OREANDA-NEWS. August 23, 2013. The Arbitration Court of St Petersburg and the Leningrad Region pronounced legitimacy of the decision made by the Office of the Federal Antimonopoly Service in the Leningrad Region (Leningrad OFAS Russia) that “Lenenergo” OJSC was abusing its market dominance on a regular basis (in breach of Part 1 Article 10 of the Federal Law “On Protection of Competition”).

The case against “Lenenergo” OJSC was initiated upon an initiative of Leningrad OFAS Russia. Due to similar circumstances OFAS joined the case with petitions from 42 residents of Tosna, Lomonosov, Gatchina, Luga, Priozersk, Vyborg, Kirov, Volosovo and Kengisepp District of the Leningrad region.

Technological connections contracts between residents and the network organization were concluded in с 2009 -2011. All petitioners indicated omissions and failure to meet the contract conditions by the network company.

Examining the case materials, the Commission of Leningrad OFAS Russia established that “Lenenergo” OJSC failed to fulfill its obligations on a regular basis because:

- The monopolist delayed the procedures for evaluating economic efficiency of investment programmes for the small-budget projects

- Delaying tender procedures for determining contractors and signing contracts for carrying out the works

- Failure to carry out claim activities with contractors

- Failure to attract additional finances (credits, loans, other sources of financing)

- Failure to use own funds (profit for investments, amortization, VAT recovery, оremaining balance at the beginning of the year, etc.)

- Failure to include the works for technological connection of applicants in the targeted investment programme.

For instance, in October 2009 a resident of Gatchina District, the Leningrad region applied to “Lenenergo” OJSC for connection to the electric power networks. The contract between the resident and the network organization was concluded only in February 2010. And only ten months after the contract was signed, “Lenenergo” concluded a contract with a contractor for carrying out works on the resident’s application. The works were supposed to be completed by the end of December 2011 but the contractor upset the timeframe. As of November 2012 “Lenenergo” OJSC had not submitted the evidence of carrying out claim activities under the contract to Leningrad OFAS Russia.

Leningrad OFAS Russia issued a determination to “Lenenergo” OJSC to eliminate the violations. The network company, however, challenged the decision and determination of the antimonopoly body at Court, which confirmed legitimacy of the actions undertaken by Leningrad OFAS Russia.

“Yet another OFAS decision withstood at Court. It means that investigating antimonopoly cases, we are able to efficiently exercise prejudicial procedures for members of general public and legal entities protecting their rights”, emphasized the Head of Leningrad OFAS Russia Vadim Vladimirov.