The Supreme Court rejects “forum shopping”

On July 3, 2007 the Argentine Supreme Court (“Supreme Court”) issued a decision in re: “Belmonte, Manuel y Asociación Ruralista de General Alvear c/ Estado Nacional – s/ Amparo” (“Belmonte case”) in which it pointed out that decisions rendered by the local Federal Judge from the City of San Rafael, Mendoza were contradictory and inconsistent. The decision, along with the one decided by the same Supreme Court on June 12, 2007, in re: “Multicanal S.A. y otro c/ Conadeco – 527/05 y otro” (“Multicanal case”), shows the clear intention of the Supreme Court to reject the practice of “forum shopping” to challenge antitrust issues outside the City of Buenos Aires.

The Belmonte case concerns challenges to the transaction between Ahold International Holding NV and Cencosud S.A. (the biggest Chilean retail chain) for the latter’s acquisition of the Disco and Vea supermarket chains. This transaction is still awaiting approval due to the different challenges raised by a Federal Judge of the City of San Rafael in the Province of Mendoza and the Federal Court of Appeals of Mendoza. The claim was initiated as a consequence of the alleged damage that the transaction could create to competition in the supermarket chain market of a small city in the Province of Mendoza. The Federal Judge first ordered three different and contradictory preventive measures and then later, when he finally analyzed the case, decided to reject the claim. That decision was confirmed by the Federal Court of Appeals of Mendoza. However, the decision of the Federal Court of Appeals of Mendoza contained some caveats that, up until now, prevented the transaction from being analyzed by the National Commission for the Defense of Competition (“Antitrust Commission”).

The Supreme Court pointed out that the Judge of the City of San Rafael issued contradictory and inconsistent decisions and it ordered the transfer of the case file to the Consejo de la Magistratura (the agency in charge of regulating judicial behavior) for the investigation of possible misbehavior during the analysis of the case.

In the Multicanal case, where one of the biggest Cable TV providers is acquiring the other largest Cable TV provider (Cablevisión S.A.), the plaintiff requested a judge from the City of Concarán, in the Province of San Luis, to suspend the analysis by the Antitrust Commission of the transaction through a preventive measure. The request was granted. On June 12, 2007 the Supreme Court declared that the local Judge from the City of Concarán did not in fact have jurisdiction to analyze antitrust issues derived from the Antitrust Law No 25,156 (“Antitrust Law”) and ordered the immediate transfer of the case file to the Federal Court on Administrative Matters No 2 of the City of Buenos Aires.

These two decisions show that the Supreme Court is trying to prevent the practice of “forum shopping” and is being tough on those local or provincial judges who assume jurisdiction to review Antitrust Law issues without having previous experience.