Availability of civil claims
Scope for civil claims in Russia
Anti-competitive conduct or its harmful effects need not occur in Russia in order to claim damages before a Russian court. Moreover, such a claim may be brought in the absence of a prior regulatory finding of the corresponding infringement.
Russian competition law was amended in 2012 so as to provide an express right for companies and individuals harmed by anti-competitive conduct to claim damages (including lost profits) and seek other redress as may be appropriate. Because these amendments represent a clarification of the existing law, such amendments do not affect the right to claim damages caused by the anti-competitive conduct that occurred before 2012.
Russian competition law prohibits certain actions of market-dominant companies, anti-competitive agreements and concerted practices, coordination and unfair trade practices. There is a distinction between per se and rule of reason violations. For example, the following actions by market-dominant companies are considered to be per se illegal: (i) establishing monopolistically high or low prices; (ii) withdrawal of goods from circulation if it leads to the increase of price for these goods; (iii) forcing contracting parties to accept unfair contractual terms; (iv) economically or technologically unjustified reduction of output; (v) economically or technologically unjustified refusal to enter or evasion from entry into contracts with selected buyers; (vi) economically, technologically or otherwise unjustified establishment of different prices for the same goods; (vii) price and non-price discrimination; (viii) creation of barriers to market entry and exit, etc.
Agreements between competitors that actually or potentially lead to the following consequences are viewed as a cartel and are per se prohibited: (i) price fixing; (ii) price maintenance at public auctions; (iii) market allocation based on territory, sales volume, assortment or composition of buyers; (iv) reduction of output; and (e) refusal to enter into contracts with selected buyers, with the most recent amendments, effective January 2016, being that a cartel is possible not only among sellers but also buyers. Other agreements are prohibited to the extent that these agreements actually or potentially lead to a restriction of competition. However, vertical agreements are per se illegal only if these agreements: (i) lead to the resale price maintenance except when they establish the maximum resale price; or (ii) provide for the duty of the buyer not to trade in competing goods (with certain exceptions).
Coordination of the activities of other economic entities (that are not members of the same group of companies as the coordinating entity) is prohibited if it leads to the same consequences described in the context of cartel-like agreements.
Applicable limitation periods
A claim for damages caused by a violation of the competition law will be characterized as a tort claim with a limitation period of three years from the time when the aggrieved person learned or should have learned that their rights had been violated.
There are no special rules for determining whether a person should have learned of the rights being violated and so this question will be resolved on a case-by-case basis.
Private claims for damages resulting from competition law infringements are subject to the ordinary procedure followed by commercial courts. This procedure provides for a hearing before a court of the first instance and the judgment of that court may be appealed to the Court of Appeals on grounds of fact and/or law.
The judgment of the Court of Appeals may be further appealed to the Court of Cassation on grounds of law only. The Court of Cassation may also set aside the judgments of the lower courts if the factual conclusions drawn directly contradict the evidence in the case.
The judgment of the Court of Cassation may be further appealed to the Court of Supervision, which is the court of the last instance. While all other courts must consider appeals from the decisions of lower courts, the court of supervision has discretion as to whether to accept jurisdiction over any appeal. The formal criteria for accepting an appeal are that judgments of the lower courts violate:
i) The rights and freedoms guaranteed by the Constitution, as well as by the generally recognized principles of international law and international treaties of the Russian Federation;
ii) The rights and lawful interests of an undefined group of persons or other public interests;
iii) The uniformity in the interpretation and application of law by lower courts.
Availability of class actions for infringement of competition law and/or damages in Russia
Group actions for infringement of competition law are theoretically possible in Russia but have not been tested in practice as yet.
An important limitation on class action claims is that, in order to form a group to bring such claims, all claimants must be participants in the legal relationship out of which the dispute has arisen (i.e., parties to the same contract). The courts have yet to apply this provision in the competition context.
Conduct of proceedings and costs
Burden of proof
The burden of proof in private claims for damages resulting from competition law infringements is governed by the ordinary rules governing commercial claims, which means that the claimant is generally required to prove the circumstances on which it relies. Whether the claimant has met this burden is decided on the balance of probabilities.
Because competition law claims are based in tort (and arise from a breach of a statutory duty), if tortious conduct is proven, a legal entity is presumed to be liable unless it can demonstrate that it was unable to comply with the applicable requirements due to some force majeure circumstances (or the causal link between the tortious conduct and claimed damages is not established). It is still unclear whether the existence of a competition compliance program may be used to rebut this presumption.
Regulatory findings are not binding upon a court considering a related private claim, but the court will likely consider such findings as very persuasive evidence of the fact that the alleged infringement actually occurred.
Joint and several liability of cartel participants
Competition law claims are by nature tort claims and so, where more than one entity has participated in commissioning the tort, joint tortfeasors will be deemed jointly liable for the damages caused. A tortfeasor that has alone paid compensation to a claimant in respect of damages caused jointly with others may claim contribution from the other tortfeasors in such proportion as those damages are attributable to the individual fault of each. If the individual fault of each joint tortfeasor cannot be determined, their shares in the overall amount of damages are deemed to be equal. If a joint tortfeasor is sued alone, it may request the court to join the others and if the court denies this request, it may initiate a contribution claim in a separate action.
Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege
In Russia, the potential to obtain discovery in general is very limited. A party to court proceedings may request that the court order the other party to produce documents necessary to the case. However, to succeed on such a request, the documents requested must be identified fairly specifically otherwise the court will not grant production. Although the party that was ordered must provide a reasonable excuse for not producing the evidence that it was ordered to produce, the court is not formally required to draw an adverse inference from such a refusal.
The question of whether a claimant in court proceedings may obtain access to documents gathered by the competition authorities during a competition audit or competition proceedings has not yet been resolved. The competition authorities would probably not disclose evidence obtained during competition proceedings voluntarily to an entity that was not a party to this proceeding, particularly as the parties to the competition proceedings usually mark the evidence they submit as confidential. However, it may be possible to obtain such evidence by requesting the court to order the competition authorities to produce it even if the competition authority is not a party to the court proceedings.
There is no pre-action disclosure, i.e., the court proceedings must be initiated to apply for disclosure of any documents.
Average length of time from issue of claim to judgment in Russia
Court proceedings in Russia are very quick. The statutory period for the court of the first instance to resolve a case is three months and most first instance court judgments are issued within this time.
This period may be extended by a further three months for complex cases, which is likely to be the case for competition-related claims. The judgment of the first instance court becomes effective within one month of its issue unless the judgment is appealed to the Court of Appeals (which is a usual practice). The statutory period for the Court of Appeals to consider and determine an appeal is two months. The judgment of the Court of Appeals becomes effective immediately but may be appealed to the Court of Cassation within two months (which is also a usual practice). The time period for the Court of Cassation to consider and determine an appeal (and for that appeal to be challenged) is the same as in the Court of Appeals.
Average cost from issue of claim to judgment in Russia
The maximum fee charged to file commercial claims is fixed at RUB200,000 (approximately EUR2,500 at the time of writing).
The average cost of legal and expert fees is difficult to estimate but a range between EUR25,000 and EUR100,000 may be taken as a rough estimate. The winner may request the court to award legal fees but the courts are very conservative in determining what fees are reasonable.
There are no rules limiting third party or alternative funding and this practice is not wide-spread.
Alternative methods of dispute resolution
There is no direct prohibition against submitting private claims in relation to breaches of competition law to arbitration and mediation provided that the parties consent to it.
Availability of damages and quantification
As noted above, Russian competition law was amended in 2012 so that companies and individuals harmed by anti-competitive conduct now have an express statutory right to claim damages, including lost profits, or seek other redress against the infringing party.
The courts are yet to develop any particular approach to quantification of private damages based on competition claims. The ordinary rule is that the claimant should be compensated for the damages suffered as a result of the violation, which means that the courts should place the claimant in a position it would have been in but for the respondent’s actions. Although opinions of the economic experts are not required, without such an opinion, proving damages will be difficult.
The passing-on defense is arguable in theory but it is not yet clear whether the claimant or the defendant should bear the burden of proving passing-on.
Punitive and exemplary damages
There are no punitive or exemplary damages available under Russian law.
Availability of interim or final injunctions in respect of an alleged competition law infringement
Injunctions in respect of an alleged competition law offense are governed by the ordinary rules of procedure, which means that injunctions are possible in principle but are very difficult to obtain in practice.
As an interim measure, an injunction may be granted: (i) in cases where not granting it would subsequently prevent or hinder execution of the judgment; or (ii) for the purposes of preventing substantial damage to the claimant. A permanent injunction is possible but the court would have to indicate in the judgment what actions must be performed as well as the time and place of their performance.
Other types of relief
Apart from damages, an aggrieved person may seek any type of relief that would reinstate its rights (e.g., invalidation of a contract, requiring the respondent to enter into a contract, etc.).
There have been a limited number of private claims based on competition law offenses, covering both stand-alone and follow-on cases. However, the Government of Russia and FAS have sought to encourage civil claims for damages resulting from anti-competitive conduct. This includes the government’s instruction to develop federal legislation on class actions and a broad discussion around FAS’ latest proposals relating to multiple damages (e.g., 10% of the offender’s annual revenue in the affected market). These are subject to a certain degree of criticism but the ongoing discussions in this area are likely to promote private competition claims.
Moreover, there have been certain interesting cases relating to claims based on decisions of FAS. For instance, a foreign manufacturer of pharmaceuticals was found guilty of abusing dominance by unjustifiably refusing to deal with a local distributor. Based on FAS’ decision, the distributor sued for damages and won. The damages awarded to the claimant amount to approximately USD11.5 million. In another case, a manufacturer of concrete was found guilty of an unjustified refusal to deal with a local reseller and, based on FAS’ decision, the court then awarded loss of profit to the claimant in the amount of approximately USD3.2 million. Several other cases also involved follow-on claims, whereas successful stand-alone claims continue to be rare.
Competition principles can be used in addition to, or instead of, claiming for damages by terminated distributors seeking reinstatement, or by rejected potential distributors seeking a direct contract with a manufacturer. A number of successful claims in the automotive sector had a significant impact on the industry. Although these were not directly connected with a violation of competition law, FAS issued recommendations to automotive manufacturers covering, inter alia, suggested terms of dealer contracts as well as terms of terminating such contracts. The said provisions were then reflected in the AEB Code of Conduct for manufacturers of automobile manufacturers. There is a similar code in the works for the pharmaceuticals industry.
Private claims are expected to be made more often, and are also expected to obtain additional support and preservation through statutory provisions.