The Supreme Court of the Russian Federation upheld “dawn raids” without any legal analysis

The website of the Federal Arbitrazh Courts recently published a ruling of the Judicial Chamber of the Supreme Court of the Russian Federation on Economic Disputes (the Judicial Chamber) regarding the so-called “dawn raids.” The judges of the Supreme Court of the Russian Federation (SC RF) supported the opinion of the Supreme Arbitrazh Court (SAC RF) on the invalidity of the recommended methods of the Federal Antimonopoly Service of the Russian Federation (FAS) concerning scheduled and unscheduled inspections.

Earlier information on the case is on the ART DE LEX website here.

After the hearing in the Judicial Chamber, the representatives of JSC Argus-Spectr expected to see a response in the ruling about whether the FAS was entitled to carry out inspections prior to initiating corresponding administrative proceedings, based on its own procedural recommendations. The applicant expected a negative response and did not exclude the possibility of an appeal, in the event that the decision contradicted antitrust legislation. However, judges of the SC RF disregarded the issue of “dawn raids.”

The ruling determined that there was a violation of the FAS regulations on the registration and publication of a normative act. The judges noted that, in this case, the contested act corresponded with paragraph 17 of the Ruling of the Plenum of the SC RF, dated 29 November 2007, no. 48, titled The judicial practice of challenging normative legal acts in full or in part.

Paragraph 6.3 of the Ruling of the Plenum of the SAC RF, dated 30 July 2013, no. 58, titled Issues arising in judicial practices within arbitrazh proceedings when challenging normative acts, clarifies that, according to clause 4, paragraph 1, of article 193, and paragraphs 4 and 5 of article 194 of the Arbitrazh Procedure Code of the Russian Federation (APC RF), an arbitrazh court is obliged to ascertain weather a contested act or its provisions correspond to the legal acts specified in the application, regardless of the arguments in the application that a normative legal act is invalid. In the procedural documents, the applicant in the case pointed to a list of those norms of federal legislation which contradict the recommendations. It is noteworthy that the ruling of the Judicial Chamber contains a reference to the above-mentioned ruling of the Plenum of the SAC RF.

Regarding the rest of the ruling, the judges of the SC RF confirmed the conclusions of the SAC RF, agreeing that the recommendations included the rules of conduct, based on repeated offenses and legal implications for an indefinite number of persons. Therefore, the recommendations complement existing legislation about unscheduled inspections, and consequently, they constitute a normative legal act that requires their mandatory registration with the Ministry of Justice and official publication as well as the recognition of the inadmissibility of the recommendations in the form of a letter.

Now the Presidium of the SC RF is the last resort for appealing the ruling. According to paragraph 4, article 308.1 of the APC RF, a supervisory appeal of the ruling may be filed within three months from the date of its entry into force, that is, from 15 October 2014.

Unless the Presidium of the SC RF overturns the judicial acts in this case, the FAS would be able to continue the practice of conducting extraordinary inspections without initiating administrative proceedings. These could take place if the FAS corrected the legal errors the courts indicated regarding the form of the recommendations, the order of registration, and official publication. Such an administrative practice may exist until a court holds that “dawn raids” contradict antitrust legislation, which is what the representatives of Argus-Spectr were hoping to see in the ruling.

The ruling of the Judicial Chamber of the SC RF is available here.