Mumbai: Schneider Electric SA, the biggest electronic components manufacturer in France, has sought €1.6 billion ($2.2 billion) in compensation from the European Commission for damages arising from its competition ruling. This is the first time the regulator has been sued.

The EC had, in late 2001, forced Schneider out of a €6.7-billion takeover of French electronic distributor Legrand Holding SA, as it felt the combination would create competition problems.

The European Court of First Instance, the EU''s lower court, overturned the decision in October 2002, following an appeal by Schneider. The court described the decision to block the deal as "vitiated by errors and omissions."

The reversal, however, could not save the deal as Schneider in July 2002 agreed to sell Legrand to New York buyout firm Kohlberg Kravis Roberts & Co. and French investment firm Wendel Investissement for €3.6 billion.

Schneider claims the EC''s decision cost it about €2 billion, though it subsequently received a €500 million tax credit. If successful, Schneider''s claim would pave the way for further claims against the watchdog.

Meanwhile, British discount holiday company MyTravel Group plc has lodged a £518 million ($1 billion) compensation claim on EC for blocking its 1999 bid for First Choice Holidays plc. That decision was also overturned in 2002.

The EC also tried unsuccessfully to blocked Swedish industrial group Tetra Laval International SA''s €1.7-billion takeover of French packaging equipment maker Sidel SA.

The reversals have led to a review of the EC''s merger assessments among the EU members.