THE SUPREME Court has unanimously overturned a decision by the Competition Commission (CPC) to fine four fuel companies close to €43 million for collusion, after finding that the watchdog’s chairman had been appointed illegally, it was announced yesterday.
In September 2009, the CPC, under Costakis Christoforou, fined Petrolina, Lukoil, Exxon Mobile and Hellenic Petroleum (EKO) €42.9 million for “concerted practice,” a term meaning the informal and tacit understanding between firms to influence the conduct of the market.
The heaviest fine was imposed on EKO – €14.26 million while Exxon Mobile was fined €13.36 million, Petrolina, €12.56 million and Lukoil €2.7 million.
The violations concerned the period from October 2004 to late 2006.
The Supreme Court decision will affect other CPC cases in which Christoforou was involved, said Petrolina lawyer Pambos Ioannides in an email.
The companies had appealed the CPC decision claiming it was illegal.
Before adjudicating on the essence of the appeals, the plaintiffs filed a motion asking the Supreme Court Plenum – all 13 judges – to examine four legal points whose outcome could have affected the continuation of the procedure.
One of the points was that the CPC’s composition was illegal when the case was examined.
The companies argued that the chairman had been appointed in violation of the relevant law and did not possess the necessary qualifications for the position.
The cabinet had not carried the necessary research before appointing Christoforou as head of the CPC, or if it did, it had not been adequate, the companies said.
Christoforou, who had just retired after serving as director of parliament, was appointed as head of the CPC in March 2008, for the duration of the previous chairman’s term after the latter had resigned.
In April of the same year, Christoforou was appointed chairman of the CPC for a five-year term.
According to the CPC website, Christoforou is a holder of an undergraduate law degree. He also did postgraduate studies at the Institute of Advance Legal Studies in London, on the subject of Legislative Drafting and Public International Law. He also has a master’s in European Law and Management from Leicester University.
Unlike the first appointment, the second was governed by a new law, which included the addition that the appointee should have “specialised knowledge and experience in legal affairs and is capable of contributing to the implementation of the law’s objectives.”
The companies argued that both the trade minister’s proposal to appoint Christoforou and the cabinet decision to put him at the helm of the CPC made “no reference whatsoever to his education, experience, career or knowledge.”
And there was nothing to lead to the conclusion that he has specialised knowledge and experience in legal affairs and is capable of contributing to the implementation of the law’s objectives, the companies said.
The state suggested there were no grounds to appeal the legitimacy of the appointment since it had not been contested the first time.
Citing the law, the defence further claimed that even if there is a problem with the appointment “this does not make the … decision void.”
The Court disagreed with both arguments. It noted that the new law demands different qualifications and pointed out that the provision cited by the state could only apply in cases in which the chairman of the CPC had not participated.
“In the present case however, he apparently took part in the decision-making; thus, since his appointment was illegal, the administrative decision in question is also illegal,” the Supreme Court said.
