The Art De Lex law firm has successfully represented the New Forwarding Company and Ferrotrans, Russian railway operators both belonging to the Globalports Group, before the Moscow Commercial Court, in a challenge to a RUB 2.2 billion fine levied by the Federal Antimonopoly Service of Russia (FAS) against Russian Railways, 16 railway operators, and the administration of the Kemerovo region. In addition to Art De Lex, other defendants were represented by Goltsblat BLP, the Pepeliaev Group, and YUST.
In September 2013, the FAS found the administration of Kemerovo region, Russian Railways and 16 operators in breach of Article 16 of the Russian Law on Protection of Competition for entering into "anti-competitive agreements on the market for provision of rail cars for transfer of coal from the Kuzbass region,” which the competition authority concluded would reduce the number of operator services players on the market in the Kemerovo region from 230 to 16.
The New Forwarding Company and Ferrotrans were among the 16 operators accused by the FAS of entering into the anti-competitive agreements. Other operators involved in the action were Federal Freight, Independent Transport Company, Freight One, NefteTransServis, Novotrans, SibUgleMetTrans, RG-Trans, ZapSib-TransServis, SUEK, Mechel-Trans, TransGroup, RVD-Servis, Eurosib-Transportation Systems, and Tranzit-Plus.
Subsequently, based on the decision of the FAS, all participants were fined 2.2 billion rubles.
In October 2013 the operators and the administration of Kemerovo Railways filed a lawsuit appealing the FAS’s decision and fine, claiming that "the selection of individual operators was a path to improve the technology of transportation process without price fixing methods.” According to a statement by the Art De Lex firm, explaining the GlobalTrans position, "In 2011, there was a significant problem with export of coal from Kuzbass enterprises. Due to the excess of empty cars idle on the tracks of Russian Railways, there was a blockage of transportation and loaded cars could not leave. Due to the lack of capacity at the warehouses of Kuzbass enterprises in the summer 2011, 17 million tons of coal were accumulated that resulted in coal mining companies beginning to cut production."
Art De Lex also reported that “the governor of the Kemerovo region, Aman Tuleyev, sent these facts in a letter to then-President Dmitry Medvedev. There was a meeting, at which new procedure for the export of coal was approved. The regional administration selected the largest operators who should lead this process and procure resolving a blockage of railways through synchronized actions."
According to Art De Lex Partner Yaroslav Kulik, who led the firm’s team in the case: "The willingness of the market players to moderate the rail transport market had its primary goal to resolve transport and infrastructure crisis, and of course should not be regarded as anti-competitive behavior. Despite this, the competition authority tends to interpret such initiatives on a voluntary optimization of transportation processes as an infringement of competition laws. The so-called 'Kemerovo case' is a precedent. In case of victory of FAS Russia we could expect initiating of the similar probes in different Russian regions.”
FAS Russia is expected to appeal.
The interests of the New Forwarding Company and Ferrotrans were represented in this matter by Kulik and Art De Lex lawyer Kirill Dozmarov.
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