Arkhangelsk OFAS Russia lawfully fined “TGK-2” OJSC

Сентября 22, 2010

Yaroslavl Regional Arbitration Court dismissed the claim of “TGK-2” OJSC on invalidating the determination of the Office of the Federal Antimonopoly Service in the Arkhangelsk region (OFAS Russia), which imposed an administrative fine upon “TGK-2” OJSC (RUB 300,000).

The Prosecutor’s Office of the Arkhangelsk Region instructed Arkhangelsk OFAS Russia to verify the facts about “TGK-2” OJSC described in the article “TGK-2” got cash while people are freezing!”, which was published in the Arkhangelsk newspaper (No.44, 2010).
On 5th April 2010, Arkhangelsk OFAS Russia requested “TGK-2” OJSC to provide legal justification of the company’s position regarding non-payments described in the article.
“TGK-2” OJSC refused to provide such information on the grounds that the request does not fir the current law and FAS’ scope of reference. According to the company, the purpose of the request was to control whether commercial organizations fulfilled their obligations to the counteragents, in particular, making timely payments for the received goods, which is beyond the scope of reference of the Antimonopoly Service.
On 12th May 2010, Arkhangelsk OFAS Russia sent a second request to “TGK-2” OJSC for similar information. Again the company refused to provide information to the Antimonopoly Service on the same grounds.
The antimonopoly body classified the company’s omissions as a violation, liability for which is specified in Part 5 Article 19.8 of the Code of the Russian Federation on Administrative Violations.
On 12th July 2010, Arkhangelsk OFAS Russia issued a determination “On imposing a fine” upon the company; the size of the fine is RUB 300,000.
“TGK-2” OJSC considered the determination unlawful and filed a lawsuit. The Court, however, rules that request made by Arkhangelsk OFAS Russia had sufficient and proper explanations under Clause 1 Article 25 of the Federal Law “On Protection of Competition”. The Court also dismissed the arguments of “TGK-2” OJSC about the absence of the subject of antimonopoly control and that Arkhangelsk OFAS exceeded its authority.
“The court ruling is very important for antimonopoly enforcement in the market of heating energy. It was not the first time that “TGK-2” OJSC refused to provide information on the grounds that the subject of the request lies beyond the scope of reference of the antimonopoly authority. Now the Court has confirmed our right to independently determine our terms of reference”, said the Head of Arkhangelsk OFAS Russia Konstantin Alyoshin.