Argentina: Competition Litigation

The In-House Lawyer Logo

This country-specific Q&A provides an overview to competition litigation laws and regulations that may occur in Argentina.

This Q&A is part of the global guide to Competition Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/competition-litigation/

  1. What types of conduct and causes of action can be relied upon as the basis of a competition damages claim?

    Competition damages claim is regulated under Chapter IX of the Argentine Competition Law N° 27,442 (the Competition Law). The Competition Law does not distinguish between bilateral and multilateral antitrust infringements (for example, a cartel), and unilateral antitrust infringements (for example, behavioural infringements, monopolisation, or abuse of dominant position). Therefore, competition damages claim is available for bilateral, multilateral and unilateral infringements.

  2. What is required (e.g. in terms of procedural formalities and standard of pleading) in order to commence a competition damages claim?

    Claimant will be required to call the defendant to a prior and mandatory mediation (according to Law 26,589). Besides, claimant will have to pay the tax Court consisting of the 3% of the amount of the claim plus interest.

    The general rule is that anyone who suffers harm that results from an antitrust infringement has standing to initiate a damages claim. Hence, the existence of (i) an antitrust infringement; and (ii) the actual harm due to said infringement must be alleged, and eventually demonstrated, to commence a damages claim.

    The antitrust court's resolution in relation to a violation of the Competition Law, once it becomes final and binding, has the force of res judicata, so the claimant of a follow-an action must only demonstrate that the already proved infringement caused him harm.

  3. What remedies are available to claimants in competition damages claims?

    The claimant can seek a cease court order and it can also try to obtain other interim measures aiming to prevent the damages that the conduct may cause during the proceedings.

    In order to request such interim measures, the party has to:

    - Prove that there is a likelihood of success on the merit of the case (fumus bonis iuris).
    - Prove that there is actual danger in waiting for the final resolution (periculum in mora).
    - Provide security for the damages that the precautionary measure may cause.

    Besides, Individuals who violate the provisions of the Competition Law may be obliged, at the request of the damaged party, to pay a civil fine to the damaged party (section 64, Competition Law). The fine's amount is determined by the judge having jurisdiction and is based on the seriousness of the event and other circumstances of the case, regardless of any other compensation that may apply.

  4. What is the measure of damages? To what extent is joint and several liability recognised in competition damages claims? Are there any exceptions (e.g. for leniency applicants)?

    If the infringement was perpetrated by more than one person, all the persons involved are jointly and severally liable to the damaged party, regardless of the recovery actions that may apply (section 65, Competition Law).

    The liable individuals or legal entities may be entitled to an exemption or reduction of the obligation to compensate the claimant, if the leniency programme in chapter VIII of the Competition Law applies. However, an individual or legal entity that used the leniency programme continues to be jointly and severally liable to its direct or indirect purchasers or suppliers, and other damaged parties, if it is impossible to obtain full compensation from the other companies/individuals that were involved in the same violation.

    The defendant may file a recovery claim against other infringing parties. The Competition Law is not clear enough about on the statute of limitation term for such claims. The most conservative option is two years counting as from the date that defendant paid the damages. However, there are grounds to support a five-year term of statute of limitation. So far, there are no relevant precedents clarifying this issue.

  5. What are the relevant limitation periods for competition damages claims? How can they be suspended or interrupted?

    Under Section 62 of the Competition Law, the period of limitation is either:

    - Three years from when the: (i) infringement was committed or ceased (in case of continuous behaviour); or (ii) injured party becomes aware of the infringement or it may be reasonably expected to have knowledge of it.

    - Two years after the Argentine Antitrust Authority’s sanctioning resolution is final and binding.

    The limitation periods will be suspended as from the Argentine Antitrust Authority initiates the investigation or the procedure related to an infraction that could be related to the damages claim. Said suspension will end when a final and binding decision is issued or when the investigation is closed by any other way.

  6. Which local courts and/or tribunals deal with competition damages claims?

    According to the Competition Law damages claims must be filed with the Civil and Commercial Federal Courts at national level or Federal Court in provinces jurisdictions.

  7. How does the court determine whether it has jurisdiction over a competition damages claim?

    A court will determine that it has jurisdiction if either the defendant is domiciled within its jurisdiction or the alleged damages occurred within its jurisdiction.

  8. How does the court determine what law will apply to the competition damages claim? What is the applicable standard of proof?

    The court will determine what law is applicable by applying Argentine private international law.

    The standard of proof will be analysed on a case by case basis. Besides, if a final and binding sanctioning resolution stating that there has been an infringement to the Competition Law is issued, such resolution has the force of res judicata and it is mandatory in the damages claim to prove the facts.

    If there is no resolution confirming the Competition Law infringement, the claimant must provide evidence of the alleged infringement.

    In both cases, the complainant must prove the factual relationship between the damages and the infringement invoked.

    The claimant must prove the facts, using evidence from the following sources: documents, experts (who can be cross examined at trial), witnesses (who can be compelled to attendance at hearing, and can be cross-examined at trial), rogatory letters, any other kind of evidence that the court considers appropriate, including evidence from criminal proceedings.

    No rebuttable presumptions exist to shift the burden of proof.

  9. To what extent are local courts bound by the infringement decisions of (domestic or foreign) competition authorities?

    The sanctioning resolution in relation to a violation of the Competition Law issued in Argentina, once it becomes final and binding, has the force of res judicata. The court having jurisdiction has the obligation to base its decision on damages on the conduct of the parties and the facts established in said Argentine sanctioning resolution.

    The finding of a fact and/or infringement in a decision or judgment in a third country is not binding in Argentina. It can be used as an example of what happened in similar situations in a different jurisdiction, but the court is not bound to follow that decision.

  10. To what extent can a private damages action proceed while related public enforcement action is pending? Is there a procedure permitting enforcers to stay a private action while the public enforcement action is pending?

    Damages claims are usually initiated as follow-on actions, in reliance on the prior finding of infringement by the public enforcement authority. However, it is not a requirement that there is a prior finding of infringement and neither there is an obligation to stay a private action while the public enforcement action is pending.

  11. What, if any, mechanisms are available to aggregate competition damages claims (e.g. class actions, assignment/claims vehicles, or consolidation)? What, if any, threshold criteria have to be met?

    It is possible to bring actions on behalf of multiple claimants (for example, collective actions). Consumer associations or public bodies have standing to file collective actions.

    In addition, multiples parties can act as claimant (litisconsorcio activo). However, in this kind of action the ruling does not have the same effect as a ruling issued in a collective action. In a multiple claimant action, the ruling only binds the parties that have directly acted in the proceeding as claimant or defendant.

    No threshold criteria have to be met.

  12. Are there any defences (e.g. pass on) which are unique to competition damages cases? Which party bears the burden of proof?

    Defendants can argue that a claimant is not entitled to claim under the proceeding, as it has passed on the overcharge to indirect purchasers and therefore suffered no loss. This defence must be invoked when replying to the claim.

    Burden of proof principle, which states that every party that alleges a fact as a cause for the claim has to prove that fact, is applicable.

    There are no precedents so far on passing on defences.

  13. Is expert evidence permitted in competition litigation, and, if so, how is it used? Is the expert appointed by the court or the parties and what duties do they owe?

    Yes, expert evidence is permitted in competition litigation. The expert will be an independent expert appointed by the court and he or she will have the appropriate qualifications to establish the damages, for example, accountants, economists, engineers, as may be applicable. The expert’s duties will be determined by the court after hearing the parties.

    Parties can also appoint its own expert as a technical consultant, who will issue a report as well. This report can be used to challenge the report of the court’s expert.

  14. Describe the trial process. Who is the decision-maker at trial? How is evidence dealt with? Is it written or oral, and what are the rules on cross-examination?

    The trial is a written process in which the court establishes a proof period in which all the requested and granted evidence must be produced.

    The burden of producing a certain evidence is in the party that requested such evidence. Parties can be declared negligent in producing the evidence or a certain evidence can be determined to expire if it is not produced within the proof period.

    The following evidence is admissible:

    - Documents.
    - Appointed experts. The experts can be cross examined at trial.
    - Witnesses. The witnesses can be compelled to attendance at hearing and can be cross-examined at trial.
    - Rogatory letters.
    - Any other kind of evidence that the court considers appropriate, including evidence from criminal proceedings.

  15. How long does it typically take from commencing proceedings to get to trial? Is there an appeal process? How many levels of appeal are possible?

    There is a lack of precedent in this field, but damages actions regarding consumer rights usually take between three to four years, which may be a good indicator.

    The time period may increase in cases of class actions, as the claimant must comply with the Supreme Court requirement to certify the existence of the class.

    In addition, the lack of court experience and precedents in this kind of claims may cause an increased time period.

    Besides, there is an appeal process consisting of a first level of appeal with the appeal court and a second level of appeal with the Supreme Court.

  16. Do leniency recipients receive any benefit in the damages litigation context?

    The liable individuals or legal entities may be entitled to an exemption or reduction of the obligation to compensate the claimant, if the leniency programme in chapter VIII of the Competition Law applies. However, an individual or legal entity that used the leniency programme continues to be jointly and severally liable to its direct or indirect purchasers or suppliers, and other damaged parties, if it is impossible to obtain full compensation from the other companies/individuals that were involved in the same violation.

  17. How does the court approach the assessment of loss in competition damages cases? Are “umbrella effects” recognised? Is any particular economic methodology favoured by the court? How is interest calculated?

    The Civil and Commercial Code allows a party to claim for any and all damages caused by the infringing party. However, how the court approaches the assessment of loss will be determined on a case by case basis since currently there is no particular economic methodology favoured by the court.

    Interest is awarded in all cases, mainly due to the high inflation that Argentina experiences periodically.

  18. Can a defendant seek contribution or indemnity from other defendants? On what basis is liability allocated between defendants?

    The defendant may file a contribution claim against other infringing parties.

    Against the claimant, all infringing parties are jointly and severally responsible (with the exception of the party that used the leniency programme). However, between infringing parties, liability is allocated based on the actual participation held in the damages caused.

  19. In what circumstances, if any, can a competition damages claim be disposed of (in whole or in part) without a full trial?

    A defendant can apply to "strike out" all or part of a competition damages claim in order to dispose it before a full trial. The strike-out implies the recognition of the infraction.

    In cases of a partial strike-out, the court determines whether or not it is possible to continue the remaining part of the action.

    There is a lack of precedent in private antitrust actions, so a trend cannot be established.

  20. What, if any, mechanism is available for the collective settlement of competition damages claims? Can such settlements include parties outside of the jurisdiction?

    Permission is not required from the court to settle any action before trial. During trial, parties can request the court to rule admitting the settlement. There are no cost implications.

    There is no specific regime for class actions, unless they involve a consumer law infringement. If the consumer law is involved prior to settle an agreement the Public Prosecutor must agree with the terms of the agreement and the court must issue a ruling homologating it.

    A settlement validated by the court would not include parties outside the court’s jurisdiction since said settlement would not be enforceable as the court lacks jurisdiction.

  21. What procedures, if any, are available to protect confidential or proprietary information disclosed during the court process? What are the rules for disclosure of documents (including documents from the competition authority file or from other third parties)? Are there any exceptions (e.g. on grounds of privilege or confidentiality, or in respect of leniency or settlement materials)?

    Parties can ask the court to keep documents confidential, to avoid third parties accessing them, arguing that the documents and the information disclosed in the file are sensitive. The court will decide whether said documents and/or information must remain or not confidential and said decision can be challenged until it is final and binding.

    Party that does not want to disclose a document, that will not be granted with confidentiality, can opt to not incorporate it into the file. However, since parties should file any documents related to the case, not doing so can result in negative presumptions against them (section 388, National Civil and Commercial Procedural Code).

    It will be concealed and treated as confidential:

    - Copies of confidential versions of competition authorities' decisions.

    - Copies of leniency materials that the defendant prepared and submitted to the competition authorities, if they are confidential.

    - Any other confidential documents or materials not in the defendant's possession or control.

    All information and documents controlled by third parties, including antitrust court files and documents, can be offered and obtained as evidence, if the court allows it. In general, courts allow this evidence if it is relevant to resolve the subject matter of the private antitrust litigation. To obtain this evidence, parties must request it together with the evidence offered when they file or answer a claim.

    Additionally (and exceptionally), the court can order disclosure of evidence held by third parties without a party request, if the court considers it relevant to better resolve the litigation.

  22. Can litigation costs (e.g. legal, expert and court fees) be recovered from the other party? If so, how are costs calculated, and are there any circumstances in which costs recovery can be limited?

    The applicable principle related to the litigation cost is that the party that loses pays.

    When filing the claim, the claimant must pay a fee to the Tax Court. If the claimant wins the case, it can recover that fee from the defendant.

    The winner party may be obliged to pay court appointed experts' fees, if the loser does not pay them.

    It is possible to insure against litigation costs risks, using surety insurance (Seguro de Caución). However, there is no precedent for this and insurance companies may be reluctant to offer this insurance.

    It is possible for a defendant to a claim to bring an application for security for costs. When answering the complaint, the defendant must file a request for seizure (Excepción de Arraigo). However, in most cases this is impractical because various international treaties signed by Argentina require equal treatment of parties in every jurisdiction, therefore the request for seizure cannot be applied.

    The costs of bringing an action are:

    - Tax Court: 3% of the amount of the claim plus interest.

    - Mediator fees: these are charged as established in Decree No. 1467/11 (amended by Decree No. 2536/2015).

    - Lawyers' fees: between 11% and 20% of the cost of the process (i.e the claimed amount capital plus interests) or agreement reached in the first instance. The cost at second instance is estimated to be up to 25% of the fees granted in the first instance.

    - Experts' fees: the fees of the experts involved are estimated to be between 5% and 10% of the amount of the process (Section 21, Law 27,423).

  23. Are third parties permitted to fund competition litigation? If so, are there any restrictions on this, and can third party funders be made liable for the other party’s costs? Are lawyers permitted to act on a contingency or conditional fee basis?

    Third party funding is allowed. However, this option is not frequently used.

    A claimant can assign its claim to a third party funder, but the claimant will remain liable for associated costs if the complaint is rejected. However, there is no history of claims being assigned to third party funders.

    Lawyers are permitted to act on a contingency or conditional fee basis.

  24. What, in your opinion, are the main obstacles to litigating competition damages claims?

    The main obstacle to litigating competition damages is that there are no precedents yet. In fact, one of the few competition damages claim was rejected by the Supreme Court due to a procedural formality. This, creates uncertainty when seeking competition damages.

  25. What, in your opinion, are likely to be the most significant developments affecting competition litigation in the next five years?

    The current Competition Law came into force recently (on 24 may, 2018) and incorporates the possibility of requesting a civil fine (punitive damages) that will be established for the claimant’s benefit. We are of the opinion that this civil fine will increase the class actions’ claims, specially those filed claiming for consumers’ rights.

    In this sense, we may expect in the next five year a class actions proliferation seeking damages based on antitrust violations.