Court of Appeals issues an injunction suspending the effects of another injunction

On April 3, 2012, the Federal Civil and Commercial Court of Appeals (“FCCCA”) issued a resolution suspending the effects of an injunction issued by the Argentine Secretariat of Domestic Trade (“SDT”) which ordered three oil companies to sell the “JP1” fuel to all the airlines at a given price, in accordance to section 35 of the antitrust law.

On March 12, 2012, the SDT ordered YPF S.A., Shell Cía. Argentina de Petróleo S.A. (“Shell”) and Esso Petrolera Argentina S.A.) to sell the so called “Jet A1”  (aerokerosene) fuel to all the airlines at a net price that may not exceed 2.7% the price these companies sell the “super” fuel at their gas station closest to each airport. This injunction was taken as a result of a claim made by Aerolíneas Argentinas and Austral Líneas Aéreas in February 2012. The SDT issued the injunction based on a recommendation issued by the Commission for the Defense of Competition (“CNDC”), which held that the companies were distorting their prices thus abusing their dominant positions. Since both Aerolíneas Argentinas and Austral are companies managed by the Argentine State, this conduct was not only damaging the airline companies but also the Argentine State.

This was the second injunction issued by the SDT against the main oil companies this year. On January 26, 2012, as reported previously, it prohibited certain oil companies (including the three companies mentioned above) to discriminate gas oil prices among their different customers. In that case the SDT understood that the oil companies were jointly abusing of their dominant position in the gas oil commercialization domestic market by charging bulk gas oil to the passenger transport industry at a higher price than that charged to end consumers through their self-owned gas stations, with no apparent business justification.

Shell appealed the new injunction with the CNDC as determined by the law requesting that the appeal to be granted suspending the effects of the injunction. Since the CNDC was neither rejecting the appeal nor sending it to the court of appeals, the oil company went directly to the FCCCA in order to request an injunction against the SDT injunction.

The FCCCA issued the temporary suspension of the effects of the SDT injunction until the CNDC either elevates the appeal to the FCCCA or reports the refusal of the appeal, on the grounds that the delay by the CNDC on deciding on Shell’s appeal was harming the due process and the constitutional right of defense.

This is the first time in antitrust history in Argentina that such a measure is taken by the courts. However, there have been cases where a court issued an injunction prohibiting the SDT to issue an injunction in a given case and another case where the court of appeals issued an injunction ordering the SDT to issue an injunction.

For further information on this topic please contact Julián Peña