FAS CAN EVALUATE ACTIONS OF THE AUTHORITIES IN THE FIELD OF CONSTRUCTION THAT AFFECT DEVELOPER’S OPERATIONS

The competition authority can consider all circumstances investigating complaints and make decisions on violating construction procedures

In July 2017, following an auction, “Aviator” and the Tver Authority entered into contracts for land plot lease* and integrated development of the area** - residential housing. Later the leased plot, which the developer planned to split and build up, was transferred form municipal property to the public property of the Tver region.

In October 2017, the company, observing all necessary procedures, approached the Ministry of Property and Land Relations of the Tver region to receive lease the newly formed land plots without competitive procedures under the frame of developing the land. Technically, the plots form a single land plot earlier leased by the company from the Tver Authority.

The developer did not receive a response within the statutory period and filed a complaint to FAS under Article 18.1 of the Law “On Protection of Competition” that the Ministry had breached the deadline for responding to the application.

When the complaint was investigated, the developer received a refusal referring that the contracts concluded after the auction was invalid and the company cannot claim lease of newly formed plots without tendering procedures.

“Having studied the applications and the reasons for the refusal, FAS ordered the Ministry to reconsider the company’s application since only Court could invalidate the deal”, emphasize Head of FAS Department for Control over Construction and Natural Resources, Oleg Korneev.

The 9 Appeal Court in Moscow concluded that investigating the complaint the antimonopoly body had had the rights to go beyond its arguments and evaluate other actions of the authority containing violations affecting developer’s operations.

Deputy Head of FAS Rachik Petrosyan emphasized: “So far, two Courts have ruled that the decisions and order of the antimonopoly body, designed to observe the procedures in construction, are legitimate and reasonable. The Ministry must reconsider the company’s application as soon as possible because it is due to the unlawful ministerial actions the developer is incurring losses, paying the land plot lease without being able to start developing it – executing residential housing construction”.

Background:

* Land plot lease contract, cadastre number 69:40:0100120:1251, location: No. 370-1, 2 Krasin St., Tver, the Tver region.

** The contract on integrated development of the land plot, cadastre number 69:40:0100120:1251, location: No. 370-1, 2 Krasin St., Tver, the Tver region.