Supreme Court precedent
In response to the extraordinary appeal lodged by the National Commission for the Defence of Competition on November 29 2011,(1) the Supreme Court upheld the decision of Division A of the Federal Court of Appeals on Civil and Commercial Matters in In re Moda SRL s/ solicitud de intervención. The federal court had overturned a decision through which the commission had ordered the closure of the proceedings initiated in connection with the complaint filed by Moda SRL for anti-competitive acts prohibited by the Antitrust Law (25,156).
In the Supreme Court's opinion, the resolution to close the proceedings exceeded the powers vested in the commission. While the creation of the National Tribunal for the Defence of Competition, as established by the law, is pending, such resolutions should be issued by the secretary of domestic trade of the Ministry of Economy.
According to the court, whatever the reason chosen by the commission for ordering the closure of the proceedings, and mindful of its importance and consequences, the court ruled that the decision clearly resembled powers of adjudication and not those of instruction and investigation assigned to the commission by law.
Furthermore, under the court's criteria, the commission's argument that the decision to close proceedings responded purely to formal reasons involving the lack of ratification of the complaint - which would be within the scope of its instruction powers - was also unsuccessful. The court concluded that the annulled decision also made merit of the substance of the complaint, setting forth reasons that led to its inadmissibility and justified its dismissal.
The resolution issued in this case is consistent with other cases in which the court has previously ruled that the decision to close proceedings is within the purview of the decision-making powers applicable to the secretary of domestic trade. This is not the first case to arise during the interim period provided under Section 58 of the law (ie, until the tribunal has been created) in which the Supreme Court has questioned the interpretation of the law regarding the powers that should be assigned to the commission and the secretary of domestic trade, respectively.
In cases such as Credit Suisse First Boston Private Equity II LLC-Sucursal Argentina,(2) Recreativos Franco s/ apelación resolución Comisión Nac Defensa de la Competencia(3) and Belmonte(4) the Supreme Court held that until the tribunal has been created, the commission and the secretary of domestic trade are the current enforcement authorities with the power to examine and decide cases involving competition.
In the Credit Suisse ruling, the Supreme Court ruled that until the tribunal has been constituted, the commission and the secretary of domestic trade are the enforcing authorities to address issues of competition arising from the law.
Furthermore, according to the ruling in Recreativos Franco, the Supreme Court accepted the arguments given by the attorney general that Section 58 of the law establishes that the former enforcing agency that acted pursuant to the terms of the abrogated Antitrust Law (22,262) must continue analysing cases until the tribunal has finally been created. The court specifically stated that the commission must instruct, investigate and issue a recommendation and the secretary of domestic trade must issue the final decision.
In Belmonte, the Supreme Court once again stated that the commission and the secretary of domestic trade have the power to analyse and decide antitrust cases until the tribunal has been set up.
The Supreme Court decision in this case is consistent with the precedents mentioned above whereby, until the tribunal has been created, the system for analysing antitrust issues in Argentina involves the commission and the secretary of domestic trade. Nevertheless, in this case the court has gone one step further and classified the limits to the instruction powers vested in the commission.
For further information on this topic please contact Alfredo M O'Farrell or Miguel del Pino at Marval O'Farrell & Mairal by telephone (+54 11 4310 0100), fax (+54 11 4310 0200) or email ([email protected] or [email protected]). The Marval O'Farrell & Mairal website can be accessed at www.marval.com.ar.
(1) Decision available at www.csjn.gov.ar/cfal/fallos/cfal3/toc_fallos.jsp.
(3) R 1170 XLII and R 1172 XLII.