“LUKOIL-ASTRAKHANENEGRO” LTD. AVOIDED CONTRACT FOR HEATING ENERGY TRANSMISSION

Appeal Court confirmed the fact of violating the antimonopoly law by the company

Earlier, FAS received a statement from “Kolos” Astrakhan Municipal Unitary Enterprise that “Lukoil-Astrakhanenergo” Ltd. had been rejecting a contract for the heating energy transmission service.

Under the Law on heat supply (No.190-FZ) and the Heating Supply Rules in the Russian Federation, in statutory cases a heat network company and a unified heat supplier (UHS) must conclude a contract for heat energy transmission services.

The Ministry of Energy assigned the UHS status to “Lukoil-Astrakhanenergo” Ltd. by the time of filing the statement. The company has the dominant market position.

Having considered the statement made by “Kolos”, FAS exposed elements of violating the antimonopoly law and issues a warning to “Lukoil-Astrakhanenergo” Ltd. In 15 days the company must had sent a contract offer to the enterprise for heat energy transmission services under the conditions specified by the law. In addition, FAS sent explanations on executing the warning to “Lukoil-Astrakhanenergo” Ltd. and extended the deadline.

The company failed to execute the warning within the deadline, and appealed it at Court. The Court of First Instance and the Appeal Court confirmed legitimacy of FAS warning.

If the economic entity fails to execute the warning of the antimonopoly body, FAS shall open a case against the company.

In May 2018 FAS opened a case against “Lukoil-Astrakhanenergo” Ltd. FAS Commission found that the company violated the Federal Law “On Protection of Competition” (Clause 5 Part 1 Article 10).

“Lukoil-Astrakhanenergo” Ltd. appealed FAS decision. The Court of First Instance and then, on 17 June 2019, the Appeal Court confirmed legitimacy of the decision made by the Antimonopoly Service.

Such violations are liable under Article 14.31 of the Code of the Russian Federation on Administrative Violations. FAS fined the company 737,500 RUB.

Head of FAS Department for Regulating the Housing-and-Utility Sector, Alexei Matyukhin, informed: “It is worth reminding that in case of repeated violations of the law by companies, measures are determined to deprive them of the status of a unified heat supplier”.