CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 3 juin 2004

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PETERSBURG and no. 69050/01 by ZAO KIRISHIAVTOSERVICE, no. 69054/01 by OOO NEVSKAYA TOPLIVNAYA, no. 69055/01 by ZAO TRANSSERVICE, no. 69056/01 by OOO FAETON, no. 69058/01 OOO PTK-SERVICE against Russia   The European Court of Human Rights (Third Section), sitting on 3   June 2004 as a Chamber composed of:   Mr   G. Ress , President ,   Mr   B. Zupančič ,   Mr   J. Hedigan ,   Mrs   H.S. Greve ,   Mr   A. Kovler ,   Mr   K. Traja ,   Mrs   A. Gyulumyan, judges and   Mr   M. Villiger , Deputy Section Registrar , Having regard to the above applications lodged on 14 and 15 December 2000, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants, Having deliberated, decides as follows: THE FACTS The applicants, OOO Neste St. Petersburg, ZAO Kirishiavtoservice, OOO   Nevskaya Toplivnaya, ZAO Transservice, OOO Faeton and OOO   PTK-Service are Russian companies operating on the fuel market in St.   Petersburg. They are represented before the Court by Mr Luis Ortiz Blanco and Ms Elena Barikhnovskaya, lawyers practising in Madrid and St.   Petersburg. The respondent Government are represented by Mr Pavel Laptev, the Representative of the Russian Federation at the European Court of Human Rights. A.     The circumstances of the case The facts of the case, as submitted by the parties, may be summarised as follows. 1.     Petrol price increase in St. Petersburg In April–May 1999 the automotive fuel market in St. Petersburg found itself in a situation which became known as the “petrol crisis”. Shortages started to occur in the supply of certain types of petrol. A sharp growth in demand for automotive fuel further intensified its deficit in the city. Fuel retailers began to raise their prices. In several days, prices for different types of petrol increased all over the city approximately twofold. 2.     Proceedings before the anti-monopoly authorities of St. Petersburg On 29 April 1999 the Head of the Territorial Administration for St.   Petersburg and the Leningrad Region of the Ministry for Anti-monopoly Policy and Business Support (“TU MAP”) ordered an investigation into the situation on the oil products market. On 11 May 1999 the TU MAP instigated a case on the violation of the Law on Competition and the Restriction of Monopolies in the Commodity Markets (“Competition Law”). The TU MAP accused the applicant companies (with the exception of Kirishiavtoservice, which was added as a defendant on 28 June 1999) of concerted practices aimed at increasing the prices. The TU MAP requested the applicant companies to provide information concerning fuel turnover. The applicant companies provided the requested information. As a result of the investigation, on 21 July 1999 the TU MAP found the applicant companies guilty of a breach of section 6-1 of the Competition Law by engaging in the concerted practices and the restriction of competition. The applicant companies were ordered to pay to the Treasury the profit obtained as a result of the breach. In section 6 of its decision the TU MAP said that in the course of its investigation it had discovered evidence suggesting that the companies’ managers had committed an offence punishable under Article 178 of the Criminal Code. The TU MAP informed the Public Prosecutor’s Office of St. Petersburg about the outcome of its investigation. The applicant companies applied for judicial review of the TU MAP’s decision. 3.     Proceedings before the Commercial Court of St. Petersburg and the Leningrad Region In order to draft the appeal, the applicant companies requested the TU   MAP to give them access to the files on the basis of which it had adopted its decision. The TU MAP denied access to the files on the ground that they contained “commercial secrets”. Nevertheless, in August–September 1999 the applicant companies applied to the Commercial Court of St. Petersburg and the Leningrad Region. They claimed that the proceedings before the TU MAP had violated the principle of presumption of innocence. The applicant companies considered that this principle should have been observed not only within the framework of criminal proceedings, but also in administrative proceedings of a quasi-criminal nature, such as anti-trust proceedings. The applicant companies requested the court to join to the case-file the materials of the TU MAP’s investigation so that they would be able to discover why they had been prosecuted and found guilty. On 5 October 1999 the court requested the TU MAP to provide its administrative files concerning the violation of anti-monopoly legislation. The TU MAP submitted the files to the court on 22 October 1999. On 25   October 1999 representatives of the applicant companies visited the court to study the case-file, to which, they presumed, the TU MAP’s files had been joined. However, the judge’s assistant did not permit the representatives to study the case-file. On the same day the court ruled that it was impossible to add the TU MAP’s files to the case-file or disclose them to the applicant companies because the documents contained confidential data concerning business activity and making the data public would jeopardise its secrecy. The court decided that the files would be examined at the hearing. On 10 November 1999 the court examined the applicant companies’ petitions for access to the files and decided to postpone the examination of the case. The court asked the applicant companies to confirm in writing that in the course of the investigation they had not passed to the TU MAP any information containing commercial secrets. The applicant companies informed the court that the information submitted was not confidential. On 23 December 1999 the court held a hearing. The court had before it certain bundles containing documents from the TU MAP’s administrative files not joined to the judicial case-file. The TU MAP and the applicant companies made oral and written pleadings before the court. The TU MAP used graphic charts to support its allegations. The applicant companies asked for permission to examine the charts prepared by the TU   MAP on the basis of its administrative files. The court permitted the applicant companies only to examine and copy the charts, but not the documents from which the charts had been drafted, nor the drafting method used by the TU MAP. The applicant companies state that the time given to them was not sufficient to assess possible defects of the charts. On 23 December 1999 the Commercial Court of St. Petersburg and the Leningrad Region dismissed the claims of the applicant companies. The court based its decision, inter alia , on the TU MAP’s “analysis and appraisal of the state of the competitive environment on markets of wholesale and retail automotive fuel, storage and transport services”. 4.     Proceedings before the Appellate Collegium of the Commercial Court of St. Petersburg and the Leningrad Region In early 2000 the applicant companies appealed to the Appellate Collegium of the Commercial Court of St. Petersburg and the Leningrad Region claiming that the first-instance court had breached procedural rules, disregarded the presumption of innocence, the right of access to the file and the principle of equality of arms. On 22 February 2000 the court quashed the decision of the trial court, essentially on the ground that the applicant companies’ malicious intent had not been proven, and invalidated the TU MAP’s decision of 21 July 1999 and the confiscation orders issued on its basis. 5.     Proceedings before the Federal Commercial Court of the Northwest Circuit The TU MAP lodged a cassation appeal with the Federal Commercial Court of the Northwest Circuit against the ruling of the appeal court. On 15 June 2000 the court allowed the appeal in part. It upheld the TU MAP’s conclusion as to the guilt of the applicant companies but ordered re-consideration of the amount of the profit to be confiscated. 6.     Further proceedings On 4 June 2001 the Commercial Court of St. Petersburg and the Leningrad Region determined the amount of the profit to be confiscated from the applicant companies. This decision was later upheld by the appeal and cassation courts. B.     Relevant domestic law 1.     Anti-monopoly regulation The basics of anti-monopoly regulation in Russia are defined in the Law on Competition and the Restriction of Monopolies in the Commodity Markets of 22 March 1991 (the “Competition Law”, the “Law”). As in force at the material time, the Law read as follows. Article 2. Sphere of application of the Law “1.     [T]he Law applies to relations which involve ... companies, [State bodies] and private individuals and which influence the competition in commodity markets of the Russian Federation...” Article 6. Agreements (concerted actions) between business entities which restrict competition “1.     There shall be no contracts between ... or concerted actions by business entities dealing in the same commodity market ... which can result in: fixing ... of prices ..., raising or lowering of prices in auctions, sharing of the market ..., restricting access to the market for other business entities ..., avoiding contracts with certain sellers or buyers... 2.     Neither shall there be other contracts between or concerted actions by business entities dealing in the same commodity market which can prevent, restrict or eliminate competition and damage other business entities’ interests. 3.     There shall be no agreements between or concerted actions by business entities which do not compete in a relevant commodity market ... if such agreements or ... actions can prevent, restrict or eliminate competition... 4.     In exceptional cases, the agreements and concerted practices ... referred to in pp.   2 and 3 above may be recognised by an antimonopoly authority as lawful ... if the business entities prove that the positive effect of their actions, also in the socio-economic sphere, will outweigh implications for the commodity market in question...” The antimonopoly policy is enforced by the Federal Anti-monopoly Authority, an executive body acting through its territorial branches. Article 12. Powers of the antimonopoly authority “[T]he antimonopoly authority may: 1.     carry out investigations if there is evidence of violations of antimonopoly regulations, issue decisions and orders based on the result of the investigations; 2.     issue mandatory orders in respect of business entities concerning: –     prevention of activity which may violate antimonopoly laws; –     removal of consequences of violations of antimonopoly laws; –     restoration of the situation which existed before a violation of antimonopoly laws happened; –     compulsory division of a company...; –     amendment or rescission of contracts...; –     signing of contracts with business entities; –     payment to the State budget of proceeds gained as a result of a violation of antimonopoly laws; –     change or restricted use of a trade-mark; –     carrying out ... measures aimed at prevention of discriminatory conditions; –     taking steps aimed at ensuring of competition... 4.     impose administrative sanctions for breaches of antimonopoly law on companies   ..., their managers ... in accordance with the law on administrative offences...” Article 23. Responsibility of commercial and non-commercial entities “Commercial and non-commercial entities shall be fined for the following breaches: non-compliance in time with an order of an antimonopoly authority ...; non-submission ... of documents or information [requested by an antimonopoly authority]   ...; submission to an antimonopoly authority of false information...” Decisions and orders of anti-monopoly authorities can be appealed against in courts or commercial courts. The proceedings before the anti-monopoly authorities are conducted in accordance with the Rules adopted in 1996. Pursuant to section 2.13 of the Rules, if the authority discovers evidence showing that company managers, State officials or private individuals may have committed a criminal offence, it should inform competent law-enforcement bodies. 2.     Criminal Code of 1996 Pursuant to Article 19 of the Criminal Code, criminal responsibility extends only to capable natural persons. Pursuant to Article 178 of the Criminal Code, as in force at the material time, monopolistic activity manifesting itself in fixing of monopolistically high or monopolistically low prices, restriction of competition by sharing of the market, by hindering access to the market, by removing from it other business entities, or by fixing and holding of uniform prices, shall be punished by a fine in the amount of 200 to 500 minimum statutory salaries or in the amount of the offender’s salary or other income for a period of 2 to 5 months, or by arrest for a period of 4 to 6 months, or by imprisonment for a term of up to 2 years. The same offences committed several times or in concert with others or by an organised group shall be punished by a fine in the amount of 500 to 700 minimum statutory salaries or in the amount of the offender’s salary or other income for a period of 5 to 7 months, or by imprisonment for a term of 2 to 5 years. If violent means are used, the above offences shall be punished by imprisonment for a period of 3 to 7 years with or without forfeiture of estate. 3.     Commercial courts in anti-monopoly proceedings Commercial courts ( арбитражные суды ) form a system of State-run courts who hear mostly disputes between business entities. Recourse to these courts does not depend on any agreement between the parties. At the material time the functioning of the courts was governed by the Code of Commercial Procedure of 1995. Pursuant to Article 22-2 of the Code, commercial courts also had jurisdiction to examine complaints about fines imposed on companies by administrative supervisory bodies. COMPLAINTS 1.     The applicant companies asserted that the proceedings before the TU   MAP and the commercial courts had determined a “criminal charge” against them. They complained under Article 6 of the Convention that they had been unable to obtain access to and contest the materials on which their conviction had been based. They claimed that this amounted to disrespect of the principle of equality of arms, hampered their right to prepare their defence and made the proceedings before the commercial courts generally unfair. 2.     In addition, the applicant companies alleged that the findings of the courts had been unreliable and not based on a reasonable interpretation of the evidence submitted. They claimed that their guilt of monopolistic behaviour had not been proven beyond reasonable doubt as their conduct in the course of the petrol crisis could alternatively be explained by the wish to adapt themselves to the existing and anticipated conduct of their competitors. According to the applicant companies, these circumstances violated the principle of the presumption of innocence established by Article   6 § 2 of the Convention. THE LAW 1.     On 31 July 2003 OOO Neste St. Petersburg informed the Court about its wish to withdraw its application. The Government made no comments in this regard. The Court notes that the applicant company does not intend to pursue its application within the meaning of Article 37 of the Convention which, in so far as relevant, reads as follows: “1.     The Court may at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to the conclusion that (a)     the applicant does not intend to pursue his application; ... However, the Court shall continue the examination of the application if respect for human rights as defined in the Convention and the Protocols thereto so requires...” The Court considers that the conditions of Article 37 § 1 (a) are fulfilled. Furthermore, the Court finds no special circumstances relating to respect for human rights as defined in the Convention and its Protocols which require it to continue the examination of the application. Accordingly, the application of OOO Neste St. Petersburg should be struck out of the Court’s list of cases. 2.     The applicant companies complained under Article 6 of the Convention that they had had no access to the prosecution files. Article 6, in so far as relevant, reads as follows: “In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by [a] ... tribunal...” The Court first needs to determine whether Article 6 § 1 applied to the proceedings in question. 1.     Arguments of the parties (a)     The Government The Government contended that Article 6 of the Convention was not applicable since the case was heard in commercial, not criminal, courts. (b)     The applicant companies The applicant companies submitted that Article 6 did apply to the proceedings in question. According to them, antitrust proceedings should be considered as “criminal” under the criteria established in the Convention case-law, namely in the cases of Engel , Öztürk and Lutz (see Engel and Others v. the Netherlands , judgment of 8 June 1976, Series A no. 22; Öztürk v. Germany , judgment of 21 February 1984, Series A no. 73; Lutz v. Germany , judgment of 25 August 1987, Series A no. 123). First, the offence was recognised as “criminal” in the domestic law because it was punishable under Article 178 of the Criminal Code to which the TU MAP had referred in its decision. Secondly, Russian antitrust law regulated competition in the Russian market. Accordingly, the aim of the antitrust proceedings was to protect the general interest which is a typical feature of criminal law. The law had a general application and was not a special regulation. Thirdly, breaches of the antitrust law entailed severe penalties: civil, administrative and criminal. The TU MAP had the power to request a public prosecutor to initiate criminal proceedings that could involve fines approximately of up to 1,641   euros and up to 2 years’ imprisonment for the first offence, and up to 2,298   euros and 5 years of prison for repeated offences or even 7 years in case of use of violent means. These sanctions were intended to be exemplary and to avoid re-offending. Furthermore, the Convention case-law unequivocally suggested that the Convention organs tended to treat antitrust proceedings as “criminal” (see Deweer v. Belgium , judgment of 27 February 1980, Series A no. 35; Société Stenuit v. France , no. 11598/85, Commission’s report of 30 May 1991; Lilly France S.A. v. France (dec.), no. 53892/00, 3 December 2002). 2.     The Court’s assessment The Court notes, first, that the Convention case-law, including the cases invoked by the applicant companies, does not contain an explicit conclusion that competition law offences should be regarded as “criminal” within the meaning of Article 6. The Court hence considers it more appropriate to consider the applicant companies’ individual situation against the principal criteria defining the notion of “criminal”. In this connection the Court reiterates that there are three criteria to be taken into account when deciding whether a person was “charged with a criminal offence” for the purposes of Article 6. These are the classification of the offence under national law, the nature of the offence and the nature and degree of severity of the penalty (see Engel and Others , cited above, §   82). (a)     Domestic classification As to the first of these criteria, which serves only as a starting point (see Weber v. Switzerland , judgment of 22 May 1990, Series A no. 177, § 31), the Court does not agree with the applicant companies that, under Russian law, the proceedings before the TU MAP and the commercial courts were regarded as criminal in nature. The TU MAP charged and penalised the applicant companies under section 6-1 of the Competition Law, which was quite distinct from criminal laws and laws of criminal procedure. It is true that section 22-1 of the Competition Law provides that breaches of antimonopoly law may entail criminal responsibility. However, pursuant to Article 19 of the Criminal Code it is only individuals, e.g. managers of the applicant companies, who could bear such responsibility. If such proceedings took place, they would be conducted by a public prosecutor’s office and criminal courts, and would be separate from the proceedings initiated by the TU MAP. There is no question of the applicant companies themselves being prosecuted under the Criminal Code. (b)     Nature of the offence The second criterion, the nature of the offence, carries more weight. In this connection, the Court observes, first, that the Competition Law applies only to “relations which influence competition in commodity markets” (section 2), and therefore is of a restricted, not universal, application. Secondly, the powers of antimonopoly authorities, as set out in section   12 of the Law, are aimed at prevention of disturbances of competition and its restoration if disturbances take place. It does not appear that the main goal of the process is to punish or deter offenders. Even though section 12-4 of the Law empowers the antimonopoly bodies to impose administrative sanctions, it follows from section 23 that these sanctions are imposed for obstructing the authorities’ investigation, and do not serve as punishment for substantive antimonopoly violations. Thirdly, pursuant to section 6-4 of the Law, certain types of monopolistic behaviour may even be authorised by the State if proven to serve common good. Genuinely criminal behaviour is not usually subject to such utilitarian justification. Lastly, freedom of market competition is a relative, situational value and encroachments on it are not inherently wrong in themselves. (c)     Severity of the potential penalty As to the third criterion, the Court notes that section 6-1 of the Competition Law, under which the applicant companies were charged, does not provide for any specific sanctions as such. Offenders must, nevertheless, comply with orders issued by the TU MAP pursuant to section 12 of the Law. These orders range from a simple warning to stop monopolistic activity to compulsory division of the company. In the Court’s opinion these powers of the TU MAP belong to regulatory field. So does the confiscation of unlawfully gained profit, to which the applicant companies were subjected. The Court considers that this order is intended as pecuniary compensation for damage rather than as a punishment to deter re-offending (see, by contrast, Bendenoun v. France , judgment of 24 February 1994, Series A no. 284, § 47). Having regard to these factors, the Court concludes that the applicant companies were not “charged with a criminal offence” for the purposes of Article 6. Accordingly, this Article is not applicable. It follows that this complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35   §   3 and must be rejected in accordance with Article 35   §   4. For these reasons, the Court unanimously Decides to strike the application of OOO Neste St. Petersburg out of its list of cases; and by a majority Declares inadmissible the remaining applications.   Mark Villiger   Georg Ress Deputy Registrar   President