November 15, 2012, Brussels — The Court of Justice of the European Union (ECJ) today ruled in favor of Steptoe client Zhejiang Aokang Shoes Co., closing nearly six years of litigation before the EU courts and fully overruling a March 2010 Court of First Instance judgment that had rejected all seven pleas of Aokang. Steptoe Brussels partner Jim Searles led the litigation throughout, after representing a number of both Chinese and Vietnamese exporting producers in the underlying EU anti-dumping investigation of footwear imports from China and Vietnam. Steptoe represented four Chinese producers at the Court of First Instance, but only Aokang sought to appeal that judgment at the ECJ.
In its ruling today, the ECJ annulled the contested anti-dumping regulation as it concerns Aokang, thus opening the way to Aokang’s EU importers claiming refunds of duties paid under that regulation. The litigation is especially notable because the European Commission and the EU Council, for the first time ever in EU trade litigation, sought to overturn the trade law precedent cited by Steptoe on grounds of fiscal considerations. They claimed that more than EUR 490 million in anti-dumping duties had been collected by the EU and its member states under the contested footwear regulation and that, if Aokang’s pleas were sustained, this could open the floodgates and have serious EU budget implications due to refund claims from all importers. The ECJ’s judgment expressly rejects this argumentation, and also orders the EU Council to pay the litigation costs of Aokang, concerning both the lower court proceedings and the ECJ case. The European Commission and EU industry, which intervened before both courts against Aokang, were ordered to pay their own costs.
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