OREANDA-NEWS. June 01, 2011. The Supreme Arbitration Court of the Russian Federation supported the decision of the Office of the Federal Antimonopoly Service in the Chelyabinsk region (Chelyabinsk FAS Russia) that “ROSBANK” Shareholding Commercial Bank” OJSC violated Clauses 4, 5 and 8 Part 1 Article 11 of the Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.

Earlier Chelyabinsk FAS Russia established that “ROSBANK” Shareholding Commercial Bank” OJSC concluded agreements with “VSK” OJSC, “RESO-Garantia” Open Joint-Stock Insurance Company, “Rosgosstrakh” OJSC, “Moscow Share-Holding Insurance Company” CJSC, “SOGLASIE” Insurance Company” Ltd., and “Yugoria” State Insurance Company” Ltd., that are contrary to the antimonopoly law. A Cooperation Agreement was a mandatory condition for confirming accreditation of insurance companies with the bank. In 2007 – 2009 accredited insurance companies exercised insurance against risks of bank clients within the framework of the mortgage loan programme. At the same time insurance companies that do not have Cooperation Agreements with the bank did not have a possibility to compete for the bank clients by offering their services. The bank could refuse to grant a loan if a client provided an insurance policy issued by an insurance company that did not have an Agreement with the bank.

Another mandatory condition for “ROSBANK” Shareholding Commercial Bank” OJSC to grant mortgage loans was insuring life and the risk of loss of capacity to work of both borrowers and guarantors. Under Clause 2 Article 935 of the Civil Code of the Russian Federation, by law citizens cannot be obligated to insure life or health. Insurance is a separate service and therefore granting loans subject to mandatory insurance infringes consumer rights and is contrary to the Federal Law “On Protection of Competition”.

Chelyabinsk FAS Russia found that Cooperation Agreements, concluded by “ROSBANK” Shareholding Commercial Bank” OJSC with “VSK” OJSC, “RESO-Garantia” Open Joint-Stock Insurance Company, “Rosgosstrakh” OJSC, “Moscow Share-Holding Insurance Company” CJSC, “SOGLASIE” Insurance Company” Ltd., and “Yugoria” State Insurance Company” Ltd., were contrary to the antimonopoly law and issued a determination to the bank to transfer the income obtained as a result of these violations (499,299 Rubles) to the federal budget.

“ROSBANK” Shareholding Commercial Bank” OJSC disagreed with the decision of the antimonopoly body and filed a lawsuit to Chelyabinsk Regional Arbitration Court. The Court of First Instance revoked the decision of Chelyabinsk FAS Russia.

However, the antimonopoly body was able to prove legitimacy of its decision and determination at the 18th Arbitration Appeal Court and the Federal Arbitration Appeal Court of the Urals District.

The Supreme Arbitration Court of the Russian Federation (SAC RF) ruled to refuse to transfer the case to the Presidium of SAC RF for judicial review.

“Restricting competition on the market of insurance services, the bank and insurance companies reached mutual financial benefits. By imposing insurance companies and their services upon the borrowers, the bank was getting agency commission and insurance companies were extending their client base and getting profit from borrowers insuring life and risk of loss of capacity to work”, commented the Head of Chelyabinsk FAS Russia, Ms. Anna Kozlova.

Reference:

Clauses 4, 5 and 8 Part 1 Article 11 of the Federal Law “On Protection of Competition” prohibit agreements between economic entities and concerted actions of economic entities on the market, if such agreements or concerted actions lead or can lead to economically or technologically unjustified refusals to conclude contracts with particular sellers or buyers (customers), unless such refusals are not directly provided for by the federal laws; imposing disadvantageous contract conditions or contract conditions irrelevant to the contract subject; preventing market entry / exit of other economic entities.