Legislation and jurisdiction

Development of antitrust litigation

How would you summarise the development of private antitrust litigation in your jurisdiction?

Private antitrust litigation is being actively developed in Russia.

Before 2012, private antitrust litigation was quite rare in Russia. In January 2012 an amendment to Federal Law No. 135-FZ on protection of competition, dated 26 July 2007 (Competition Law), entered into force, enabling plaintiffs to recover damages for violations of antitrust legislation. Since then, the number of claims has been rising as well as the number of decision awarding damages to plaintiffs.

In May 2016, the Federal Antimonopoly Service of the Russian Federation (FAS) introduced Guidelines on Proof and Calculation of Damages Inflicted Through Violations of Antitrust Legislation (FAS Guidelines), which are aimed at making private antitrust litigation more clear and promoting the submission of private claims. Further, in October 2017, FAS approved the Guidelines on Determination of Losses Caused by Violation of Antitrust Laws, summarising the methods of their calculation for different types of antitrust violations.

Applicable legislation

Are private antitrust actions mandated by statute? If not, on what basis are they possible? Is standing to bring a claim limited to those directly affected or may indirect purchasers bring claims?

Private antitrust actions are mandated by article 37(3) of the Competition Law. A private antitrust action may be brought by any person whose rights and interests have been infringed by an antitrust violation, regardless of whether such person was affected by the violation directly or indirectly.

If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?

Private antitrust actions are considered in accordance with the Competition Law, the Civil Code of the Russian Federation, the Arbitrazh (Commercial) Procedure Code of the Russian Federation (APC) and the Civil Procedure Code of the Russian Federation (CPC) by arbitrazh (commercial) courts and courts of general jurisdiction. Arbitrazh courts hear economic disputes and other cases connected with business or other economic activity involving legal entities and individual entrepreneurs, and courts of general jurisdiction consider cases involving an individual as one of the parties. For a discussion of alternative dispute resolution see question 37.

Private actions

Availability

In what types of antitrust matters are private actions available? Is a finding of infringement by a competition authority required to initiate a private antitrust action in your jurisdiction? What is the effect of a finding of infringement by a competition authority on national courts?

Private antitrust actions are available in all types of antitrust matters, including cartel cases, abuse of dominance and unfair competition. As a general rule, an FAS decision on an antitrust violation is not required to initiate private litigation. However, plaintiffs rarely file private actions before applying to the FAS.

An FAS decision is not prejudicial in nature and is not binding on a competent court. It is regarded only as evidence of a violation of the law by a defendant.

Required nexus

What nexus with the jurisdiction is required to found a private action? To what extent can the parties influence in which jurisdiction a claim will be heard?

A person can file a private antitrust action in a Russian court if it is closely connected with the Russian Federation. This is evident if both parties are Russian and the violation was committed in Russia. If one of the parties is a foreign entity or individual, such a nexus exists if, for example:

  • the defendant is located or resides in the Russian Federation;
  • the foreign entity has its management body, branch or representative office in Russia or property located in the Russian Federation;
  • a party challenges an agreement that has or will be executed in the Russian Federation;
  • the damages occurred in the Russian Federation or are caused by an action or omission committed in the Russian Federation; or
  • a Russian entity files a claim for protection of business reputation.

Whether a plaintiff may decide in which jurisdiction a claim will be heard is arguable, because the law does not expressly provide for such an opportunity. In theory it can happen if the courts of several jurisdictions are competent to consider the case (eg, a court of any jurisdiction considers cases involving parties resident within its jurisdiction, regardless of the place where the violation occurred, and the relevant antitrust legislation does not have extraterritorial effect).

Restrictions

Can private actions be brought against both corporations and individuals, including those from other jurisdictions?

Private actions can be brought against both corporations and individuals if such individuals are qualified as business entities under the Competition Law. A business entity is a commercial organisation, a non-commercial organisation earning income, an individual entrepreneur, an individual carrying out professional activities by which he or she earns income on the basis of state registration, licence or membership in a self-regulating organisation. One can bring a private action against both Russian and foreign business entities.

Private action procedure

Third-party funding

May litigation be funded by third parties? Are contingency fees available?

Russian law neither directly provides for nor prohibits third-party funding of litigation. However, recovery of legal costs paid by third parties may be difficult (eg, the Higher Arbitrazh Court has only recognised recovery of counsel’s fees paid by third parties to discharge an outstanding debt owed to the winning litigant).

Contingency fees are not expressly stipulated by Russian law. Court practice is not uniform. There are as many decisions allowing recovery of contingency fees as prohibiting it. Previously in its practice, the Supreme Court upheld the position on availability of contingency fees but ruled that such fees cannot be recovered from the defeated party. The rationale behind this decision is that contingency fees are an additional bonus paid to counsel separate from remuneration for his or her services. However, in one of the rulings in 2017, the Supreme Court upheld decisions of lower courts stating that provisions on contingency fees are void. But, in 2018, the Supreme Court announced its intention to revise its approach to contingency fees. In addition, a bill introduced to the Russian legislative body, the State Duma, proposes to recognise contingency fees as a type of remuneration for legal services of attorneys-at-law.

Jury trials

Are jury trials available?

Jury trials are not available.

Discovery procedures

What pretrial discovery procedures are available?

Pretrial discovery procedures are not available.

Admissible evidence

What evidence is admissible?

Evidence may include:

  • written documents and materials;
  • oral statements and physical exhibits;
  • explanations of parties to the proceedings (including by video conference);
  • expert reports;
  • consultations of specialists;
  • witness statements;
  • audio and video records; and
  • other documents and materials.

Evidence must be relevant and admissible. Evidence is relevant if it relates to the case being considered. Evidence is admissible if it was obtained in accordance with the law and can be used to prove certain circumstances (eg, witness statements are not admissible if two legal entities failed to conclude a transaction in written form).

Legal privilege protection

What evidence is protected by legal privilege?

Legal privilege covers any information (in oral or written form) obtained by an attorney-at-law from his or her client in the course of advising a client or vice versa (attorney-client privilege). An attorney-at-law cannot give witness statements with respect to the facts he or she has become aware of in the course of providing legal services to a client. Any evidence obtained as a result of the criminal investigation of an attorney-at-law or his or her premises is admissible only if it is not related to proceedings involving the attorney-at-law’s client; in particular, it cannot be used in a private antitrust litigation. Evidence obtained by legal counsel not registered as an attorney-at-law, such as in-house counsel, is not privileged.

Trade secrets are not legally privileged, and the court may request the provision of any relevant information; however, the court may take steps to limit the disclosure of sensitive commercial information (eg, the court may close the hearing to the general public if one of the parties asks for preservation of the secrecy of the respective information).

Criminal conviction

Are private actions available where there has been a criminal conviction in respect of the same matter?

A plaintiff can initiate separate civil proceedings parallel to criminal proceedings or, alternatively, bring a civil action in criminal proceedings under article 44 of the Criminal Procedure Code.

A separate claim can be brought before a court of general jurisdiction or arbitrazh court. Pursuant to article 69(4) of the APC and article 61(4) of the CPC, a criminal sentence imposed in parallel proceedings will be prejudicial to the consideration of such a civil claim in terms of whether and by whom certain actions were committed.

A civil action in criminal proceedings may be brought at any time, starting from the commencement of criminal proceedings and until the closing of the trial court investigation. If, for example, the defendant is an officer of a company that concluded a cartel agreement, such civil action in criminal proceedings can be brought against the company, which will participate in the criminal proceedings as a civil defendant. If a not-guilty verdict is passed or the criminal case is terminated, the civil claim cannot be sustained. However, it can be resubmitted under ordinary civil procedure, unless a not-guilty verdict is presumed by the absence of a crime or the criminal case is terminated because the accused person is found innocent of such a crime.

Utilising of criminal evidence

Can the evidence or findings in criminal proceedings be relied on by plaintiffs in parallel private actions? Are leniency applicants protected from follow-on litigation? Do the competition authorities routinely disclose documents obtained in their investigations to private claimants?

Plaintiffs in civil proceedings (both in courts of general jurisdiction and arbitrazh courts) can rely on evidence presented in criminal proceedings if it is relevant and admissible, even if the criminal proceedings have not been closed yet. The findings of a police investigation (generally, not admissible as evidence in criminal proceedings) may also be regarded as admissible in civil proceedings, although court practice in this respect is not uniform. A criminal sentence is prejudicial for civil proceedings (see question 12); however, a decision on termination of criminal proceedings serves only as evidence.

Leniency applicants formally are not protected from follow-up civil litigation, but such actions are rare as compensation for damages is one of the prerequisites for exemption from criminal liability.

The FAS routinely discloses the documents obtained during consideration of an antitrust violation case only to the participants of such case. If a private plaintiff did not participate in the consideration of an antitrust violation case or the antitrust violation case has already been closed, the respective documents may be requested from the FAS, but the FAS is not obliged to provide them. If a plaintiff is unable to obtain documents from the FAS, it can apply for their provision to the court considering the action. However, practically speaking, plaintiffs mostly have all relevant materials at their disposal, because in the majority of cases they participate in FAS proceedings before filing private actions.

Stay of proceedings

In which circumstances can a defendant petition the court for a stay of proceedings in a private antitrust action?

There are no special rules for petitions on stay of proceedings in private antitrust actions. Generally, an arbitrazh court or a court of general jurisdiction must allow a stay of proceedings if a case cannot be decided until another Russian court passes its judgment. An arbitrazh court can also allow a stay of proceedings if a foreign or international court is considering a case which may be relevant for such litigation. Starting from March 2015, courts of general jurisdiction must stay proceedings until the competent body issues a decision on an administrative offence; however, it is doubtful that this provision applies to proceedings in the FAS (see question 4). There are also other reasons to stay the proceedings in arbitrazh courts or courts of general jurisdiction: namely, the commissioning of an expert evaluation, or death or the reorganisation of a party to a dispute.

Standard of proof

What is the applicable standard of proof for claimants? Is passing on a matter for the claimant or defendant to prove? What is the applicable standard of proof?

Russian law does not specify any standards of proof for private antitrust actions. Generally, each party must prove the facts it refers to. The burden of proof of the unlawfulness of a defendant’s actions, the fact of losses and their amount, and cause-and-effect between the actions and the losses rests with the plaintiff. However, it is presumed that a defendant is guilty of a violation alleged by the plaintiff.

Timeframe

What is the typical timetable for collective and single party proceedings? Is it possible to accelerate proceedings?

Generally, under the APC, a single party claim must be accepted within five days from the filing date. It must be considered within three months from the filing date. Under the CPC these stages must take no more than two months. For a timetable of appeals on the facts and on the law see question 18.

Collective proceedings with respect to private antitrust claims are not available under Russian law (see question 19).

It is possible to accelerate proceedings only in the event that after the allowance of a claim (as well as claim of appeal on facts or on law) an arbitrazh court or a court of general jurisdiction does not consider the claim for a long time and the trial drags on. In this case, interested parties have the right to apply for acceleration to the chairman of the respective court.

Limitation periods

What are the relevant limitation periods?

Under article 196 of the Civil Code of the Russian Federation the general statutory limitation period for a private action constitutes three years starting from the date when a plaintiff became aware or should have become aware of a violation of its rights and of the proper defendant, but not more than 10 years starting from the date of violation. For certain claims there may be a specific statutory limitation period, for example, the statutory limitation period for claims seeking to have a transaction declared void (eg, a cartel agreement) constitutes three years from the effective date of its execution or from the date when a person who is not a party to such transaction became or should have become aware of the effective date of its execution, but in each case, not more than 10 years from the date of its conclusion (ie, the date of the violation).

Appeals

What appeals are available? Is appeal available on the facts or on the law?

Russian law provides for both appeal on the facts and appeal on the law.

Under the APC an appeal on the facts is available within one month from the date of the judgment of a trial court and takes two months. After a ruling on an appeal on the facts comes into force, the parties have two months to file an appeal on the law with an arbitrazh circuit court. Such proceedings take two months. Subsequently, the parties may file a ‘second’ appeal with the Supreme Court Economic Chamber within two months from the date when the ruling on the ‘first’ appeal on the law comes into force. The ‘second’ appeal on the law is considered within a maximum period of five months. An appeal on the law in the Supreme Court Economic Chamber is possible only in the event of a major breach of material or procedural law that has affected the decision and must be eliminated to protect individual economic rights and interests and the public interest. The last appeal stage is supervision review in the Presidium of the Supreme Court (also available only on the law). It may be filed within three months from entry into force of the ruling on the ‘second’ appeal on the law and can take up to five months. Supervision review in the Presidium of the Supreme Court is available only if constitutional rights, rights provided under international law or public rights or other public interests have been violated or, alternatively, if a decision breaches the uniformity of the application and construction of the law.

Under the CPC, an appeal on the facts is available within one month from the date of the judgment of a trial court and takes two months. After the ruling on the appeal on the facts comes into force, the parties have six months to file an appeal on the law with the Presidium of the court of the respective constituent entity of the Russian Federation, which will be considered within three months, and then in the Supreme Court Civil Cases Chamber, which must consider the appeal within five months. Both appeals on the law are available only in the event of a major breach of material or procedural law that has affected the decision and must be eliminated to protect individual rights and interests and the public interest. The last stage is supervision review in the Presidium of the Supreme Court on grounds similar to those provided by the APC. It may be filed within three months from entry into force of the ruling on the appeal on the law in the Supreme Court Civil Cases Chamber and takes up to five months.

Collective actions

Availability

Are collective proceedings available in respect of antitrust claims?

Collective proceedings in respect of antitrust claims are not available under Russian law.

Applicable legislation

Are collective proceedings mandated by legislation?

Collective proceedings are not mandated by legislation.

Certification process

If collective proceedings are allowed, is there a certification process? What is the test?

Collective proceedings are not allowed in respect of antitrust claims.

Have courts certified collective proceedings in antitrust matters?

Not applicable.

Opting in/ out

Can plaintiffs opt out or opt in?

Not applicable.

Judicial authorisation

Do collective settlements require judicial authorisation?

Not applicable.

National collective proceedings

If the country is divided into multiple jurisdictions, is a national collective proceeding possible? Can private actions be brought simultaneously in respect of the same matter in more than one jurisdiction?

Not applicable.

Collective-proceeding bar

Has a plaintiffs’ collective-proceeding bar developed?

Not applicable.

Remedies

Compensation

What forms of compensation are available and on what basis are they allowed?

A person may claim damages under article 37(3) of the Competition Law, namely:

  • actual damages: expenses that were incurred or will be incurred to reinstate the violated right or damaged property; and
  • lost profit: profit that would have been derived in the ordinary course of business if the right had not been violated. The amount of lost profit cannot be less than the benefit earned by the wrongdoer through his or her violation.

In accordance with court practice and the FAS Guidelines, in order to recover damages a plaintiff must prove:

  • violation of antitrust legislation;
  • the fact of losses;
  • the amount of losses; and
  • cause-and-effect between the antitrust violation and the losses suffered.

An FAS decision on antitrust violation serves only as evidence of a violation but does not exempt a plaintiff from having to prove losses, their amount and cause. Damages are often difficult to calculate. Therefore, the amount of damages is calculated with a reasonable degree of credibility, but recovery cannot be declined based on the fact that it is impossible to assess their exact amount.

It is also possible to recover expenses borne by a claimant in connection with administrative proceedings in the FAS. Such expenses (eg, fees for legal services) are considered actual damages incurred to reinstate the rights violated by the antitrust breach of the defendant.

Other remedies

What other forms of remedy are available? What must a claimant prove to obtain an interim remedy?

A plaintiff may apply for restoration of its position to before the time of the wrongdoing and for termination of unlawful conduct. A plaintiff may also file a claim to have a contract that was concluded in violation of antitrust law deemed null and void and apply for the consequences of its nullification, that is, a return of everything received under this transaction to each of the parties. In some cases (eg, involving a defendant’s dominant position), the court may order that a defendant conclude a contract with the plaintiff if the defendant has unlawfully refused to do so.

The courts are also competent to issue an order on interim measures at the request of a participant in the case. Therefore, a court may issue a freezing order in respect of a defendant’s bank accounts or property, prohibit the conduct of certain actions or activities by a defendant or, to the contrary, oblige a defendant to perform certain actions to prevent further damage. The court will issue such an order if either:

  • failure to apply interim measures could hinder or prevent the enforcement of the court’s decision; or
  • such measures could prevent substantial damages being incurred by the plaintiff.

Practically speaking, however, plaintiffs usually do not apply for interim measures in private antitrust litigation.

Punitive damages

Are punitive or exemplary damages available?

Generally, Russian antitrust legislation does not provide for punitive or exemplary damages.

Interest

Is there provision for interest on damages awards and from when does it accrue?

Generally, under Russian law interest does not accrue on damages.

Consideration of fines

Are the fines imposed by competition authorities taken into account when setting damages?

Fines imposed by the FAS are not taken into consideration when setting damages.

Legal costs

Who bears the legal costs? Can legal costs be recovered, and if so, on what basis?

Legal costs consist of stamp duty and litigation expenses (including legal fees and experts’ fees). The party that initiated the proceedings pays the stamp duty and each party bears its litigation expenses. However, legal costs may be recovered by a winning party from the defeated party. If a claim is only partially awarded, the expenses are paid on a pro-rata basis. Recovery of litigation expenses will be declined if a party fails to prove the fact that such expenses were borne and that they were connected with consideration of the case. The amount of litigation costs may be reduced by the court, but only at the defeated party’s request and if it manages to prove that such costs are excessive.

Legal fees are recovered within reasonable limits. Legal fees are deemed reasonable if under comparable circumstances similar legal services would have the same price. Courts take into consideration the amount claimed, complexity of the case, time required for preparation of the relevant documents, etc.

Joint and several liability

Is liability imposed on a joint and several basis?

Pursuant to article 1080 of the Civil Code of the Russian Federation the liability of several persons is generally imposed on a joint and several basis. However, the court may decide upon a plaintiff’s petition that the liability of several wrongdoers should be in shares.

Contribution and indemnity

Is there a possibility for contribution and indemnity among defendants? How must such claims be asserted?

Russian antitrust and civil legislation does not contain provisions on contribution or indemnity among defendants. However, under article 1081(2) of the Civil Code of the Russian Federation a wrongdoer who has compensated harm that was caused jointly as a whole can claim repayment of part of the compensation from each of the other wrongdoers corresponding to the degree of their guilt. If the degree of guilt of each wrongdoer cannot be determined these parts are deemed equal. Such claims are adjudicated in separate court proceedings after a judgment on the liability of joint wrongdoers is rendered.

Passing on

Is the ‘passing on’ defence allowed?

The ‘passing-on’ defence is not allowed either by Russian legislation or by the courts.

Other defences

Do any other defences exist that permit companies or individuals to defend themselves against competition law liability?

All ordinary civil law defences are available to defendants in private antitrust litigation (eg, damages caused by a plaintiff’s wilful intent cannot be recovered; the amount of damages can be reduced if the plaintiff’s gross negligence contributed to the occurrence or increase of losses, etc). Defendants may also refer to the absence of an antitrust violation (eg, if an anticompetitive agreement or abuse of dominance are permissible under the Competition Law) as a ground for dismissal of a private action.

Alternative dispute resolution

Is alternative dispute resolution available?

Private antitrust claims have not been recognised as non-arbitrable in court practice. They are also not mentioned among non-arbitrable disputes pursuant to the provisions of the APC and the CPC as amended in the course of the Russian arbitration reform. Therefore, in theory, arbitration is available for private antitrust claims. However, decision of an arbitral tribunal in a stand-alone claim on presence of antitrust violation can be qualified as excess of power of the tribunal because the tribunal decides on a matter not provided under an arbitration agreement. Consequently, the courts can refuse to enforce or sustain challenge of such domestic arbitral award. However, there is currently no respective positive or negative practice.

Domestic and international arbitration in general is governed by Federal Law No. 382-FZ on Arbitration in the Russian Federation, dated 29 December 2015, Law of the Russian Federation No. 5338-1 on International Commercial Arbitration, dated 7 July 1993, and the APC and the CPC as amended by Federal Law No. 409-FZ, dated 12 December 2015. Arbitration can be used by the parties if they agree upon a valid arbitration agreement or include an arbitration clause in an agreement that is the subject matter of a dispute (eg, its validity is challenged due to an alleged breach of antitrust legislation).

UPDATES & TRENDS

Updates & Trends

Updates and trends

The main issue currently disputed by the FAS is the introduction of collective proceedings for the purposes of private antitrust litigation. However, major business is against these amendments. The FAS was planning to include provisions on collective proceedings in the Fifth Antitrust Package, but it seems that their consideration was again postponed.