Availability of civil claims
Scope for civil claims in Argentina
Follow-on claims are available in Argentina. It is not yet clear whether stand-alone claims may be brought in this jurisdiction.
Article 51 of Competition Defense Law Nbr. 25,156 (the “Law”) establishes a right for individuals or companies affected by an anti-competitive act to sue the infringing party for damages. Usually, civil and commercial courts at the national or provincial level have jurisdiction over such claims at first instance. Presidential Decree 89/2001 regulates the Law but does not contain any specific provision as far as civil claims are concerned.
The right to sue includes damages suffered as a consequence of anti-competitive actions that have been sanctioned in a foreign jurisdiction but that also have effects in Argentina. According to the Civil and Commercial Procedures Code, claimants may choose to instigate an action in either the courts where the defendant is domiciled, or in the courts of the place where the anti-competitive act took place or had effect. Where a claim is based upon an infringement alleged to have taken place outside Argentina, it is as yet unclear whether an Argentine court would allow all damages suffered globally to be claimed in Argentina, or if recovery would be limited to damages suffered in Argentina.
To date, only one civil claim for damages has been brought in Argentina. Damages were awarded at first instance against the defendant, Yacimientos Petrolíferos Fiscales (“YPF”), in the amount of approximately USD3 million on the basis of a finding by the Argentine Secretary of Commerce that YPF had abused its dominant position in the oil and gas sector. However, that decision is currently under appeal.
The Competition Defense Commission and the Secretary of Commerce (jointly, the “Agency”) are responsible for investigating competition law infringements and initiating proceedings aimed at punishing such infringements where appropriate. Such proceedings may be initiated by the Agency in its own right or based upon a complaint filed by an affected private party. The Agency may decline to investigate a complaint if it considers that the complaint has no substance.
It is not currently clear whether an administrative finding of infringement by the Agency is a pre- condition to a civil action being brought or not. There are no examples to date of stand-alone actions being issued before Argentine courts.
If an administrative action has been initiated prior to or during any private competition law litigation, a claim related to the matter subject to investigation may be filed without obtaining prior permission from the Agency or the courts. However, where an Agency investigation is active, the courts will be obliged to stay any claims and wait for the Agency’s decision prior to issuing any final judgment on the civil action (Section 1101 of the Civil Code). Agency investigations take no less than five or six years, with the potential for appeal to the Federal Court of Appeals and, in extraordinary cases, the Supreme Court. Each stage of appeal may take 18 months or more.
Applicable limitation periods
The statute of limitation for instigation of an administrative investigation by the Agency is five years from the date on which the infringement was committed or the claimant could have become aware of the infringement, whichever event occurs later. It is not clear whether this limitation period also applies to civil claims issued before the courts or whether the general statute on limitation periods applies.
The general statute sets a period of two years in which to bring a tort claim, running from the date on which the infringement was committed or the date on which the claimant took notice of the infringement, whichever event occurs later. A regulatory finding of infringement will be considered sufficient notice of an infringement in the context of competition law claims. A limitation period of 10 years from the date of the breach applies in the context of contractual claims.
Appeals
A first instance decision in respect of a civil action may be appealed to the competent Court of Appeals on grounds of fact, law or both, within a period of five working days of the first instance judgment. Appeals take no less than 18 months to be resolved.
Further appeal to the Supreme Court is possible but the grounds for doing so are limited to specific constitutional issues. Examples include circumstances where the lower courts’ decisions were arbitrary or infringed upon constitutional rights, such as the right of defense.
Availability of class actions for infringement of competition law and/or damages in Argentina
There is no formal class action procedure under Argentine law for competition law claims. However, a type of collective action is available in the context of consumer protection cases and, in theory, might be utilized in future in a competition law context.
Class representation first arose under Argentine law when the Argentine Federal Constitution was amended in 1994. As per Section 43 of the Constitution, standing to file collective claims may be granted to an affected party,1 to the Public Defender (“Defensor del Pueblo”), and to consumer associations authorized and registered to act as class representatives by law. There are several hundred such consumer associations registered with the various national and provincial registries.2
Cases have been brought in which the “collective right” forming the base of a class claim has been easily identified (mostly in environmental cases), however, in other cases extensive legal debate took place in order to ascertain whether or not “collective” rights were affected (as opposed to individual rights). A category of collective rights has accordingly been developed by case law where a specified group of individuals holding similar or identical rights have “collectively suffered” as a result of the infringing activity of the defendant (examples include challenges to unsolicited or unlawful banking charges 3 and the defective provision of public services,4 among many others).
In the above cases, initiated by different private consumer associations, the intervening courts ordered the reimbursement of unsolicited charges to the clients that paid them (Banco Provincia case), and invited any party that suffered damages to appear individually and provide proof as to the existence and extent of such a claim (Edesur case).
The dissenting opinion of the Supreme Court Justice Lorenzetti in Mujeres por la Vida,5 and the subsequent opinion rendered by the Supreme Court in Halabi,6 establish that standing to file “collectively suffered” claims will exist when: (i) there is a group of people that shares a similar situation; (ii) a single event damages that group of people, thereby creating a common factual scenario affecting the group; (iii) individual litigation would not be appropriate because of the particular circumstances of these cases; and (iv) even if all of the above requirements are not met, a class action may be accepted if the Argentine state has an interest in addressing the particular subject matter of the class action, based on its social importance. To date, the Argentine state has not identified private enforcement of competition law infringement as a matter of social importance.
The Supreme Court also noted in Halabi that to be certified as a class the members of the class should be identifiable, be represented and publicize the proposed action in order to avoid similar litigation (and so the potential for contradictory rulings). However, the Supreme Court has not yet given further guidelines regarding how such matters might appropriately be addressed. The requirements for certification will accordingly be considered by the courts on a case-by-case basis.
A recent amendment to the Consumers Protection Law (the “CPL”) determined that the ruling on any class action would be binding on all parties that might qualify as members of the class, regardless of whether they agreed to join the class, unless such members appear on the docket in order to express that they do not want to be bound by such judgment.7
Conduct of proceedings and costs
Burden of proof
A claimant may rely on a regulatory decision that an infringement has occurred in order to establish the defendant’s liability to pay damages resulting from that infringement. However, the claimant must show, where not identified in the decision, the effect of the infringement upon it and the extent (monetary amount) of damages that it has suffered as a result of the defendant’s behavior.
If a defendant argues that, to the extent the claimant suffered any damage, the claimant has passed on losses to its own customers, the burden will be upon the defendant to prove that this occurred.
As noted above, at the time of writing, only one award of damages has been made by the Argentine courts and, since there is just one precedent on this matter, the courts have no developed standard of evidence for competition law matters. In principle, claimants will have to provide evidence that damage has been suffered and prove the amount of such damages. Such evidence may include expert economic evidence but it is worth noting that, in the one case determined to date, the Supreme Court was prepared to apply a rough “rule of thumb” approach in awarding damages.
Joint and several liability of cartel participants
Pursuant to Section 1081 of the Civil Code, participants in an illegal action are jointly and severally liable for the damages resulting from that action. This provision applies to cartel participants and to other participants in any willful breach of the competition law regulations (e.g., collective dominance, etc.).
A defendant may seek to join other cartelists in a claim but if he does not do so, separate action at a later date is not apparently possible in view of Section 1082 of the Civil Code, which provides that parties to an illegal activity may not seek a contribution from each other. So, one cartel member can be sued for all damage caused by the whole cartel and will not be able to claim a contribution from his co-cartelists if they are not joined to the claim proceedings.
Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege
Discovery of documents is not available as a right to claimants under Argentine law. However, some measures are available to gather information needed to assert a claim. A claimant must apply to the Argentine court for assistance and this usually involves an application for documentation held by the other party or by a third party (e.g., documentary evidence of a cartel). The claimant must specifically identify the documents it wants and may not make a broad request so as to “fish” for relevant information.
Parties may also apply via the courts or to the Agency directly for access to the Agency’s investigation files so as to use these in evidence. The Agency does not have a specific policy on the disclosure of such information. Under Argentine law, if a court requests the release of an administrative file, the Agency will have to release it. The Agency may arrange with the court for the protection of certain confidential information but it cannot refuse to surrender a whole file to a court on the basis of confidentiality.
Parties are protected by a constitutional right not to incriminate themselves. However, if the court requires them to produce certain documents and it does not do so, the court may draw such inferences against the non-disclosing party, as it deems appropriate.
Pre-action disclosure
As explained, there is no disclosure in Argentina. However, some measures are available to gather information needed to duly assert a complete claim and these can be applied for before a claim is issued. Claimants must identify the documentation/evidence that is being requested as well as provide reasons as to why such documentation/evidence is necessary in making such an application.
Average length of time from issue of claim to judgment in Argentina
A claim in a civil/commercial court in the city of Buenos Aires typically takes no less than three years to reach a final judgment in the first instance. Considering that courts have very little experience whatsoever in competition law litigation, determination of such cases may take longer than ordinary commercial litigation.
Average cost from issue of claim to judgment in Argentina
The cost of litigation varies widely, depending on the complexity of the case.
A 3% court fee on the amount of the claim must be paid by the claimant upon filing the claim (a waiver may be requested in cases of claimants that can show a lack of economic means to pay the fee).
The court will always order a party who loses the case to pay both parties’ legal costs (including the fee paid by the claimant upon initiation of the claim) unless: (i) the case raises serious doubts as regards the facts or the application of the relevant law; or (ii) the arguments of the losing party are not totally dismissed. In these situations, each party may end up paying their respective costs.
In general, the losing party will pay costs amounting to between 11% to 25% of the total claim in the first instance, and a further 7% to 12% in the event of an appeal.
Third party/alternative funding
There is no rule preventing third party/alternative funding other than certain bar rules on the sharing of lawyers’ fees.
Alternative methods of dispute resolution
In principle, any compensation claim between two private parties may be subject to arbitration. However, this is not common and we are not aware that this has ever happened where the arbitral seat was in Argentina.
In some jurisdictions (like the city of Buenos Aires) mediation with a private mediator is mandatory prior to filing a claim for damages. Otherwise, the court will not accept the filing of a claim.
Relief
Availability of damages and quantification
Under the general principles of Argentine civil liability, the damages caused by an illegal action must be compensated fully. This compensation includes: (i) actual damages suffered (whether direct or indirect); and (ii) loss of profits.
In the YPF case mentioned above, the court adjudicated damages in the following way: (a) the difference between the price paid by the claimant to YPF and YPF’s export price (just 30% of the total amount claimed by the claimant); (b) the loss of profits associated with the decrease in sales suffered by the claimant as a consequence of the higher price charged by YPF in Argentina (just 15% of the total amount claimed by the claimant); and (c) the difference between the price charged by YPF to the claimant and to other competitors of the claimant (50% of the amounts originally claimed by the claimant). However, the court appears to have determined these amounts in an approximate fashion and its judgment does not refer to any underlying economic analysis on how these amounts were determined.
Fines imposed by the Competition Defense Commission are not taken into account in calculating the amount of a damages award because, applying Argentine principles of civil liability, an award compensates for damage suffered by a claimant (whereas a fine is intended to punish the defendant). Furthermore, since a claimant has to prove all the damages suffered, the “passing-on” defense may be used by the defendant in order to argue that the claimant has not in fact suffered any loss.
Punitive and exemplary damages
No punitive damages or multiples of actual damages are available under Argentine law.
Availability of interim or final injunctions in respect of an alleged competition law infringement
Before the initiation of the proceedings or during them, courts may issue injunction orders and other interim remedies in respect of anti-competitive behavior. Injunction orders may include cease-and-desist orders with respect to certain conducts that are deemed to be, prima facie, against the law.
In order to obtain an injunction order, the applicant must provide: (i) evidence of the potential damages that will be suffered if the injunction is not granted, pending the determination of the proceedings (although the applicant need not show that it will suffer irremediable loss if the injunction is not granted);(ii) evidence that its claim as to the illegality of the respondent’s actions is arguable and that it is has a right to obtain the injunction; and (iii) a sufficient guarantee against any damages that might be caused to the respondent if the injunction is granted.
Emerging trends
Private competition law litigation is practically non-existent in Argentina. Only one case of private competition law litigation in Argentina has been reported publicly to date (as explained above, a damages claim against YPF – a local oil and gas company – for alleged abuse of a dominant position in the gas market). In this case, the first instance court awarded damages to the claimant of approximately USD2 million based on a finding of infringement by the Agency. This award is currently on appeal.
The main reasons for the low level of private competition law claims in Argentina to date are that:
i) claimants can only obtain compensation if they can prove that damages have actually been suffered and it may be difficult to obtain evidence that damage has been suffered in this context;
ii) punitive damages are not available (thus reducing claimants’ monetary incentive to initiate claims); and
iii) no class actions based on competition law infringements have yet been brought, or recognized as possible, under Argentine law (thus reducing the incentive to litigate in cases where a number of consumers have been affected but the amount of the damages effectively suffered by each one is low).
1 The term “affected party” is not defined clearly in the Constitution or in Argentine case law. Accordingly, the question of whether a person has standing to bring such a claim will be determined on a case-by-case basis.
2 Section 43 of the Argentine Federal Constitution.
3 Camara Nacional de Apelaciones en lo Comercial, Sala C, Unión de Usuarios y Consumidores c/ Banco de la Provincia de Buenos Aires s/ Sumarisimo, October 5, 2005 (LL 1.11.05, F° 109.591; JA 14.12.05; ED 30/31.1.06, F. 53816).
4 Camara de Apelaciones en lo Civil y Comercial Federal, Sala I, Defensoría del Pueblo de la Ciudad de Buenos Aires c/ Edesur S.A, March 16, 2000,. JA 2000-II-235.
5 Corte Suprema de Justicia de la Nación, Mujeres por la Vida—Asociación Civil sin Fines de Lucro—filial Córdoba—c/ E.N.; P.E.N.—Ministerio de Salud y Acción Social de la Nación s/ amparo. 31/10/2006.
6 Corte Suprema de Justicia de la Nación, Halabi, Ernesto c/ P.E.N. s/ amparo ley 16.986, February 24, 2009., Section 54 of the CPL.
7 Section 54 of the CPL.