KIAP contributes to case law on food retailing

On 9 July 2013 there came into effect a judgment of the Arbitrazh [Commercial] Court of Rostov Oblast, which can become a watershed for one of the fastest-growing sectors of the Russian economy – food retailing.

We remind the readers that on 8 April 2013 the Arbitrazh Court of Rostov Oblast set aside the decision of the Rostov Office of FAS of Russia, which found KIAP's Principal to be engaged in discriminatory practices against suppliers by setting the charge for the services rendered by the retail chain as a percentage of sales. Note that this was quite normal in the relationship between suppliers and retailers until the FAS of Russia declared it illegal in its Business Conduct Guidelines titled “Antitrust Regulation of Commerce”, which appeared early in 2011. Not all market players embraced this philosophy; this led to a number of actions, including the one under discussion.

The Firm's litigators have succeeded in demonstrating to the court that such pricing methodology is not, in and of itself, discriminatory, and suppliers and the retail chain are operating within the principle of freedom of contract enshrined in civil legislation.

The case is among the few where the court has upheld a business practice found non-competitive by the antitrust authority, explicitly saying so in a document, albeit not a regulation.

The litigator in the case was a KIAP partner, lawyer Ilya Ischuk.