Ucom Company Has Shared Its Position with the RA Commission for Protection of Economic Competition

On June 26 of this year, the Republic of Armenia's Commission for Protection of Economic Competition addressed Ucom LLC to clarify the latter's position regarding the concentration through the acquisition of 100% of VimpelCom Armenia LLC's shares by Team LLC.

This was announced in a statement released by Ucom LLC: "It should be noted that on June 8 of this year, Team LLC submitted a request to the RA Commission for permission to carry out the mentioned transaction. On July 1 of this year, Ucom LLC presented its position regarding the transaction, stating in particular that this concentration is subject to prohibition on several grounds.

Specifically, according to the position, the actions of Team LLC and its management should be classified as unfair competition (including the use of confidential information belonging to Ucom without disclosure, which constitutes unfair competition). Therefore, the signing of the transaction in question contradicts Articles 11 and 16 of the Law on Protection of Economic Competition of the Republic of Armenia, and the concentration is subject to prohibition by the Commission.

The position notes and substantiates that the former CEO of Ucom, Hayk Yesayan, as well as the former Deputy Director and Strategic Director Alexander Yesayan (who is still a member of the board of directors of Ucom LLC), in our assessment, violated their fiduciary duties toward Ucom, as well as used confidential information considered the property of Ucom when negotiating the transaction with VimpelCom Armenia LLC and signing the memorandum submitted to the Commission (including details of the transaction with VimpelCom, which in the legislation and judicial practice of various countries is known as the doctrine of corporate opportunity misappropriation).

Thus, we find that the disclosure and use of confidential information belonging to Ucom by the Yesayans enabled Team LLC to negotiate and sign a memorandum within a month and is preparing to acquire shares of VimpelCom Armenia LLC, whereas negotiations for similar transactions usually last for months, if not longer. The actions indicated, as substantiated in the Position, constitute unfair competition and are prohibited.

Ucom LLC has provided the RA Commission with factual circumstances supporting the aforementioned claims. Moreover, a comparative-legal analysis of the practices of countries with similar legal regulations has been presented as an additional argument supporting the reasoning provided in the position. The information provided emphasizes that such manifestations are not unique and are condemnable both in Armenia and abroad.

Ucom LLC announces that it is prepared to defend its violated rights both in the relevant authorities in Armenia and in appropriate courts abroad, and is currently conducting discussions with a team of legal service providers and foreign lawyers regarding possible legal actions abroad as well," the statement reads.