Armenia: Competition Litigation Comparative Guide

1 Legal framework

1.1 Which laws regulate competition in your jurisdiction?

Competition in Armenia is regulated by the following laws.

• the Constitution;
• the Civil Code;
• the Law on Economic Competition Protection;
• the Law on Trade and Services;
• the Law on Administrative Offences;
• the Law on Fundamentals of Administration and Administrative Procedure;
• the Law on Enforcement of Judicial Acts;
• the Law on the Budgetary System;
• the Criminal Code; and
• the Law on Organisation and Conduct of Inspections.

1.2 Which authorities are responsible for enforcing the competition legislation? What is their general approach to enforcement?

The main supervisory authority in the field of competition is the Commission for the Protection of Competition. If violations committed in the field of competition constitute a crime under the Criminal Code, the investigative committee will initiate criminal proceedings and the Prosecutor's Office will supervise the legality of pre-trial proceedings and pursue the accusations in court. In certain circumstances, the Central Bank and the Public Services Regulatory Commission are also responsible for enforcing the competition legislation.

A decision on prosecution by the Competition Protection Commission becomes effective from the moment of its adoption and is subject to immediate enforcement by the Compulsory Enforcement Service, since it cannot be appealed.

The relevant authorities apply the competition legislation by:

• initiating proceedings in relation to violations of the law;
• applying measures of liability;
• issuing assignments on the elimination of violations; and
• warning businesses to refrain from committing violations.

2 Private claims

2.1 What types of private claim may be brought for breach of competition law in your jurisdiction?

In case of damage to business entities or individuals due to a violation of competition law, a damages claim may be filed. Both natural and legal persons may claim both actual loss and lost benefits.

Natural and legal persons cannot directly request the court to rule on a potential violation of competition law (eg, an anti-competitive agreement or abuse of a dominant position). The claim must rather be directly related to a loss incurred due to a violation of competition law.

It is possible to defend violated rights before the Commission for the Protection of Competition. If the commission fails to initiate proceedings in relation to an administrative violation following the submission of a report in this regard, it is possible to appeal to the Administrative Court.

2.2 What is the legal basis for bringing a claim for breach of competition law?

In accordance with Article 10.1(6) of the Civil Code of the Republic of Armenia:

Article 12(1) of the Civil Code provides as follows:

In accordance with Article 98 of the Law on Protection of Economic Competition, business entities or persons that suffer damage as a result of a violation in the field of economic competition are entitled to compensation from the business entity, state authority or official that committed the violation.

3 Parties

3.1 Who has standing to bring a claim for breach of competition law?

Business entities and/or individuals may file a claim for breach of competition law if they suffered damage due to the breach․

Most commonly, the protection of rights in Armenia involves the submission of a report to the Commission for the Protection of Competition.

3.2 Can a claim for breach of competition law be brought against parties outside the jurisdiction?

Claims may be filed against parties outside the jurisdiction of Armenia that have violated the competition law through activities carried out in the Armenian territory either in person or through branches and representative offices, causing damage to other persons.

3.3 Can a claim for breach of competition law be brought against individuals, or only companies?

It is possible to file claims against both natural and legal persons.

Claims against individuals may be filed only if the damage was caused by:

• an act of unfair competition;
• a prohibited concentration; or
• a prohibited coordination of economic activities.

4 Collective actions

4.1 Is it possible to bring a collective action for breach of competition law in your jurisdiction? If so, what is the applicable regime?

Under the Civil Procedure Code, it is possible both:

• for several plaintiffs to jointly file a lawsuit; and
• for a lawsuit to be filed against several defendants.

To be considered a collective action:

• the action must be initiated by at least 20 co-plaintiffs against the same defendant or defendants; and
• the subject and the basis of the action must be the same.

The report to be submitted to the Commission for the Protection of Competition may be signed by an unlimited number of persons and there are no special regulations in this regard.

4.2 Do collective actions proceed on an 'opt-in' or an 'opt-out' basis?

Collective actions proceed on an 'opt-in' basis and the consent of each claimant is necessary to draft one general power of attorney.

4.3 Do collective actions require certification? If so, what requirements must be met to obtain certification?

There is no requirement in Armenia for certification to conduct a collective action.

5 Forum

5.1 In what forum(s) are claims for breach of competition law heard in your jurisdiction?

Damages claims as a result of violations committed in the field of economic competition are considered in the Court of First Instance of General Jurisdiction. Proceedings challenging decisions of the Commission for the Protection of Competition are heard in the Administrative Court.

6 Bringing a claim

6.1 What is the limitation period for claims for breach of competition law in your jurisdiction?

Where a violation of competition law causes damage to natural or legal persons, the general statute of limitations for filing a damages claim is three years. It begins to run from the moment the injured party knew or should have known about the compensation for damages.

As regards proceedings before the Commission for the Protection of Competition, a party is released from liability if, as of the date of the initiation of proceedings, five years have passed since the violation was committed.

6.2 What are the formal requirements for bringing a claim for breach of competition law?

A damages claim is initiated by filing a lawsuit in accordance with the law.

Proceedings regarding a violation of competition law may be initiated:

• based on reports on the violation submitted by natural or legal persons, state authorities or their officials;
• based on publications in the mass media; or
• on the initiative of the Commission for the Protection of Competition.

Appeals against decisions of the Commission for the Protection of Competition are initiated through the commencement of a lawsuit before the Administrative Court.

6.3 What are the procedural and substantive requirements for bringing a claim for breach of competition law?

The statement of claim/petition must be submitted clearly and legibly in writing. The statement of claim/petition must include the following:

• the name of the court to which the statement of claim/petition is submitted;
• details of the claimant's:
• • name and address;
  • notification address (other than its place of registration);
  • identity document (ie, passport data) in the case of a natural person or state registration number in the case of a legal person; and
  • representative (ie, passport data, notification address and, if the statement of claim/petition has been filed by an authorised official, the name and position of that person);
• the respondent's name and address;
• the names and addresses of other participants in the case;
• the facts on which the claim is based;
• in case of a monetary claim, the amount and calculation of the claimed or contested amount;
• the substantive claims against the respondent and, where the lawsuit is filed against several respondents, the plaintiff's claim against each, if this is not a collective claim; and
• a list of documents and evidence to be submitted.

The report of a natural or legal person on a violation of competition law must be submitted in writing to the Commission for the Protection of Competition. The report should include:

• the name of the commission;
• where the report is submitted by an individual, that person's name, passport data and address or, where the report is submitted by a legal entity, its full name, state registration or registration number and address;
• the name, surname, and position of any person submitting the report on behalf of the natural or legal person;
• the notice address (if other than the registered address);
• details of a clear violation of competition law and the perpetrator;
• the claim of the person submitting the report;
• the year, month and date of submission; and
• a list of documents to be attached to the report.

The natural or legal person must also sign the report to be submitted. If the report is submitted through a representative, an instrument certifying the authority should also be submitted.

Materials supporting the existence of the facts outlined in the report may be attached to the report, including photos, videos and audio recordings.

6.4 What are the implications if a public enforcement action in relation to the same behaviour is pending? Can a claim still be brought?

In Armenia, if a case is considered in court, it cannot be considered before the Commission for the Protection of Competition. Even if the commission has initiated proceedings in consideration of the case, these will be dismissed if court proceedings are commenced.

At the same time, Armenian law does not provide for the possibility of directly bringing cases that are heard by the Commission for the Protection of Competition before the Armenian courts. However, the courts may consider the legality of actions of the commission, as well as issues relating to damage caused as a result of violations of competition law.

6.5 How is jurisdiction over the claim determined?

Damages claims filed against natural and legal persons are of a private law nature and are heard by the Court of First Instance of General Jurisdiction.

Claims filed against the actions and decisions of state authorities are of a public law nature and are heard by the Administrative Court.

6.6 How is the applicable law determined?

The court will apply the laws or other legal acts in force at the time the disputed legal relationship originated.

If there is no substantive law or other legal act regulating the disputed relationship, the court will apply:

• the rules of laws that regulate similar relationships; or
• in the absence of such rules, the general principles of the law (application by analogy).

Procedural rules cannot be applied by analogy.

The court may apply good business practices in cases provided for by law. The burden of proving the existence of applicable good business practices is borne by the party referring to them and participating in the case.

6.7 Under what circumstances must security for costs be provided?

If the court, on the plaintiff's petition, applies measures to secure the claim, the respondent may file a petition with the court requesting an application for countersecurity if it can prove that, as a result of the applied measures to secure the claim, it will or may suffer loss.

6.8 Are interim remedies available in competition litigation? If so, how are they obtained?

Interim measures are available only as a measure to secure the claim during the trial. Upon the petition of a party, a measure to secure the claim will be applied if failure to do so might:

• make the claim impossible;
• complicate execution of the judicial act;
• lead to a change in the actual or legal status of the property that is the subject of the dispute; or
• cause significant damage to the party submitting the petition.

7 Disclosure and privilege

7.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply?

A party must disclose to the court and other participants in the case and, if possible, must provide all evidence known to it on which it has based its claims and objections before the end of the period set in the decision on allocation of the burden of proof.

7.2 What rules on third-party disclosure apply in your jurisdiction?

If a party has not been provided with the relevant evidence within the timeframe set by law, or if the provision of such evidence without a court decision is prohibited under law, the party may file a petition to the Court of First Instance of General Jurisdiction requesting the evidence from a third party.

That third party must provide the relevant information within the timeframe set in accordance with the court's decision; otherwise, the decision will be enforced through the Compulsory Enforcement Service.

If it is not possible to execute the decision on the request for evidence, the third party should apply in writing to the Court of First Instance of General Jurisdiction stating that execution of the decision is not possible and explaining the reasons for this. The court, taking into account the opinions of the parties, may declare these reasons acceptable.

7.3 What rules on privilege apply in your jurisdiction?

The documents requested and submitted to the court within the framework of the proceedings may be made available to the parties.

A party to the proceedings cannot refuse to submit a specific document on the grounds of its confidentiality.

If the nature of the information is not amenable to publication, the trial can be held in a closed session on the petition of the relevant party. In case of a closed court session, the parties will be warned in writing that publication of any confidential information they become aware of during the proceedings will result in criminal liability.

8 Evidence

8.1 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

The types of evidence to be submitted in proceedings before the Commission for the Protection of Competition are:

• witness testimony;
• written evidence;
• material evidence;
• photographs, recordings and videos;
• expert opinions; and
• specialist explanations.

8.2 What is the applicable standard of proof?

In proceedings before the Court of First Instance of General Jurisdiction, each party must prove the facts that are the basis of its claims and objections and that are significant for the resolution of the case, unless otherwise stipulated. A party refuting such facts does not bear the burden of proving the absence of those facts, except in cases specified by law.

During administrative proceedings, the parties must submit to the court all evidence in their possession or sphere of influence on which they will rely to substantiate their claims or objections.

The administrative body must also present all materials for the administrative proceedings, as well as all evidence in its possession or its sphere of influence that substantiates the claims or objections of the other party.

8.3 On whom does the burden of proof rest?

In cases that are heard under the Civil Procedure Code, the burden of proving that the obligation at issue has been fulfilled is borne by the debtor. The burden of proving that the obligation has been improperly fulfilled is borne by the party making this claim in the proceedings.

Where evidence supporting a fact cited by party, by virtue of the law or other legal act, is in the possession of another party to the case, that fact is considered proven unless otherwise proved by a relevant party to the case.

A party which challenges the authenticity of a document issued or certified by a state or local governing authority, or a notarized document, bears the burden of proving the inauthenticity of that document.

In cases that are heard under the Administrative Procedure Code, the administrative authority is obliged to submit all materials for the administrative proceedings, as well as all evidence under its possession or within its sphere of influence which substantiates the claims or objections of the other party.

8.4 What defences are typically available in competition litigation?

In competition litigation, the following types of defences are available:

• statute of limitations;
• statute of fraud;
• force majeure;
• plaintiff's fault; and
• volenti non fit injuria.

9 Settlement

9.1 Can the proceedings be discontinued without a full trial? If so, how; and what are the implications?

Early completion of the proceedings is possible:

• in cases before both the Court of First Instance of General Jurisdiction and the Administrative Court; and
• in proceedings before the Commission for the Protection of Competition.

In the event of court proceedings, early completion of the case examination is possible if:

• the parties sign a settlement agreement;
• the plaintiff withdraws the claim;
• the respondent accepts the claim; or
• the court dismisses the claim without consideration.

Within two weeks of receipt of a decision of the Commission for the Protection of Competition to initiate proceedings on a violation of competition law, the respondent may file a motion with the commission to apply for expedited proceedings if:

• the consequences of the violation attributed to it have been remedied; and
• the facts of the violation has been accepted.

9.2 In the case of collective actions, is collective settlement possible? If so, how; and what are the implications?

In the case of collective claims, the settlement agreement is signed in accordance with the rules established for cases considered within the framework of general claim proceedings; there are no other special regulations. If the settlement agreement must be signed by the plaintiffs' representative on their behalf, this authority must be directly stated in the power of attorney given to him or her.

10 Court proceedings

10.1 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Cases are heard in open session in court.

However, either at the request of a party or on its own initiative, the court may order that the proceedings or part thereof take place in a closed court session in order to protect:

• the privacy of the parties (including trade secrets);
• the rights of minors;
• the interests of justice;
• state security; or
• public order or morals.

10.2 How do the court proceedings unfold in your jurisdiction?

Court proceedings unfold as follows:

• A preliminary hearing is scheduled.
• During the preliminary court session, the court will ascertain:
• • the subject matter of the claim;
  • the factual and legal grounds of the claim;
  • the factual and legal grounds of the defendant's objections;
  • the identity of the parties;
  • the involvement of any other parties to the proceedings;
  • the nature of the disputed legal relationship including the applicable legal rules;
  • the circumstances to be proven; and
  • the procedure for presenting evidence.
• After completion of the actions to be performed during the preliminary court session, the trial will proceed.
• During the trial, the evidence submitted by parties will be examined.
• The trial ends with the court announcing the date of publication of its decision.

10.3 What is the typical timeframe for proceedings?

There is no specific period within which proceedings relating to competition law violations must be completed – merely a stipulation that these be considered and completed within a 'reasonable' period.

10.4 What rules apply to the joinder of third parties?

In proceedings under the Civil Procedure Code, third parties that file independent claims in relation to the subject of the dispute may be joined to the case if their claims are submitted before a decision on allocation of the burden of proof has been issued.

Third parties that fail to file independent claims in relation to the subject matter of the dispute may still be joined in the case on the side of either the plaintiff or the respondent until the end of the trial.

In proceedings under the Administrative Procedure Code, third parties may be joined to the proceedings on their application. If a judicial act will inevitably and directly extend to certain persons or authorities, the administrative court is also obliged to join those persons or authorities to the proceedings as third parties.

10.5 To what extent do the decisions of national or foreign competition authorities influence the court's decision?

In accordance with the Constitution, an international treaty ratified by Armenia or the law, the court may also apply the laws of other states.

If the application of foreign law is necessary, the court will ascertain the existence and content of its rules in accordance with their interpretation and application in the foreign country.

Decisions of foreign authorities do not have absolute significance for the Armenian courts, although they can have advisory and auxiliary significance.

11 Remedies

11.1 What remedies are available in competition litigation in your jurisdiction?

Rights are protected in competition litigation by:

• compensating for damages through the payment funds or the surrender of property;
• terminating illegal actions;
• revoking illegal acts; and
• ceasing actions that present a danger of the violation of rights.

11.2 Are punitive damages awarded in your jurisdiction?

In Armenia, punitive damages are not allowed in competition litigation.

11.3 Will the courts consider any fines imposed by the competition authorities in deciding on the quantum of damages? What other factors will it consider in this regard?

The courts do not take into account any fine imposed by the competition authorities when deciding on the quantum of damages.

A mandatory requirement with regard to compensation for damages is the simultaneous existence of:

• wrongful behaviour by the party that violated the right;
• a causal relationship between the damages and the wrongful action; and
• the fault of the party that violated the right.

When assessing the award of damages, the court will take into account:

• the costs incurred by the party that suffered damage;
• the reasonableness of those costs; and
• the lost income which the party that suffered damage could have received had its rights not been violated.

12 Appeals

12.1 Can the decision of the court or tribunal be appealed? If so, on what grounds and what is the process?

The decision of the court or tribunal may be appealed.

Decisions of the Court of First Instance of General Jurisdiction may be appealed to the Civil Appellate Court; while decisions of the Civil Appellate Court may be appealed to the Court of Cassation.

13 Costs, fees and funding

13.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

Court costs involve state fees and other expenses relating to the proceedings, including:

• the reasonable remuneration of the parties' lawyers; and
• the fees paid to witnesses, experts, specialists and translators.

The winning party has the right to recover the court costs incurred. The amount of court costs to be compensated will be determined by the court in accordance with the law.

13.2 Are contingency fees and similar arrangements permitted in your jurisdiction?

Contingency fees are permitted in Armenia. The payment details are set out in the contract for legal services.

13.3 Is third-party funding permitted in your jurisdiction?

Third-party funding is permitted in Armenia. The relations between the claimant and the third party are generally regulated through a contract.

14 Trends and predictions

14.1 How would you describe the current competition litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Armenian competition regime is improving and extensive amendments introduced in recent years are gradually yielding results. Increasing numbers of economic entities are interested in understanding and observing the competition law. Consumers are also defending their rights within the framework of competition law.

While no major amendments to Armenian competition laws currently planned, the implementation of extensive amendments in 2021 suggests that the regime will undergo significant revisions in the very near future, as the law and bylaws have introduced numerous new rules which require improvement or amendment to have a more efficient impact on competition matters.

15 Tips and traps

15.1 What would be your recommendations to parties facing competition litigation in your jurisdiction and what potential pitfalls would you highlight?

In Armenia, issues of competition protection – especially procedural issues – are regulated in detail. However, both the Law on Protection of Competition and the applicable bylaws are quite extensive and complex, and it is thus often impossible to fully understand and fulfil their requirements without proper professional advice.

The Commission for the Protection of Competition has quite broad discretionary powers, both in the application of liability measures and in assessing the actions of business entities. It is thus necessary to continually follow the practice established by the commission and the approach adopted by the courts in order to avoid the risk of violations to the fullest possible extent.

This is even more important as the fines that can be applied for violations of competition law are quite high.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.