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The Supreme Court is set to review the position of the Supreme Arbitrazh Court

In accordance with the recently published ruling of G. G. Kireykova, a judge on the Supreme Court of the Russian Federation (SC RF), beginning on 8 October 2014, the Judicial Chamber on Economic Disputes of SC RF, acting as the court of second cassation, will review the findings of the Presidium of the Supreme Arbitrazh Court of the Russian Federation (SAC RF) regarding the power of the Federal Antimonopoly Service of the Russian Federation (FAS) to carry out inspections prior to the initiation of corresponding administrative proceedings, i.e., without notice of the controlling entity–the so-called “dawn raids.”

In June 2014, SAC RF considered the claim of JSC “Argus-Spectr” (case No. BAC 7907/2013) on the invalidation of the Methodological Recommendations of FAS Russia in relation to scheduled and unscheduled inspections (letter of FAS No. IА/48530, dated 26 December 2011).

The applicant appealed to the court after the territorial antimonopoly authority had carried out an unscheduled inspection and initiated administrative proceedings, as the recommendations permitted. According to the applicant’s arguments, such recommendations were in fact a normative legal act, the adoption of which is beyond the competence of FAS. The recommendations were not published and not registered in the Russian Ministry of Justice.

The position of the public authority was that the recommendations are a nonnormative act since their provisions are advisory and not mandatory. This means that the authority was not obliged to publish and register the recommendations in the Ministry of Justice.

The Court, having analyzed the provisions of the recommendations, concluded that they complement existing legislation on unscheduled inspections and establish rights and obligations. As a result, the recommendations are a regulatory legal act, which is subject to registration and publication.

In this case, the adoption of the recommendations was outside the competence of the antimonopoly body, which only may provide clarifications on the application of antitrust legislation, summarize and analyze its application, and elaborate on recommendations for its use. However, FAS is not entitled to adopt a normative legal act outside of the area of competition law.

According to the adopted amendments to legislation related to the abolition of SAC RF, the legal position established in the Rulings of the Plenum and the Presidium of SAC RF shall remain in force until they the unified Supreme Court reviews them.

The case to be heard on 8 October 2014 will be the first case of its kind and may lead to a revision of the position of the SAC. Noteworthy is that the judge of the Supreme Court did not find that revision is necessary but only ruled on the formal grounds for revision.

The world practice of “dawn raids” derives from the fact that inspections without preliminary court decisions may be carried out only with court sanction and only for a small number of the most serious antitrust violations, mainly related to cartels. In January 2014, the Ministry of Economic Development acted in favor of limiting the powers of FAS, an idea which did not receive the support of legislators.