The Supreme Court revokes CNMC’s fine due to the invalidity of parallel proceedings

In its Judgment of February 23, 2023, the Spanish Supreme Court revoked the Judgment of the Spanish High Court (Audiencia Nacional) of December 18, 2020, confirming the €35,372 fine imposed by the CNMC on Hormigones de Sevilla, S.L. (“Hormigones de Sevilla”) for its alleged participation in the cement cartel.

Background

In the context of sanctioning proceedings S/DC/0525/14 Cementos, the Spanish competition authority (CNMC) sanctioned 24 cement companies for allegedly participating in a price-fixing, market-sharing and information exchange cartel in the cement and concrete markets.

In 2020, following the appeals filed by the sanctioned companies against the CNMC’s decision, the Spanish High Court annulled most of the fines for lack of evidence, as explained in this Post| Cement: the Audiencia Nacional annuls a €29.1 million fine imposed by the Spanish Competition Authority due to lack of evidence.

However, the Spanish High Court dismissed the appeal filed by Hormigones de Sevilla. While the rest of the companies questioned the very existence of the infringement seeking to invalidate the sanction, the Sevillian company simply challenged the amount of the fine. In response to the dismissal, Hormigones de Sevilla filed a cassation appeal before the Supreme Court. It argued that maintaining a sanction based on a case that had been declared null and void due to lack of evidence violated its presumption of innocence.

The Supreme Court’s Judgment

The Supreme Court first rejects the argument of an alleged violation of the presumption of innocence (due to the non-existence of the infringement) since the appellant had not invoked it at first instance. The Supreme Court recalls that cassation appeals cannot raise new issues, since their purpose is to verify the conformity of the contested judgment with the applicable legislation and case law.

Nevertheless, the Supreme Court admitted the appeal to analyze whether the High Court should have taken into consideration the grounds for nullity alleged in the rest of the cement cartel appeals—or whether, on the contrary, it should have restricted itself only to the claims raised by Hormigones de Sevilla, which were limited to questioning the amount of the fine.

On this issue, the Supreme Court states that Administrative Jurisdiction Act 29/1998, of July 13, 1998, enables the courts to introduce issues other than those raised by the parties, provided that they are granted a period of time to submit their pleadings. It also recalls that, although the court is not obliged to use this power, it must do so when effective judicial protection so requires. And this is the case when there is such a connection between different lawsuits that the grounds for nullity found in a final judgment must be taken into account in the rest.

Applying the above to the appeal filed by Hormigones de Sevilla, the Supreme Court considers it inconsistent to maintain a sanction based on a cartel when the CNMC’s resolution had been declared null and void for lack of evidence of participation by the rest of the companies on such conduct. For this reason, the Supreme Court annulled the judgment and returned the proceedings to the time prior to the ruling, granting the parties a period of time to present their arguments on “the potential impact for this appeal of the grounds for nullity found in other rulings of this court referring to the remaining companies to which this same infringement was attributed.”

Conclusions

The Spanish Supreme Court confirms its previous case law (set out in its judgment of June 2, 2014) on a key issue regarding the challenging of CNMC’s sanctions involving numerous companies—as has been common recently. In that case, Mercadona requested the enforcement of a Supreme Court judgment annulling sanctioning proceedings 612/06 (ACEITES 2) in response to an appeal filed by another of the sanctioned companies, SOS Cuétara. In the first instance, the Spanish High Court dismissed Mercadona’s appeal on the grounds that it had not been a party to the judgment and had not even appealed the sanction. However, the Supreme Court reversed this decision arguing that, despite not having been a party to the proceedings, Mercadona should be considered a “person affected.” Therefore, it had standing to request the enforcement of the judgment—and, consequently, the revocation of the fine.

This judgment confirms that the Spanish High Court must take into account the rulings in related cases when determining whether to maintain or revoke a sanction in a specific appeal—even if the appellant has not raised such issues. This prevents inconsistencies and violations of effective judicial protection, which would be the case if sanctions are upheld against certain companies for alleged violations that have not been duly proven.

Keywords: Supreme Court, High Court, appeal, cassation, CNMC, cement, concrete, Hormigones Sevilla, revocation, fine, S/DC/0525/14, effective judicial protection, nullity, erga omnes effects.