Communicated on 21 June 2017
FOURTH SECTION
Application no. 45849/13
ORLEN LIETUVA LTD.
against Lithuania
lodged on 11 July 2013
STATEMENT OF FACTS
The applicant, Orlen Lietuva Ltd, is a company registered in Mažeikiai. It is represented before the Court by Mr M. Juonys and Mr K. Kačerauskas, lawyers practising in Vilnius.
A. The circumstances of the case
The facts of the case, as submitted by the applicant company, may be summarised as follows.
In 2004 the Competition Council opened an investigation into the applicant company’s activities for allegedly abusing its dominant position in the fuel market. The investigation covered the applicant company’s activities between 2002 and 2004. According to the applicant company, the last action by the applicant company to fall within the scope of the investigation had been taken on 31 December 2004.
On 22 December 2005 the Competition Council found that the applicant company had abused its dominant position and fined it 32,000,000 Lithuanian litai (LTL – approximately 9,267,841 euros (EUR)).
The applicant company appealed. On 28 June 2007 the Vilnius Regional Administrative Court held that the Competition Council had made some mistakes in defining the geographical scope of the market too broadly, and decided to cancel the fine and annul the part of the decision finding that the applicant company had breached domestic and European Union law.
The Competition Council appealed. On 8 December 2008 the Supreme Administrative Court held that the Competition Council had not examined all the relevant circumstances and returned the case to it for additional examination.
On 15 January 2009 the Competition Council decided to restart the investigation into the applicant company’s activities.
The applicant company appealed against the decision of the Competition Council to recommence the investigation. On 25 May 2009 the Vilnius Regional Administrative Court held that the decision of the Supreme Administrative Court of 8 December 2008 had obliged the Competition Council to recommence the investigation and thus it had been done lawfully.
The applicant company appealed, claiming that the investigation had been ended by the Competition Council on 22 December 2005 and had covered the period between 2002 and 2004. Although the initial investigation did not mention the end date of the actions examined, it could be presumed that the last investigated action had been taken on 31 December 2004. Domestic law provided that entities could only be held responsible for breaches of the Competition Law within three years of the date of the violation or, if the violation was continuous, within three years of the date of the last action that was contrary to the Competition Law. The applicant company stated that the last action had been taken by it on 31 December 2004, thus the period of limitation had ended on 31 December 2007 and it could not be held responsible for breaches of the Competition Law.
On 13 May 2010 the Supreme Administrative Court rejected the applicant company’s appeal. It held that by the decision of the Competition Council of 15 January 2009 the investigation had merely been restarted; a new one had not been opened.
On 16 December 2010 the Competition Council held that the applicant company had breached the Competition Law and the Treaty on the Functioning of the European Union and fined it LTL 8,231,000 (approximately EUR 2,383,862).
The applicant company complained to the courts and asked for the order of the Competition Council of 16 December 2010 to be annulled, claiming that the period of limitation had been missed and that it could not be held responsible for violations of the Competition Law.
On 15 April 2011 the Vilnius Regional Administrative Court rejected the applicant company’s complaint. It held that different actions taken by it had been investigated, and had had different starting dates. As to the end of the activities, the court held that there was no information that the applicant company had ended its activities that had been contrary to the law, and thus the period of limitation had not even started to run. Moreover, the court held that even if the period of limitation had started to run, it should have been considered terminated when the Competition Council had adopted its decision on 22 December 2005. Furthermore, when the Supreme Administrative Court had decided to partly annul the Competition Council’s decision of 2005, the period of limitation had to be restarted from that date. The court relied on a case where the Supreme Administrative Court had held that responsibility for violations of the Competition law was administrative responsibility in a broad sense. Lastly, the court held that the investigation had simply been restarted, and thus the applicant company’s arguments as to the period of limitation had been unfounded.
The applicant company appealed. On 21 January 2013 the Supreme Administrative Court held that Competition Council had not proved that the violation had continued after 31 December 2004. The court further held that in accordance with the res judicata principle, the decision of the Supreme Administrative Court of 13 May 2010 had become final and it would be against that principle to change it. The decision in question had established that the Competition Council had merely restarted the investigation as opposed to starting a new one. The court also referred to another one of its cases, decided on 21 June 2012, where it had explained the application of the Competition Law in cases where decisions of the Competition Council had been annulled by the court and the cases referred back to it for additional investigation (see relevant domestic practice below). However, the court held that in the present case that explanation was inapplicable, firstly because its decision of 13 May 2010 had become res judicata and secondly because the circumstances of the two cases were different. As a result, the court decided that the Competition Council had correctly assessed that the period of limitation had not been missed and that the applicant company could be held responsible for violations of the Competition Law. The court did however lower the fine to LTL 7,819,450 (approximately EUR 2,264,669).
B. Relevant domestic law and practice
At the material time, legal entities could be held responsible for violations of the Competition Law within three years of the date of the violation or, if the violation was continuous, within three years of the date when the last action had been taken (Article 40 § 3).
On 3 May 2011 an amended Competition Law entered into force. Legal entities could be held responsible for violations within three years of the date of the violation or, if the violation was continuous, within five years of the date when the last action had been taken (Article 40 § 3). The period of limitation was suspended when the Competition Council had been performing the investigation, when the court had suspended the investigation of the Competition Council, or when there was a dispute in the domestic courts about a decision by the Competition Council to impose sanctions.
On 21 June 2012 the Supreme Administrative Court examined a case concerning a decision by the Competition Council on 28 February 2008. On 11 June 2009 it had returned the case to it for additional investigation. On 9 June 2011 the Competition Council had imposed fines on two legal entities for breaching the provisions of the Competition Law. The Supreme Administrative Court held that the last disputed action of the legal entities had been taken in December 2007, and the period of limitation had thus ended in December 2010. The court further explained that Article 40 § 3 of the Competition Law did not provide that the period of limitation could be suspended or restarted, which had been a conscious decision by the legislature and failure to establish any exceptions to that provision meant that no exceptions were possible. If the explanation was broadened, this would be contrary to the principle of the rule of law and legitimate expectations. The Competition Council stated that it had merely carried out an additional investigation, however, there had been no final decision by it to impose fines on the legal entities before, and thus this argument had been unfounded. The court thus held that the period of limitation had been missed. It referred to the case of the Supreme Administrative Court of 13 May 2010 (no. A822-692/2010) where it had been held that the circumstances of that case had been different because the dispute had been about the restarting of the investigation rather than whether the Competition Council could impose fines after the period of limitation had ended. Lastly, the court held that in accordance with the provisions of the Competition Law, the courts did not have any opportunities to oblige the Competition Council to carry out a new investigation. It could only return the case for additional investigation. The period of limitation was thus three years and after that the legal entities could not be held responsible for violations of the Competition Law (case no. A520-2136/2012).
COMPLAINTS
The applicant company complains under Article 6 § 1 of the Convention that it was deprived of a fair hearing and that the principle of legal certainty was breached when the period of limitation had not been applied and it had been fined. It claims that in a very similar case it was held that the period of limitation could not be suspended and that in all cases a three year period of limitation had to be applied, however, its case was decided differently by the same court.
The applicant company also complains that disregarding the three-year period of limitation the fine amounting to EUR 2,383,862 had been imposed, contrary to Article 7 of the Convention.
QUESTIONS TO THE PARTIES
1. Has there been a violation of Article 6 § 1 of the Convention on account of the fact that the period of limitation had not been applied by the domestic courts and as a result the applicant company had to pay a fine for breaches of competition law?
2. Has the principle of certainty, guaranteed by Article 6 § 1 of the Convention, been respected with regard to the fact that the domestic courts interpreted the domestic law differently in another case on the similar matter (see, for example, Nejdet Şahin and Perihan Şahin v. Turkey, [GC], no. 13279/05, §§ 49-58 and 61, 20 October 2011, Albu and Others v. Romania, nos. 34796/09 and 63 others, § 34, 10 May 2012, Remuszko v. Poland, no. 1562/10, § 92, 16 July 2013, Mráz and Others v. Slovakia, no. 44019/11, § 51, 25 November 2014, Ferreira Santos Pardal v. Portugal, no. 30123/10, § 42, 30 July 2015, Stanković and Trajković v. Serbia, nos. 37194/08 and 37260/08, § 40, 22 December 2015, Borg v. Malta, no. 37537/13, §§ 107-108, 12 January 2016, Hayati Çelebi and Others v. Turkey, no. 582/05, § 52, 9 February 2016, Cupara v. Serbia, no. 34683/08, § 34, 12 July 2016, Lupeni Greek Catholic Parish and Others v. Romania [GC], no. 76943/11, § 116, ECHR 2016 (extracts))?
3. Having regard to the three-year period of limitation which was applicable at the material time with respect to the relevant breaches of competition law, could the fine imposed on the applicant company be said to have constituted a penalty within the meaning of Article 7 of the Convention?
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