OREANDA-NEWS. September 03, 2012. The 9th Arbitration Appeal Court allowed the claim of FAS Russia to abolish the judgment of Moscow Arbitration Court, which had reversed an administrative fine imposed by the Antimonopoly Service upon the “Savings Bank of Russia” OJSC, reducing it from 5,359,157 to 4,962,182 Rubles, reported the press-centre of FAS Russia.

On 2nd August 2010, the FAS Commission found that the “Savings Bank of Russia” OJSC, “Odintsovo” Municipal Commercial Bank (Ltd.), “Russian Post” Federal State Unitary Enterprise, as well as “Information-and-Payments Centre” and suppliers of housing-and-utility services in Odintsovo violated Part 2 Article 11 of the Federal Law “On Protection of Competition” (Part 4 Article 11 of the Federal Law “On Protection of Competition” in the edition that came into force on 6th January 2012).

These organizations violated the law by entering into trilateral agreements, as a result of which the residents of more than 250 apartment houses in Odintsovo could pay housing-and-utilities services only through the “Savings Bank of Russia” OJSC, “Odintsovo” Municipal Commercial Bank (Ltd.), and “Russian Post” Federal State Unitary Enterprise.

Arbitration Courts of three instances supported the position of FAS Commission that such agreements restricted competition.

The respondents to the case were held administratively liable under Part 1 Article 14.32 of the Code of the Russian Federation on Administrative Violations.

On 5th March 2012, Moscow Arbitration Court confirmed the fact of committing the administrative violation, elements of violation and guilt of the “Savings Bank of Russia” OJSC. However, the Court reversed the fine imposed upon the Bank, indicating that the Bank had met the conditions for relieving from administrative liability, formulated in the Notes to Article 14.32 of the Code on Administrative Violations.

The judgment was based on the fact that even before the antimonopoly case was initiated, the “Savings Bank of Russia” OJSC had informed FAS in writing that one of the agreements concluded by the Bank had not complied with the antimonopoly law.

The Court also took into consideration that in course of the case investigation, the Bank had voluntarily eliminated the violation by signing an agreement to terminate the trilateral competition-restricting agreements.

FAS disagreed with the judgment of Moscow Arbitration Court, and appealed to the 9th Arbitration Appeal Court.

At the Court hearing FAS asked to take into consideration that the “Savings Bank of Russia” OJSC had petitioned to the antimonopoly authority regarding possible violation in relation of only one out of four agreements that later were recognized as competition-restricting agreements.

At the time of lodging the claim FAS had information that the “Savings Bank of Russia” OJSC had concluded the agreement in question, and FAS also possessed a copy of the agreement. The antimonopoly authority obtained these materials investigating a petition of a physical person, received from a different source.

At the Court hearing it was also specifically stated that before FAS issued a decision on the case on violating the antimonopoly law, the “Savings Bank of Russia” OJSC had indicated in writing that the trilateral agreement had not contravened the antimonopoly law. Thus, the Bank essentially withdrew the earlier statement where the Bank had admitted the violation.

The 9th Arbitration Appeal Court accepted FAS arguments and reversed the judgment of Moscow Arbitration Court.

At the same time, in the absence of the circumstances aggravating administrative liability, the 9th Arbitration Appeal Court reduced the fine imposed upon the “Savings Bank of Russia” OJSC from 5,359,157 to 4,962,182 Rubles.

Reference:

Part 1 Article 14.32 of the Code on Administrative Violations:

When an economic entity concludes an agreement prohibited by the antimonopoly law of the Russian Federation as well as participates in such an agreement, it is punishable by an administrative fine upon company officers – from 20,000 to 50,000 Rubles or disqualification for the period up to three years; upon legal entities – from one hundredth to fifteen hundredths of the income of the violator from selling goods (works, services), on the market where the administrative violation was committed, but no less than 100,000 Rubles, and if the income of the violator from selling goods (works, services), on the market where the administrative violation was committed, exceeds 75% of the total income of the violator from selling all goods (works, services) – from three thousandths to three hundredths of the income of the violator from selling goods (works, services), on the market where the administrative violation was committed, but no less than 100,000 Rubles.

The Notes to Article 14.32 of the Code on Administrative Violations:

1. A person (a group of persons determined in accordance with the antimonopoly law of the Russian Federation), that voluntary reports to the federal antimonopoly body, its regional office about concluding an agreement prohibited by the antimonopoly law of the Russian Federation or about exercising concerted actions prohibited by the antimonopoly law of the Russian Federation, is relieved from administrative liability for committing administrative violations specified in Parts 1 and 3 Article 14.32 of the Code on Administrative Violations, if the following conditions are met in their totality:

- As of the date of receiving a person’s petition, the antimonopoly body did not possess relevant information and documentation regarding the committed administrative violation;

- The person refused to participate or further participate in an agreement, or exercise, or further exercise concerted actions;

- The submitted information and documentation are sufficient to establish an event of an administrative violation.

A person that the first meets all conditions specified in the Notes shall be relieved from administrative liability.