OREANDA-NEWS. April 10, 2014. The Federal Arbitration Court of the North-Caucasus District confirmed legitimacy of an over 34 million RUB fine imposed upon “Dagestan Power Supply Company” OJSC (“DESK” OJSC).

In November 2009, “Kaspenergosbyt” Ltd. complained to the regional Office of the Antimonopoly Service about actions of “DESK” OJSC. Investigating the case, Dagestan OFAS Russia established that “DESK” OJSC violated Part 1 Article 10 of the Federal Law “On Protection of Competition” (the decision was issued at the end of 2010).

“DESK” OJSC restricted power supply to “Kaspenergosbyt” Ltd. and bona fide consumers in Kaspiiskaya and to socially important town facilities.

On 15th December 2011, the antimonopoly body issued a determination to fine “DESK” OJSC over 34 million RUB.

The power supply company challenged the determination at Dagestan Arbitration Court that dismissed the claim of “DESK” OJSC. The company appealed the judgment of Dagestan Arbitration Court at the 16th Arbitration Appeal Court that also dismissed the claim of “DESK” OJSC and upheld the judgment of the lower Court.

“DESK” OJSC lodged a cassation appeal and the Federal Arbitration Court of the North-Caucasus District reversed the rulings of the Courts of lower instances and forwarded the case for reconsideration to Dagestan Arbitration Court, which on 21st February 2013 again confirmed legitimacy of the fine and dismissed the company’s claim.

“DESK” OJSC re-appealed the judgment of Dagestan Arbitration Court but the 16th Arbitration Appeal Court once again confirmed legitimacy of the fine.

Then “DESK” OJSC paid the fine: the antimonopoly body received the relevant documents.

Although the fine was already paid, the power supplier newly attempted to challenge its legitimacy and approached the Federal Arbitration Court of the North-Caucasus District, which this time supported OFAS decision and the rulings of the Courts of lower instances, confirming legitimacy of the actions undertaken by the antimonopoly body.

“Unlawful restrictions of power supply to “Kaspenergosbyt” Ltd. has socially dangerous consequences, particularly, an adverse impact upon competitive environment (restricting competition). For several years, the power suppliers were trying to avoid liability for the committed violation, challenging the fine at Courts. However, Courts mostly passed objective rulings, confirming legitimacy of the actions of Dagestan OFAS Russia. Although the company already lost judicial proceedings several times and paid the fine, it still continued challenging the sanction at Courts”, pointed out the Head of Dagestan OFAS Russia Kurban Kubasaev.

“I call upon power supply companies to think over possible large fines before making decisions on introducing unlawful restrictions of power supply to consumers. Violations shall not remain unpunished”, stated Kurban Kubasaev.