In its unanimous decision of May 22, 2012, the Argentine Supreme Court of Justice ratified the precautionary measure obtained by Grupo Clarín which suspended the adjustment obligation established under Section 161 of the Audiovisual Communication Services Law No. 26,522 (the "Media Law") and set the term of effectiveness of such measure until December 7, 2012.
Background
On December 7, 2009 Grupo Clarín obtained a precautionary measure suspending the application of Sections 41 (prohibition of transferring licenses) and 161 (adjustment obligation) of the Media Law (File No. 8836/09 "Grupo Clarín SA y otros s/Medidas cautelares" – Federal Civil and Commercial National Court No. 1, City of Buenos Aires, Judge Edmundo J. Carbone).
On May 13, 2010 the precautionary measure was confirmed by the Federal Civil and Commercial Court of Appeals of the City of Buenos Aires (the "Court of Appeals"), but only with respect to Section 161 of the Media Law.
On October 5, 2010 the Argentine Supreme Court rejected the extraordinary appeal filed by the Federal Government, confirming thus the validity of the precautionary measure of Grupo Clarín with respect to Section 161 of the Media Law. In its decision the Supreme Court considered it appropriate to establish a term of duration for the precautionary measure.
On November 9, 2010 the Judge Edmundo J. Carbone (who had originally granted the measure in favor of Grupo Clarín) rejected a request by the Federal Government to revoke the precautionary measure and to establish a term of duration for the same.
However, the Court of Appeals established a validity term of 36 months for the precautionary measure, counted as from the notification of the lawsuit (which took place on November 17, 2010, when the measure had been granted on December 7, 2009).
The Federal Government then lodged an extraordinary appeal, which denial motivated the filing of a complaint appeal before the Supreme Court requesting to revoke the precautionary measure obtained by Grupo Clarín.
The Supreme Court Decision. Application of Section 161
On May 22, 2012 the Argentine Supreme Court ruled in re "Recurso de hecho deducido por el Estado Nacional (Jefatura de Gabinete de Ministros) en la causa Grupo Clarín S.A. y otros s/medidas cautelares".
In an unanimous ruling, the Supreme Court decided the following:
- That the precautionary measure obtained by Grupo Clarín must be maintained – according to the finding of the Supreme Court in its judgment of October 5, 2010.
- That the 36-month timeframe established by the Court of Appeals for the effectiveness of the precautionary measure is not unreasonable.
- That such term must be counted as from the granting of the precautionary measure, which took place on December 7, 2009.
- That considering that the term provided by Section 161 of the Media Law expired on December 28, 2011 (according to the regulation of the Media Law), such obligation will be applicable to Grupo Clarin from December 7, 2012, with all its effects.
Accordingly, in terms of the judgment of the Supreme Court, Grupo Clarín will be subject to the adjustment obligation established under Section 161 of the Media Law from December 7, 2012.
Section 161 of the Media Law states the following: "The holders of licenses of services and registries regulated by this law that at the date of its enactment do not fulfill or do not comply with the requirements provided by it, or the legal entities that at the moment of entry into force of this law were holders of a larger quantity of licenses, or with a corporate composition different from the allowed one, must adjust to the provisions of the present within a term not exceeding one (1) year as from the time the enforcement authority establishes the transition mechanisms. Expired said term will be applicable the measures that for breach – in each case– corresponded."
Within the framework of Section 161, in order to adjust the situation of the licensees who do not comply with the requirements provided by the Media Law with a corporate composition different from the allowed one or with a larger quantity of licenses, the Regulatory Decree of the Media Law No. 1225/2010 established the following transition mechanisms:
- Voluntary Adjustment: adjustment procedure initiated by the licensee by an affidavit proposing the regularization of their situation.
- Verification ex officio: procedure to be initiated ex officio by the Audiovisual Communication Services Federal Authority (AFSCA) to verify the effective adjustment to the provisions of Section 161 of the Media Law.
- Adjustment by transfer of licenses.
- Voluntary Transfer: the licensees may transfer the licenses to a third party that complies with the legal requirements, or grant such power to the AFSCA for the respective tender.
- Transfer ex officio: The AFSCA will order the transfer of the licenses for the purposes of adjustment in case that the holders do not comply with the adjustment in the terms of Section 161 of the Media Law.
The transfer mechanisms detailed above were, in turn, regulated by Resolution AFSCA No. 297/2010 (published in the Official Gazette on September 8, 2010) which established that the term not exceeding 1 year for the adjustment provided under Section 161 would commence to be in force as from the day after the Resolution's publication.
This deadline was extended by Resolution AFSCA No. 1295/2011 (published in the Official Gazette on September 30, 2011), for 60 (business) days from its publication, this is, as of December 28, 2011.
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