The Supreme Court of Justice of Argentina confirms a 2005 cement cartel fine

On May 7, 2013, the Supreme Court of Justice of Argentina confirmed the fines imposed by the Secretariat of Domestic Trade (SDT) in 2005 to several cement companies involved in a nationwide price-fixing and territorial market allocation scheme, implemented by means of a detailed information exchange system, which lasted almost a decade.

Originally, in 2005, after a 6-year long investigation that included the first dawn raid ever performed by the antitrust authorities in Argentina, the SDT -based on a report issued by the National Commission for Defense of Competition (CNDC)- imposed fines totaling AR$ 309 million (approximately US$ 58 million at today’s official exchange rate) to the following cement companies: Loma Negra C.I.A.S.A., Juan Minetti S.A., Cementos Avellaneda S.A., Petroquímica Comodoro Rivadavia S.A., and Cemento San Martín S.A and the Asociacion Fabricantes de Cementos Portland. The fines collectively considered are the highest antitrust fine ever imposed in Argentina.

The fined companies appealed the SDT’s administrative decision, which in 2008 was upheld by the Court of Appeals in Criminal and Economic matters. Afterwards, the cement companies filed an extraordinary appeal against such decision, but the Court of Appeals denied it. Subsequently, the cement companies filed a direct extraordinary appeal with the Supreme Court of Justice, which was formally admitted due to following reasons: (i) the special features of the case; (ii) the economic significance of the fines; (iii) the risk of the execution of the fines still pending certain appeals; and (iv) the possibility of certain federal law issues capable of falling under the scope of Supreme Court of Justice’s jurisdiction to be at stake in the case.

Despite the formal acceptance of the Supreme Court of Justice to hear the case, in a brief decision, it dismissed the extraordinary appeals filed by the cement companies, stating that the arguments set forth in their appeals were related with the facts and evidence produced in the investigation, which are not subject-matters to be discussed by means of an extraordinary appeal. Regarding the exorbitant amount of the fines alleged by the cement companies, the Supreme Court of Justice concluded that, although being a matter of fact and proof exceeding the Court’s jurisdiction, the Court of Appeals’ decision was well-founded and was by no means an arbitrary decision. Therefore, the Supreme Court of Justice confirmed the decision of the Court of Appeals without discussing the substance of certain antitrust issues that were at stake in the case.

With the affirming decision of the Supreme Court of Justice, the CNDC has now been able to execute and collect from the companies the fines imposed in 2005.

For further information on this topic please contact Julián Peña