by ACI Partners

News10 July 20150 comments

Abuse of Dominant Position by Moldovan Railways upheld by Court of Appeal

Chisinau, Moldova, 10 July 2015 – ACI Partners News.

On 17 June 2015, the Chisinau Court of Appeal upheld the decision of the Competition Council on abuse of dominant position case against the State Company “Calea Ferata din Moldova” (“Moldovan Railways” or “CFM”) that has been initiated back in 2012. 

CFM is the only company providing railway transport services in Moldova, whose dominant position on the Moldovan market of railway transport services has been recognized in 2012.  The Competition Council found that CFM had abused of its dominant position when changing its pricing policy for the transport of goods from the Giurgulesti International Free Port (“GIFP”) to the rest of the Moldovan territory.  By the said change, CFM started to qualify the transport from GIFP to other Moldovan territory as international transport, notwithstanding the fact that GIFP represents an integral part of the territory of the Republic of Moldova.  CFM reasoned change of its pricing policy by the fact that the delivery of goods and services from GIFP to rest of the territory of the Republic of Moldova shall be assimilated to export operations, as expressly regulated by law. 

As a consequence, the tariffs applied by CFM for the transport from the territory of GIFP, were significantly higher compared to the internal transport tariffs.  Thus, CFM has created by such practice a disadvantage for business entities that had to support double costs when transporting goods on the same itinerary within Moldovan territory, only because of the fact that the point of departure was located in GIFP. 

CFM new pricing policy has been criticized by the Moldovan Government at the time.  In this respect, the services of ACI Partners has been retained in order to issue a legal opinion and to determine the legal regulations in the field of international and internal railway tariffs.  ACI Partners has opined on whether treating by CFM of delivery of goods and services from GIFP as an international transportation was legally grounded.

CFM arguments did not convince the Competition Council, neither the court of first instance, nor the Chisinau Court of Appeal and as a result the CFM has been imposed with a fine of around MDL 1.3 million for the abuse of dominant position. 

CFM still has the right to challenge the decision of the Court of Appeal in the Supreme Court of Justice, which will have the decisive word in this case. 

For additional details on Moldovan competition law rules, please contact Carolina Parcalab, Legal Manager, who is in charge of ACI Partners Competition Law Service Line.