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The Senate Annuls Administrative Regional Court's Unfavourable Judgement for the Competition Council in Construction Companies Cartel Case



On June 29, 2009 the Senator Collegium of the Department of Administrative Cases of the Senate of the Supreme Court annulled the unfavourable judgement of the Administrative Regional Court and the case were several construction companies were fined for concerted practices in relation to public procurement procedures was transmitted back to the Regional Court for a new reviewing.

Competition Council (CC) with its decision of September 14, 2005 concluded that construction companies Stats Ltd., Info Serviss Ltd. and Alti A Ltd., who participated in public procurement for the reconstruction work in the Jurmala Social care centre, exchanged information on prices and coordinated their participation in the tender as well as terms of the participation. CC stated that these construction companies were involved in horizontal cartel agreement and amount of fines imposed for this violation was € 109 094 in total.

All three companies brought the case to the Court asking for the annulment of CC's decision and both Administrative District Court and Administrative Regional Court upheld these applications, noting that violation of the prohibited agreements / concerted practices infringement can not be found without proving that there has been an information exchange concerning bids. Considering that Regional Court has not correctly interpreted provisions of the Competition Law, CC appealed the judgement of Administrative Court before the Senate.

CC points that Senate's judgement which annuls completely Administrative Regional Court's judgement fortifies the sound understanding of application of the provisions laid down in the Competition Law and defines clearly what actions of companies participating in public tenders are inadmissible with regard to the competition law. In this judgement it has been stated that fair competition is hindered or distorted by any information exchange between participants of the procurement. Senate has also affirmed that if the market participant refuses to present to CC all information it possesses this refusal is considered as an infringement even in those cases when CC can not prove that the particular market participant has the exact information CC is looking for.