Supreme Court judgment will not benefit all cartel participants
A judgment of the Supreme Court overruling a decision of the president of the Office of Competition and Consumer Protection (UOKiK) does not apply to all participants in an agreement restricting competition. If a cassation appeal by one of them has been rejected or the Supreme Court has refused to accept it for examination, the case is irrevocably closed, regardless of how the proceedings continue and whether the decision of the president of UOKiK is ultimately upheld.
The specific appeal procedure against decisions of the president of the Office of Competition and Consumer Protection still raises doubts. One such issue is the participation of the parties appealing against decisions of the regulator in court proceedings and the consequences of a judgment modifying or reversing previous decisions against the parties to the proceedings.
Proceedings concerning anticompetitive practices are heard by the president of UOKiK according to the rules for administrative proceedings, with certain differences resulting from the Competition and Consumer Protection Act. This procedure ends with an administrative decision. After the president of UOKiK makes a decision, the proceedings are transferred to the civil courts. The parties may appeal against the decision of the regulator to the Court of Competition and Consumer Protection, which examines the case as a first-instance court. During the court proceedings, the parties to the administrative proceedings act as plaintiffs, and the administrative body—the president of UOKiK—as the defendant.
In case of multi-entity proceedings, e.g. cases concerning agreements (cartels) concluded by several market participants, the question arises whether a party that has not appealed against the regulator’s decision, or has done so ineffectively, may be the beneficiary of a judgment vacating or amending the decision.
This matter was addressed in the order of the Supreme Court of Poland of 14 March 2018 (Case III SK 38/16, unpublished). The president of UOKiK filed an application for interpretation of the judgment of the Supreme Court overturning the judgment of the Warsaw Court of Appeal and remanding the case to that court for re-examination. The president of UOKiK expressed his doubts as to whether the Supreme Court’s judgment, issued as a result of cassation appeals of several parties to the proceedings, would apply to other parties to the proceedings who participated in an anticompetitive agreement, whose cassation appeals were not accepted for examination. The competition authority was not sure whether these entities should be reimbursed for the penalty imposed in the judgment of the court of appeal.
The Supreme Court pointed out that cassation proceedings have a strictly defined subject matter and scope. Participants in cassation proceedings are considered to be the parties to the appeal proceedings, provided that the appeal covers a part of the judgment concerning those parties. If the circumstances justifying the acceptance of the appeal for examination are not established, the Supreme Court issues a decision refusing to accept the appeal for examination. That ends the cassation proceedings with respect to the party concerned in this decision. At the same time, the court indicated that certain doubts may arise from the possibility of applying Art. 378 §2 of the Civil Procedure Code in conjunction with Art. 39821 during the cassation proceedings, the so-called ex officio examination of a complaint in favour of the other co-participants who did not appeal against the judgment, when the rights and obligations subject to the appeal are common to them. Following the legal literature, the Supreme Court took the position that Art. 378 §2 of the Civil Procedure Code should not be applied in cassation proceedings and thus the scope of parties covered by that provision should not be expanded. The court also concluded that not only the entities that did not lodge any cassation appeals, but also those whose cassation appeals were not accepted for examination, should be included in the group of entities that did not lodge an appeal.
It follows from the Supreme Court’s decision that failure to file a cassation appeal by a participant in a practice restricting competition, or refusal to accept the cassation appeal for examination, results in a definitive termination of the case, even if, as a result of other cassation proceedings, the decision of the president of UOKiK or the court judgments are subsequently vacated or modified. Such parties to the proceedings have to pay the penalty awarded definitively by the court of appeal, even if at a later stage of the proceedings it turns out that the judgment of the court of appeal was defective or unfounded.
The situation is slightly different at the stage of appeal proceedings. It seems that the Supreme Court allows the application of Art. 378 §2 of the Civil Procedure Code in appeal proceedings against the decision of the president of UOKiK. This would make it possible to examine the appeal ex officio in favour of other parties to the proceedings—participants in the alleged agreement who have not appealed against the judgment. The decision in this respect is a matter for the court, but nothing prevents a party to the agreement who for some reason has not appealed against the judgment from requesting the application of this provision to its case.
Sabina Famirska, attorney-at-law, Competition practice, Wardyński & Partners