Eurocement Group and the Federal Antimonopoly Service of Russia (FAS) have signed an amicable agreement in settlement of a dispute concerning alleged violation of antitrust laws. This agreement was announced by the Deputy Director of the FAS, Andrey Tsyganov, and Dimitry Afanasiev, lawyer for the cement holding company.

On the 11 October 2005 the FAS had passed judgment on lawsuit № 105/227-05 stating that the actions of Eurocement Group constituted a violation of point 1, article 5, of the Law RS F S R dated 22 March 1991, № 948-1 “About competition and restrictions of monopolistic activity in the goods’ markets”. Eurocement was instructed to eliminate the violations of the antitrust laws.

The Arbitrage Court of Moscow, in a judgment dated 17 January 2006 concerning lawsuit №A40-67098/05-92-591 which had been brought by Eurocement, upheld that decision in favour of the FAS. However a ruling of the 9th Arbitrage Appeal Court of Moscow, dated 31 March 2006, discharged the decision of the Arbitrage Court of Moscow and the FAS instruction was declared invalid.

Having considered the above-mentioned cases as well as the results of an additional examination into the condition of the Russian cement industry that had been carried out by the FAS, the parties have now agreed to a complete settlement of the dispute. In particular, account was taken of the fact that the activity of Eurocement had a number positive socio-economic effects, including increasing tax revenues for the state budget, increasing investment for the industry, increasing employment and also the fact that Eurocement is ready to undertake a full-scale modernization and re-equipment of the cement enterprises during 2005-2010 to a value of RUB10 bn.

“We are satisfied with the amicable agreement that we have reached, because it opens the door for the consolidation of Eurocement and allows for the realization of large scale investment in the cement industry that is important for the increasing demands of both the building industry and the realization of the priority national project “Accessible housing – citizens of Russia” – declared Eurocement’s President, Mikhail Skorohod.

The agreement will be presented for the confirmation by the Federal Arbitrage Court of Moscow Region.