São Paulo judge quizzes state on possible Siemens settlement

31 January 2017 9:57am

10 October 2014. By Ana Rita Rego.

A Brazilian judge has asked the state of São Paulo whether it attempted to amicably settle a damage claim it brought against Siemens for its alleged involvement in a bid-rigging cartel.

São Paulo filed the claim in a state court in August 2013, after the German engineering company blew the whistle on the suspected illegal conduct.

The state is seeking to recover money that it says it overspent on building and maintaining a subway system in its capital city. It has also asked the court to include other companies involved in the suspected cartel as defendants.

The damages action has moved slowly, with the court frequently seeking clarifications and further information from the state to advance the case.

In an interim decision dated Oct. 8, the São Paulo court asked the state and public prosecutors whether they had reached out to Siemens to amicably settle the claim through mediation.

Public prosecutors have previously called the state’s action flawed. They have also suggested that the litigants could reach a negotiated settlement involving two agreements.

One would put an end to any anticompetitive conduct. The other, known as a “transaction agreement,” would spell out the amount of overspent money to be recovered.

But the state of São Paulo has no interest, at this point, in entering into mediation talks with companies allegedly involved in the cartel, because it can’t yet quantify the damage it sustained, MLex has learned.

The judge also asked for more information about other companies that the state claims wants to include in the claim.

“The state of São Paulo asked for the inclusion of other companies as defendants,”* the Oct. 8 ruling says. “But it didn’t describe the reason behind the request, nor did it indicate which
contracts had a binding effect.”

In May, the judge asked the state to clarify its allegations that it was overcharged by 30 percent for the subway works.

“Does the allegation of overcharging refer to each contract described in the action,” the judge asked. “And did it benefit all of the defendants, or in which proportion on average?”

Brazil’s antitrust authority is investigating the alleged conspiracy. Public prosecutors have launched five criminal actions against 34 employees suspected of rigging tenders.

The companies under scrutiny in the antitrust authority’s probe are: Alstom Brasil Energia e Transporte; Balfour Beatty Rail Power Systems Brazil; Bombardier Transportation Brasil; CAF Brasil Indústria e Comércio; Caterpillar Brasil; ConsTech Assessoria e Consultoria Internacional; Empresa Tejofran de Saneamento e Serviços; Hyundai-Rotem; IESA Projetos Equipamentos e Montagens; MGE Equipamentos e Serviços Ferroviários; Mitsui; Montagens e projetos especiais; Projetos e Consultoria Internacional; Serveng-Civilsan Empresas Associadas
de Engenharia; Siemens; Tecnologia e Consultoria Brasileira; Temoinsa do Brasil; and Trans Sistemas de Transportes.

ABA 2019