Russian court OKs Eurocement, regulator's settlement of antitrust case

Russia's Federal Arbitration Court for the Moscow Region passed a judgement of consent on Thursday on the amicable agreement reached by the country's largest cement producer Eurocement and the country's Federal Antimonopoly Service (FAS) in July.

The court declared null and void all previous verdicts on the case and put an end to the litigation process.

In October 2005, the FAS accused Eurocement of unreasonable cement price hikes and output cuts, which, the FAS said, violated the country's antimonopoly law. The regulator ruled that Eurocement should lower its prices to a reasonable level and pay fines totaling 1.9 billion rubles to the federal budget.

Eurocement appealed against the ruling to the Moscow Arbitration Court, which rejected the appeal in March, and to the Moscow Arbitration Court of Appeals, which upheld the case on January 10.

Subsequently, the FAS filed a cassation appeal against the court of appeals' verdict with the federal arbitration court.

In July, Eurocement and the FAS announced that they had reached an-out-of-court settlement. Under the settlement, Eurocement has agreed to pay 267 million rubles in fines and has pledged to comply with antitrust law and abstain from price hiking or cutting its output without good cause and regulatory approval. Eurocement must notify the regulator when it increases cement prices by more than 5%, under the deal. Eurocement must also submit to the regulator at its request quarterly information on cement prices and must notify the regulator about purchases of stakes amounting to 15% and more in other companies.

Eurocement's production assets include 13 cement facilities in Russia and two cement plants in Ukraine. The company's annual output amounts to 33 million tonnes.

(26.7863 rubles - U.S. $1)