to sustain the Claimant's interpretation of the Agreement, it would entail the Defendant's paying royalties in respect of a licence which it did not use, or else to manufacture a product which the market had effectively rejected.

(29) Nonetheless, we are of the opinion that the parties to the Agreement did not intend that the Claimant during the currency of the Agreement should be less well protected than during the period after the termination of the Agreement, as provided for by Clause 14 d and that it is a necessary implication of the Agreement that the Defendant should not manufacture and sell products competitive with the Claimant's [product] during the currency of the Agreement. It would follow, accordingly, that the Defendant had violated that obligation by selling the 25 products for use in Italian [machines].

(30) Given such an obligation and its consequent breach by the Defendant, the Tribunal is constrained to consider the impact of Article 85 of the Treaty of Rome on such an inferred obligation. We conclude that such an inferred obligation would, for reasons analogous to those which we have adopted in connection with Clause 14 d, infringe Article 85 of the Treaty of Rome and that such an obligation is not capable of being exempted under Commission Regulation 556/89. We refer again to Article 3, sub-para. 5, of this Regulation which provides that exemption is not accorded where the licensee is charged royalties on goods and services not produced by the licensed technology. As we have found in fact, the Defendant's product did not make use of the licensed technology.

Costs of the arbitration

. . . . . . . . .

(5) As regards "the normal legal costs incurred by the parties", including the fees of legal counsel and experts, we are of the opinion that each side should support its own costs. We have reached this conclusion on the ground that the substantial success of the Defendant in this arbitration is materially due to our decision that Article 85 of the Treaty of Rome applied to the Agreement. In our view, since the Agreement, jointly negotiated by the parties, was entered into in 1989, four years after the decision of the United States Supreme Court in Mitsubishi Motor Corporation, cited above, the implications of that decision for anti-competitive clauses in contracts entered into between parties established, respectively, in the United States and in a member state of the European Community, and which required performance within the European Community, should have been taken into account by the negotiators on both sides.'

1
A French translation of extracts from this award were published in 1999 in the Journal du droit international, pp. 1074-1079, with a commentary by Jean-Jacques Arnaldez; and the award was summarized by Fabien Gélinas, again in French, in Gazette du Palais, Spécial Arbitrage, 9-11 January 2000, pp. 27-28.

2
1988 ICC Rules of Arbitration