The Constitutional Chamber of the Supreme Court of Justice is reviewing an action that was filed to protect the constitutional rights of a company. The company claims that the court of first instance in administrative matters incorrectly interpreted Article 54 of the Law to Promote and Protect Free Competition and Article 136 of the Law of the Supreme Court of Justice.
In March 1999 the Pro-competition Superintendency issued a resolution against the Venezuelan company Consorcio Guaritico-Guaritico III. The superintendency ruled that the company was guilty of abuse of a dominant position. Three companies alleged before the superintendency that Consorcio had discriminated against them in favour of other clients. The superintendency ordered Consorcio to cease its discriminatory practices and a fine was imposed.
Consorcio filed an appeal before the court to have the superintendency's decision annulled on the grounds of illegality and unconstitutionality. Consorcio requested that the court suspend the effects of superintendency's decision in the meantime, until the court issued its judgment. The superintendency insisted that Consorcio should comply with its order. Consorcio argued that the administrative act containing the order was not yet final. A second fine was imposed by the superintendency for non-compliance with its order.
On August 6 1999 the court declared that the petitioners' request was legally valid. Suspension of the fine was ordered upon payment of a bond by the petitioners.
The superintendency refused to suspend the effects of its decision (other than the fine). Consorcio filed new briefs with the superintendency and the court, stating that the order to cease its practices should be deemed to be suspended since Consorcio had requested the suspension of all effects of the superintendency's ruling. The court declared that its decision in August had only referred to the suspension of the fine.
On May 18 2001 Consorcio filed an action before the constitutional chamber of the Supreme Court of Justice, alleging violation of the following constitutional rights:
- to defence;
- to obtain an adequate answer to the petitions of suspension of the effects of the objected ruling;
- to have all of its arguments reviewed; and
- to have the case judged by its original judges.
The claimant's main argument was that the first court had unduly over-generalized its interpretation of Article 54 of the Pro-competition Law to the point of linking Consorcio's request with this provision, instead of noting that the request had been based on Article 136 of the Law of the Supreme Court of Justice.
According to Consorcio, the position of the court has customarily been to lessen the automatic suspension ordered by the law of acts issued by the superintendency. This is contemplated by Article 54 of the Pro-Competition Law (which operates through the posting of a bond). Before the Supreme Court Consorcio argued that Article 136 of the Law of the Supreme Court of Justice sets forth a general suspension of the act provided that certain requirements are met and that the party requesting the suspension of effects proves the alleged damage.
On June 5 2001 the constitutional chamber of the Supreme Court of Justice issued a provisional ruling declaring that (i) it is competent to try the action filed by Consorcio, since the action was autonomous, seeking the protection of constitutional rights, and (ii) it will review the arguments made by Consorcio with respect to the incomplete application of Article 136 of the Law of the Supreme Court of Justice.
The superintendency has broad powers to impose measures that are aimed at preventing the harmful effects of prohibited practices.
To date, the interpretation given by the court to Article 54 of the Pro-competition Law has been employed to suspend fines by means of the posting of bonds, but the effectiveness of the superintendency's other orders have been left intact. If the final decision issued by the court in a given case favours the party which had to comply with the superintendency's orders, the party could have suffered the irreversible impact that measures of that type could cause.
The Supreme Court's review of the interpretation of Article 54 of the Pro-competition Law by the first court and of the application of Article 136 of the Law of the Supreme Court of Justice will clarify an important issue for companies and any other entities that are subject to the Pro-competition Law.
For further information on this topic please contact Olga Nass de Massiani, Isabel Victoria Márquez or Vera De Brito de Gyarfas at Travieso Evans Arria Rengel & Paz by telephone (+58 212 277 3333) or by fax (+58 212 277 3334) or by e-mail ([email protected], [email protected] or [email protected]).
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