DAGESTAN ROAD CARTEL WILL PAY A FINE OF 170 MILLION RUBLES

The arbitration court of Moscow upheld the decision of the FAS Russia on bringing to administrative responsibility Mostootryad-99 JSC, Dorstroyotrayd-99 LLC and scientific production association (SPA) Dormost LLC.

It should be reminded that in November of 2018, the FAS Russia recognised the companies guilty of maintaining prices at the auction for execution of works on construction, repair, reconstruction, maintenance of roads and bridges and other activities undertaken on roads and bridges in the Republic of Dagestan in 2015-2018.

The total income of the cartel amounted to more than 7 billion rubles.

Participants of the anti-competitive agreement were brought to administrative responsibility. Taking into account changes in the economic situation associated with the spread COVID-19, the FAS Russia decided to extend execution of decisions on bringing to justice all the parties to the agreement for 3 months, that is the maximum term provided by the Administrative Code of the Russian Federation.

Disagreeing with the decision of the FAS, Mostootryad-99 JSC, Dorstroyotrayd-99 LLC and SPA Dormost LLC appealed the decisions on bringing to administrative responsibility in the Arbitration court of Moscow. The court’s decision reduced the company’s fines by 10 times. The appeal left the decision of the court of first instance unchanged.

Canceling judicial acts and returning cases for a new trial, the court of cassation pointed out that “the reduction of sanctions (legislative or law enforcement) is permissible only to the point where the general and private prevention of administrative offenses loses its effectiveness, and the violation of the rights and freedoms of citizens protected by Antimonopoly legislation begins. Therefore, contrary to the conclusions of the courts, the amount of administrative punishment imposed for the imputed offense cannot be excessive due to the seriousness of the company’s act.

In a new review, the Moscow Arbitration court also found no grounds for reducing the fine to companies and stressed* that “an unjustified reduction in the amount of the administrative fine prevents the proper implementation of the state policy aimed at preventing and suppressing monopolistic activities”.

* Referring to the Strategy for the development of economic security of the Russian Federation for the period up to 2030, approved by decree of the President of the Russian Federation No. 208 of 13.05.2017, which established that the prevention of cartel collusions is the main task of the state in the economic sphere.