Amicable settlements in OECD focus

On 17 June 2016, the session of the Competition Committeeof the Organization for Economic Cooperation and Development (OECD) in Paris (France) included a Round Table about “Amicable settlements in investigating cases on violating the antimonopoly law”.

In the past decade the number of competition authorities that use amicable settlements with economic entities as an efficient measure to counter anticompetitive practices increased considerably. At the same time there are a lot of competition authorities that do not employ this tool. Therefore, the objective of the Round Table was to study experience of various competition authorities in this filed and to identify advantages and problem areas related to amicable settlements with economic entities.

The key speakers were Mr. Tadashi Shirashi, a professor of Tokyo University, Japan; Joshua Wright, a professor at Gorge Mason University, a former Commissioner of the Federal Trade Commission, the USA; and Mr. Jean-Francois Bellis, the managing partner of Van Bael & Bellis law firm, Belgium. Deputy Head of FAS Andrey Tsyganov gave a report on the specifics of amicable settlements in the Russian Federation.

Andrey Tsyganov outlined the specifics of Russian antimonopoly law when an event of an antimonopoly violation is ascertained at the stage of investigating a case on violating the antimonopoly law in accord with Chapter 9 of the Federal Law “On Protection of Competition”, and the guilt of a particular person is determined at the stage of considering a case on an administrative violation / a criminal case. In fact, it is a situation when an element of violation (event) and an element of corpus delicti for the same violation (guilt) are the outcomes of different procedures.

Due to the above specifics of Russian law, there is no institution of relieving from liability upon an agreement between the parties at the stage of opening or investigating the antimonopoly law. FAS does not have the powers to conclude any agreements with an economic entity at the stage of considering materials on signs of violating the antimonopoly law. Concluding an agreement between the parties or between FAS and an economic entity does not constitute the grounds to not opening or terminating a case (Article 44 of the Federal Law “On Protection of Violation”).

At the same time, when challenging a decision of the antimonopoly body issued upon the outcome of investigating an antimonopoly case, settlement arrangements are available: amicable settlements. The procedure and conditions for amicable settlements as well as the requirements to their content and execution are given in Chapter 15 of the Arbitration procedural Code of the Russian Federation.

“For the first time the Court confirmed FAS right to conclude amicable settlements in 2002 and since then the practice has been developing. The main conditions for amicable settlements between FAS and economic entities in all cases are that such entities recognize their guilt for violating the antimonopoly law. In return we propose partial mitigation of punishment. Amicable settlements always include mandatory conduct conditions”, pointed out Andrey Tsyganov.

In an amicable settlement an economic entity and FAS agreed at Court about the compromise conditions for resolving their dispute in accord with the law on competition. In practice amicable settlements most often are reached on the cases on abusing market dominance, particularly, fixing and maintaining monopolistically high prices. They are allowed, however, for nearly any antimonopoly disputes. Such agreements are in demand and are efficient, which is corroborated by the fact that they are typically reached on big or socially important cases (for instance, cases against such companies as “Evrocement Group” CJSC, “Uralkalii” PJSC as well as the case on violating the antimonopoly law on the market of liquid caustic soda, etc.)

Andrey Tsyganov informed the Round Table participants that in the Russian Federation amicable settlements approved by Courts are mandatory and, therefore, is the guarantee for protecting the rights of the parties to the agreement. At the same time, further challenging amicable settlements is possible. Courts may refuse to approve amicable settlements if it breaches the rights and interests of other persons or is contrary to the law.

“Amicable settlements form an efficient tool of compromise solution of disagreements with the antimonopoly body at the stage of challenging decisions (determinations) of the antimonopoly body at Court. FAS finds it expedient to develop the amicable settlement institution at the stage of judicial proceedings as one of the efficient tools of executing its public functions. At the same time, amicable settlements are an efficient tool of guaranteeing the rights and legitimate interests of case participants including the right for judicial protection”, summed up Andrey Tsyganov.