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12 August 2021

Sayenko Kharenko has successfully defended the interests of the JTI group of companies

Sayenko Kharenko has successfully defended the interests of the Japan Tobacco International Group of companies (JTI) in the Court of Appeal and the Supreme Court on invalidating the headline-making decision of the Antimonopoly Committee of Ukraine (AMC) on anti-competitive concerted practices in the tobacco market.

Supported by Sayenko Kharenko’s team, the companies of the JTI Group successfully challenged one of the most notable AMC’s decisions regarding the alleged anti-competitive concerted practices between Ukrainian subsidiaries of international tobacco manufacturers JTI, Philip Morris, BAT and Imperial Tobacco and the distributor TEDIS Ukraine LLC.

By its decision dated 10.10.2019, the AMC recognised that the above-mentioned companies had conducted anti-competitive concerted practices in the form of restricting the access of other undertakings to the market of primary sale of cigarettes by manufacturers. The aggregate fines imposed by the AMC on the defendants in the case amounted to UAH 6.5 billion. It is the largest fine in cases of anti-competitive concerted practices in the history of the AMC. The AMC imposed a cumulative fine of UAH 923 million on the companies of the JTI Group.

The well-established effective cooperation of the legal teams of JTI and Sayenko Kharenko allowed developing a strong and large-scale legal position regarding the illegality of the AMC’s decision. Both in terms of the application of competition law provisions, and in the assessment of the actual circumstances of the case, including general gaps in the consistency of the evidence used by the AMC to accuse the JTI group of companies of alleged anti-competitive concerted practices.

A combination of the expertise of Sayenko Kharenko’s experienced attorneys and lawyers in litigation and antitrust & competition practices made it possible to form a balanced and comprehensive procedural strategy to appeal the AMC’s decision, considering the subtleties of Ukrainian competition and economic procedural legislation. This let the Sayenko Kharenko’s team successfully represent the client’s interests in the Appellate and Supreme Courts. Based on the results of the consideration of the case, the courts supported arguments about the illegality and groundlessness of the AMC’s decision regarding the clients, despite the negative decision of the first instance court. As a result, the courts made a final decision on the full satisfaction of JTI’s claims – to invalidate on the part of the clients the AMC’s decision, which imposed a fine of almost UAH 1 billion on the clients.

Sayenko Kharenko’s counsel Oleksiy Koltok comments: “When cases are as significant as this one, we all understand that this is not about just a case, this is about the formation of judicial practice. Therefore, the whole team feels a special responsibility and the need to apply the highest levels of professionalism. I am very grateful to all members of the Sayenko Kharenko’s and the client’s team for their belief in the result, perseverance, and adherence to principles.”

Sayenko Kharenko’s partner Maksym Nazarenko adds: “I believe that this excellent result is the fruit of joint efforts of the extremely professional legal team of JTI and the cooperation of Sayenko Kharenko’s traditionally highly professional litigation and antitrust & competition practices. The results of our court appeal against the AMC’s decision will undoubtedly have a significant impact on the further formation of the practice of applying competition law.”

Two Sayenko Kharenko’s teams worked on forming a legal position and procedural strategy for appealing the AMC decision – antitrust & competition and litigation practices. The competition team consisted of counsel Oleksandr Nagorny and associate Mykhailo Sus led by partner Maksym Nazarenko. The litigation team consisted of counsel Oleksiy Koltok and senior associate Sergiy Protyven under the general supervision of partner Olena Sukmanova. Oleksiy Koltok, Oleksandr Nagorny, and Sergiy Protyven represented the client before the court.

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