Jurisdiction of the Federal Courts for Administrative Matters in Cases Brought before the Argentine Antitrust Commission

Introduction

On April 30, 2013 the Supreme Court of Justice (the “Supreme Court”) stated that “as the courts for administrative matters have jurisdiction to hear and determine such legal proceedings, the case shall be sent to the Court of Appeals of said jurisdiction.” The statement refers to the case entitled “Unión de Consumidores de Argentina vs. Telefónica de Argentina S.A. et al (summary proceeding)”. In regard to this contest over jurisdiction, the Supreme Court stated that the Federal Court of Appeals for Administrative Matters shall decide on this case regarding the application of the antitrust regime.

Contest over Jurisdiction: the Case

The Unión de Consumidores de Argentina (the Consumers’ Association of Argentina, the “Association”) filed a complaint against Telecom Argentina S.A. (“Telecom”), Telefónica de Argentina S.A. (“Telefónica”) and the Argentine Government (the “Government”), pursuant to the terms and provisions of Section 52 of Law No. 24,240 (the “Consumer Protection Law”) and Section 51 of Law No. 25,156 (the “Antitrust Law”) in order to: i) reverse the merger authorized by Resolution No. 148/2010 of the Secretariat for Economic Policy of the Ministry of Economy and Public Finance, by means of which Telefónica took control over Telecom (the “Transaction”); ii) compel telephone companies to divest pursuant to the provisions set forth in Resolution No. 483/2009 of the Secretariat of Domestic Trade; and iii) assess the damages that the Transaction might have caused to consumers and users of services of internet broadband, local fixed and mobile telephone services, against the co-defendants.

The Association alleged that said Transaction was prohibited under the Antitrust Law and was in violation of the Constitution and the Consumer Protection Law. Therefore, it filed a complaint before the First Instance Federal Court in Civil and Commercial Matters No. 5 (“First Instance Court No. 5”). Said Court declared its lack of authority to hear on the case, noting that the Executive Branch exercised its powers beyond its jurisdiction. Therefore, by means of Decree No. 89/2001, jurisdiction was granted to First Instance Court No.5 in order to intervene in the appeals brought against the decisions of the Antitrust Court.

Given the lack of jurisdiction of First Instance Court No. 5, the case was referred to the Criminal Court of Appeals for Economic Matters (Tribunal B) who also declared its lack of jurisdiction stating that: a) none of the assumptions provided by the Antitrust Law to confer jurisdiction to serve as a Court of Appeals were met, and b) the Antitrust Law did not provide the intervention of the Criminal Court in Economic Matters. Therefore, it decided to return the case to First Instance Court No. 5, which considered that the contest over jurisdiction was raised and promoted it to the Supreme Court to intervene in the dispute, as set forth in Section 24, sub section 7 of Decree-Law No. 1285/58.

The Prosecutor’s Opinion and its Arguments

On December 27, 2011, the Public Prosecutor’s Office issued its opinion stating that, in principle, the Criminal Court of Appeals for Economic Matters is the competent court within the jurisdiction of the City of Buenos Aires to intervene in cases related to the enforcement of the Antitrust Law. However, the Public Prosecutor explained that “every time the jurisdictional activity pursued is related to acts issued by a governmental organization exercising an administrative function, and the non-contractual liability of the Government is at stake, I consider that the national courts for administrative federal matters should decide on the case.”

Moreover, the Public Prosecutor’s Office added that the Supreme Court’s extraordinary powers, as the highest court, allowed this Office to declare the jurisdiction of a third court which would have not participated in the dispute.

One year and four months later, on April 20, 2013, the Supreme Court ruled in accordance with the opinion issued by the Public Prosecutor, with no further explanation.

Conclusion

In the contest over jurisdiction between the First Instance Federal Court in Civil and Commercial Matters and the Criminal Court for Economic Matters, the Supreme Court decided to grant jurisdiction to a third court - the Federal Courts for Administrative Matters - in a case regarding the enforcement of Antitrust Law.