The Supreme Economic Court Sustained a Claim of the AMCU Regarding Charging 100 Million UAH Penalty from Ukrzaliznytsia

The Supreme Court of Ukraine left the cassation claim of the State Administration of Railway Transport of Ukraine (Ukrzaliznytsi) without sustaining on 01.08.2015, and the decisions of the previous courts – without any changes.

The Court found the grounds of the cassation claim of Ukrzaliznitsia are denied by the conclusions, grounds and motives, given in the decisions, taken on the merits of the case, and for disagreement with which the cassation institution has no grounds.

In 2013 the Antimonopoly Committee of Ukraine recognized the actions of the State Administration of the Railway Transport (Ukrzaliznitsi) the violation of the legislation on the protection of economic competition in the form of abuse of the monopoly (dominant) state on the national market of goods transportation by the public transport (resolution from 16.07.2013 No 576) (hereinafter – resolution No 1). The penalties for the violation were 100 million UAH.

The State administration of the Railway Transport of Ukraine appealed in the court not personal decision on the violation of the legislation on the protection of the economic competition (resolution No1), but the decision of the AMCU on the resolution consideration from 03.06.2014 No 321-p (hereinafter – resolution No2), by which the resolution No1 was left without any changes.

Thus, the legislation provides the right of the defendant to address the bodies of the Antimonopoly Committee of Ukraine with the application for the resolution consideration in the cases by them. In this case, Ukrzaliznytsia addressed the AMCU to consider the resolution, but the resolution No1 was left without any changes by the Committee.

The Court institutions supported the resolution No2 and recognized the refusal of the AMCU to comply the consideration application legitimate. The Resolution No1 was not appealed in court. And the appeal of the resolution No2 didn’t influence the termination of the penalty charging for not compliance of resolution No1.

For the period of the delayed payment of the fine the Committee charged the penalty, which exceeds the amount of the fine. Thus, the total number of days of the delayed fine payment is 67 (during the period since 22.07.2014 till 26.09.2014), the penalty sum per one delayed day is 1,500,000 UAH, and for 67 days – 100,500,000 UAH.

But, the provisions of the Law of Ukraine “On the protection of the economic competition” provides, that the penalty amount can’t exceed the fine amount, charged by the appropriate resolution of the AMCU body, then Ukrzaliznytsia is charged a penalty in the amount of 100,000,000 UAH.

The case was considered by the economic courts not once. Finally, the Supreme Court of Ukraine concluded the lack of grounds for sustaining of the cassation claim of Ukrzaliznytsia.

Moreover, the court refused to sustain the application of Ukrzaliznytsia on the penalty amount decrease, since the provided grounds for this are absent.

So,

  • The resolutions of the AMCU bodies are binding;
  • The person, who is charged a fine in accordance to the resolution of the AMCU, pays it during the two-months term since the day of the resolution on charging the fine receiving;
  • For each day of the fine payment delay the penalty in the amount of one and a half per cent from the fine sum is charged. The penalty amount can’t exceed the fine amount, charged by the appropriate resolution of the AMCU body. The penalty charging terminates on the day of the resolution on charging the appropriate fine by the economic court. The penalty charging suspends for the period of consideration or reviewing by the economic court of: the case about the invalidation of the AMCU body’s resolution on the fine charging; the appropriate decision (resolution) of the economic court. The penalty charging suspends for the period of the consideration by the AMCU body of the application of the person, who is charged the fine, about the check or reviewing of the resolution regarding the case on the legislation on the protection of economic competition violation;
  • The penalty amount is charged in court and credited to the state budget.

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