Monday, 26th March 2012 by Rachel Hall

Brazil’s Council for Economic Defence (CADE) has dismissed a 12 year administrative proceeding relating to an international lysine cartel investigation from the 1990s after the time frame for handling the case passed under the statute of limitations.

Pinheiro Neto Advogados, Trench, Rossi e Watanabe Advogados and Machado, Meyer, Sendacz e Opice Advogados helped the local subsidiaries of three companies – Ajinomoto, Archers Daniels Midland and Sumitomo – involved the proceeding, which closed on 14 March.

The companies are all producers of lysine, an essential amino acid derived from corn-soybean and used in several additives for food.

Brazil’s antitrust authorities initiated an administrative proceeding in 2000; four years after the US Department of Justice ordered a group of lysine producers to pay a fine for operating as a cartel in the international lysine market between 1992 and 1995. Brazil investigated the local subsidiaries of ADM, Ajinomoto and Sumitomo to asses the potential effects in Brazil of the cartel case. The companies were also condemned by the antitrust authorities in Canada, the European Union and Mexico.

After the companies presented their defences in June 2000, the administrative proceeding lay dormant for a long time without any further steps being taken by Brazil’s antitrust investigative body, the SDE. This month, some 12 years on from the initiation of the administrative proceeding in Brazil, and 20 years after the original case in the US, CADE made a unanimous decision that the administrative proceeding should be dismissed on the grounds of the statute of limitations, as the case had remained inactive for a period exceeding the three year limit.

Trench Rossi partner Francisco Todorov says such an outcome is relatively common in Brazil. “When the SDE sees the case has no chance of success instead of quickly terminating the case they tend to leave it to sit idly.” He would like to see the SDE formally terminate cases that have no chance of succeeding rather than leaving them to expire, although he does not that there have been improvements since the lysine cartel case was launched as the authorities have more experience handling international cases.

The companies investigated in the international case were Archers Daniels Midland, Ajinomoto, Kyowa Hakko Kogyo, Daesang and Cheil Jedang.

Counsel to Ajinomoto
In-house counsel - Koji Fujitani, Shuhei Takehara, Masanori Kobayashi and Ricardo Kiyoshi Sasaki
Pinheiro Neto Advogados
Partners Flávio Lemos Belliboni and Renê Guilherme da Silva Medrado and associates Fabricio Antonio Cardim de Almeida and Tiago Cação Vinhas

Counsel to Archers Daniels Midland
Trench, Rossi e Watanabe Advogados
Partners Tulio Freitas do Egito Coelho and Francisco Ribeiro Todorov

Counsel to Sumitomo
Machado, Meyer, Sendacz e Opice Advogados
Partner Tito Amaral de Andrade

(Latin Lawyer 26.03.2012)

(Notícia na Íntegra)