SOVIET DISTRICT COURT IN VLADIVOSTOK PASSED A PRECEDENT RULING

Andrey Tenishev: This is the first Court ruling of such kind and one can hardly overestimate its significance for both combating cartels and countering corruption

Soviet District Court in Vladivostok fully allowed the claim of the General’s Prosecutor’ Office against an ex-Mayor of Vladivostok, his brother and former  Head of “Vladivostok Roads” Vladivostok Municipal Unitary Enterprise as well as 6 companies controlled by the ex-Mayor’s family on recovering over 1.4 billion RUB to the state revenue.

Court found that the above sum had been gained by the defendants as a result of an anticompetitive agreement and corruption offences. The arguments of the defendants, who requested to dismiss the claim, were pronounced by Court inconsistent and unreasoned.

In 2014, Primorye OFAS found that the Vladivostok Authority, the Road and Urban Amenities Department of the Vladivostok Authority, “Vladivostok Roads” Vladivostok Municipal Unitary Enterprise and “Vostokcement” Ltd. had concluded and participated in an agreement that resulted in restricting and eliminating competition in procurement of construction materials for repair, reconstruction, redevelopment and maintaining urban road infrastructure.

In the course of the investigation, it was established that “Vladivostok Roads” had purchased inert construction materials for the needs of the Vladivostok Authority from the “Vostokcement” Group, controlled by the family of Vladivostok ex-Mayor, for more than 1.4 billion RUB.

Also, Vladivostok ex-Mayor is sentenced to 15 years imprisonment for abuse of office in the course of public procurement, bribe-taking and embezzlement, Director of “Vostokcement” Ltd. is given an 8-year suspended sentence, and the punishment for Director of “Vladivostok Roads” Ltd. is 10 years in a maximum security facility. All above persons are fined 500 million RUB.

“Competition is a constitutional value and Court confirmed it. Transactions concluded on the basis of anticompetitive agreements can be recognized contrary to the basic principles of justice and everything gained in such transactions can be recovered to the benefit of the state. This is the first claim and the first judicial ruling of such a kind, and one can hardly overestimate its significance for combating cartels as well as countering corruption”, stated Head of FAS Anti-Cartel Department Andrey Tenishev.