APPEAL COURT CONFIRMED LEGITIMACY OF FAS WARNING TO SYZRA AUTHORITY

FAS exposed elements of a violation in the course of determining a sole heating supplier

In July 2018, Syzran Town Authority adopted a Road Map for preparing to 2018-2019 autumn-winter season in view of more than 700 million RUB debt of “ZhES” Municipal Unitary Enterprise.

According to the Road Map, in June 2018 “ZhES” stopped being the sole heating supply company in Syzran.

Within 3 working days after the decision was made, the local self-government body had to make the act, that “ZhES” lost its sole heating supplier status, publicly accessible and invite heating suppliers and heating network companies to apply а for the status of the sole heating supplier.

The law provides for an open and competitive determination of the sole heating supplier. On 31 July 2018, Syzran Authority passed an act without competitive procedure to assign the status of the sole heating supplier to “Energetik” Ltd.

FAS issued a warning to the local self-government body to eliminate elements of the antimonopoly violation. Within 60 days upon receiving the warning, the local self-government body had to execute it my withdrawing the act on assigning the status of the sole heating supplier to “Energetik” Ltd. and organize a competitive procedure to determine the sole heating supplier.

Syzran Authority failed to execute the FAS warning and filed a lawsuit. On 2 September 2019, the Appeal Court confirmed legitimacy of FAS warning.

Head of FAS Department for Regulating the Housing-and-Utility Complex. “Guided by the Law “On Protection of Competition”, FAS opened a case upon the fact of failure to execute FAS warning. Investigating the case, FAS exposed elements of an anticompetitive agreement with the economic entity - “Energetik” Ltd. – and requalified it to Article 16 of the Law “On Protection of Competition”, that bans such agreements. The next case hearing will be on 19 September 2019”.