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angle-left null The court invalidated the Order of the Federal Antimonopoly Service on the dominant position of JSC TransContainer in the container supply market
21.09.2011

The court invalidated the Order of the Federal Antimonopoly Service on the dominant position of JSC TransContainer in the container supply market

By order No. 431 dated August 3, 2010 (hereinafter referred to as the “Order”), the Federal Antimonopoly Service of Russia included JSC TransContainer and JSCo RZD in the register as a group of persons with a share of more than 50% in services on the commodity market providing general purpose containers for their use when carrying out internal transportation of goods in general purpose containers by public railways (hereinafter referred to as the “Register”).

The basis for the publication of the Order was the Analytical Report prepared by the antimonopoly authority.

According to JSC TransContainer, the Analytical Report was prepared in violation of the Procedure for the Analysis and Assessment of the Competitive Environment in the Commodity Market, approved by Order of the Federal Antimonopoly Service of Russia dated April 25, 2006 No. 108, and therefore JSC TransContainer submitted to the Arbitration Moscow City Court an application declaring the Order invalid. 

By a decision of the Moscow Arbitration Court dated June 10, 2011 in the case No. A40-137583/10-144-894, the application of JSC TransContainer was dismissed.

JSC TransContainer did not agree with the decision of the Moscow Arbitration Court and filed an appeal with the Ninth Arbitration Court of Appeal against the decision.

By a resolution of the Ninth Arbitration Court of Appeal, the complaint of JSC TransContainer was satisfied, as a result of which the decision of the Moscow Arbitration Court dated June 10, 2011 in case No. A40-137583/10-144-894 was canceled, and a new judicial act was passed in the case to uphold the application of JSC TransContainer regarding the recognition of the Order as invalid.

“The court of first instance examined our company’s arguments formally, without a proper assessment,” Viktor Markov, Director for Legal Affairs and Property Management of JSC TransContainer, commented. 

“The court of appeal, on the contrary, examined in detail all the circumstances of the case. The court confirmed our position that the Analytical Report, which served as the basis for the publication of the Order, was prepared superficially, without proper market research on the provision of containers and with serious violations of the law. Among other things, the report did not investigate the issue of competition between container and other methods of cargo transportation similar in quality of service (for example, transportation of goods in boxcars, transportation of goods by road, as well as transportation of the same containers by road); the territorial authorities of the Federal Antimonopoly Service of Russia collected inaccurate information on the volume of containerized cargo transportation; moreover, it was fairly outdated and was already biased at the time of issuing the order, since it concerned the pre-crisis period. Among other serious violations, in our opinion, one can also note that the Analytical Report artificially created a nonexistent product market by substituting the concept of “general purpose container” (used on all types of transport) with the concept of “railway container” (which supposedly, is used only on railway transport), and work has not been done to obtain complete and objective information about other business entities engaged in the provision of a container moat for the transport of goods,” said Victor Markov. 

The case on declaring the Order of the Federal Antimonopoly Service invalid is not the only dispute between TransContainer and the Federal Antimonopoly Service in the courts. Over the entire period of conducting business activities of JSC TransContainer (since July 2006), the Federal Antimonopoly Service filed 35 cases against the Company regarding violation of antitrust laws. At the same time, 30 cases were won by the company, including in the courts, the remaining five cases are under consideration.