Argentina: Appeals Against Resolutions On An Advisory Opinion: When Does An Adverse Outcome Entail Sufficient Grounds?

Last Updated: 12 December 2012
Article by Alfredo M. O'Farrell and Miguel Del Pino

A ruling of the Federal Court of Appeals sets out a new perspective on what would be the grounds for the filing of appeals against Advisory Opinions.


In a recent ruling ("Talanx International AG and others v. Antitrust Commission"), the Federal Civil and Commercial Court of Appeals (the "Court of Appeals") rejected an appeal filed against a resolution issued by the Secretary of Domestic Trade (the "Secretary") by means of which it ordered the notification of a transaction. This ruling sets out a new perspective on what would be the grounds for the filing of appeals against Advisory Opinions.


On July 10, 2012, Room I of the Court of Appeals issued a ruling by means of which it rejected the appeal filed by Talanx International AG and Messrs. Antonio Tedin and Marcelo Fabiano against Resolution No.106 dated July 27, 2011 issued by the Secretary (the "Resolution"). The challenged Resolution had been issued in the context of the Advisory Opinion submitted before the Argentine Antitrust Commission (the "Antitrust Commission") in order to determine whether a transaction was subject to merger control as set out by Law No. 25,156 (the "Antitrust Law").

Pursuant to the Resolution, the parties that had requested the Advisory Opinion had to notify the proposed transaction due to the fact that the exemption set out by Section 10, sub-section c) of the Antitrust Law was not applicable. In its analysis of the case, the Antitrust Commission considered that said exemption was not enforceable, since one of the companies of the economic group of the purchaser, Hannover, offered services of reinsurance in favor of insurance companies that operated in the Argentine market and thus "an independent businesses volume, with clients and own value could be attributed, thus being able to generate matters of economic nature".

The appealing parties requested that the transaction be exempted from the merger control procedure. In their opinion, the Secretary erred in considering that the exemption provided by Section 10, sub-section c) of the Antitrust Law would not be applicable to the case since the acquiring party was not the holder of shares or assets in Argentina as textually set out in Antitrust Law and, moreover, the volume of business of the transaction did not surpass the threshold requested under Section 8 of the Antitrust Law.

Pursuant to Section a.5) of the Schedule of Resolution No. 26/2006 of the Secretary of Technical Coordination, the resolutions that are issued as a consequence of a request for an Advisory Opinion can be appealed. Said resolution states that the Secretary will resolve upon the admissibility or not of the appeal, while the Court of Appeals will resolve upon the matter.

Due to the majority vote of the members of the Court of Appeals, the matter to be analyzed consisted of determining whether the obligation of notifying the transaction under Section 8 of the Antitrust Law was an "excessive burden that altered constitutional rights and guarantees of the contracting parties". Hence, the Court of Appeals understood that the Resolution did not cause an irreparable damage to the interest of the parties, and as such the appeal was rejected.

The conclusion of the Court of Appeals was based on Section 8 of Decree No. 89/2001 and Resolution No. 26/2006, by considering that Advisory Opinions just decide whether the transaction was subject to merger control as set out in Section 8 of the Antitrust Law but does not decide on the existence, scope and modality of the appealing parties' rights. As stated by the Court of Appeals: an Advisory Opinion "... decides upon a doubtful situation before the administration [...] does not cause any harm or detriment to the rights or interests of the contracting parties" and "does not declare the existence or extinction of a right".

On the other hand, the majority of the Court understood that the defense based on the excessive delay that would demand the analysis set out by Section 8 of the Antitrust Law was not sufficient in order to justify the existence of harm since it was a conjecture due to the fact that the notification form to initiate the procedure had not even been submitted.

Furthermore, the majority vote stated that, since the appealing parties had not indicated which was the volume of business involved in the transaction nor proved the non-existence of ownership of assets of the acquiring party in the country, it was appropriate to disregard the defenses based on those grounds.

In contrast with the analysis of the majority, Mr. Francisco de las Carreras concluded that the appealed decision should be revoked. The dissident vote understood that the issue rose by the appeal involved whether the requirements for concluding that the transaction brought to consideration under the Advisory Opinion was or not exempted to undergo merger control review by the Antitrust Commission. In this regard, Mr. de las Carreras considered that the law should be interpreted as to what has been literally stipulated therein, the exemption to comply with the obligation set out by Section 8 of the Antitrust Law would take place when the acquirer has no "assets or shares of other companies in Argentina". In this regard, Mr. de las Carreras concluded that, to the extent that the Secretary did not analyze whether the acquiring party owned any shares of any company based in Argentina and actually did not produce any evidence as to the fact that it lacked to own any assets in Argentina, the Resolution should be revoked and the proceedings returned to the Antitrust Commission in order produce the relevant evidence so that the competent authority will have the necessary elements to "decide on the relevance of the exemption relied upon by the parties".


This precedent creates a new scenario regarding the request for an advisory opinion since, to the extent that Resolution No. 26/2006 provides for the possibility of appealing resolutions on said matter, the question that would arise would revolve on what would then be the grounds for an appeal if the parties were not allowed to question the outcome of the decision that would order them to notify a transaction under the terms of Section 8 of the Antitrust Law. The sentence of the Court of Appeals in this ruling entails that the appealing parties should at least provide other grounds aside from a mere disagreement with the resolution of the Secretary.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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