Cancellation of the notification of the Agency for Protection and Development of Competition
No. 6001-23-00-6ap/227 dated 08/01/2023
Plaintiff: JSC "SEC".
The Respondent's permission: RSU "Department of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan for the city".
The subject of the dispute: cancellation of the notification.
Review of the defendant's cassation appeal.
PLOT: On December 23, 2021, the Department sent a request to JSC SEC for information:
1) The procedure for granting land plots to the Company.
2) Land plots under the jurisdiction of the Company.
3) The area of land plots provided in 2021 is their target area. On December 29, 2021, the Company provided a response to this request.
On April 14, 2022, the Agency instructed the Department to provide an opinion and the results of the review of legislation in the field of competition protection, including in case of signs of violation, by May 12, 2022. On May 3, 2022, as part of the execution of the Agency's specified order, the Department issued a notification on the presence of signs of violation of the legislation of the Republic of Kazakhstan in the field of competition protection in actions (inaction).
The claim is motivated by the fact that SEC JSC does not provide benefits or other advantages to individual market entities, since each entity can apply for the implementation of an investment project on a general basis, provided that it meets the requirements of current legislation and internal regulatory documents.
Judicial acts:
1st instance: the claim is satisfied.
Appeal: the court's decision is upheld.
Cassation: judicial acts are cancelled, the claim is returned.
Conclusions: The Court of First Instance, satisfying the claim, indicated that the notification of the presence in actions (inaction) of signs of violation of the legislation of the Republic of Kazakhstan in the field of protection of competition cannot be addressed to the Company, since it is not the subject of such violations.
The Court of Appeal agreed with the conclusions of the court of first instance. The Board cannot agree with the above conclusions of the local courts on the following grounds. The courts of the first and appellate instances committed violations of the rules of procedural law when making decisions, which were not mentioned in the plaintiff's complaint, but affected the legality of the contested judicial acts. The Court should have returned the Company's claim for declaring the notification illegal due to the fact that it is not subject to consideration in administrative proceedings.
According to the second part of Article 102 of the Code of Administrative Procedure, the courts have jurisdiction over disputes arising from public law relations provided for by this Code. In accordance with the first part of Article 4 of the APPC: 4) an administrative act is a decision taken by an administrative body, an official in public relations, exercising the rights and obligations of a certain person or an individually defined circle of persons established by the laws of the Republic of Kazakhstan.; 9) an administrative claim is a claim filed in court for the purpose of protecting and restoring violated or disputed rights, freedoms or legitimate interests arising from public law relations. An administrative act is adopted, which is the main external form of management activity of administrative bodies and officials.
It is an administrative body in public law relations, has an authoritative character and represents a unilateral decision of an administrative body endowed with authority, which is mandatory and secured by state coercion and is aimed primarily at the realization of subjective public rights and obligations, addressed to a specific person or an individually defined circle of people.
It follows from this definition that an administrative act must meet a number of criteria:
-to be an authoritative measure, that is, a conscious expression of will in the form of a decision, action (inaction), through which the public authority of an administrative body is exercised.;
-must come from an administrative authority (within the meaning of subparagraph 7) of the first part of Article 4 of the APPC);
-to have a regulatory effect, that is, to be a measure aimed at establishing, canceling or changing any legal relationship;
-be individually defined, have a specific addressee to whom the administrative act is sent;
-accepted in the field of public law.
This is due to the fact that an organ or organization can act not only as an administrative entity, but also as an economic entity.
Only those acts that are adopted in the field of public law and have an administrative; public-legal character can be externally oriented, that is, the legal impact of the act must be directly external when the addressee is a person located outside the administrative body.
After analyzing the circumstances of the case, the judicial board concludes that the contested document (notification) is not legally binding, has no external impact, but rather is an internal act sent to a government agency and does not affect the interests of the plaintiff, does not entail legal consequences and is not binding, and as such the investigation cannot be an independent subject of judicial appeal.
Despite the legal norms, the courts, pointing out that the Department, in accordance with Article 199 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the PC), may conduct an investigation if there is a fact of non–compliance with the notification, did not take into account the dispositivity and legal nature of the institution regulated by Article 216 of the PC, as well as the reasons and grounds listed therein.
That is, even if there is an unfulfilled notification, the antimonopoly investigation, within the meaning of Article 216 of the Criminal Code, may not be initiated.
This is due to the need for an administrative authority to have a certain degree of confidence at the time of resolving the issue of launching an investigation that the actions of the subjects show signs of a violation of the law. This indicates the administrative discretion of the authority in this matter. the existence of an act contested by the plaintiff in the category of administrative acts, it must have an authoritative, regulatory effect, and be binding under the threat of liability for its non-fulfillment.
However, the contested notification is not authoritative, is not enforced by State coercion, and is not directly aimed at exercising the plaintiff's public rights and obligations.
Accordingly, there is no need to protect and restore violated or disputed rights, freedoms or legitimate interests in this situation.
Its assessment can be given by the court as an administrative action within the completed administrative procedure or as administrative evidence in the case.
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