Breaking News - DB Schenker Settles U.S. Law Case with 3 Carriers

In New York, Deutsche Bahn’s logistics pillar DB Schenker dropped legal action against Cargolux, Nippon Cargo Airlines and SAS after reaching an out-of-court settlement. The action continues against three other carriers targeted by the lawsuit after an amicable deal could obviously not be agreed on by the parties involved.

Determined to pursue its rights vigorously - DB Schenker  /  source: hs
Determined to pursue its rights vigorously - DB Schenker / source: hs

In a statement, railway giant Deutsche Bahn confirms to have reached a deal with Cargolux, SAS and Nippon Cargo, dismissing its claims against these airlines. According to reports, the trio agreed to pay compensation of less than U.S.$100 million to settle the legal dispute with DB Schenker. Originally, the railway company had demanded payments totaling U.S.$370 million from 6 cargo carriers as compensation for alleged inflated fees cashed in by the airlines as a result of illegally fixing prices on kerosene and security surcharges over many years. However, CargoForwarder was informed by credible sources, the three carriers agreed to pay a substantially smaller amount to Schenker for getting the case off the table. “In their statement Deutsche Bahn has exaggerated the compensation obtained for marketing reasons,” said a manager close to the case.

Stern warning
The lawsuit against 6 airlines was filed in August of last year at a district court in New York and has now led to a first result. DB emphasizes that their daughter Schenker will continue to pursue its claims against the other three carriers that have not consented to the settlement. These are Air France-KLM-Martinair, Qantas and Japanese airline ANA. Deutsche Bahn states: “Schenker plans to pursue its rights vigorously, seeking damages relating to the air carrier’s anticompetitive conduct alleged in the U.S. cartel lawsuit, based on the legal principle of joint and several liabilities.”

Mounting pressure
Simultaneously, Deutsche Bahn in a statement warns the 3 airlines that refrained from the out-of-court deal that in the event of a conviction the entire issue could become extremely expensive for them in the end. Based on the incurred financial damages estimated at approximately U.S.$370 million, the court could award treble this amount in case the three defendants should be convicted. Given this, compensation payments could go up to U.S.$1.1 billion, says Deutsche Bahn.
This way, enormous pressure is put on the 3 airlines to settle the issue prior to any court decision. 
The complaint filed by DB Schenker in New York is a reaction to a judgment delivered by the U.S. Department of Justice, the European Commission and other international judicial authorities that found cargo carriers being guilty of having fixed prices on fuel and security surcharges between 1998 and 2006 or even after.

Cologne comes next
Another lawsuit against 11 carriers was filed by Deutsche Bahn last autumn at a regional court in Cologne, Germany based on the same price-fixing allegations. DB emphasized that also in this case an amicable settlement with the defendants is still possible and preferred by the company.
At Deutsche Bahn nobody was available today for further comments on both cases. This also leaves open, which percentage of the total compensation payment of less than U.S.$100 million ends up as a success fee in the pockets of law firm Freshfields, Bruckhaus and Deringer  who represent plaintiff DB Schenker/Deutsche Bahn.

Heiner Siegmund

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