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PRIVATE ENFORCEMENT CLAIMS FOR DAMAGES IN SERBIA
Milica Subotic Partner Jankovic, Popovic
Mitic, Belgrade, Serbia
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Enforcement of competition law in Serbia

• The Serbian Law on Protection of Competition of
  2005 (the Competition Law) follows the basic
  antitrust standards set out in Articles 81 and 82
  of the European Community Treaty and defines in
  detail
• prohibited agreements between participants in the
  market which prevent, restrict or distort
  competition (restrictive agreements)
• the abuse of a dominant market position
• For the first time the procedure for the control
  of concentrations is regulated.
• The Competition Law establishes the Commission
  for Protection of Competition (the "Commission ")
  and stipulates the procedure for establishing
  competition law infringements before the
  Commission. The National Competition Council (the
  "Council") is a decision making body consisting
  of 5 members appointed by the Serbian
  Parliament.

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Enforcement of competition law in Serbia

• There are no special provisions regarding the
  legal protection of individuals with respect to
  damage claims in cases of violation of the
  competition law, so in cases where an individual
  has suffered damage as a result of actions
  representing a violation of the competition law,
  the Serbian general (civil law) rules on
  compensation for damages are applicable.
• A draft bill of the Protection of Competition Law
  is currently being discussed in the Serbian
  Parliament. In addition to many controversial
  clauses, the bill contains special provisions
  concerning compensation for damages and, to a
  certain extent, introduces private enforcement in
  Serbia.

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Competition law enforcement mechanisms

• In general, there are two possible mechanisms for
  enforcing competition law in Serbia
• enforcement by the Commission and
• litigation between private parties before a
  court.
• In proceedings before the Commission the
  provisions of the Serbian General Administrative
  Procedure Act are applied, unless otherwise
  regulated by the Competition Law. In some aspects
  the provisions of the Competition Law are
  ambiguous and, partially, quite different from
  the principles of Serbian administrative law.
• The practice of the Commission is still being
  developed, which currently results in legal
  uncertainty and difficulties in anticipating the
  Commissions stance in procedural matters with
  regard to each respective case.

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Commencing proceedings before the Commission

• The Commission may initiate proceedings
• ex officio and
• upon the request
• Ex Officio
• Ex officio commencement is mandatory when the
  Commission learns about actions which reasonably
  indicate a breach of the Competition Law.
• The Competition Law does not contain special
  rules or immunity from fines in cartel law cases.
  
• The decision to commence ex officio proceedings
  is made by the president of the Council. The
  decision is subject to appeal within 3 days after
  its delivery to the respective party.
• In practice, the facts and evidence, on which the
  official action of the Commission is based, are
  often disputable and badly explained to the party
  concerned.

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Commencing proceedings before the Commission

• Commencement upon the request of an interested
  party
• The Commission is authorised to commence
  proceedings subject to a request submitted by
• undertakings on the market which have incurred
  damage or which could incur damage
• a chamber of commerce or association of employers
  and entrepreneurs
• a consumer protection association and
• state administration bodies and regional and
  local authorities.
• Approximately half of all Commission proceedings
  to investigate alleged competition law
  infringements were initiated at the request of an
  interested party
• The president of the Council must make a decision
  on the request within a period of 8 days from the
  date of its submission.

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Commencing proceedings before the Commission

• The interested partys request will be rejected
  if (i) the request was submitted by an
  unauthorised person, or (ii) the action which is
  alleged to infringe the Competition Law is not an
  action which restricts, prevents or distorts
  competition. It is not clear whether the
  Commission is obliged to initiate proceedings
  where the interested party has presented little
  or no evidence to substantiate its request.
• It is questionable whether the applicant has to
  prove the damage suffered and what could be
  considered to be reasonable grounds in order to
  prove that an undertaking has suffered or could
  have suffered damage through infringement of the
  Competition Law.

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Commencing proceedings before the Commission

• The Commission has issued instructions on the
  content of a request for initiation of
  proceedings to determine abuse of a dominant
  market position, stating that a party may submit
  evidence when filing the request. Similar
  instructions have not been drafted with respect
  to restrictive agreements.
• There is also the possibility to apply for a
  preliminary injunction under certain
  circumstances.

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Conclusions

• Characteristics of Commission proceedings
• Lack of certainty and Commissions extensive
  discretionary powers when determining whether to
  initiate proceedings.
• Debatable quality of the facts and evidence taken
  into consideration when deciding whether to
  initiate proceedings.
• Conflict with Serbian administrative law and
  inconsistent practice of the Commission.

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Enforcement of competition law by claiming damages

• Private enforcement is essentially nonexistent in
  Serbian legal practice, hence it currently cannot
  be considered to be an effective alternative to
  regulatory enforcement.
• Earlier antitrust regulations in Serbia
  explicitly regulated special civil law protection
  in the case of violation of the competition rules
  before the competent courts.
• The Competition Law is silent as to whether
  individuals who suffer damage as a result of
  anticompetitive behaviour have a right to bring
  actions for damages before the courts.
• The draft bill of the new Law on Protection of
  Competition stipulates that compensation for
  damage caused by acts and actions representing
  competition infringement and specified in the
  Commissions resolution shall be determined
  during litigation proceedings before the
  compe-tent court. The Commissions resolution
  does not assume that damage has occurred but the
  damage has to be proven during the court
  proceedings.

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Enforcement of competition law by claiming damages

• The Competition Law does not contain explicit
  provisions regarding the exclusive jurisdiction
  of the Commission in the enforcement of
  competition law, i.e. it does not exclude the
  possibility of bringing such legal issue before
  the court in an action for damages or for the
  annulment of an agreement.
• The issue of the binding force of the
  Commissions decisions has yet to arise. It would
  be realistic to expect that the courts would take
  the final decision of the Commission to be an
  irrefutable fact or a presumption that an
  infringement existed. However, the draft bill of
  the new Law on Protection of Competition is also
  not clear in this respect.

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Enforcement of competition law by claiming damages

• In addition, the damaged party must take into
  account the following potential problems
• Court competence rules
• Inexperience of the courts in such disputes and
  complexity of the disputes concerned
• Access to the Commissions files
• Proving and quantifying the damage suffered
• Fear of the injured party of a potential loss of
  customers for its products or services
• Length of court proceedings
• Legal costs and
• Rules on burden of proof.

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Thank you for your attention!

• CHSH Belgrade
• in cooperation with
• Jankovic, Popovic Mitic o.d.Carli Caplina 37
  SER-11000 Belgrade telephone [phone]
  50fax [phone]
• e-mail milica.subotic_at_jpm.rs