THE CASSATION SUPPORTED DECISION OF THE FAS RUSSIA IN RELATION TO RUSSIAN RAILWAYS

15-04-2021 | 11:15

The company violated antimonopoly legislation and abused its dominant position

The Arbitration Court of the Moscow District supported the position of the FAS Russia in relation to Russian Railways JSC. As the FAS Russia previously found out, the organization set a monopolistically high price for thermal energy, abusing its dominant position and violating antimonopoly legislation.

The company fictitiously overestimated the cost of producing thermal energy, while the market conditions, the volume of steam generation, and the composition of sellers and buyers remained unchanged. Earlier, the authority’s position on the company's actions was supported by the courts of the first and appellate instances.

The deregulation mechanism conceived by the legislator allowed many counterparties to form a proactive price for thermal energy that is beneficial to both parties to the heat supply contract.

However, according to the FAS Russia, it is unacceptable that free pricing for unscrupulous market participants turned into the possibility of predicative dominance of the market power by setting or imposing unreasonably high prices for steam to counterparties, denying buyers the opportunity to provide the necessary level of profitability in their production process.

The FAS Russia, taking into account the established practice, will continue to apply actively the antimonopoly response mechanisms in the event of detection of such precedents on the part of a seller that occupies a dominant position in the market.

 

For reference:

The FAS Russia established the fact of violation of the antimonopoly legislation by Russian Railways JSC after considering the application of Rikvest-Service LLC on the actions of the company. The organization unilaterally unreasonably increased the price of thermal energy in the form of steam, which is supplied to Rikvest-Service by the boiler house in Samara, which is on the balance sheet of Russian Railways.

Since January 2019, the legislation provides for full liberalization of relations between heat producers and consumers (business). Accordingly, the price of thermal energy is an essential condition of the contract and is determined by agreement of the parties.



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