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Final Award

Representing the Claimant:

Mr. [Person 1]
Mr. [Person 2]
Willkie Farr & Gallagher LLP
Avenue Louise 480/3B
1050 Brussels
Belgium

Representing the Respondent:

Mr. [Person 3]
Ms [Person 4]
Gomez-Acebo & Pombo
Avenue Louise 480/4
1050 Brussels
Belgium

THE ARBITRAL TRIBUNAL

Makes the following Award:

I. INTRODUCTION AND PARTIES

1.

This case concerns a dispute submitted to arbitration on the basis of the Distribution Agreement entered into between [Claimant] and [Respondent] in 2016 (the "Distribution Agreement").

2.

The Claimant, [Claimant] (the "Claimant" or "[Claimant]"), is a limited liability company ("société anonyme") incorporated under the laws of [Redacted], registered with the [Redacted] under No. [Redacted]. The Claimant's address is:

[Redacted]

3.

The Claimant is represented in this proceeding by:

Mr. [Person 1]
Mr. [Person 2]
Willkie Farr & Gallagher LLP
Avenue Louise 480/3B
1050 Brussels
Belgium

Tel: [Redacted]
Fax: [Redacted]
Email: [Redacted] and [Redacted]

4.

The Respondent [Respondent] (the "Respondent" or "[Respondent]"), is a limited liability company incorporated under [Redacted] law with identification number [Redacted]. The Respondent's address is:

[Redacted]

5.

The Respondent is represented in this proceeding by:

Mr. [Person 3]
Ms [Person 4]
Gomez-Acebo & Pombo
Avenue Louise 480/4
1050 Brussels
Belgium

6.

On 11 March 2019, the Arbitral Tribunal (the "Tribunal") informed the Claimant and the Respondent that this arbitration proceeding was closed. This Award contains the Tribunal's decision on the merits of the Claimant's and the Respondent's respective claims.

7.

This Award is rendered in accordance with the Rules of Arbitration of the International Chamber of Commerce, in force as from 1 March 2017 (the "ICC Rules").

II. PROCEDURAL HISTORY

8.

On 4 May 2018, Claimant's Counsel filed a Request for Arbitration on behalf of [Claimant] with the Secretariat of the International Court of Arbitration of the International Chamber of Commerce (the "ICC Secretariat").

9.
On 7 May 2018, the ICC Secretariat acknowledged receipt of Claimant's Request for Arbitration. On 9 May 2018, the ICC Secretariat notified Claimant's Request for Arbitration to Respondent.
10.
On 8 June 2018, Respondent's Counsel submitted Respondent's Answer to the Request for Arbitration.
11.

On 12 June 2018, the ICC Secretariat:

- acknowledged receipt on 12 June 2018 of 3 copies of Respondent's Answer dated 8 June 2018;

- notified Respondent's Answer to Claimant;

- advised the Parties that the International Court of Arbitration of the International Chamber of Commerce (the "ICC Court") would appoint the arbitrator, pursuant to Article 12(3) of the ICC Rules.

12.

On 21 June 2018, the ICC Court:

- decided to take the necessary steps for the appointment of a sole arbitrator; and

- fixed the advance on costs at US$ 110 000, subject to later readjustments.

13.

On 26 July 2018, the ICC Court appointed Jérôme Barbet as sole arbitrator upon the French National Committee's proposal (Article 13(3) of the ICC Rules). The sole arbitrator's address is:

Jérôme Barbet
SCP Enjea Avocats
5, rue du Renard
75004 Paris
France

14.

On 9 August 2018, the Tribunal provided the Parties with draft Terms of Reference and asked them to provide their availabilities for the Case Management Conference ("CMC").

15.
On 3 September 2018, the Claimant provided its comments on the draft Terms of Reference.
16.
On 11 September 2018, the Tribunal asked the Respondent to provide its comments on the draft Terms of Reference by 13 September 2018. The Tribunal also asked the Claimant and the Respondent to provide their availabilities for the CMC by 13 September 2018.
17.
On 13 September 2018, the Respondent provided its comments on the draft Terms of Reference.
18.
On 21 September 2018, the Tribunal provided the Parties with the draft Terms of Reference, as amended following the Parties' comments.
19.

The CMC took place in Brussels, Belgium, on 26 September 2018. At the CMC, Claimant's Counsel signed the Terms of Reference on behalf of the Claimant, and Respondent's Counsel signed the Terms of Reference on behalf of the Respondent. Also, Claimant's Counsel, Respondent's Counsel and the Tribunal discussed:

- Claimant's request that the arbitration proceeding be bifurcated;

- the procedural timetable; and

- the rules regarding communications and notifications.

20.

After consulting the Parties at the CMC, the Tribunal decided not to bifurcate the proceeding and to fix the following timetable, as set out in Procedural Order No. 1 of 26 September 2018:

- 24 October 2018: Respondent will file an Expert Report on the relevant market shares;

- 21 November 2018: Claimant and Respondent will both file their respective Memorials No. 1 covering all of Claimant's claims and all of Respondent's counterclaims (together with the documents on which they rely);

- 21 December 2018: Claimant and Respondent will both file their respective Memorials No. 2 covering all of Claimant's claims and all of Respondent's counterclaims (together with the documents on which they rely);

- 18 January 2019: Claimant and Respondent will both file their respective Memorials No. 3 covering all of Claimant's claims and all of Respondent's counterclaims (together with the documents on which they rely);

- 31 January 2019: Final Hearing from 10:30am (location: offices of Claimant's Counsel in Brussels, Belgium).

21.
After consulting Claimant's Counsel and Respondent's Counsel at the CMC, the Tribunal also decided to fix certain rules regarding notifications and communications, as set out in Section III of Procedural Order No. 1.
22.
At its session of 4 October 2018, the ICC Court extended the time-limit for rendering the final award until 29 March 2019 based upon the procedural timetable (Article 31(1) of the ICC Rules).
23.
On 24 October 2018, the Tribunal received Respondent's "Report on Market Definition and Market Shares".
24.
On 23 November 2018, the Tribunal received Claimant's First Memorial, together with Claimant's Exhibits, and Respondent's Memorial No. 1, together with Respondent's Exhibits (Annex I and Annex II).
25.
On 21 December 2018, the Tribunal received Claimant's Second Memorial together with Claimant's Exhibits, and Respondent's Memorial No. 2.
26.

On 15 January 2019, the Tribunal invited the Parties:

- to produce the legal authorities on which they relied, including copies of the Belgian court decisions and other legal material to which they referred in their respective Memorials;

- to address the issue of Clause 19.8.2 of the Distribution Agreement in their respective Memorials (Clause 19.8.2 provides that "(...) The Arbitral Tribunal may act as an ‘amiable compositeur' (...))".

27.
On 18 January 2019, the Tribunal received Claimant's Memorial No. 3 together with its exhibits (exhibits No. 2, 3.33, 12, 13.1, 13.2 and 13.3 together with "literature, case-law and official communications"') and Respondent's Memorial No. 3 with its exhibits ("legal authorities relied on by [Respondent] in its Memorials").
28.

By letter of 23 January 2019 (sent by fax and email), the Tribunal noted that the Parties had produced a number of documents in French (legal authorities such as case-law, legal commentaries, excerpts from legal textbooks, legal provisions, as well as extracts from the "[Redacted]"...). The Tribunal invited the Parties to confirm, by 28 January 2019, that:

- they did not require English translations of the documents in French produced by the other Party in this arbitration; and that,

- they agreed for the Arbitral Tribunal to rely, in the Arbitral Award, on documents in French produced by the Parties in this arbitration (without English translations).

29.
In the same letter, the Tribunal also invited the Respondent to produce English translations of its documents in Spanish.
30.
By letter of 22 January 2019, received by email on 23 January 2019, Respondent's Counsel wrote to the Tribunal that he could not attend the Final Hearing due to take place on 31 January 2019 and asked the Tribunal to reschedule the Final Hearing at a later date in February 2019. Respondent's Counsel proposed three new dates for the Final Hearing, including 14 February 2019.
31.
On 23 January 2019, Claimant's Counsel wrote that he accepted to postpone the Final Hearing, provided that the Tribunal agreed with such postponement. Claimant's Counsel indicated that he was available at the three dates proposed by Respondent's Counsel, "with a clear preference for the 14th".
32.

On 23 January 2019, Claimant's Counsel wrote that:

- Claimant did "not require English translations of the documents in French produced by the Respondent"; and that,

- Claimant agreed for "the Arbitral Award to rely on documents in French produced by the parties (without English translations)".

33.

Respondent's Counsel also confirmed:

- on 23 January 2019, that the Respondent did "not require English translations of the documents in French produced by the Claimant";

- on 24 January 2019, that the Respondent agreed "for the Arbitral Tribunal to rely in the Arbitral Award, on documents in French produced by the parties (without English translations)".

34.

On 24 January 2019, the Tribunal informed the Parties that:

- the Final Hearing scheduled on 31 January 2019 was cancelled; and that,

- the Final Hearing would take place on 14 February 2019.

35.
The Final Hearing took place on 14 February 2019 in Brussels, Belgium. At the Final Hearing, Claimant's Counsel and Respondent's Counsel pleaded their respective cases. The Tribunal and the Parties' respective Counsel also discussed a timetable regarding the submission of Memorials on the Costs of the Arbitration.
36.

After consulting Claimant's Counsel and Respondent's Counsel at the Final Hearing on 14 February 2019, the Tribunal decided to fix the following timetable, as set out in Procedural Order No. 2 of 19 February 2019:

- 28 February 2019: Claimant and Respondent will both file their respective Memorials on the Costs of the Arbitration (art. 38 of the ICC Rules);

- 6 March 2019: Claimant and Respondent may file Memorials responding to the other Party's Memorial on the Costs of the Arbitration.

37.
On 28 February 2019, the Tribunal received: (i) Respondent's letter on the arbitration costs, with two invoices; and (ii) Claimant's Memorial on the cost of the arbitration, with a new invoice to be added to Exhibit No. 12.
38.
By letter of 1 March 2019 (sent by fax and email), the Tribunal noted that the Respondent's invoices for legal fees were in Spanish and that the Claimant's invoices for legal fees were in French. The Tribunal informed the Parties that these documents would not be taken into account, unless the Parties provided English translations. The Tribunal also noted that the Claimant had submitted three documents in Spanish without providing English translations (Exhibits No. 13.1, 13.2 and 13.3) and informed the Parties that the Tribunal would not take these documents into account, unless the Claimant provided English translations. Finally, the Tribunal noted that the Claimant had submitted partial translations in English of its Exhibits No. 10.1 and 10.3. The Tribunal invited the Respondent to state whether (i) it agreed for these documents in Spanish to be submitted by the Claimant with partial translations in English only; or (ii) if Respondent required full translations of these documents in English.
39.
On 4 March 2019, the Respondent provided English translations of its invoices for legal fees. Respondent also confirmed that it agreed for Claimant's Exhibits No. 10.1 and 10.3 (in Spanish) to be submitted by the Claimant with partial English translations only.
40.
On 6 March 2019, the Tribunal received a letter of Claimant's Counsel with English translations of Claimant's Exhibits 12 (invoices for legal fees) and 13.
41.
On 8 March 2019, the Tribunal informed the Parties that it intended to close these proceedings on 11 March 2019.
42.
On 11 March 2019, the Tribunal issued Procedural Order No. 3, declaring that in accordance with Article 27 of the ICC Rules, these arbitration proceedings were closed as of 11 March 2019.
43.
At its session of 14 March 2019, the ICC Court extended the time-limit for rendering the final award until 30 April 2019 pursuant to Article 31(2) of the ICC Rules.
44.
At its session of 18 April 2019, the ICC Court extended the time-limit for rendering the final award until 31 May 2019 pursuant to Article 31(2) of the ICC Rules.

III. FACTUAL BACKGROUND

(A) The Parties

45.

The Claimant, [Claimant], is a [Redacted] company specialized in the research and development, conception, manufacturing and sale of EC certified ophthalmologic devices, and in particular of enhanced as well as premium intraocular lenses ("IOLs") (see Recitals to the Distribution Agreement, § (A)).

46.

The Respondent, [Respondent], is a [Redacted] company active in [Redacted], providing the health sector with professional support, marketing and advanced technology. Medical products distributed by [Respondent] are related to aesthetics, plastic surgery, hospital engineering, urology, cardiology, clinical & hospital interior and, more particularly, ophthalmology (Respondent's Memorial No. 1, §4).

47.
[Respondent] has alleged that its turnover in 2016 amounted to EUR 13 million, "which represented a very substantial increase as compared to 2015, when [Respondent]'s turnover amounted to EUR 2 million" (Respondent's Memorial No. 3, §13) and that its turnover fell to EUR 7 million in 2018.
48.
The Claimant has alleged that [Respondent]'s turnover was EUR 13,604,596 in 2016 and EUR 11,023,268 in 2017 (Claimant's Memorial No. 3, §6).

(B) Intraocular lenses (IOLs)

49.
An IOL implant is an artificial replacement for the lens of the eye. It is used as part of the surgery to fix cataracts.
50.

There are different types of IOLs. The Respondent has explained that:

- a monofocal IOL is exclusively used to fix a cataracts pathology;

- whilst other types of IOLs do not only fix cataracts but also other pathologies; thus, a trifocal IOL will not only fix a patient's cataracts pathology but also his astigmatism. While monofocal IOLs can only fix one sight defect, trifocal IOLs can fix up to three issues in the sight of a patient (Respondent's Memorial No. 3, §60 and §61).

(C) The Distribution Agreement

51.
The Distribution Agreement was entered into between [Claimant] (as Supplier) and [Respondent] (as Distributor) for an initial period of three years, effective from 1 January 2016 to 31 December 2018 (Clause 3.1). The Distribution Agreement was tacitly renewable (Clause 3.2).
52.

Under the Distribution Agreement, [Respondent] was appointed as non-exclusive Distributor in [Redacted] for the promotion and sale of [Claimant]'s Products (identified in Schedule 1) under the label [Respondent] (Clause 2.1 of the Distribution Agreement).

53.

Prior to the conclusion of the Distribution Agreement, [Claimant] had appointed [Redacted] as exclusive distributor of its products in [Redacted].

54.

The appointment of [Respondent] as non-exclusive Distributor of [Claimant]'s products in [Redacted] was made possible by paying to [Redacted] a "compensation fee" designed to compensate [Redacted] for the loss of its exclusivity in [Redacted]. In consideration for the payment of this Compensation Fee, [Redacted] agreed to waive its exclusivity in [Redacted]. Under the Distribution Agreement, [Respondent] accepted to "bear a part of this compensation fee, as set forth in Article 10 of this Agreement" (Recitals to the Distribution Agreement, § D).

55.

Thus, the recitals to the Distribution Agreement stated that:

"The appointment of the Distributor is subject to the waiver by [Redacted] ("[Redacted]"), the current exclusive distributor of the Products in [Redacted], of his exclusivity on the distribution of the Products in [Redacted]. [Redacted] has agreed to waive such exclusivity in consideration (inter alia) of a compensation fee to be paid by the Supplier. The Distributor has accepted to bear a part of this compensation, as set forth in Article 10 of this Agreement." (Recitals of the Distribution Agreement, § D).

56.

Clause 2.1 of the Distribution Agreement provided that:

"Subject to the terms and conditions of this Agreement, the Supplier hereby appoints the Distributor (and the Distributor hereby accepts such appointment) as its nonexclusive Distributor in the Territory [Redacted] for the promotion and the sale of the Products under the label [Respondent]".

57.

Clause 2.2 of the Distribution Agreement provided that:

"The Distributor is allowed to import, sell and distribute the Products solely in the Territory and solely under the label [Respondent]. The Distributor has no right to sell or distribute the Products in any country outside the Territory. The Distributor undertakes to refrain from advertising the Products, establishing a sales office or branch, or keeping a warehouse for distribution outside of the Territory and, in general, shall not actively solicit orders (or accept orders) for the Products from customers located outside the Territory."

58.

Clause 2.3 of the Distribution Agreement provided that:

"The Distributor shall purchase the Products exclusively from the Supplier."

59.

Clauses 3.1 and 3.2, regarding the commencement and duration of the Distribution Agreement, provided that:

"3.1. This Agreement shall enter into effect on 1st January 2016 (the "Effective Date") and shall continue into effect until 31st December 2018 (the "Initial Period"), subject to the provisions of Section 15.

3.2. At the end of the Initial Period, the Agreement shall, subject to the provisions of Section 15, automatically be renewed for maximum four (4) successive twelve (12)-months periods (each a "Renewed Period"), unless terminated by either Party, at the end of the Initial Period, by giving six (6) months prior written notice to the other party, or at the end of any Renewed Period, by giving three (3) months prior written notice to the other party. "

60.
Clause 5.4.1 (§1) of the Distribution Agreement provided that [Claimant]'s invoices for ordered Products had to be paid by [Respondent] within sixty (60) calendar days of receipt of the invoice.
61.
Clause 5.4.1 (§2) of the Distribution Agreement provided that: "Should the Distributor not agree with any invoice sent by the Supplier, the Distributor shall send a written disagreement notice to the Supplier setting forth, in reasonable details, the reason of such disagreement with ten (10) days of receipt of the invoice. Failing to do so, the Distributor shall be deemed to accept the invoice".
62.

Clause 5.4.2 of the Distribution Agreement provided for interest on unpaid invoices as follows:

"The Parties agree that timely payment by the Distributor of invoices relating to the Products and other amounts due by the Distributor pursuant to this Agreement is essential for the Supplier. Without prejudice to any other right of the Supplier, (i) the Supplier shall be entitled to postpone the delivery of the Products to the Distributor until full payment of any amount due by the Distributor and to subject any further delivery to specific payment conditions and (ii) an interest at an annual rate of 8% shall automatically accrue on any amount due by the Distributor to the Supplier pursuant to this Agreement as from the due date of such payment".

63.

Clause 6 of the Distribution Agreement provided for sales targets and minimum purchase commitments. Clause 6.2.1 provided that:

"The Distributor ommits to purchase from the Supplier during each Contractual Year no less than 70% of the Units Sale Targets (the "Yearly Minimum Purchase Commitment") as set out in Schedule 6 (i.e. in an amount of 3,576,650 Euros for Year 1)".

64.

Clause 10 of the Distribution Agreement provided that [Respondent] had to pay, each year (from 2016 to 2018), a "Compensation Fee", as follows:

"10. COMPENSATION FEE

10.1 The Distributor shall pay to the Supplier the following yearly lump sum:

2016 2017 2018
250,000 Euros 300,000 Euros 350,000 Euros

10.2 The yearly amount due by the Distributor to the Supplier shall be paid each year in two instalments (each equal to one half of the yearly amount referred to in Clause 10.1) which shall be paid at the latest on June 30th and at the latest on December 31st upon receipt of the corresponding invoice from the Supplier".

65.
Thus, pursuant to Clause 10.1 of the Distribution Agreement, the Respondent had to pay to [Claimant] a Compensation Fee of EUR 250,000 for the year 2016, EUR 300,000 for the year 2017 and EUR 350,000 for the year 2018.
66.

Clause 17.1 of the Distribution Agreement provided that:

"For the duration of this Agreement, the Distributor shall not manufacture, sell or offer for sale, directly or indirectly, or use any other means with a view to marketing, either as principal, distributor, agent, intermediary or any other capacity within the Territory, any multifocal intraocular lenses not manufactured by the Supplier."

67.

Schedule 1 to the Distribution Agreement listed [Claimant]'s Products (to be distributed by [Respondent]) as follows:

 

[Redacted]

68.
The Respondent has explained that, "in essence, this list includes trifocal IOLs (a, b and d); toric trifocal IOLs (c and e); toric monofocal IOLs (f); monofocal IOLs (g); and an injector (h)" (Respondent' Memorial No. 3, §8).
69.

The Distribution Agreement provided for a severability clause (Clause 19.1), as follows:

"19.1 Severability

The invalidity or unenforceability of any provision of this Agreement shall not result in the invalidity or the unenforceability of any other provision of this Agreement or of this Agreement as a whole. In the event that the validity or the enforceability of this Agreement or any provision thereof is challenged, the Parties hereto undertake to do whatever is reasonably necessary or advisable to maintain such provision and this Agreement in full force and effect or to substitute such provision by other provisions that have economically substantially the same effect for all Parties hereto".

70.

The Distribution Agreement contained the following governing law clause (Clause 19.8.1):

"(...) This Agreement shall be governed by and construed in accordance with Belgian Law, excluding July 27th 1961's law" (...)".

71.

The Distribution Agreement contained the following arbitration clause:

"In the event of any dispute arising out of this Agreement, the Parties hereto shall endeavour first to resolve the dispute by amicable settlement. If the Parties are unable to reach an amicable settlement, any dispute arising out of or in connection with this Agreement (including its validity, its execution, its interpretation, its performance and its termination) shall be finally settled exclusively by arbitration under the Rules of Arbitration of the International Chamber of Commerce by a sole arbitrator appointed in accordance with said rules. The place of arbitration shall be Brussels and the language of arbitration shall be English. The Arbitral Tribunal may act as an "amiable compositeur". For the purpose of the arbitration proceeding, the Distributor and Alphaeon shall be regarded as one party”.

(D) The dispute

72.
According to the Claimant, the invoices for the sale of the Products amounted to EUR 3,480,000 in 2016 and EUR 3,470,000 in 2017. The Respondent has not challenged [Claimant]'s invoices for the sale of the Products.
73.
The Parties are in agreement that [Respondent] has not paid the Compensation Fee for the year 2018, in the amount of EUR 350,000. [Respondent] considers that this amount is not due.
74.
The Parties are also in agreement that [Respondent] has not paid some of [Claimant]'s invoices in respect of the sale of the Products, up to an amount of EUR 1,374,080.00. [Respondent] has not contested that this sum of EUR 1,374,080.00 is owed to [Claimant] (on 17 April 2018, Respondent's Counsel wrote to Claimant's Counsel that [Respondent] did "not dispute the debt arising from the sale and purchase of contractual products": Claimant's Exhibit No.5). However, [Respondent] has asserted that it is entitled to set off the total amount of the Compensation Fees which [Respondent] paid in 2016 and 2017 (i.e. EUR 550,000) against the amount of EUR 1,374,080.00, claimed by [Claimant] in respect of the sale of the Products.
75.

[Respondent] has alleged that:

- in May 2017, [Redacted] started to lower prices down to a level that was "not affordable for the Respondent" ; and that in October 2017, [Redacted] offered [Claimant]'s IOLs to [Redacted] (“the largest ophthalmic clinic group in [Redacted], with approximately 40 establishments throughout the country") "for a price that [Respondent] could not match as doing so would have entailed selling at a loss. Such a price would have neither covered the costs of transportation, logistics and storage nor the financial costs related to stocks" (Respondent's Memorial No. 3, §15).

- the "only reason that explains why [Redacted] could afford selling at these prices was that the latter was funding the sales with the Compensation Fees paid by [Respondent]" (Respondent's Memorial No. 3, §16); "in these circumstances, [Respondent] did not only lose [Redacted] as a client but also found it highly difficult to find new clients, as [Redacted]'s pricing strategy put [Respondent] at a clear disadvantage." (Respondent's Memorial No. 3, §17);

- these circumstances allegedly caused the Respondent to suffer "important financial difficulties. By way of illustration, while [Respondent]'s turnover in 2017 amounted to EUR 11 million, it dramatically dropped down to EUR 7 million in 2018." (Respondent's Memorial No. 3, §18); and

- this situation "resulted in the Respondent not being able to bear certain payments in a timely manner" (Respondent's Memorial No. 3, §19).

76.

Before 11 April 2018, [Respondent] sent a draft "complaint pursuant to Article 7 of Regulation (EC) No. 1/2003" to [Claimant]'s shareholder, [Redacted].

77.
On 11 April 2018, [Claimant]'s CEO, Mr. [Person 5], wrote to [Respondent] that "(...) after carefully reviewing this draft complaint, [Claimant] categorically rejects its background and conclusions which contain many factual errors. To name but one example, it is perfectly clear that Article 2.2 of the distribution agreement solely concerns 'active sales' and therefore does not restrict in any way [Respondent]'s abitlity to perform 'passive sales' "(Claimant's Exhibit No. 8).
78.
On 11 April 2018, Claimant's Counsel served a notice upon [Respondent] requesting payment of [Claimant]'s invoices for the sale of the Products, together with interest.
79.
On 17 April 2018, Respondent's Counsel responded to the Claimant's Counsel that whilst [Respondent] did “not dispute the debt arising from the sale and purchase of contractual products", the Distribution Agreement was null “for being clearly in breach of articles 101 TFEU and 1 of the Spanish Competition Act" (Claimant's Exhibit No. 5). Respondent's Counsel proposed to “open negotiations in order to reset the parties' contractual obligations to their mutual benefit and by respecting the Law".
80.
On 20 April 2018, Claimant's Counsel responded that the “allegations according to which three provisions of the Distribution Agreement would infringe competition law with the consequence that the entire Distribution Agreement would be null and void are unfounded" (Claimant's Exhibit No. 6).
81.
In June 2018, [Respondent] served a notice of termination of the Distribution Agreement upon [Claimant] (Claimant's Exhibit No. 11: undated letter of termination of [Respondent]). Thus, the Distribution Agreement terminated on 31 December 2018.
82.

In 2018, the Respondent entered into an agreement with [Redacted], a manufacturer of IOLs, to start distributing [Redacted]'s monofocal extended depth of focus ("edof") IOLs in [Redacted] (according to the Respondent, this agreement was entered into in September 2018).

83.

In October 2018, a new company called "[Redacted]" was incorporated in [Redacted] with the same registered office and the same Director as [Respondent] (Claimant's Exhibits 13.1 and 13.2).

IV. SUMMARY OF THE PARTIES' CLAIMS

84.
The Tribunal sets out below a summary of the Parties' respective allegations and claims.

(A) The Claimant's allegations and claims

85.
The Claimant has asserted that in accordance with the Distribution Agreement, [Respondent] has ordered Products from [Claimant] which have been duly delivered and invoiced by [Claimant]. All amounts due by [Respondent] to [Claimant] under the Distribution Agreement (including the Compensation Fee for the year 2016 and 2017) have been paid by [Respondent] until the amounts invoiced in October 2017. [Claimant] accepted an extension of the payment term of the invoices from 60 days to 90 days. Despite such extension, [Respondent] has remained in default of payment of the invoices due to [Claimant].
86.
As of August 31, 2018, invoices adding up to EUR 1.374.080,00 were owed by [Respondent] to [Claimant] for Products delivered under the Distribution Agreement. Such invoices have never been challenged by [Respondent]. In addition, the Compensation Fee for 2018, in the amount of EUR 350,000 has not been paid.
87.
Not only has [Respondent] never challenged the invoices for the delivery of the Products, but [Respondent] expressly stated, in its response of April 17, 2018 to [Claimant]'s notice letter (Exhibit 5 to the Request for Arbitration) and in its Answer to the Request for Arbitration (see in particular points 5 and 53), that it does not dispute its debts vis-a-vis [Claimant], arising from the sale and purchase of the Products. However, despite this acknowledgment, [Respondent] has not paid the amounts due to [Claimant].
88.
The sole defense raised by [Respondent] is that the Distribution Agreement would be null "on the basis of the existence of two hardcore restrictions in clause 2.2 of said agreement, within the meaning of Article 4(b) of Regulation 330/2010 and in accordance with Article 101(1) and 101(2) TFEU" (point 55 of [Respondent]'s Answer to the Request for Arbitration).
89.
According to the Claimant, the fact that these allegations have been raised for the very first time more than two years after the signature by [Respondent] of the Distribution Agreement, in reaction to [Claimant]'s request to obtain payment of the amounts due by [Respondent] and simultaneously with [Respondent]'s request to renegotiate the Distribution Agreement, shows, as such, that they are made by [Respondent] for the sole purpose of trying in vain to escape from its payment obligations.
90.
In any case, in addition to being unsubstantiated, these allegations have no bearing on [Respondent]'s payment obligations to [Claimant] for Products ordered under the Distribution Agreement and are irrelevant with regards to the arbitration proceedings. According to the Claimant, even assuming (quod non) that certain specific provisions of the Distribution Agreement would be questionable under competition law, this would not release [Respondent] of its obligation to pay the amounts due to [Claimant] for the sale from the Products as well as for the Compensation Fee, which are the subject matter of this arbitration.
91.
The Claimant has alleged that as a matter of principle, should a provision of an agreement be null because it would infringe competition law, such nullity does not automatically result in the nullity of the entire agreement, whatever the infringement and even if it would relate to a so-called "hardcore restriction". This principle has been expressly confirmed by the Belgian Supreme Court in a decision of June 28, 2012. Applying this principle, the Belgian Supreme Court confirmed that the nullity of a provision of an agreement prohibiting passive sales in violation of European law does not entail the nullity of an entire agreement which provides for a severability clause.
92.
In the case at hand, the Distribution Agreement provides for a severability clause according to which: "the invalidity or unenforceability of any provision of this Agreement shall not result in the invalidity or the unenforceability of any other provision of this Agreement or of this Agreement as a whole" (art. 19.1). Therefore, even assuming that certain provisions of the Distribution Agreement would be null (quod non), such nullity would not result in the nullity of the entire Distribution Agreement, and in particular of [Respondent]'s payment obligations.

(B) Relief sought by the Claimant

93.

[Claimant] has made the following claims (Claimant's Memorial No. 3, §88):

(i) Payment by [Respondent] of the invoices with respect to the Products and the Compensation Fee:

- Main claim: to order [Respondent] to pay to [Claimant] the principal amount of all invoices due by [Respondent] pursuant to the Distribution Agreement increased by a default (contractual) interest at the yearly rate of 8% from the due date of each invoice until full payment.

As of January 18, 2019, (i) the principal amount of all invoices due to [Claimant] is EUR 1.724.080,00 (i.e. EUR 1.374.080,00 for the Products purchased by [Respondent] and EUR 350.000,00 for the Compensation Fee) and (ii) the interests amount to EUR 101.051,44 (see new Exhibit Erreur ! Source du renvoi introuvable. as of January 18, 2019).

- Subsidiary claim: should the Arbitral Tribunal consider that either the entire Distribution Agreement or Clause 10 thereof relating to the Compensation Fee be null and void, [Claimant] requests the Arbitral Tribunal to (i) order [Respondent] to pay the principal amount of all invoices due to [Claimant] for the purchase of the Products (i.e. EUR 1.374.080,00) increased by the applicable interests (being either the legal interest due in case of late payment in business transactions (i.e. 8%) if the Distribution Agreement is considered as null and void in its entirety or the contractual interest (i.e. also 8%) if solely Clause 10 is considered as null and void) and to (ii) dismiss [Respondent]'s claim to offset part of its debt with the amount of the Compensation Fee already paid by [Respondent] and the amount of the legal interest on such amount.

(ii) In all cases, to indemnify [Claimant] from any damages resulting from the breach of the Distribution Agreement, such damages being estimated ex aequo et bono at EUR. 15.000.

(iii) In all cases, to order [Respondent] to bear, pay and reimburse the arbitration costs (including the ICC administrative costs, arbitrator's fees and expenses) as well as all the costs and expenses incurred by [Claimant] for the defense of its interest, including but not limited to its lawyers' fees and expenses.

As of December 31, 2018, [Claimant]'s defense costs and expenses amounted to EUR. 74.780 (excluding VAT) (see Exhibit 12). The Claimant has updated this amount to EUR 127,041.80 (excluding VAT) in its Memorial on the Costs of the arbitration.

(i) to order [Respondent] to pay to [Claimant] the principal amount of all invoices due by [Respondent] pursuant to the Distribution Agreement (such principal amount adding up to EUR 1.549.080,00 (EUR 1.374.080,00 + EUR 175.000,00) as of August 31, 2018) increased by a default interest at the yearly rate of 8% from the due date of each invoice until full payment (the amount of such interests adding up to EUR 52.827,61 (EUR 50.449,53 + EUR 2.378,08), as of August 31, 2018),

(ii) to order [Respondent] to bear and pay the arbitration costs as well as all the costs and expenses borne by [Claimant] for the defense of its interest, including but not limited to its lawyers' fees and expenses,

(iii) to indemnify [Claimant] from any other damages resulting from the breach of the Distribution Agreement.

94.
The Claimant has also asked the Tribunal to dismiss any and all counterclaims made by [Respondent].

(C) The Respondent's allegations

95.

The Claimant has asserted that since 2002, [Claimant] has put into place a wide network of distributors worldwide. As part of this distribution policy, on 1 December 2016, [Claimant] and [Respondent] entered into a non-exclusive distribution agreement (the Distribution Agreement) for the sale of [Claimant]'s cataracts' surgery products by [Respondent] in [Redacted], namely, monofocal intraocular lenses ("IOLs"), toric monofocal IOLs, trifocal IOLs, toric trifocal IOLs and an injector.

96.

In addition to [Respondent], [Claimant] also operates in the [Redacted] through [Redacted], its former exclusive distributor for [Redacted].

97.
The Respondent has asserted that the Distribution Agreement (i) violates Article 101(1) of the Treaty of the Functioning of the European Union (TFEU) and Article IV.1, §1 of the Belgian Code of Economic Law; and (ii) does not benefit from the exemption provided for under Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the TFEU to categories of vertical agreements and concerted practices (Regulation 330/2010).

(1) Regulation 330/2010

a) Preliminary observations

98.
Article 101(1) TFEU and Article IV.l, §1 of the Belgian Code of Economic Law prohibit agreements that restrict and/or distort competition, including those that limit and/or share markets. According to Article 101(2) TFEU and Article IV.l, §2 of the Belgian Code of Economic Law, any agreements falling under such a prohibition shall be void.
99.
Regulation 330/2010 establishes that Article 101(1) TFEU shall not be applied to those vertical agreements that fulfil the conditions foreseen therein (the "Exemption").
100.
For Regulation 330/2010 to apply to a vertical agreement, it is necessary that (i) the market share of the supplier (in this case, [Claimant]) does not exceed 30% of the relevant market on which it sells its goods; and (ii) the buyer's (in this case, [Respondent]) market share is not greater than 30% of the relevant market on which it purchases the contract goods.
101.
In the event these 30% thresholds were not exceeded, Regulation 330/2010 could still not apply if the agreement contains what is known as "hardcore restrictions" as per Article 4 of the regulation. These are particularly serious infringements under Competition Law. In addition, certain clauses of an agreement would not benefit from the exemption contained in the Regulation if they qualify as "excluded restrictions" within the meaning of Article 5 of Regulation 330/2010.
102.
The Respondent has asserted that in the present case, the Distribution Agreement does not benefit from the Exemption, as evidenced by the analysis below, since: (i) the parties to the Distribution Agreement do not have market shares below 30% in the relevant market; and (ii) the Distribution Agreement contains hardcore restrictions. Moreover, a number of clauses present in the Distribution Agreement are excluded restrictions, to which the Exemption shall not apply.

b) Market shares

103.

According to the Respondent, the relevant product market should be at least the IOLs market, which could be further segmented into the different categories of IOLs available: monofocal IOLs and trifocal IOLs. Additionally, it would be possible to draw a further distinction in the IOLs market between standard and premium IOLs. Premium IOLs include trifocal, bifocal and extended depth of focus ("edof") IOLs. Geographically, the relevant market is [Redacted].

104.

In at least two of the relevant markets, [Claimant]'s market share exceeds 30%, namely, in the segment of trifocal IOLs (where [Claimant]'s market share in [Redacted] is estimated to amount to 51%) and in the premium IOLs segment (where [Claimant]'s market share in [Redacted] is estimated to be 38%).

105.
Therefore, the Distribution Agreement would not be covered by the exemption provided under Regulation 330/2010.

c) Hardcore restrictions

106.
In any event, even if market shares of the Parties did not exceed 30%, the exemption provided under Regulation 330/2010 would not be applicable if the Distribution Agreement contains "hardcore restrictions" (those included in Article 4 of Regulation 330/2010).
107.

In this regard, Clause 2.2 of the Distribution Agreement prevents the Respondent from engaging in either active or passive sales outside the territory of the contract, i.e., [Redacted]. This prohibition constitutes a hardcore restriction within the meaning of Regulation 330/2010.

108.

More precisely, a prohibition to engage in active sales outside of the territory of [Redacted] is in breach of Article 4.b) of Regulation 330/2010. In so far as [Claimant] has not assigned other territories of the EEA exclusively to other distributors or has reserved some territories to itself (nothing is said in this regard in the Distribution Agreement), this clause leads to a market partitioning by territory contrary to EU Competition Law.

109.
As for the prohibition on passive sales outside of the territory, it is also, by virtue of Article 4.b) of Regulation 330/2010, a hardcore restriction contrary to EU Competition Law.
110.
According to the Respondent, the presence of this type of restrictions in an agreement entails that the agreement cannot benefit from the exemption of Regulation 330/2010 and, accordingly, breach both Article 101(1) TFEU and (if applicable) Article IV.l, §1 of the Belgian Code of Economic Law.

d) Excluded restrictions

111.
According to the Respondent, the Distribution Agreement contains, at least, two clauses that qualify as "excluded restrictions" within the meaning of Article 5 of Regulation 330/2010, i.e., Clause 2.3 and Clause 17.1.
112.
Indeed, Clause 2.3 provides for an exclusive purchase obligation, and Clause 17.1 imposes a non-compete obligation on [Respondent], for a duration that in accordance to clauses 3.1 and 3.2 may exceed 5 years, which is contrary to Article 5(1) of Regulation 330/2010.
113.
The exemption provided under Regulation 330/2010 shall not be applicable to non-compete obligations contained in vertical agreements, the duration of which is indefinite or exceeds five years (Article 5 Regulation 330/2010).
114.
Therefore, per se these clauses cannot benefit from the exemption provided under Regulation 330/2010.

(2) Compensation Fee

115.
Clause 10 of the Distribution Agreement obliges [Respondent] to pay an increasing yearly Compensation Fee to [Claimant], as from 2016. To date, [Respondent] has paid for the Compensation Fees corresponding to 2016 and 2017, which totalled EUR 550,000. Under the Distribution Agreement, [Respondent] was required to pay EUR 350,000 for the 2018 Compensation Fee. This amount had to be paid in two equal instalments, the first being due by 30 June 2018 and the second being due by 31 December 2018.
116.

According to the Respondent, Clause 10 also entails competition concerns. This compensation mechanism was in theory set up for the following reason: before [Respondent] joined [Claimant] distribution network, [Redacted] was the only distributor in [Redacted], and benefited from exclusivity in the [Redacted]. When [Respondent] joined, the Parties agreed that [Respondent] would pay [Claimant] a compensation fee on an annual basis, intended to compensate [Redacted] for future decrease of income arising from the loss of its exclusivity. Two consequences stem from the compensation mechanism:

- First, as stated above, [Claimant]'s market shares in [Redacted] exceed 30%. In this scenario, the mere existence of an exclusive distribution agreement (such as the one formerly executed with [Redacted]) entails a high risk of significant reduction of intra-brand competition. However, opening [Claimant] products to a second distributor ([Respondent]) did not lead to open intra-brand competition as it should have been desirable, as this was countervailed by the compensation fee to be paid by [Respondent] to [Redacted] (indirectly through [Claimant]). [Respondent] entered into [Claimant]'s distribution network under a disadvantaged position compared to [Redacted], and [Redacted] could benefit from the same level of income arising from the sale of [Claimant]'s products without, at the same time, bearing the costs arising from organising the distribution.

- Second, in practice, the compensation mechanism is allowing [Redacted] to lower its prices to levels that would not be affordable for [Respondent], thereby starting a price war which, at the end of the day, would be purely artificial or deprived of benefit for final customers. As a consequence, [Respondent] is finding difficulties to compete and, especially, to comply with the minimum purchase obligations set out in Clause 6.2 of the Distribution Agreement. Clause 15.1.3 allows for termination of the Distribution Agreement in case of breach of Clause 6.2. Termination on these grounds would lead again to a situation of de facto exclusivity for [Redacted].

117.
In other words, a mechanism that theoretically was presented as a way to increase intra-brand competition (by opening the market to two distributors) leads to a collusive practice to exclude [Respondent] from the market. This means that the final result will be the exclusion of [Respondent] from the [Redacted] in favor of [Redacted], which, as sole and dominant distributor will be in a position to increase prices to the detriment of ophthalmology clinics and patients.

(3) Market partitioning proposal

118.
In addition to the above, in the context of an attempt by [Respondent] to renegotiate with [Claimant] the terms of the Distribution Agreement, [Claimant] suggested [Respondent] to limit its resale activity to its current customers in the trifocal segment, without being able to expand its market beyond that (i.e., for the sake of putting an end over the price war, [Claimant] proposed to split the market). In exchange, the compensation fee would be waived. [Respondent] refused this proposal which, in substance, consisted in an exclusive customer allocation scheme. This scenario would further reduce intra-brand competition and facilitate price discrimination.

(4) Consequences for the Distribution Agreement: nullity

119.
The Respondent has asserted that in view of the above, it is clear that the Distribution Agreement contains hardcore restrictions of competition as provided for by Article 4 of Regulation 330/2010 and that the mere existence of the compensation fee leads to serious anti-competitive issues. This prevents the Distribution Agreement from qualifying for an exemption from the applicability of Articles 101 TFEU. In addition, [Claimant] has clearly tried to implement a strategy of market allocation among its non-exclusive distributors, which also constitutes a serious infringement under EU and Belgian Competition Law.
120.

The presence of hardcore restrictions implies the nullity of the agreement as a whole. This is established by both Article 101(2) TFEU (and Article IV.l, §2 of the Belgian Code of Economic Law) and by the Guidelines on Vertical Restraints, which read as follows regarding Regulation 330/2010 and hardcore restrictions:

(70) The Block Exemption Regulation exempts vertical agreements on condition that no hardcore restriction, as set out in Article 4 of that Regulation, is contained in or practised with the vertical agreement. If there are one or more hardcore restrictions, the benefit of the Block Exemption Regulation is lost for the entire vertical agreement. There is no severability for hardcore restrictions.

(71) The rule of severability does apply, however, to the excluded restrictions set out in Article 5 of the Block Exemption Regulation. Therefore, the benefit of the block exemption is only lost in relation to that part of the vertical agreement which does not comply with the conditions set out in Article 5.

121.
It is settled case law by the Court of Justice of the EU that, in accordance with Article 101(2) TFEU, agreements subject to the prohibition in that Article are automatically void and that no undertaking can therefore be required to comply with them. Since the invalidity referred to in Article 101(2) TFEU is absolute, an agreement which is null and void by virtue of this provision has no effect as between the contracting parties and cannot be invoked against third parties (Judgment of the General Court of 28 June 2016 in Case T-208/13, Portugal Telecom SGPS, SA v European Commission, par. 160).
122.
This automatic nullity applies to those parts of the agreement affected by the prohibition, or to the agreement as a whole if it appears that those parts are not severable from the agreement itself (Judgment of the Court of 30 June 1966 in Case C-56/65, Société Technique Minière (L.T.M.) v Maschinenbau Ulm GmbH (M.B.U.)).
123.
The same line has been followed by the Belgian courts, which have confirmed that when an agreement contains a clause contrary to Article 5 of Regulation 330/2010 (i.e., excluded restrictions), only that clause shall be declared null and void in application of the severability rule contained in such article, and the rest of the agreement continues to benefit from the exemption by categories. However, in that aspect, Article 5 differs from Article 4 of the same Regulation, which also contains exclusion causes, the so called "hardcore" restrictions, which existence jeopardises the legal validity of the contract as a whole (Judgement no. C.08.0029.N from the Belgian Supreme Court of 15 May 2009).
124.
Based on the above, the Respondent has asserted that it is clear that the Distribution Agreement would be vitiated by the hardcore restrictions and therefore null and void in its entirety. Consequently, the nullity of the Distribution Agreement also results in the nullity of the clauses which are inherent to the distribution relationship, in particular Clause 10, that provides for the Compensation Fee, as this obligation would be deprived from a valid or licit cause in the sense of Article 1108 of the Belgian Civil Code (Belgian Court of Cassation, 13 November 1953, Pas., 1954, I, p. 190).
125.
As per the amount due corresponding to the goods purchased, while the Distribution relationship would be null and void due to containing hardcore restrictions, the fact is that there would still remain an agreement between the parties on (i) the goods to be purchased and (ii) the price to be paid for them, which results on a valid purchase agreement.
126.
Therefore, the Arbitral Tribunal is called to adjust the amount corresponding to the goods purchased, by offsetting it with the amounts corresponding to the Compensation Fees that [Respondent] has already unduly paid to the Claimant (EUR 550,000). In addition, the Arbitral Tribunal is called to order [Claimant] to further offset [Respondent]' debt, accrued as a consequence of the purchase of goods under the Distribution Agreement, with the amount of legal interest that corresponds to [Respondent] for the unduly paid Compensation Fees.

(D) Relief sought by the Respondent

127.

[Respondent] has requested the Tribunal (Respondent's Memorial No. 3, §192):

(i) To partially dismiss [Claimant]'s claims by:

Main claim:

a. Declaring that the Distribution Agreement (and, thereby, the distribution relationship) is null and void on the basis of the existence of two hard core restrictions in Clause 2.2 of the said agreement, within the meaning of Article 4.b) of Regulation 330/2010 and in accordance to Article 101(1) and 101(2) TFEU;

b. Declaring that, as a consequence of the above, the Compensation Fee foreseen in Clause 10 of the Distribution Agreement is not due and that, consequently, there is no obligation for [Respondent] to pay the 2018 Compensation Fee, which amounts to EUR 350.000;

c. Ordering [Claimant] to offset part of [Respondent]'s debt, accrued as a consequence of the purchase of goods under the Distribution Agreement, with the Compensation Fees already paid by [Respondent] (i.e. EUR 550.000);

d. Ordering [Claimant] to further offset [Respondent]'s debt, accrued as a consequence of the purchase of goods under the Distribution Agreement, with the amount of legal interest that corresponds to [Respondent] for the unduly paid Compensation Fees;

Subsidiary claim:

a. Declaring that Clause 2.2 of the Distribution Agreement is null and void because it contains hardcore restrictions.

b. Declaring that, as a consequence, and for being inherent and non-severable from Clause 2.2, the Compensation Fee foreseen in Clause 10 of the Distribution Agreement is not due and that, consequently, there is no obligation for [Respondent] to pay the 2018 Compensation Fee, which amounts to EUR 350.000;

c. Ordering [Claimant] to offset part of [Respondent]'s debt, accrued as a consequence of the purchase of goods under the Distribution Agreement, with the Compensation Fees already paid by [Respondent] (i.e. EUR 550.000);

d. Ordering [Claimant] to further offset [Respondent]'s debt, accrued as a consequence of the purchase of goods under the Distribution Agreement, with the amount of legal interest that corresponds to [Respondent] for the unduly paid Compensation Fees;

(ii) To dismiss [Claimant]'s claim for damages (provisionally estimated at EUR 15,000);

(iii) To state, in accordance with Article 38 (4) of ICC Arbitration Rules, that each party will bear (i) its own costs and fees of defence arising from the arbitration proceedings and (ii) 50% of fees and expenses of the arbitrators and the ICC administrative expenses.

V. MERITS OF THE PARTIES' CLAIMS IN LAW

128.
The Claimant has asked the Tribunal to order [Respondent] to pay to [Claimant] the principal amount of all invoices due by [Respondent] pursuant to the Distribution Agreement, such principal amount to be increased by a default (contractual) interest at the yearly contractual rate of 8% (in accordance with Clause 5.4.2 of the Distribution Agreement) until full payment is received.
129.

The total amount of Claimant's claims is EUR 1,724,080.00. This amount includes:

- the price of products purchased by [Respondent] to [Claimant] under the Distribution Agreement, in the amount of 1,374,080.00; and

- the Compensation Fee for the year 2018, provided for in Clause 10 of the Distribution Agreement, in the amount of EUR 350,000.

130.

The Respondent has asked the Tribunal:

- to declare that the entire Distribution Agreement is null and void on the basis of the existence of two hardcore restrictions in Clause 2.2 of the said agreement, within the meaning of Article 4(b) of the Block Exemption Regulation and in accordance with Article 101(1) and 101(2) TFEU (Respondent's Memorial No. 3, §192 (i) (a));

- alternatively, to declare that Clause 2.2 of the Distribution Agreement is null and void because it contains hardcore restrictions; and to declare that, as a consequence, and "for being inherent and non-severable from Clause 2.2", the Compensation Fee provided for in Clause 10 of the Distribution Agreement is "not due” (Respondent's Memorial No. 3, §192 (i) (a) an (b)).

131.

Thus, the Respondent has asked the Tribunal:

- to reject the Claimant's claim for payment of the Compensation Fee for the year 2018, in the amount of EUR 350,000; and

- to order the Claimant to repay to the Respondent, by way of set-off against Claimant's claims, the Compensation Fees for 2016 and 2017 already paid by the Respondent, for a total amount of EUR 550,000; the Respondent has asked the Tribunal to deduct the amount of EUR 550,000 (corresponding to the Compensation Fees already paid by the Respondent) from the total amount of the price of the products owed by [Respondent] to [Claimant].

132.
In order to determine the Claimant's claims, the Tribunal must therefore first determine whether the Respondent's counterclaims for the Distribution Agreement to be declared null and void in its entirety (or alternatively, for Clause 2.2 of the Distribution Agreement to be declared null and void and for the Compensation Fee provided for under Clause 10 of the Distribution Agreement to be considered "not due") are well-founded as a matter of law.

(A) Applicable law

133.

Under the Distribution Agreement: "This Agreement shall be governed by and construed in accordance with Belgian Law, excluding July 27th 1961's law" (Clause 19.8.1).

134.
As Belgium is a Member State of the European Union, the Tribunal will apply the relevant EU rules which are directly effective in Belgium.
135.

The EU rules which are directly effective in Belgium include:

- Article 101 of the Treaty on the Functioning of the European Union (the "TFEU");

- Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty establishing the European Community [now Articles 101 and 102 TFEU] ("EU Regulation 1/2003"); and,

- Commission Regulation (EU) No. 330/2010 of 20 April 2010 on the application of Article 101(3) of the TFEU to categories of vertical agreements and concerted practices (the "Block Exemption Regulation").

136.
The Respondent has asserted that the Distribution Agreement also contravenes Article IV.1 of the Belgian Code of Economic Law which, according to the Respondent, mirrors the content of Article 101 TFEU (Respondent's Memorial No. 3, §29).
137.

Accordingly, the Tribunal will set out below its reasoning as to the merits of the Parties' respective claims, defences and counterclaims under:

- Article 101 of the TFEU;

- the Block Exemption Regulation;

- EU Regulation 1/2003;

- Article IV.1 of the Belgian Code of Economic Law; and,

- the relevant rules of Belgian civil law relied upon by the parties.

(B) Introduction: Article 101 TFEU, Article IV.l of the Belgian Code of Economic Law, EU Regulation 1/2003 and the Block Exemption Regulation

138.

Article 101 of the TFEU provides that:

"1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings,

- any decision or category of decisions by associations of undertakings,

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question."

139.
Article IV.l of the Belgian Code of Economic Law mirrors the content of Article 101(1) of the TFEU, except that the rules laid down in Article IV.l of the Belgian Code of Economic Law apply to agreements and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in a substantial manner within the Belgian market, or a substantial part thereof.
140.

EU Regulation 1/2003 provides, inter alia, that:

- "In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled" (Article 2);

- "National courts shall have the power to apply Articles 81 and 82 of the Treaty" (Article 6).

141.
Article 2.1 of the Block Exemption Regulation provides that: "Pursuant to Article 101(3) of the Treaty and subject to the provisions of this Regulation, it is hereby declared that Article 101(1) of the Treaty shall not apply to vertical agreements." Thus, in accordance with the Block Exemption Regulation, Article 101(1) TFEU does not apply to certain categories of vertical agreements. However, the benefit of the block exemption is subject to certain conditions defined in the Block Exemption Regulation. In particular, the Block Exemption Regulation provides that when a vertical agreement contains some "hardcore restrictions", the benefit of the exemption is lost. The hardcore restrictions are defined in Article 4 of the Block Exemption Regulation.
142.

Article 4 of the Block Exemption Regulation provides that the "exemption provided for in Article 2 shall not apply to vertical agreements which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object: (...) (emphasis added)

(b) the restriction of the territory into which, or of the customers to whom, a buyer party to the agreement, without prejudice to a restriction on its place of establishment, may sell the contract goods or services, except: (i) the restriction of active sales into the exclusive territory or to an exclusive customer group reserved to the supplier or allocated by the supplier to another buyer, where such a restriction does not limit sales by the customers of the buyer, (ii) the restriction of sales to end users by a buyer operating at the wholesale level of trade, (iii) the restriction of sales by the members of a selective distribution system to unauthorised distributors within the territory reserved by the supplier to operate that system, and (iv) the restriction of the buyer s ability to sell components, supplied for the purposes of incorporation, to customers who would use them to manufacture the same type of goods as those produced by the supplier; (emphasis added)

(c) the restriction of active or passive sales to end users by members of a selective distribution system operating at the retail level of trade, without prejudice to the possibility of prohibiting a member of the system from operating out of an unauthorised place of establishment; (...)"

143.

The Respondent has alleged that the Distribution Agreement cannot benefit from the exemption provided in the Block Exemption Regulation because "(i) the parties to the agreement do not have market shares below 30%; and (ii) it contains hardcore restrictions" (Respondent's Memorial No. 3, §42).

(C) Scope of the Block Exemption Regulation

144.
In order for the block exemption provided for in Article 2 of the Block Exemption Regulation to apply, the supplier's and the buyer's market share must each be 30 % or less (Article 3.1 of the Block Exemption Regulation; Guidelines on Vertical Restraints, §23).
145.
Also, the Block Exemption Regulation contains in Article 4 a list of hardcore restrictions which lead to the exclusion of the whole vertical agreement from the scope of application of the Block Exemption Regulation, even in cases where the supplier's and the buyer's market share are each 30 % or less (Guidelines on Vertical Restraints, §47).

(1) The hardcore restrictions

146.
When a vertical agreement contains one or more hardcore restrictions, the benefit of the Block Exemption Regulation is lost for the entire agreement.
147.
This rule is enshrined in Article 4 of the Block Exemption Regulation, relating to "Restrictions that remove the benefit of the block exemption - hardcore restrictions", which provides that: "The exemption provided for in Article 2 shall not apply to vertical agreements which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object (...)" (emphasis added).
148.
Also, the Guidelines on Vertical Restraints state that "The Block Exemption Regulation exempts vertical agreements on condition that no hardcore restriction, as set out in Article 4, is contained in or practised with the vertical agreement. If there are one or more hardcore restrictions, the benefit of the Block Exemption Regulation is lost for the entire vertical agreement. There is no severability for hardcore restrictions." (emphasis added) (Guidelines on Vertical Restraints, §70).
149.
As the Tribunal will explain below, the Distribution Agreement contains two hardcore restrictions (see Section V (E) below).
150.
It follows that, by reason of these two hardcore restrictions, the Block Exemption Regulation does not apply to the Distribution Agreement.

(2) The Parties' respective market shares

151.

Article 3(1) of the Block Exemption Regulation provides that:

"1. The exemption provided for in Article 2 shall apply on condition that the market share held by the supplier does not exceed 30 % of the relevant market on which it sells the contract goods or services and the market share held by the buyer does not exceed 30 % of the relevant market on which it purchases the contract goods or services."

152.

Thus, the exemption provided for in Article 2 of the Block Exemption Regulation does not apply in the following circumstances (Article 3(1) of the Block Exemption Regulation):

- when the market share of the supplier exceeds 30% of the relevant market on which it sells the contract goods; and/or

- when the market share of the buyer exceeds 30% of the relevant market on which it purchases the contract goods.

a) Relevant market

153.

The Commission Notice on the definition of relevant market for the purposes of Community competition law (97/C 372/03) (the "Commission Notice") has laid down the following definitions:

- "A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the products' characteristics, their prices and their intended use." (Commission Notice, §7).

- "The relevant geographic market comprises the area in which the undertakings concerned are involved in the supply and Remand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those area" (Commission Notice, §8).

154.

The Respondent has asserted that:

- the relevant geographical market is [Redacted] (Respondent's Memorial No. 3, §86); and that

- there are several relevant product markets:

o IOLs;
o Trifocal IOLs;
o Monofocal IOLs;
o Standard IOLs;
o Premium IOLs.

155.

The Respondent has asserted that:

- the intended use of monofocal IOLs is exclusively to fix cataracts; whilst the intended use of trifocal IOLs is to fix cataracts and other pathologies, such as astigmatism (Respondent's Memorial No. 3, §60-§62);

- monofocal IOLs are "considerably less costly" than trifocal IOLs: "in [Redacted], monofocal IOLs' average price is EUR 45, while trifocal IOLs' average price is EUR 225" (Respondent's Memorial No. 3, §63);

- "some patients will simply not be able to afford trifocal lenses and will have no choice but to opt for monofocal IOLs" (Respondent's Memorial No. 3, §64).

156.
The Claimant has asserted that the only "relevant market" for the purposes of competition law is the IOLs market at the wholesale level in the EEA.
157.
The Respondent has provided no legal authority supporting its case that IOLs may be segmented in several different markets (Trifocal IOLs, Monofocal IOLs, Standard IOLs, Premium IOLs).
158.
In two cases, the European Commission examined whether there existed a relevant market for ophthalmic surgical products and whether this market may be further fragmented in five narrower market segments: (i) ophthalmic medical devices, (ii) viscoelastic solutions, (iii) vitreo-retinal products, (iv) disposables and (v) IOLs (see Case No. COMP/M.6969, EC, 5 August 2013, Valeant Pharmaceuticals International / Bausch & Lomb Holdings; see also Case No. COMP/M. 7309 (EC, 4 August 2014, Bridgepoint / EdRCP). Whilst the European Commission decided to leave the exact product market definition open (on the basis that in the cases at hand, competition concerns were unlikely to arise under any plausible market definition), the European Commission never envisaged that the market for IOLs may be fragmented in several other submarkets such as "Trifocal IOLs", "Monofocal IOLs", "Standard IOLs" and "Premium IOLs".
159.
It follows that the Respondent has failed to prove its case that each of the Trifocal IOLs, Monofocal IOLs, Standard IOLs and Premium IOLs constitute a different "relevant market".

b) The figures

160.

Market share of the buyer: the Respondent has asserted that its own market share in [Redacted] was 5.1% (Respondent's Memorial No. 3, §94).

161.
The Claimant has not contested this figure.
162.
Accordingly, the only contested issue is the amount of the supplier's ([Claimant]'s) market share on the "relevant market".
163.
Market share of the supplier: the Claimant has provided no evidence showing what its market share on the "relevant market" may be.
164.

As for the Respondent, it submitted a "Report on Market Definition and Market Shares" (annexed to Respondent's Memorial No. 1), whose figures are based:

- on the Respondent's own estimates of [Claimant]'s market share; and

- certain figures included, according to the Respondent, in a "report prepared by Global Market Insights" (Respondent's Memorial No. 3, §91); however, the Respondent has not produced this report of Global Market Insights.

165.

In its "Report on Market Definition and Market Shares", the Respondent has estimated that [Claimant]'s market shares were as follows in [Redacted]:

- 6.5% of the IOLs sales market (2017);

- 51% of the Trifocal IOLs market (2017);

- 2.65% of the Monofocal IOLs market (2017);

- 38% of the Premium IOLs market (2017).

166.
The Respondent has provided no figure regarding [Claimant]'s market shares in the EEA. In its "Report on Market Definition and Market Shares", the Respondent only estimated that the value of [Claimant]'s total sales of IOLs in the EEA was 32 million euros in 2017.
167.
In accordance with the timetable set out in Procedural Order No. 1, the Respondent was supposed to provide an Expert Report on the relevant market shares by 24 October 2018. However, the Respondent has provided no Expert Report on the relevant market shares in this arbitration.
168.
The Respondent has only produced a document prepared by its legal counsel, (entitled "Report on Market Definition and Market Shares") based on the Respondent's own estimates of [Claimant]'s market shares and data deriving (according to the Respondent) from a "report prepared by Global Market Insights".
169.

As the Respondent has produced no independently verified information showing what [Claimant]'s actual market shares are (either in [Redacted] or in the EEA), the Tribunal concludes that the Respondent has not established that the Claimant's market share exceeded 30% of the "relevant market".

170.
Whilst the Respondent has not established that the Claimant's market share exceeded 30% of the "relevant market", the benefit of the Block Exemption is still lost for the entire Distribution Agreement, by reason of the presence of hardcore restrictions in the said agreement (see Section V- (C)-(1) above and Section (E) below).

(D) Excluded restrictions

171.

Pursuant to Article 2 of EU Regulation 1/2003, the burden of proving an infringement of Article 101(1) TFEU rests on the party alleging the infringement. Thus, Article 2 of Regulation 1/2003 provides that:

"In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled."

172.
It follows that the Respondent had the burden of proving, in this arbitration, that the Distribution Agreement infringed Article 101(1) TFEU.
173.
The Respondent has alleged that "Clause 2.3 of the Distribution Agreement, providing for an exclusive purchase obligation, and Clause 17.1, imposing a noncompete obligation on [Respondent], for a duration that in accordance to Clauses 3.1 and 3.2 may exceed five years, falls under Article 5(1) of Regulation 330/2010 and, as such, cannot benefit from the exemption of the regulation" (Respondent's Memorial No. 3, §115).
174.

Article 5 of the Block Exemption Regulation provides that:

"1. The exemption provided for in Article 2 shall not apply to the following obligations contained in vertical agreements:

(a) any direct or indirect non-compete obligation, the duration of which is indefinite or exceeds five years;

(b) any direct or indirect obligation causing the buyer, after termination of the agreement, not to manufacture, purchase, sell or resell goods or services;

(c) any direct or indirect obligation causing the members of a selective distribution system not to sell the brands of particular competing suppliers.

For the purposes of point (a) of the first subparagraph, a non- compete obligation which is tacitly renewable beyond a period of five years shall be deemed to have been concluded for an indefinite duration."

175.
As stated in the Guidelines on Vertical Restraints, "Article 5 of the Block Exemption Regulation excludes certain obligations from the coverage of the Block Exemption Regulation even though the market share threshold is not exceeded. However, the Block Exemption Regulation continues to apply to the remaining part of the vertical agreement if that part is severable from the non-exempted obligations" (Guidelines on Vertical Restraints, §65).
176.
Pursuant to Article 1.1(d) of the Block Exemption Regulation, " 'non-compete obligation' means any direct or indirect obligation causing the buyer not to manufacture, purchase, sell or resell goods or services which compete with the contract goods or services, or any direct or indirect obligation on the buyer to purchase from the supplier or from another undertaking designated by the supplier more than 80 % of the buyer's total purchases of the contract goods or services and their substitutes on the relevant market, calculated on the basis of the value or, where such is standard industry practice, the volume of its purchases in the preceding calendar year".
177.

Clause 2.3 of the Distribution Agreement provides that:

"The Distributor shall purchase the Products exclusively from the Supplier."

178.

Clause 17.1 of the Distribution Agreement provides that:

"For the duration of this Agreement, the Distributor shall not manufacture, sell or offer for sale, directly or indirectly, or use any other means with a view to marketing, either as principal, distributor, agent, intermediary or any other capacity within the Territory, any multifocal intraocular lenses not manufactured by the Supplier."

179.

Clauses 3.1 and 3.2 of the Distribution Agreement provide that:

"3.1. This Agreement shall enter into effect on 1st January 2016 (the "Effective Date") and shall continue into effect until 31st December 2018 (the "Initial Period"), subject to the provisions of Section 15.

3.2. At the end of the Initial Period, the Agreement shall, subject to the provisions of Section 15, automatically be renewed for maximum four (4) successive twelve (12)-months periods (each a "Renewed Period"), unless terminated by either Party, at the end of the Initial Period, by giving six (6) months prior written notice to the other party, or at the end of any Renewed Period, by giving three (3) months prior written notice to the other party. "

180.
As the Respondent was obliged to purchase the Products exclusively from [Claimant], Clause 2.3 of the Distribution Agreement contained a non-compete obligation within the meaning of Articles 1.1(d) and 5.1(a) of the Block Exemption Regulation.
181.

As the Respondent was not allowed to manufacture, sell or offer for sale, goods (multifocal intraocular lenses) which competed with the Products to be distributed in [Redacted] under the Distribution Agreement, Clause 17.1 of the Distribution Agreement contained a non-compete obligation within the meaning of Articles 1.1(d) and 5.1(a) of the Block Exemption Regulation.

182.

Under Clauses 3.1 and 3.2 of the Distribution Agreement:

- the duration of the Initial Period was three years (from 1 January 2016 to 31 December 2018) (Clause 3.1); and

- the maximum duration of all the Renewed Periods was four years.

183.
Thus, under Clauses 3.1 and 3.2, the Distribution Agreement could potentially have a duration exceeding five years (three years for the Initial Period, and four Renewed Periods of twelve months). Accordingly, the non-compete obligations, provided for in Clauses 2.3 and 17.1 of the Distribution Agreement, were tacitly renewable beyond a period of five years.
184.

Under Article 5.1 (§5) of the Block Exemption Regulation, "For the purposes of point (a) of the first subparagraph, a non- compete obligation which is tacitly renewable beyond a period of five years shall be deemed to have been concluded for an indefinite duration." It follows that:

- in accordance with Article 5.1 (§5) of the Block Exemption Regulation, the non-compete obligations provided for in Clauses 2.3 and 17.1 of the Distribution Agreement are deemed to have been concluded for an indefinite duration within the meaning of Article 5.1(a) of the Block Exemption Regulation; and that

- in accordance with Article 5.1(a) of the Block Exemption Regulation, the non-compete obligations provided for in Clauses 2.3 and 17.1 of the Distribution Agreement do not benefit from the block exemption provided for in Article 2 of the Block Exemption Regulation.

185.
In accordance with Article 5 of the Block Exemption Regulation, as Clauses 2.3 and 17.1 of the Distribution Agreement contain excluded restrictions, these clauses cannot benefit from the block exemption. This is confirmed by the Guidelines on Vertical Restraints which state that: "the benefit of the block exemption is only lost in relation to that part of the vertical agreement which does not comply with the conditions set out in Article 5" (Guidelines on Vertical Restraints, §71).
186.
However, this does not necessarily mean that Clauses 2.3 and 17.3 are prohibited by Article 101(1) TFEU. The purpose of an exemption regulation such as the Block Exemption Regulation is not to define the conditions under which a practice or vertical agreement may be regarded as legal under EU competition law, but only to specify the conditions under which it can reasonably be presumed that such a practice or vertical agreement has a favourable economic balance within the meaning of Article 101(3) TFEU and can be excluded from the automatic nullity provided for in Article 101(2) TFEU. This is supported by European case-law. Thus, the ECJ ruled, on 18 December 1986, in the case of VAG France (ECR 1986, p.1 - 4071), that an exemption regulation ''does not lay down any mandatory provisions directly affecting the validity or the content of contractual provisions or oblige the contracting parties to adapt the content of their agreement but merely lays down conditions which, if they are satisfied, exclude certain contractual provisions from the prohibition and consequently from the automatic nullity provided for in Article 85(1) and (2) of the EEC Treaty [Articles 101(1) and (2) TFEU]" (emphasis added).
187.
Consequently, as a matter of principle, the fact that a clause in a vertical agreement does not benefit from a block exemption should not entail, per se, the illegality of the said clause, but should only remove it from the "safe harbour" of the block exemption by excluding any positive presumption of a positive economic balance within the meaning of Article 101(3) of the TFEU.
188.
In accordance with Article 2 of EU Regulation 1/2003 and Article 5 of the Block Exemption Regulation, in circumstances where a vertical agreement contains an excluded restriction, the party alleging that such excluded restriction has infringed Article 101(1) TFEU still bears the burden of proving that the said excluded restriction contravenes Article 101(1) TFEU and must be annulled pursuant to Article 101(2) TFEU.
189.
In the present case, the Respondent has not asked the Tribunal to annul Clauses 2.3 and 17.1 of the Distribution Agreement, which contain excluded restrictions, on the basis of Articles 101(1) and 101(2) TFEU. Accordingly, the Tribunal cannot annul these clauses. The only consequence of the existence of excluded restrictions in Clauses 2.3 and 17.1 is that the benefit of the block exemption is lost for these clauses.
190.
However, the Distribution Agreement also contains hardcore restrictions (see Section V-(E) below). Thus, by reason of these two hardcore restrictions, the loss of the benefit of the block exemption is not limited to Clauses 2.3 and 17.1 of the Distribution Agreement: the benefit of the block exemption is lost for the entire Distribution Agreement (see section V-(E) below).

(E) Hardcore restrictions

(1) The Distribution Agreement contains two hardcore restrictions within the meaning of Article 4 (b) of the Block Exemption Regulation

191.
Clause 2.2 of the Distribution Agreement provides that: "The Distributor is allowed to import, sell and distribute the Products solely in the Territory and solely under the label [Respondent]. The Distributor has no right to sell or distribute the Products in any country outside the Territory. The Distributor undertakes to refrain from advertising the Products, establishing a sales office or branch, or keeping a warehouse for distribution outside of the Territory and, in general, shall not actively solicit orders (or accept orders) for the Products from customers located outside the Territory."
192.

The Respondent's case is that Clause 2.2 of the Distribution Agreement contains two hardcore restrictions within the meaning of the Block Exemption Regulation. The Respondent has alleged that:

- Clause 2.2 of the Distribution Agreement "contains an absolute, unjustified and anti-competitive restriction on active sales outside of [Redacted]" (Respondent's Memorial No. 3, §106); and that

- "moreover, the last sentence of Clause 2.2., and especially the reference that appears in brackets to "accept orders", is an upfront prohibition to engage in passive sales outside of [Redacted] and, as such, a hardcore restriction" (Respondent's Memorial No. 3, §107).

193.

As its main claim, the Respondent has alleged that the Distribution Agreement contains "anticompetitive clauses (including the hardcore restrictions and the Compensation Fee)", and that as such, it is null and void. The Respondent has asserted that, by reason of the hardcore restrictions and the Compensation Fee:

- the Distribution Agreement is "presumed to fall within Article 101(1) TFEU" (Respondent's Memorial No. 3, §133); and that

- the Distribution Agreement is "unlikely to fulfil the conditions of Article 101(3) TFEU" (Respondent's Memorial No. 3, §133).

194.
Alternatively, the Respondent has asked the Tribunal to annul Clause 2.2 of the Distribution Agreement on the basis that it contains hardcore restrictions.

a) The Distribution Agreement contains a hardcore restriction on active sales

195.
Clause 2.2 of the Distribution Agreement provides, in relevant part, that: "The Distributor is allowed to import, sell and distribute the Products solely in the Territory and solely under the label [Respondent]. The Distributor has no right to sell or distribute the Products in any country outside the Territory. (...)".
196.

Under the Distribution Agreement, the "Territory" is defined as "[Redacted]" (Schedule 2 to the Distribution Agreement).

197.

Thus, under the Distribution Agreement, [Respondent] was allowed to actively sell the products only in [Redacted]. The Respondent's right to actively sell the contract products was restricted to [Redacted].

198.

It follows from the wording of Article 4(b)(i) of the Block Exemption Regulation, that vertical agreements which restrict active sales may benefit from the block exemption, if the restriction concerns:

- actives sales "into the exclusive territory (...) reserved to the supplier"; or

- active sales "into the exclusive territory (...) of another buyer".

199.
This meaning is confirmed by the Guidelines on Vertical Restraints which state that, for the purposes of Article 4(b)(i): "A territory or customer group is exclusively allocated when the supplier agrees to sell his product only to one distributor for distribution in a particular territory or to a particular customer group and the exclusive distributor is protected against active selling into his territory or to his customer group by all the other buyers of the supplier inside the Union, irrespective of sales by the supplier" (Guidelines on Vertical Restraints, §51).
200.

The Tribunal notes that:

- the Claimant has not disputed the Respondent's assertion that "To the best of the Respondent's knowledge, the Claimant has not appointed any exclusive distributor throughout the EEA" (Respondent's Memorial No. 2, §90); the Claimant has merely asserted that "throughout the European Economic Area, [Claimant] operates either through its own distribution system or through independent distributors" (Claimant's Memorial No. 3, §62); the Claimant has not asserted that it allocated territories of the EEA (except [Redacted]) exclusively to other buyers; and the Claimant has not asserted that it reserved the territories of the EEA (except [Redacted]) exclusively to itself;

- in any event, the Claimant has produced no document showing either that [Claimant] exclusively allocated all the territories of the EEA (except [Redacted]) to other distributors or that [Claimant] exclusively reserved all the territories of the EEA (except [Redacted]) to itself.

201.
It follows that Clause 2.2 of the Distribution Agreement contains a hardcore restriction on actives sales and that as such, the Distribution Agreement cannot benefit from the block exemption provided for in Article 2 of the Block Exemption Regulation.

b) The Distribution Agreement contains a hardcore restriction on passive sales

202.
Clause 2.2 of the Distribution Agreement provides, in relevant part, that: "(...) The Distributor undertakes to refrain from advertising the Products, establishing a sales office or branch, or keeping a warehouse for distribution outside of the Territory and, in general, shall not actively solicit orders (or accept orders) for the Products from customers located outside the Territory.”
203.
The Guidelines on Vertical Restraints state that " 'Passive' sales mean responding to unsolicited requests from individual customers including delivery of goods or services to such customers” (Guidelines on Vertical Restraints, §51) (emphasis added).
204.

It follows from Clause 2.2 of the Distribution Agreement that the Respondent was not allowed to:

- “actively solicit orders" from customers located outside [Redacted];

- "(or accept orders)" from customers located outside [Redacted].

205.

The Respondent's obligation, under Clause 2.2 of the Distribution Agreement, not to actively solicit orders from customers located outside [Redacted] was very clear: the Respondent was not allowed to actively approach individual customers by for instance direct mail, including the sending of unsolicited e-mails of visits; or actively approaching a specific customer group or customers outside [Redacted] through advertisement in media, or on the internet. This interpretation of Clause 2.2 is consistent with the Guidelines on Vertical Restraints, which state that "active sales" have the following meaning: "'Active' sales mean actively approaching individual customers by for instance direct mail, including the sending of unsolicited e-mails, or visits; or actively approaching a specific customer group or customers in a specific territory through advertisement in media, on the internet or other promotions specifically targeted at that customer group or targeted at customers in that territory. (...)" (Guidelines on Vertical Restraints, §51).

206.

The precise scope of the Respondent's obligation not to "accept orders" from customers located outside [Redacted], provided for in Clause 2.2, was the subject of different interpretations by the Claimant and the Respondent in this arbitration. The Respondent alleged that its obligation not to "accept orders" from customers located outside [Redacted] was a hardcore restriction on passive sales. The Claimant refuted the Respondent's interpretation.

207.
The conjunction "or" may have different meanings depending on the context; it is often used to introduce another possibility. In Clause 2.2 of the Distribution Agreement, the conjunction "or" before the words "accept orders" was used to introduce another act which is forbidden under Clause 2.2 (besides the act of "actively solicit[ing] orders"): that of "accept[ing] orders".
208.
However, an order cannot be "actively" accepted: an order may only be accepted or not; it is clear that the words "active sales" relate only to the act of "actively approaching" customers (as stated in the Guidelines on Vertical Restraints, §51) and not to the act of accepting orders. Accordingly, the Tribunal finds that the word "actively" in Clause 2.2. was used to qualify the act of "solicit[ing] orders" only and not the act of "accept[ing] orders".
209.
This interpretation is confirmed by the fact that the words "accept orders" in Clause 2.2 were put into brackets ("(or accept orders)"). The use of these brackets confirms that the words "actively" before "solicit orders" only relate to the act of "solicit[ing] orders” and not the act of "accept[ing] orders".
210.

It follows that, under Clause 2.2, the Respondent was obliged:

- not to actively solicit orders; and

- not to accept any orders, whether actively solicited or not; in other words, the Respondent was obliged not to make passive sales outside the Territory.

211.

For these reasons, the Tribunal concludes that Respondent's obligation not to "accept orders" from customers located outside [Redacted] constituted a hardcore restriction on passive sales; and that as a result, the Distribution Agreement cannot benefit from the block exemption provided for in the Block Exemption Regulation.

(2) The hardcore restrictions are presumed to be restrictions by object forbidden by Article 101(1) TFEU

212.

Pursuant to Article 2 of EU Regulation 1/2003, the burden of proving an infringement of Article 101(1) TFEU rests on the party alleging the infringement. Thus, Article 2 of Regulation 1/2003 provides that:

"In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled."

213.
It follows that, as a matter of principle, the burden of proving that the Distribution Agreement infringed Article 101(1) TFEU should rest on the Respondent.
214.
However, the Respondent has alleged that when a vertical agreement such as the Distribution Agreement contains one or more hardcore restrictions, the said agreement is presumed to be prohibited by Article 101(1) TFEU. Thus, the Respondent has alleged that hardcore restrictions are "anti-competitive by object" and that "an agreement that includes this type of restriction cannot benefit from the exemption of Regulation 330/2010 and is presumed to be prohibited by Article 101(1) TFUE" (emphasis added) (Respondent's Memorial No. 3, §100). The Respondent's position is that in such a case, it is for the other party ([Claimant]) to prove that the vertical agreement can benefit from an individual exemption, by providing proof that the agreement "produces efficiencies" or has a positive economic balance within the meaning of Article 101(3) TFEU, which according to the Respondent is "unlikely" in circumstances where the agreement contains hardcore restrictions (Respondent's Memorial No. 3, §133).
215.
As explained in Section V (D) above, as a matter of principle, the purpose of an exemption regulation such as the Block Exemption Regulation is not to define the conditions under which a practice or vertical agreement may be regarded as legal under EU competition law, but only to specify the conditions under which it can reasonably be presumed that such a practice or vertical agreement has a favourable economic Balance within the meaning of Article 101(3) TFEU and can be excluded from the automatic nullity provided for in Article 101(2) TFEU. This is supported by European case-law. Thus, the ECJ ruled, on 18 December 1986, in the case of VAG France (ECR 1986, p.1 - 4071), that an exemption regulation "does not lay down any mandatory provisions directly affecting the validity or the content of contractual provisions or oblige the contracting parties to adapt the content of their agreement but merely lays down conditions which, if they are satisfied, exclude certain contractual provisions from the prohibition and consequently from the automatic nullity provided for in Article 85(1) and (2) of the EEC Treaty [Articles 101(1) and (2) TFEU]" (emphasis added).
216.
Consequently, as a matter of principle, the fact that a vertical agreement does not benefit from a block exemption (because the buyer's or the supplier's market share exceeds 30% for example) should not entail, per se, the illegality of the said agreement, but should only remove it from the "safe harbour" of the block exemption by excluding any positive presumption of a positive economic balance within the meaning of Article 101(3) of the TFEU.
217.

This said, the position that when a vertical agreement contains a hardcore restriction within the meaning of the Block Exemption Regulation, it is presumed to be prohibited by Article 101(1) TFEU is consistent with the Guidelines on Vertical Restraints, which state that:

- "The Block Exemption Regulation contains in Article 4 a list of hardcore restrictions which lead to the exclusion of the whole vertical agreement from the scope of application of the Block Exemption Regulation. Including such a hardcore restriction in an agreement gives rise to the presumption that the agreement falls within Article 101(1). It also gives rise to the presumption that the agreement is unlikely to fulfil the conditions of Article 101(3), for which reason the block exemption does not apply. However, undertakings have the possibility to demonstrate pro-competitive effects under Article 101(3) in an individual case. In case the undertakings substantiate that likely efficiencies result from including the hardcore restriction in the agreement and that in general all the conditions of Article 101(3) are fulfilled, this will require the Commission to effectively assess the likely negative impact on competition before making the ultimate assessment of whether the conditions of Article 101(3) are fulfilled." (Guidelines on Vertical Restraints, §47) (emphasis added);

- "Outside the scope of the block exemption it is relevant to examine whether in the individual case the agreement is caught by Article 101(1) and if so whether the conditions of Article 101(3) are satisfied. Provided that they do not contain restrictions of competition by object and in particular hardcore restrictions of competition, there is no presumption that vertical agreements falling outside the block exemption because the market share threshold is exceeded are caught by Article 101(1) or fail to satisfy the conditions of Article 101(3). Individual assessment of the likely effects of the agreement is required. Companies are encouraged to do their own assessment. Agreements that either do not restrict competition within the meaning of Article 101(1) or which fulfil the conditions of Article 101(3) are valid and enforceable. Pursuant to Article 1(2) of Regulation 1/2003 no notification needs to be made to benefit from an individual exemption under Article 101(3). In the case of an individual examination by the Commission, the latter will bear the burden of proof that the agreement in question infringes Article 101(1). The undertakings claiming the benefit of Article 101(3) bear the burden of proving that the conditions of that paragraph are fulfilled. When likely anti-competitive effects are demonstrated, undertakings may substantiate efficiency claims and explain why a certain distribution system is indispensable to bring likely benefits to consumers without eliminating competition, before the Commission decides whether the agreement satisfies the conditions of Article 101(3)." (Guidelines on Vertical Restraints, §96) (emphasis added).

218.
There is no explicit case-law of the ECJ either supporting or contradicting the Guidelines' position that when an agreement contains a hardcore restriction, it "gives rises to the presumption that the agreement falls within Article 101(1)" (Guidelines on Vertical Restraints, §47).
219.
The ECJ ruled, in the case of SIA Maxima Latvija (C-345/14), that "as regards the concept of restriction of competition 'by object', the Court has held that it must be interpreted restrictively and can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects (see, to that effect, judgment in CB v Commission, C-67/13 P, EU:C:2014:2204, paragraph 58). That case-law arises from the fact that certain types of coordination between undertakings can be regarded, by their very nature, as being harmful to the proper functioning of normal competition (judgment in CB v Commission, C-67/13 P, EU:C:2014:2204, paragraph 50 and the case-law cited)" (§18). The ECJ suggested, in this case, that in order for an agreement to constitute a restriction by object, one must take account of the "economic context" in which such an agreement is to be applied (§23).
220.

Based on the decision of the ECJ rendered in the case of SIA Maxima Latvija (C-345/14), it might be considered that a hardcore restriction within the meaning of the Block Exemption Regulation cannot be automatically considered as constituting a restriction by object forbidden by Article 101(1) TFEU:

- the opposite position might be considered as being based: (i) on an extensive interpretation of the concept of restriction of competition by object; and (ii) on a purely abstract determination, without assessing whether "taking account of the economic context" in which a vertical agreement is to be applied, the "analysis of the content" of such an agreement "clearly" shows a "degree of harm with regard to competition sufficient" for the said agreement to be considered as constituting a restriction of competition by object within the meaning of Article 101(1) TFEU (see ECJ, SIA Maxima Latvija (C-345/14), §23);

- also, the opposite position might be considered as overlooking the point that the concepts of restriction of competition by object and hardcore restriction do not operate on the same level, since the former operates under Article 101(1) TFEU and the latter under Article 101(3) TFEU. Thus, in the reasoning, the concept of restriction of competition by object comes first, and refers only to practices whose experience shows that they have a degree of harmfulness such that their restrictive nature of competition must be recognized without there being any need to prove their anticompetitive effects; whilst the concept of hardcore restriction may only appear in a second step, once the restriction of competition (by object or effect) has been established; a hardcore restriction will only define assumptions in which the block exemption is excluded. The respective scopes of hardcore restrictions and restrictions of competition by object are therefore distinct.

221.
However, the Claimant has not established that the above reasoning has been explicitly confirmed either by the ECJ of by the Belgian courts. Whilst the Guidelines on Vertical Restraints are not binding per se, they constitute an important source of interpretation of EU competition law. It follows from the Guidelines on Vertical Restraints that when a vertical agreement contains a hardcore restriction, it is presumed to be prohibited by Article 101(1) TFEU.
222.
Thus, the Guidelines on Vertical Restraints state that: "The Block Exemption Regulation contains in Article 4 a list of hardcore restrictions which lead to the exclusion of the whole vertical agreement from the scope of application of the Block Exemption Regulation. Including such a hardcore restriction in an agreement gives rise to the presumption that the agreement falls within Article 101(1)." (emphasis added, §47).
223.
In the light of the foregoing considerations, the Tribunal concludes that, as Clause 2.2 of the Distribution Agreement entered into between [Claimant] and [Respondent] contains two hardcore restrictions, it must be presumed that Clause 2.2 is prohibited by Article 101(1) TFEU.
224.
The Respondent's position that when a vertical agreement contains a hardcore restriction, it must be presumed that the whole agreement is prohibited by Article 101(1) TFEU is not supported by European case-law. The Respondent has provided no legal authority from the ECJ or from the Belgian courts supporting this position. Accordingly, the presumption must be limited to the hardcore restrictions only.

(3) The Claimant has not proved that the conditions laid down in Article 101(3) TFEU are satisfied in respect of Clause 2.2 of the Distribution Agreement

225.
When a vertical agreement is found to contain a restriction of competition within the meaning of Article 101(1) TFEU, the burden of proving that the conditions laid down in Article 101(3) TFEU are satisfied lies with the party alleging that the agreement is valid.
226.
This is confirmed by the judgment of the Belgian Supreme Court dated 15 May 2009, relied upon by the Respondent. In this judgment, the Belgian Supreme Court ruled that: "7. Article 2 of Regulation (EU) 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, provides that it is for the undertaking or the association of undertakings which invoke the benefit of the provisions of Article 81(3) of the Treaty to prove that the conditions set in that paragraph are fulfilled”.
227.
In this case, the party alleging that the Distribution Agreement is valid is the Claimant. Thus, the Claimant had the burden of proving an individual exemption within the meaning of Article 101(3) TFEU (no block exemption is applicable).
228.

Article 101(3) TFEU provides that:

"3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings,

- any decision or category of decisions by associations of undertakings,

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question."

229.

The Claimant, has asserted that the whole Distribution Agreement had a pro-competitive effect within the meaning of Article 101(3) TFEU: "the pro-competitive effect of the Distribution Agreement (i.e. increased competition and lower prices) also establishes that it largely fits into the conditions for an Article 101(3) individual exemption (even if [Respondent] succeeded to prove an anti-competitive restriction under Article 101(1) TFEU in the first place, which it does not). In particular, it results from the above that (i) the effect of the Distribution Agreement was essentially to open the market from one to two distributors (i.e. better availability and therefore distribution of products on the market), (ii) thereby increasing competition and lowering prices of IOLs to the benefit of direct customers (e.g. clinics) and ultimately to the benefit of patients in [Redacted], while (iii) not imposing to the parties restrictions which are not indispensable (to the contrary, limiting the geographic scope of the Distribution Agreement to [Redacted] was indispensable within the context of [Claimant]'s worldwide network of distributors, as obviously understood and recognized by [Respondent] from the very beginning of the contractual relationship) and (iv) competition has not been eliminated here but, on the contrary, increased, which is evidenced by the correlative decrease in price.” (Claimant's Memorial No. 3, §80).

230.

However, the Claimant has not demonstrated that the hardcore restrictions contained in Clause 2.2 of the Distribution Agreement had, per se, some pro-competitive effects. The Claimant has not demonstrated how (i) by preventing the Respondent from actively selling [Claimant]'s products outside [Redacted] and (ii) by preventing the Respondent from making passive sales outside [Redacted], Clause 2.2 may have specifically contributed to "improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit" (Article 101(3) TFEU).

231.
It follows that the Claimant has not proved that the conditions laid down in Article 101(3) TFEU are satisfied in respect of the hardcore restrictions contained in Clause 2.2.
232.
In the light of the foregoing considerations, the Tribunal concludes that Clause 2.2 of the Distribution Agreement is prohibited by Article 101(1) TFEU and must be declared null and void.

(F) Compensation Fee

233.
The Respondent has alleged that the Distribution Agreement contains an "anticompetitive Compensation Fee" (Respondent's Memorial No. 3, Section 3.6).
234.

The recitals to the Distribution Agreement state that:

"The appointment of the Distributor is subject to the waiver by [Redacted] ("[Redacted]"), the current exclusive distributor of the Products in [Redacted], of his exclusivity on the distribution of the Products in [Redacted]. [Redacted] has agreed to waive such exclusivity in consideration (inter alia) of a compensation fee to be paid by the Supplier. The Distributor has accepted to bear a part of this compensation, as set forth in Article 10 of this Agreement." (Recitals of the Distribution Agreement, § D).

235.

Clause 10 of the Distribution Agreement provides as follows:

"10. COMPENSATION FEE

10.1 The Distributor shall pay to the Supplier the following yearly lump sum:

2016 2017 2018
250,000 Euros 300,000 Euros 350,000 Euros

10.2 The yearly amount due by the Distributor to the Supplier shall be paid each year in two instalments (each equal to one half of the yearly amount referred to in Clause 10.1) which shall be paid at the latest on June 30th and at the latest on December 31st upon receipt of the corresponding invoice from the Supplier".

236.

The Respondent has asserted that:

- the "compensation mechanism" established in Clause 10 of the Distribution Agreement "was in theory set up for the following reason: before [Respondent] joined [Claimant]'s distribution network, [Redacted] was the only distributor in [Redacted], and benefited from exclusivity. When [Respondent] joined, parties agreed that [Respondent] would pay [Claimant] a compensation fee on an annual basis, intended to indemnify [Redacted] from future loss of income arising from having lost its exclusivity” (Respondent's Memorial No. 3, §117); "However, in practice, the compensation mechanism has allowed [Redacted] to lower its prices to levels that, in absence of the Compensation Fee, would have entailed losses for [Redacted], thereby starting a price war" (Respondent's Memorial No. 3, §117);

- "This war, at the end of the day, has been purely artificial or deprived of benefit for final consumers" (Respondent's Memorial No. 3, §117); "In this context, [Respondent] could not match [Redacted]'s price as doing so would have amounted to selling at a loss" (Respondent's Memorial No. 3, §118);

- the "price war resulted in [Respondent] losing its most important customer [Redacted] to [Redacted] in October 2017. This had an important impact on the sales' forecasts [Respondent] had drawn on the basis of the results of the first year, which had been calculated without taking into account the fact that [Redacted] would start a price war in the [Redacted]" (Respondent's Memorial No. 3, §120); "In these circumstances, [Respondent] did not only lose [Redacted] as a client but also found it highly difficult to find new clients, as [Redacted]'s pricing strategy had put [Respondent] at a clear disadvantage” (Respondent's Memorial No. 3, §121).

- "(...) while [Respondent]'s turnover in 2017 amounted to EUR 11 million, it dramatically dropped down to EUR 7 million in 2018 (when [Respondent] could no longer sell to [Redacted] due to [Redacted])” (Respondent's Memorial No. 3, §123).

- The Respondent's decision to give notice of termination of the Distribution Agreement with effect from 31 December 2018 "has led again to the exclusivity of [Redacted] in the [Redacted]" (Respondent's Memorial No. 3, §124).

237.
The Respondent has concluded that: "A mechanism that was theoretically presented as a way to increase intra-brand competition (by opening the market to two distributors) finally led to a collusive practice with the result of excluding [Respondent] from the market, in favor of [Redacted]. The latter, as the sole and dominant distributor, will now be in a position to increase prices to the detriment of ophthalmology clinics and patients. In this sense, the alleged intra-brand competition that the agreement intended to boost was completely artificial as the final outcome has been the expulsion of one of the distributors of the market, which provides great incentives for [Redacted] to operate in the market by implementing price increases." (Respondent's Memorial No. 3, §125).
238.

The Claimant has asserted that:

- "Before the entry into force of the Distribution Agreement, the Products were distributed in [Redacted] through another distributor ([Redacted]) entitled by [Claimant] to distribute the Products in [Redacted] on an exclusive basis. [Redacted] accepted to waive its exclusivity right in consideration of a compensation fee such that a right for distribution might be also attributed to a third party, i.e. [Respondent]. According to the preamble (see Whereas (D)) of the Distribution Agreement, [Respondent] "has accepted to bear part of this compensation" by paying to [Claimant] the Compensation Fee" (Claimant's Memorial No. 3, §10);

- "The Compensation Fee was agreed upon between the parties in view of the specific circumstances of the case, in particular the fact that, prior to the Distribution Agreement, the Products were distributed in [Redacted] through another exclusive distributor ([Redacted]) which accepted to waive its exclusivity right in consideration of a compensation fee" (Claimant's Memorial No. 3, §40);

- "(...) [Respondent] fails to put forward any figures. [Respondent] does not demonstrate that its "important financial difficulties" (Second Memorial, n°105) find their source in the Compensation Fee nor that [Redacted] would be "selling at a loss" thanks to the Compensation Fee" (Claimant's Memorial No. 3, §70);

- "In any case", the Respondent's allegations "are not grounded on any relevant theory under competition law and [Respondent] does not draw any single conclusion from its allegations as to the nullity of Clause 10 of the Distribution Agreement. In particular, it does not even try to demonstrate that the Compensation Fee would be contrary to Article 101 TFEU or argue that it would be void"(Claimant's Memorial No. 3, §70);

- "As a matter of principle, a compensation fee such as the one set forth in Clause 10 of the Distribution Agreement is not prohibited by Article 101 (1) TFUE neither, more generally, by any provision of competition law that would be applicable in the case at hand. Hence, [Respondent] does not require the Arbitral Tribunal to declare that the Distribution Agreement would be null as a result of the Compensation Fee neither that such Compensation Fee would be null" (Claimant's Memorial No. 3, §70);

- "Even assuming" that Clause 10 of the Distribution Agreement, which provides for the Compensation Fee, "would be prohibited by competition law (...), [Respondent] fails to demonstrate that it had an actual anti-competitive effect" (Claimant's Memorial No. 3, §79); "To the contrary, when [Respondent] complains about a "price war" and about the fact that it "found it highly difficult to find new clients, as [Redacted]'s pricing strategy had put [Respondent] at a clear disadvantage", it recognizes the pro-competitive effect of the Distribution Agreement in the form of increased competition and lower prices in the [Redacted], to the benefit of clinics and ultimately patients" (Claimant's Memorial No. 3, §79); "The fact that such a price reduction may be related (quod non) to the Compensation Fees is irrelevant, as competition law does not aim at protecting a particular market player, but the overall competition on the market to the benefit of consumers. The fact that price decrease would be “artificial" as this would "lead again to a new de facto exclusivity for [Redacted]" (Second Memorial, n°18) and thus would ultimately harm consumers is also irrelevant: even assuming that this would be the case (quod non), we would revert to the status quo ante, and the Distribution Agreement would be considered as competitively neutral at most, but in no way anti-competitive" (Claimant's Memorial No. 3, §79).

(1) Burden of proof

239.

Pursuant to Article 2 of EU Regulation 1/2003, the burden of proving an infringement of Article 101(1) TFEU rests on the party alleging the infringement. Thus, Article 2 of Regulation 1/2003 provides that:

"In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled."

240.
It follows that the Respondent had the burden of proving, in this arbitration, that the Distribution Agreement infringed Article 101(1) TFEU.

(2) The Respondent has not proved that the Compensation Fee is an anticompetitive clause prohibited by Article 101(1) TFEU

241.
The Tribunal sets out below the reasons why the Compensation Fee cannot be considered as an anticompetitive clause.

a) No proof of a restriction of competition by object

242.
In accordance with the case-law of the ECJ, the concept of restriction by object must be interpreted "restrictively" and "can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition (ECJ, SIA Maxima Latvija, C-345/14, §18) (emphasis added).
243.
Based on the economic experience, the ECJ has determined those types of agreements which must be regarded as having as their "object" the restriction of competition (see Competition Law, Richard Whish and David Bailey, Oxford (8th edition), p. 129 (Claimant's list of legal authorities, No. 22)).
244.
The ECJ gave an example of what can be regarded as a restriction of competition "by object": horizontal price-fixing cartels. In the case of SIA Maxima Latvija, the ECJ stated that "It is established, in that regard, that certain collusive behaviour, such as that leading to horizontal price-fixing cartels, may be considered by their nature as likely to have negative effects, in particular on the price, quantity or quality of the goods and services, so that it may be considered redundant, for the purposes of applying Article 101(1) TFEU, to prove that they have actual effects on the market (...). Experience shows that such behaviour leads to falls in production and price increases, resulting in poor allocation of resources to the detriment, in particular, of consumers (...)' (ECJ, SIA Maxima Latvija. C-345/14, §19) (emphasis added).
245.
It is generally considered that vertical restraints are less harmful to competition than horizontal restraints. Thus, the Guidelines on Vertical Restraints state that: "Vertical restraints are generally less harmful than horizontal restraints. The main reason for being less concerned about a vertical restraint than a horizontal restraint lies in the fact that the latter may concern an agreement between competitors producing identical or substitutable goods or services. In such horizontal relationships the exercise of market power by one company (higher price of its product) may benefit its competitors. This may provide an incentive to competitors to induce each other to behave anti-competitively. In vertical relationships the product of the one is the input for the other, in other words the activities of the parties to the agreement are complementary to each other. This means that the exercise of market power by either the upstream or downstream company would normally hurt the demand for the product of the other. The companies involved in the agreement therefore usually have an incentive to prevent the exercise of market power by the other" (Guidelines on Vertical Restraints, §98).
246.
As per the case-law of the ECJ, the Respondent had the burden of proving that, based on the economic experience, the Compensation Fee provided for in Clause 10 of the Distribution Agreement was likely, by its very nature, to reduce the overall competition on the relevant market to such a significant extent that negative market effects could be expected: as explained above, the ECJ requires proof of a sufficient degree of harm to the overall competition on the relevant market (ECJ, SIA Maxima Latvija. C-345/14).
247.
In order to determine whether an agreement may be regarded as likely to cause a sufficient degree of harm to competition, the following elements must be considered, as the ECJ ruled in the case of SIA Maxima Latvija (see §23 of the ECJ judgment): (i) the "economic context" of the agreement; and (ii) the "analysis of the content" of the agreement.
248.
However, the Respondent merely asserted that the Compensation Fee was "anticompetitive", without alleging that it constituted a restriction by object.
249.
The Respondent has not explained how, considering the "economic context" of the Distribution Agreement and the "analysis of the content" of this agreement, the "experience" might show that, by its very nature, Clause 10 of the Distribution Agreement was likely to reduce the overall competition on the relevant market to such a significant extent that negative effects could be expected. Therefore, the Respondent has failed to prove that the Compensation Fee provided for in Clause 10 constituted a restriction of competition by object.
250.
In the light of all the foregoing considerations, the Tribunal concludes that the mere fact that the Distribution Agreement contains a clause under which the Respondent is obliged to pay the Compensation Fee does not mean that the object of this agreement is to restrict competition within the meaning of Article 101(1) TFEU.

b) No proof of a restriction of competition by effect

251.
As a matter of law, where the analysis of the content of a vertical agreement does not reveal that it contains a restriction of competition by object (which is the case here, see Section V (F) (2) (a) above), "the effects of the agreement should then be considered and, for it to be caught by the prohibition, it is necessary to find that factors are present which show that competition has in fact been prevented or restricted or distorted to an appreciable extent" (ECJ, SIA Maxima Latvija. C-345/14, §17) (emphasis added). "Moreover, according to the settled case-law of the Court, Article 101(1) TFEU does not restrict such an assessment to actual effects alone, it must also take account of the potential effects of the agreement or practice in question on competition (...)" (ECJ, SIA Maxima Latvija. C-345/14, §17).
252.
Thus, the Tribunal will examine, in this Section, whether the Respondent has proved that Clause 10 of the Distribution Agreement had any actual or potential "effect" of preventing, distorting or restricting competition within the meaning of Article 101(1) TFEU.
253.

In order to determine whether an agreement may be regarded as having the "effect" of preventing, restricting or distorting competition within the meaning of Article 101(1) TFEU, the following elements must be considered, as per the case-law of the ECJ:

- the effects of an agreement on competition must be assessed "in the economic and legal context" in which it occurs and where it might "combine with others to have a cumulative effect on competition" (ECJ, SIA Maxima Latvija, §26) (emphasis added);

- the assessment of the impact of the agreement must take account, in the first place, "of all of the factors which determine access to the relevant market”, for the purposes of assessing whether there are real concrete possibilities for a new competitor to establish itself (ECJ, SIA Maxima Latvija, §27); in the second place, the "conditions under which competitive forces operate on the relevant market" must be assessed; in that connection it is necessary to know not only the number and the size of operators present in the market, but also the degree of concentration of that market and customer fidelity to existing brands and consumer habits (ECJ, SIA Maxima Latvija, §28);

- it is only if, after a "thorough analysis of the economic and legal context" in which the vertical agreement at issue occurs and the "specificities of the relevant market", it is found that access to that market is made difficult, that it will then be necessary to analyse "to what extent" it contributes to any "closing-off of that market", on the basis that only agreements which make an "appreciable contribution to that closing-off' are prohibited; to assess the extent of the contribution of the vertical agreement at issue to the cumulative closing-off effect, the position of the contracting parties on the market in question and the duration of the agreement must be taken into consideration (ECJ, SIA Maxima Latvija, §29).

254.
The Respondent has asserted that "A mechanism that was theoretically presented as a way to increase intra-brand competition (by opening the market to two distributors) finally led to a collusive practice with the result of excluding [Respondent] from the market, in favor of [Redacted]. The latter, as the sole and dominant distributor, will now be in a position to increase prices to the detriment of ophthalmology clinics and patients. In this sense, the alleged intra-brand competition that the agreement intended to boost was completely artificial as the final outcome has been the expulsion of one of the distributors of the market, which provides great incentives for [Redacted] to operate in the market by implementing price increases" (Respondent's Memorial No. 3, §125).
255.

The Tribunal notes that the Parties are in agreement on the fact that the Compensation Fee provided for in Clause 10 of the Distribution Agreement was designed to compensate [Redacted] for the loss of its exclusivity in [Redacted]. Thus:

- the recitals to the Distribution Agreement stated that [Redacted] has agreed to waive such exclusivity in consideration (inter alia) of a compensation fee to be paid by the Supplier. The Distributor has accepted to bear a part of this compensation, as set forth in Article 10 of this Agreement" (Recitals to the Distribution Agreement, § D);

- the Respondent alleged, in this arbitration, that: "When [Respondent] joined, parties agreed that [Respondent] would pay [Claimant] a compensation fee on an annual basis, intended to indemnify [Redacted] from future loss of income arising from having lost its exclusivity" (Respondent's Memorial No. 3, §117); and,

- the Claimant asserted, in this arbitration, that: "The Compensation Fee was agreed upon between the parties in view of the specific circumstances of the case, in particular the fact that, prior to the Distribution Agreement, the Products were distributed in [Redacted] through another exclusive distributor ([Redacted]) which accepted to waive its exclusivity right in consideration of a compensation fee (Claimant's Memorial No. 3, §40).

256.

It follows that if [Respondent] had not accepted to pay the Compensation Fee provided for in Clause 10 of the Distribution Agreement:

- [Redacted] would not have waived its exclusivity; and that

- the Respondent would have remained excluded from the [Redacted] for the sale of [Claimant]'s products (because of the exclusivity granted to [Redacted]).

Therefore, the Compensation Fee had no anticompetitive effect, but a pro-competitive effect, as it allowed a new market player ([Respondent]) to access the [Redacted].

257.

The Respondent has asserted that the Compensation Fee provided for in Clause 10 of the Distribution Agreement prevented it from sustaining a "price war" which [Redacted] started in [Redacted]. However, the Respondent has provided no evidence that:

- [Redacted] ever started a "price war" in the [Redacted]; and/or that

- the Respondent was unable to sustain this alleged "price war" because of the Compensation Fee it was obliged to pay to the Claimant pursuant to Clause 10 of the Distribution Agreement; and/or that

- the Respondent's alleged financial difficulties may have been caused by the "price war" waged by [Redacted] in [Redacted]; and/or that

- this alleged "price war" entailed, de facto, the exclusion of the Respondent from the [Redacted].

258.
In any event, assuming that [Redacted] had started a "price war" in the [Redacted], this would only serve to confirm that the waiver of exclusivity, obtained from [Redacted] as a consideration for the payment of the Compensation Fee (as the recitals to the Distribution Agreement state), had a pro-competitive effect.
259.

The Respondent has asserted that "the alleged intra-brand competition that the agreement intended to boost was completely artificial as the final outcome has been the expulsion of one of the distributors of the market, which provides great incentives for [Redacted] to operate in the market by implementing price increases" (Respondent's Memorial No. 3, §125). However:

- the Respondent has not established that it was unable to compete because of a price war;

- the Respondent has not established that [Redacted] increased prices after the Respondent stopped selling [Claimant]'s products in [Redacted]; and

- in any event, assuming that the Compensation Fee had led, de facto, to the exclusion of [Respondent] from the market because of [Respondent]'s inability to lower prices as much as its competitor [Redacted]:

o the fact would remain that because of the exclusivity waiver, obtained from [Redacted] as a consideration for the payment of the Compensation Fee, the prices of [Claimant]'s products were reduced which constitutes a pro-competitive effect;

o the alleged de facto exclusion of [Respondent] from the market (due to [Respondent]'s alleged inability to lower prices as much as [Redacted]) would not establish, per se, that the Distribution Agreement had an anticompetitive effect; the purpose of competition law is not to protect a specific market player, but the overall competition on the market to the benefit of the final consumers; and,

o the effect of the Compensation Fee would have been to reinstate a de facto exclusivity to the benefit of [Redacted], which the Compensation Fee was supposed to annihilate; thus, the Distribution Agreement could be considered, at most, as neutral from the standpoint of competition, but not as anticompetitive.

260.

The Respondent has provided no economic analysis showing what the actual impact of the Compensation Fee may have had on its business and no proof of the alleged resale of the products at a loss. The only figures provided to the Tribunal did not show, per se, that the Compensation Fee prevented the Respondent from selling the products. Thus:

- according to the Respondent, its turnover for 2016 was EUR 13 million and its turnover for 2017 was EUR 11 million, i.e. a total turnover of EUR 24 million over a period of two years;

- the total amount of the Compensation Fee for years 2016 and 2017 was EUR 550,000, i.e. only 2.29% of Respondent's total turnover for 2016 and 2017.

261.
The Respondent has not proved that the Compensation Fee had a negative effect on the market. The fact that the Distribution Agreement may not have been as profitable as the Respondent initially envisaged does not prove, per se, that the Compensation Fee rendered the Distribution Agreement anticompetitive.
262.
Finally, assuming that the Respondent had actually been excluded from the market because of the Compensation Fee (which the Respondent has not established), the Respondent would still have the burden of proving that its exclusion from the market and the resulting loss of intra-brand competition had produced an anticompetitive effect within the meaning of Article 101(1) TFEU. However, the Respondent has not demonstrated that the loss of intra-brand competition allegedly caused by the Compensation Fee produced an anticompetitive effect within the meaning of Article 101(1) TFEU.
263.
As far as Article 101(1) TFEU is concerned, the Guidelines on Vertical Restraints (§153) state that "the market position of the supplier and his competitors is of major importance, as the loss of intra-brand competition can only be problematic if inter-brand competition is limited. The stronger the position of the supplier, the more serious is the loss of intra-brand competition. Above the 30% market share threshold there may be a risk of a significant reduction of intra-brand competition" (emphasis
264.

As explained in Section V (C) (2) above, the Respondent has not demonstrated that [Claimant]'s market share exceeded 30% of the relevant market in either [Redacted] or the EEA. Thus, in any event, the Respondent has not demonstrated that the loss of intra-brand competition allegedly caused by the Compensation Fee may have produced an anti-competitive effect within the meaning of Article 101(1) TFEU.

265.
In the light of all the foregoing considerations, the Tribunal concludes that the Respondent has not discharged its burden of proving that the Compensation Fee constituted a restriction of competition prohibited by Article 101(1) TFEU.

(G) Nullity

266.
As its main claim, the Respondent has asked the Tribunal to declare the Distribution Agreement "null and void on the basis of the existence of two hardcore restrictions in Clause 2.2 of the said agreement" (Respondent's Memorial No. 3, §192).
267.
It follows from the case-law of the ECJ that a vertical agreement may only be declared null and void in its entirety if it appears that some of its clauses are forbidden under Article 101(1) TFEU and that such clauses are not severable from the agreement itself. Thus, the ECJ ruled, in the case of LTM, that "The automatic nullity in question [resulting from Article 101 (2) TFEU] only applies to those parts of the agreement affected by the prohibition, or to the agreement as a whole if it appears that those parts are not severable from the agreement itself' (emphasis added) (ECJ, Case 56/65, Société Technique Minière (L.T.M.) v Maschinenbau Ulm GmbH (M.B.U.), 30 June 1966, p. 250). Also, the ECJ ruled, in the case of CEPSA that "according to the settled case-law of the Court, the automatic nullity of an agreement within the meaning of Article 81(2) EC only applies to those parts of the agreement affected by the prohibition laid down in Article 81(1) EC or to the agreement as a whole if it appears that those parts are not severable from the agreement itself' (emphasis added) (ECJ, Case C-279/06, CEPSA Estaciones de Servicio SA, 11 September 2008, § 78).
268.
In the present case, the Tribunal has found that Clause 2.2 is forbidden under Article 101(1) TFEU (see Section V (E) above). Thus, the question arises as to whether Clause 2.2 is severable or not from the Distribution Agreement.
269.

Clause 19.1 of the Distribution Agreement provides as follows:

"19.1 Severability

The invalidity or unenforceability of any provision of this Agreement shall not result in the invalidity or the unenforceability of any other provision of this Agreement or of this Agreement as a whole. In the event that the validity or the enforceability of this Agreement or any provision thereof is challenged, the Parties hereto undertake to do whatever is reasonably necessary or advisable to maintain such provision and this Agreement in full force and effect or to substitute such provision by other provisions that have economically substantially the same effect for all Parties hereto" (emphasis added)

270.
The issue as to whether a contractual clause may be considered as severable from the agreement must be determined in accordance with the law applicable to the agreement. Thus, the ECJ ruled, in the case of Vag France, that: "It must be added that the Court has held (...) that the consequences of the fact that those contractual provisions which are incompatible with Article 85 (1) [Article 101 (1) TFEU] are automatically void for all other parts of the agreement or for other obligations flowing from it are not a matter for Community law. It is for the national court to determine in accordance with the relevant national law the extent and consequences, for the contractual relations as a whole, of the nullity of certain contractual provisions by virtue of Article 85(2) [Article 101 (2) TFEU]" (emphasis added) (ECJ, Vag France, Case 10/86, 18 December 1986, § 14-15).
271.
Also, the ECJ ruled, in the case of Cabour, that: "If the national court should declare one or more of the clauses in the contract void, it must be added that, as the Court has held [...], the consequences, for all other parts of the agreement or for other obligations flowing from it, of the fact that those contractual provisions which are incompatible with Article [101(1)] are automatically void are not a matter for Community law. It is therefore also for the national court to determine, in accordance with the relevant national law, the extent and consequences, for the contractual relation as a whole, of the nullity of certain contractual provisions by virtue of Article [101(2)]" (ECJ, Case C-230/96, 30 April 1998, Cabour, §51).
272.
In the present case, the law applicable to the Distribution Agreement is Belgian law. The effect of the severability clause contained in the Distribution Agreement (Clause 19.1) must therefore be determined in accordance with Belgian law.
273.
It follows from the opinion of one of the legal academics relied upon by the Claimant that severability clauses are enforceable as a matter of Belgian law (P. Van Ommeslaghe, Les obligations, Vol. 1, in De Page, Traité de droit civil belge, Bruylant, 2013, n°227, p. 372).
274.
Moreover, it follows from a decision of the Belgian Supreme Court of 28 June 2012 that severability clauses are enforceable as a matter of Belgian law, including in cases where the agreement at issue contains anticompetitive clauses (Pas., 2012, I, p. 1502, Claimant's list of legal authorities, No. 9). Thus, the Belgian Supreme Court ruled, on 28 June 2012, that the judgment of a Belgian Court of Appeal was justified in circumstances where the said Court of Appeal had annulled only those parts of an exclusive distribution agreement which prohibited passive sales. The Belgian Court of Appeal had refused to annul the entire distribution agreement, on the basis that it contained a severability clause.
275.

The Respondent has asserted that, in accordance with the Guidelines on Vertical Restraints, "There is no severability for hardcore restrictions". However, the Guidelines on Vertical Restraints merely state that when a vertical agreement contains one or more hardcore restrictions, the benefit of the Block Exemption Regulation is lost for the entire agreement. The Guidelines on Vertical Restraints do not state that when a vertical agreement contains one or more hardcore restrictions, the agreement as a whole must be declared null and void. Thus, the Guidelines on Vertical Restraints state that:

- "The Block Exemption Regulation exempts vertical agreements on condition that no hardcore restriction, as set out in Article 4, is contained in or practised with the vertical agreement. If there are one or more hardcore restrictions, the benefit of the Block Exemption Regulation is lost for the entire vertical agreement. There is no severability for hardcore restrictions" (Guidelines on Vertical Restraints, §70).

- "The rule of severability does apply, however, to the excluded restrictions set out in Article 5 of the Block Exemption Regulation. Therefore, the benefit of the block exemption is only lost in relation to that part of the vertical agreement which does not comply with the conditions set out in Article 5" (Guidelines on Vertical Restraints, §71).

276.
It follows from Clause 19.1 of the Distribution Agreement that no invalidity of a provision of the Distribution Agreement may entail the invalidity of the Distribution Agreement "as a whole".
277.

In accordance with Clause 19.1 of the Distribution Agreement (severability clause) and the case-law of the Belgian Supreme Court of 28 June 2012, the Tribunal concludes that:

- as Clause 2.2 of the Distribution Agreement is prohibited by Article 101(1) TFEU, it must be declared null and void; and that,

- the fact that Clause 2.2 of the Distribution Agreement is prohibited by Article 101(1) TFEU does not entail the nullity of the entire Distribution Agreement.

278.
In its Memorial No. 1, the Respondent also asserted that "the nullity of the Distribution Agreement also results in the nullity of the clauses which are inherent to the distribution relationship, in particular Clause 10, that provides for the Compensation Fee, as this obligation would be deprived from a valid or licit cause in the sense of article 1108 of the Belgian Civil Code" (Respondent's Memorial No. 1, §75). However, the Respondent has not established that the Distribution Agreement is null and void as a whole, nor that Clause 10 of the Distribution Agreement is null and void, nor that Clause 10 may be considered as the "cause" of the Distribution Agreement within the meaning of Article 1108 of the Belgian Civil Code.
279.
As an alternative claim, the Respondent has asserted that Clause 10 of the Distribution Agreement, which provides for the Compensation Fee, is "inherent and non-severable from Clause 2.2". The Respondent has asked the Tribunal to declare that, as a consequence of the nullity of Clause 2.2, the Compensation Fee provided for in Clause 10 of the Distribution Agreement should be declared "not due" (Respondent's Memorial No. 3, §192).
280.
However, Clause 19.1 of the Distribution Agreement provides, in relevant part, that "The invalidity or unenforceability of any provision of this Agreement shall not result in the invalidity or the unenforceability of any other provision of this Agreement or of this Agreement as a whole (...)".
281.
Clause 19.1 of the Distribution Agreement does not exclude Clause 10 from the scope of the severability rule. Thus, Clause 10 must be considered as severable from the other clauses of the Distribution Agreement.
282.

The Respondent has alleged that if the Distribution Agreement had not contained hardcore restrictions, the Compensation Fee would have been acceptable: "This extraordinary cost (like the Compensation Fee) for entering into the network can only be accepted if, in return, [Respondent] can benefit from all theoretical incomes arising from a fully legal distribution agreement. In other words, if [Respondent] was able to sell not only to [Redacted] clients but also to other clients located within the EEA (not exclusively assigned to another distributor), as foreseen in Regulation 330/2010" (emphasis added) (Respondent's Memorial No. 3, §163). Thus, the Respondent has alleged that Clause 10 is "inherent and non-severable" from Clause 2.2.

283.

However, the evidence does not suggest that Clause 2.2 (which provides for hardcore restrictions on active and passive sales) and Clause 10 (which provides for a Compensation Fee) were supposed to be non-severable, either from an economic point of view or from the standpoint of the Parties' intention:

- firstly, as explained above, Clause 2.2 of the Distribution Agreement contains hardcore restrictions on active and passive sales: it follows that the Respondent accepted not only these restrictions but also to pay the Compensation Fee provided for in Clause 10; therefore, the Respondent's assertion is not consistent with the wording of the Distribution Agreement; had the Respondent actually considered that the Compensation Fee was only acceptable if the Distribution Agreement did not contain hardcore restrictions on active and passive sales (as the Respondent has alleged in this arbitration), the Respondent would not have accepted hardcore restrictions on active and passive sales; however, it is clear that, by signing the Distribution Agreement, the Respondent accepted these restrictions (as the Respondent has alleged itself);

- secondly, from an economic point of view:

o in the Respondent's own admission, it is only "active in [Redacted], providing the health sector with professional support, marketing and advanced technology" (Respondent's Memorial No. 3, §5); it would not appear that the Respondent ever envisaged to develop sales of medical products in other countries than [Redacted];

o the Respondent did not assert, in this arbitration, that it ever requested [Claimant] to be able to approach customers and develop active sales of [Claimant]'s products outside [Redacted];

o up until 2018, the Respondent never asked [Claimant] to be able to perform passive sales outside [Redacted];

o when the Respondent started to challenge the validity of Clause 2.2 of the Distribution Agreement in early 2018, on the basis (inter alia) that this clause did not allow [Respondent] to perform passive sales outside [Redacted], [Claimant] responded immediately that the Distribution Agreement did not prevent [Respondent] from performing passive sales outside [Redacted]; thus, in in an email of 11 April 2018, [Claimant]'s CEO, Mr. [Person 5], wrote to [Respondent] that the Distribution Agreement "solely concerns 'active sales' and therefore does not restrict in any way [Respondent]'s ability to perform 'passive sales'" (Claimant's Exhibit No. 8); therefore, there was no doubt, at least as from 11 April 2018, that the Respondent could perform passive sales outside [Redacted];

o whilst it was clear, at least from 11 April 2018, that [Claimant] would not prevent [Respondent] from performing passive sales outside [Redacted] (despite the wording of Clause 2.2, which prohibits passive sales outside [Redacted]), [Respondent] has neither alleged nor proved that after 11 April 2018, it was able to perform passive sales of [Claimant]'s products outside [Redacted]; thus, the Respondent's assertion that the Distribution Agreement prevented it from performing passive sales, whilst legally correct (until at least 11 April 2018) would not appear to have had any significant impact on the Respondent's business in practice.

284.
The Tribunal concludes that the Respondent has not demonstrated that Clause 2.2 and Clause 10 were supposed to be non-severable.
285.
In the light of the foregoing considerations, the Tribunal finds that Respondent's claim, for the Compensation Fee provided for in Clause 10 of the Distribution Agreement to be declared "not due" (as a result of the nullity of Clause 2.2) cannot succeed.

(H) Article IV.l of the Belgian Code of Economic Law

286.
The Respondent has alleged that because of the hardcore restrictions contained in Clause 2.2, the Distribution Agreement is "in breach of both Article 101 TFEU and Article IV.l of the Belgian Code of Economic Law" (Respondent's Memorial No. 3, §41).
287.
The Respondent has not developed its assertion that the Distribution Agreement allegedly breached Article IV.l of the Belgian Code of Economic Law. The Respondent merely asserted that Article IV.l of the Belgian Code of Economic Law "mirrors the content of Article 101 TFEU" (Respondent's Memorial No. 3, §29).
288.
The Claimant has not contested Respondent's assertion that Article IV.l of the Belgian Code of Economic Law "mirrors the content of Article 101 TFEU".
289.
Article IV.l of the Belgian Code of Economic Law effectively mirrors the content of Article 101(1) TFEU, except that the rules laid down in Article IV.l of the Belgian Code of Economic Law apply to agreements and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in a substantial manner within the Belgian market, or a substantial part thereof.
290.
However, the Tribunal has found that the Respondent has not established, in this arbitration, that the Distribution Agreement as a whole contravened Article 101(1) TFEU and could be annulled in its entirely.
291.
It follows that the Respondent's claims under Article IV.l of the Belgian Code of Economic Law (which mirrors the content of Article 101(1) TFEU), for the entire Distribution Agreement to be declared null and void, or alternatively for the Compensation Fee to be declared "not due", cannot succeed either.

(I) [Claimant]'s invoices

292.
The Claimant has asked the Tribunal to order [Respondent] to pay to [Claimant] the principal amount of all invoices due by [Respondent] pursuant to the Distribution Agreement, in the amount of EUR 1,724,080.00, such principal amount to be increased by a default (contractual) interest at the yearly contractual rate of 8% (in accordance with Clause 5.4.2 of the Distribution Agreement) until full payment is received.
293.

The Claimant has produced invoices and credit notes (Claimant's Exhibits 3.1 to 3.33) which show that:

- the total amount invoiced by [Claimant] to [Respondent], in respect of the sale of the products, is EUR 1,486,807;

- the total amount of credit notes issued in respect of the sale of the products is EUR 71,640; and

- the total amount invoiced in respect of the Compensation Fee is EUR 350,000.

294.
Clause 5.4.1 of the Distribution Agreement provides that any invoice for ordered products "shall be paid by the Distributor in Euro by wire transfer to the Supplier's bank account within sixty (60) calendar days of receipt of the invoice".
295.

As regards the Compensation Fee, Clause 10 of the Distribution Agreement provided that:

- the first instalment of EUR 175,000 had to be paid by 30 June 2018; and

- the second instalment of EUR 175,000 had to be paid by 31 December 2018.

296.

Under Clause 5.4.1 of the Distribution Agreement:

"Should the Distributor not agree with any invoice sent by the Supplier, the Distributor shall send a written disagreement notice to the Supplier setting forth, in reasonable details, the reason of such disagreement with ten (10) days of receipt of the invoice. Failing to do so, the Distributor shall be deemed to accept the invoice."

297.
The Respondent has not sent notices to [Claimant] to challenge its invoices for the sale of the products. It follows that, in accordance with Clause 5.4.1, the Claimant's invoices for the sale of the products are deemed to be accepted by [Respondent].
298.
In addition, the Respondent confirmed, in a letter of 17 April 2018, that it did "not dispute the debt arising from the sale and purchase of contractual products" (Claimant's Exhibit 5).
299.
It follows that, in accordance with Clause 5.4.1 of the Distribution Agreement, the Respondent must pay to the Claimant, EUR 1,374,080.00, corresponding to the price of the products purchased by the Respondent.
300.
Furthermore, the Respondent has failed to establish that, as a matter of competition law, the Compensation Fee provided for in Clause 10 of the Distribution Agreement is not due (see Sections V(B) - V(H) above).
301.
It follows that, pursuant to Clause 10 of the Distribution Agreement, the Respondent must also pay to the Claimant, EUR 350,000, corresponding to the amount of the Compensation Fee for the year 2018.

(J) Claimant's claim for damages

302.
[Claimant] has claimed damages in the amount of EUR 15,000, on the basis of the Respondent's alleged "dilatory attitude" (Claimant's Memorial No. 3, §82).
303.
The Claimant has asserted that its claim is based on "contractual liability which, as everyone knows, requires solely the existence of a contractual breach, a damage and a causal link between the breach and the damage" (Claimant's Memorial No. 3, §83).
304.
However, the Claimant has not specified the provisions of Belgian law on which its claim may be based.
305.
In addition, the Claimant has produced no evidence showing what the costs of its employees and managers involved in the case and the administrative costs incurred by [Claimant] may have been. Thus, the Claimant has not demonstrated that it actually suffered some additional loss in the amount of EUR 15,000 as a result of the Respondent's "contractual breaches".
306.
In the light of the foregoing considerations, the Tribunal finds that the Claimant's claim for damages in the amount of EUR 15,000 cannot succeed in law.

VI. MERITS OF THE PARTIES' CLAIMS IN AMIABLE COMPOSITION

307.

In accordance with Clause 19.8.2 of the Distribution Agreement:

"(...) The Arbitral Tribunal may act as an "amiable compositeur" (...)".

(A) The Parties' respective positions

308.
The Claimant has submitted that, in accordance with the arbitration clause "the power to act as amiable compositeur is not an obligation for the Arbitral Tribunal but a possibility" (Claimant's Memorial No. 3, §16).
309.
The Claimant "considers that there is no need for the Arbitral Tribunal to act as amiable compositeur in the case at hand" and that "in any case, the fact that the Arbitral Tribunal would act as amiable compositeur would undoubtedly play in favor of [Claimant]" (Claimant's Memorial No. 3, §16).
310.

The Claimant has submitted that:

- in accordance with Article 1710, § 4, of the Belgian Judiciary Code "Irrespective of whether it decides on the basis of rules of law or as amiable compositeur, the arbitral tribunal shall decide in accordance with the terms of the contract if the dispute opposing the parties is contractual in nature and shall take into account the usages of the trade if the dispute is between commercial parties";

- "In the case at hand, the provisions of the Distribution Agreement are clear and the Arbitral Tribunal will have to apply these provisions, without having the power to release [Respondent] from its obligations to pay the amounts due to [Claimant]. There is, therefore, no room for the Tribunal to decide as amiable compositeur."

- "Nevertheless, should the Arbitral Tribunal consider deciding as amiable compositeur, this would undoubtedly play in favor of [Claimant] in view mainly of the following elements: (i) PhsylOL is only asking the Arbitral Tribunal to apply the clear provisions of an agreement which have been agreed upon between two professionals having full knowledge of the situation and which have not been challenged by [Respondent] for over two years. (ii) [Claimant] is only asking to be paid the amounts due by [Respondent] for the purchase of the Products and for the Compensation Fees (together with the contractual interest). No less, no more. (...)".

311.
Finally, the Claimant has submitted that the power to act as amiable compositeur "also allows to disregard the application of the law in what it would be too rigorous for a party for example because of its good faith, this one resulting from different elements of the file (G. Keutgen and G.-A. Dal, L'arbitrage en droit belge et international, t. I, Bruylant, 2015, p. 189)" (Claimant's Memorial No. 3, §18).
312.

The Respondent has submitted that:

- “acting as an amiable compositeur would permit the Arbitral Tribunal to exclude the application of legal provisions if for example, the application of the law would be too strict for one of the parties provided that such a party has acted in good faith. However, excluding the application of a legal provision is not possible if the provision in questions contains a rule of public order" (Respondent's Memorial No. 3, §189).

- “as an "amiable compositeur", the Arbitral Tribunal would not be entitled to deviate from competition law provisions in so far as the latter are provisions of public order. In any event, the wording of Clause 19.8.2 of the Distribution Agreement does not impose on the Arbitral Tribunal an obligation to act as an "amiable compositeur", but it only gives it discretion to do so ("The Arbitral Tribunal may act as an “amiable compositeur""; emphasis added)" (Respondent's Memorial No. 3, §190).

- “[Respondent] would accept the Arbitral Tribunal to act as an “amiable compositeur" and does not oppose to such a way in resolving the dispute, provided that the solution that could be adopted does not contravene articles 1 TFEU, IV.l of the Belgian Economic Code and Regulation 33072010" (Respondent's Memorial No. 3, §191).

(B) The Tribunal's findings as amiable compositeur

313.
In this Section, the Tribunal, using its power to act as amiable compositeur in accordance with Clause 19.8.2 of the Distribution Agreement, will determine whether the application of the law, as set out in Section V above, leads to a fair resolution of this dispute.

(1) Claimant's claim for the payment of the price of the products

314.

It is fair for the Tribunal to admit Claimant's claim for payment of the price of the products sold to the Respondent, in the amount of EUR 1,374,080.00, as:

- it is clear that the Claimant has delivered products to the Respondent and that the Respondent has raised no objection regarding the quality or quantity of the products sold; and

- the Respondent has not contested that it is obliged to pay to the Claimant the price of the products sold (albeit the Respondent has asked the Tribunal to order a set off of the price of the products against the Compensation Fee already paid by the Respondent in 2016 and 2017).

315.
The Tribunal concludes that the Claimant's claim for payment of its invoices for the sale of the products, in the amount of EUR 1,374,080.00, is well-founded.

(2) Respondent's counterclaim for Clause 2.2 of the Distribution Agreement to be declared null and void

316.
It follows from an email of 11 April 2018 that [Claimant]'s CEO, Mr. [Person 5], agreed for the Distribution Agreement not to “restrict in any way [Respondent]'s ability to perform 'passive sales'" (Claimant's Exhibit No. 8).
317.
Thus, it is fair to consider that the restriction on passive sales should not apply.
318.

Furthermore, in circumstances where the Claimant has not demonstrated that it exclusively allocated the territories of the EEA other than [Redacted] to other distributors than [Respondent] or exclusively reserved these other territories to itself, the Tribunal, acting as amiable compositeur, concludes that it is fair to declare Clause 2.2 of the Distribution Agreement null and void.

(3) Claimant's claim for the payment of the Compensation Fee and Respondent's other counterclaims

319.

The issue arises as to whether it is fair:

- to admit the Claimant's claim for payment of the Compensation Fee for the year 2018;

- to reject the Respondent's counterclaim for the Distribution Agreement to be declared null and void as a whole;

- to admit the Respondent's counterclaim for Clause 2.2 of the Distribution Agreement to be declared null and void but reject the Respondent's counterclaim for the Compensation Fee provided for in Clause 10 of the Distribution Agreement to be declared undue; and

- to reject the Respondent's counterclaim for the Compensation Fee for the years 2016 and 2017 to be refunded to the Respondent (by way of set-off against the price of the products owed by the Respondent).

320.

Firstly, the Tribunal notes that the Respondent has not established that the restrictions on active and passive sales contained in Clause 2.2 of the Distribution Agreement had any actual consequences on its business:

- in the Respondent's own admission, it is only "active in [Redacted], providing the health sector with professional support, marketing and advanced technology" (Respondent's Memorial No. 3, §5);

- it would not appear that the Respondent ever envisaged to develop sales of medical products in other countries than [Redacted];

- the Respondent did not assert, in this arbitration, that it ever requested [Claimant] to be able to approach customers and develop active sales of [Claimant]'s products outside [Redacted];

- up until 2018, the Respondent never asked [Claimant] to be able to perform passive sales outside [Redacted];

- when the Respondent started to challenge the validity of Clause 2.2 of the Distribution Agreement in early 2018, on the basis (inter alia) that this clause did not allow [Respondent] to perform passive sales outside [Redacted], [Claimant] responded immediately that the Distribution Agreement did not prevent [Respondent] from performing passive sales outside [Redacted]; thus, in in an email of 11 April 2018, [Claimant]'s CEO, Mr. [Person 5], wrote to [Respondent] that the Distribution Agreement "solely concerns 'active sales' and therefore does not restrict in any way [Respondent]'s ability to perform 'passive sales'" (Claimant's Exhibit No. 8); therefore, there was no doubt, at least as from 11 April 2018, that the Respondent could perform passive sales outside [Redacted];

- whilst it was clear, at least from 11 April 2018, that [Claimant] would not prevent [Respondent] from performing passive sales outside [Redacted] (despite the wording of Clause 2.2, which prohibits passive sales outside [Redacted]), [Respondent] has neither alleged nor proved that after 11 April 2018, it was able to perform passive sales of [Claimant]'s products outside [Redacted]; thus, the Respondent's assertion that the Distribution Agreement prevented it from performing passive sales, whilst legally correct (until at least 11 April 2018) would not appear to have had any significant impact on the Respondent's business in practice.

321.
Secondly, the Tribunal notes that whilst the Respondent has never contested that it owed at least part of the Claimant's invoices relating to the sale of [Claimant]'s products, the Respondent has not paid any of these invoices.
322.
In the light of the foregoing considerations, the Tribunal concludes that the Respondent has not acted in good faith and that the application of the law, as set out in Section V, does not lead to an unfair resolution of this dispute.

(4) Claimant's claim for payment of damages

323.
Whilst the Respondent has not acted in good faith (see Section VI (B) (3)), the Claimant has produced no evidence showing what the costs of its employees and managers involved in the case and the administrative costs incurred by [Claimant] may have been.
324.
Thus, the Tribunal concludes that is fair to reject Claimant's claim for damages in the amount of EUR 15,000.

VII. INTEREST

325.
The Claimant has asked the Tribunal to order the Respondent to pay "a default interest at the yearly rate of 8% from the due date of each invoice until full payment” (Claimant's Memorial No. 3, §1). The Respondent has made no comment with respect to Claimant's claim for interest.
326.

Clause 5.4.2 of the Distribution Agreement provides that:

"The Parties agree that timely payment by the Distributor of invoices relating to the Products and other amounts due by the Distributor pursuant to this Agreement is essential for the Supplier. Without prejudice to any other right of the Supplier (...) (ii) an interest at an annual rate of 8% shall automatically accrue on any amount due by the Distributor to the Supplier pursuant to this Agreement as from the due date of such payment".

327.
Clause 5.4.1 of the Distribution Agreement provides that any invoice for ordered products "shall be paid by the Distributor in Euro by wire transfer to the Supplier's bank account within sixty (60) calendar days of receipt of the invoice".
328.

It follows that, as regards the sale of [Claimant]'s products to [Respondent]:

- all invoices issued in respect of the sale of [Claimant]'s products became due 60 days after receipt; and that,

- interest at the yearly rate of 8% started to accrue 60 calendar days after receipt of each invoice for the sale of these products.

329.

As regards the Compensation Fee, as per Clause 10 of the Distribution Agreement:

- the first instalment of EUR 175,000 became due on 30 June 2018; and

- the second instalment of EUR 175,000 became due on 31 December 2018.

330.
It follows that as regards the Compensation Fee, interest started to accrue on 30 June 2018 for the first instalment and on 31 December 2018 for the second instalment (Clause 5.4.2 provides that interest "shall automatically accrue (...) as from the due date (...)").
331.
The Claimant has produced a chart setting out the due date of each unpaid invoice (Claimant's Exhibit No. 2).
332.

It follows from the Claimant's chart (Claimant's Exhibit No. 2) that:

- the total amount invoiced in respect of the sale of the products is EUR 1,486,807;

- the total amount of credit notes issued in respect of the sale of the products is EUR 71,640;

- the total amount invoiced in respect of the Compensation Fee is EUR 350,000;

- thus, the total amount due, according to the chart produced by the Claimant, is EUR 1,765,167 (EUR 1,486,807 + 350,000 - EUR 71,640 = EUR 1,415,167).

333.

The invoices and credit notes produced by the Claimant (Exhibits 3.1 to 3.33) also support the fact that:

- the total amount invoiced in respect of the sale of the products is EUR 1,486,807;

- the total amount of credit notes issued in respect of the sale of the products is EUR 71,640; and

- the total amount invoiced in respect of the Compensation Fee is EUR 350,000.

334.

However:

- the total amount of the Claimant's claim in respect of the sale of the products is EUR 1,374,080.00; and

- the total amount of the Claimant's claim in respect of the Compensation Fee is EUR 350,000.

335.
Thus, there is a difference of EUR 41,087 between the amount of the Claimant's claim in respect of the sale of the products (EUR 1,374,080.00) and the total amount of the invoices and credit notes issued by the Claimant in respect of the sale of the products, mentioned in the Claimant's chart (EUR 1,415,167) (Claimant's Exhibit No. 2).
336.
It would not be fair to award interest to the Claimant on a principal amount which is higher than the principal amount claimed by the Claimant.
337.
In order to make up for the difference of EUR 41,087 between the amount claimed by [Claimant] in respect of the sale of the products (1,724,080.00) and the total amount of the invoices mentioned in the Claimant's chart (EUR 1,765,167), the Tribunal, using its power to act as amiable compositeur in accordance with Clause 19.8.2 of the Distribution Agreement, decides that the Respondent shall pay to the Claimant, interest at the rate of 8% per annum from the due date of each of the invoices mentioned in the Claimant's chart (invoices for the sale of the products and invoices for the Compensation Fees), except interest on Invoice No. 18001180, in the amount of EUR 41,376.
338.
Interest on Invoice No. 18001180, in the amount of EUR 41,376 dated 30 January 2018, will not be due by the Respondent. However, the principal amount of Invoice No. 18001180 will remain due.
339.

The Tribunal sets out below a chart stating the due date of each invoice, for the purposes of calculating interest:

Invoice N°. Invoice Date Due Date Amount bearing interest
17012170 24-10-2017 23-12-2017 EUR 49,129.00
17011489 10-10-2017 09-12-2017 EUR 147,493.00
17012653 07-11-2017 06-01-2018 EUR 121,568.00
17013039 14-11-2017 13-01-2018 EUR 114,485.00
17013924 04-12-2017 04-03-2018 EUR 238.00
17013925 04-12-2017 04-03-2018 EUR 119.00
17013926 04-12-2017 04-03-2018 EUR 203,006.00
17013961 05-12-2017 05-03-2018 EUR 13,440.00
17014259 12-12-2017 12-03-2018 EUR 3,213.00
17014260 12-12-2017 12-03-2018 EUR 46,050.00
17014613 19-12-2017 19-03-2018 EUR 103,729.00
17014870 26-12-2017 26-03-2018 EUR 14,862.00
18000252 09-01-2018 09-04-2018 EUR 9,316.00
18000432 12-01-2018 12-04-2018 EUR 48,205.00
18000568 16-01-2018 16-04-2018 EUR 10,863.00
18000913 23-01-2018 23-04-2018 EUR 53,884.00
18001519 06-02-2018 07-05-2018 EUR 73,980.00
18001629 08-02-2018 09-05-2018 EUR 48,375.00
18001876 13-02-2018 14-05-2018 EUR 57,086.00
18002138 20-02-2018 21-05-2018 EUR 77,938.00
18002463 27-02-2018 28-05-2018 EUR 121,000.00
18002898 08-03-2018 06-06-2018 EUR 18,445.00
18003138 13-03-2018 11-06-2018 EUR 11,492.00
18003462 20-03-2018 18-06-2018 EUR 35,865.00
18003377 16-03-2018 14-06-2018 EUR 61,650.00
18004331 09-04-2018 30-06-2018 EUR 175,000.00
18014804 12-12-2018 31-12-2018 EUR 175,000.00

VIII. COSTS OF THE ARBITRATION

340.
The Claimant seeks that "all costs of the arbitration proceeding, including, but not limited to, ICC administrative costs, arbitrator's fees and expenses, and [Claimant]'s fees and expenses incurred in relation to this proceeding" be paid (or reimbursed) by [Respondent] (Claimant's Memorial No. 3, §84).
341.
The Respondent has asked the Tribunal to "state, in accordance with Article 38 (4) of ICC Arbitration Rules, that each party will bear (i) its own costs and fees of defence arising from the arbitration proceedings and (ii) 50% of fees and expenses of the arbitrators and the ICC administrative expenses" (Respondent's Memorial No. 3, § 192 (iii)).
342.
Articles 38(3)-38(5) of the ICC Rules define the arbitral tribunal's power to fix the costs of the arbitration and allocate them between the parties.
343.

Article 38(4) of the ICC Rules provides that:

"4. The final award shall fix the costs of the arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties."

344.

Article 38(5) of the ICC Rules provides that:

"5. In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner."

345.
In accordance with Article 38 of the ICC Rules, the arbitral tribunal has the power to determine at its discretion which party shall bear the costs and to what extent. Therefore, under Article 38 of the ICC Rules, the arbitral tribunal can allocate costs depending, inter alia, on what the Tribunal considers to be fair.

(A) Fees and expenses of the Arbitral Tribunal and ICC administrative expenses

346.
The Claimant succeeded in most of its claims in this arbitration. Moreover, the Claimant conducted this arbitration in an expeditious and cost-effective manner: the Claimant complied with the procedural timetable fixed by the Tribunal and did not act so as to increase the costs of this arbitration. Therefore, it is fair that the Respondent should bear the costs of the arbitration.
347.
The issue arises as to whether the Claimant may be entitled to recover all or part of the costs of the arbitration. The Tribunal notes, in this regard, that whilst the Respondent challenged its obligation to pay the Compensation Fee provided for in Clause 10 of the Distribution Agreement, it did not challenge that it had to pay at least part of the products which it purchased from the Claimant; however, the Respondent did not pay any of the sums claimed by the Claimant in this arbitration, not even part of the Claimant's claims which the Respondent did not challenge.
348.
In such circumstances, it is fair that the full costs of the arbitration be borne by the Respondent.
349.
At its session of 2 May 2019, the Court fixed the costs of the arbitration at USD 100,800.
350.
Accordingly, the Respondent shall pay to the Claimant, the full costs of the arbitration, i.e. the sum of USD 100,800.

(B) Reasonable legal and other costs incurred by the Claimant

351.

Article 38(1) of the ICC Rules provides that:

"1 The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court, in accordance with the scales in force at the time of the commencement of the arbitration, as well as the fees and expenses of any experts appointed by the arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration."

352.
In its third Memorial, the Claimant sought payment of "EUR 74,780 (excluding VAT) as of December 31, 2018 (subject to any further adjustment)".
353.
In its Memorial on Costs dated 28 February 2019, the Claimant submitted its "statement of costs and expenses, updating the amount mentioned in its Third Memorial".
354.

In support of its claim for legal costs, the Claimant produced six invoices of its legal counsel, Willkie Farr & Gallagher, as follows (Claimant's Exhibit No. 12):

- Invoice No. 055/18 of 29 May 2018, in the amount of EUR 13,450 (VAT excluded);

- Invoice No. 094/18 of 14 August 2018, in the amount of EUR 9,275 (VAT excluded);

- Invoice No. 115/18 of 27 September 2018, in the amount of EUR 6,965 (VAT excluded);

- Invoice No. 149/18 of 30 November 2018, in the amount of EUR 29,400 (VAT excluded);

- Invoice No. 169/18 of 31 December 2018, in the amount of EUR 18,690 (VAT excluded);

- Invoice No. 009/19 of 26 February 2019, in the amount of EUR 28,261,80 (VAT excluded).

355.
The Claimant did not produce one of the seven invoices of its legal counsel listed in paragraph 2(ii) of the Claimant's Memorial on costs. According to the Claimant, this invoice, dated 30 January 2019, was in the amount of EUR 21,000 (excluding VAT). However, on 6 March 2019, the Claimant produced an English translation of this invoice. Including this missing invoice, the total amount of the Claimant's legal fees is EUR 127,041.80 (excluding VAT).
356.
The Respondent has not contested that the Claimant was required to pay legal fees in the amount of EUR 127,041.80 (excluding VAT) to its legal counsel. In particular, the Respondent has not contested that the Claimant was required to pay an invoice in the amount of EUR 21,000 (excluding VAT) dated 30 January 2019, although the Claimant did not produce this invoice but only an English translation thereof. Thus, for the purposes of allocating costs between the Parties, the Tribunal will consider that the Claimant actually incurred legal costs in the amount of EUR 127,041.80 (excluding VAT).
357.
The Claimant would not have commenced this arbitration proceeding and incurred legal costs if the Respondent had performed its obligations under the Distribution Agreement. The Tribunal notes, in this regard, that the Respondent did not pay any of the sums claimed by the Claimant in this arbitration, not even part of the Claimant's claims which the Respondent itself did not challenge. Thus, the Claimant must be compensated for most of its legal costs. As the Respondent has lost on most of its counterclaims, it shall not be compensated for any of its legal costs (in any event, the Respondent has not asked the Tribunal to order the Claimant to repay to the Respondent, the amount of legal fees paid by the Respondent to its legal counsel: the Respondent has asked the Tribunal to “state (...) that each party will hear (i) its own costs and fees of defence arising from the arbitration proceedings
358.
Taking account of the nature of the Parties' respective claims, the number of written submissions, and the oral advocacy at the final hearing, the Claimant's legal costs, in the amount of EUR 127,041.80 appear to be reasonable. However, the Claimant shall only be entitled to recover part of its reasonable legal costs, as the Respondent has succeeded in one of its counterclaims (Respondent's request for Clause 2.2 of the Distribution Agreement to be declared null and void).
359.
In the light of the foregoing considerations, the Tribunal finds that it is fair to award EUR 120,000 to the Claimant as compensation for part of its reasonable legal costs.

IX. AWARD

360.

For the reasons set out above, the Arbitral Tribunal decides as follows:

(1) Clause 2.2 of the Distribution Agreement entered into between the Respondent, [Respondent], and the Claimant, [Claimant], is declared null and void.

(2) The Respondent, [Respondent], shall pay to the Claimant, [Claimant], EUR 1,724,080.00.

(3) The Respondent, [Respondent], shall pay to the Claimant, [Claimant], interest at the yearly rate of 8% from the due date of each of [Claimant]'s invoices (as set out in Section VII above) until full payment by [Respondent] (except interest on Invoice No. 18001180).

(4) The Respondent, [Respondent], shall bear the full costs of the arbitration (fees and expenses of the arbitral tribunal and the ICC administrative expenses). At its session of 2 May 2019, the Court fixed the costs of the arbitration at USD 100,800. Thus, the Respondent, [Respondent] shall pay USD 100,800 to the Claimant, [Claimant]

(5) The Respondent, [Respondent], shall pay to the Claimant, [Claimant], EUR 120,000 as compensation for [Claimant]'s legal costs.

(6) All other claims and counterclaims of the Parties are dismissed.

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