OREANDA-NEWS. August 31, 2012. The Federal Antimonopoly Service (FAS Russia) will appeal a judgment of Moscow Arbitration Court regarding “Russian Railways” OJSC. The Court decided that the company had not violated the antimonopoly law by evading provision of freight rail transportation at the tariffs set by the government under the law on natural monopolies, reported the press-centre of FAS Russia.

According to FAS, the carrier, a holder of natural monopoly in freight rail transportation, violated legitimate rights of particular consignors who then petitioned to FAS Russia.

FAS investigated the case on breaching the Federal Law “On Protection of Competition” and recognized that the company had violated the law.

The consignors applied to “Russian Railways” OJSC for obtaining integrated services for transporting particular cargo in the carrier’s cars in accordance with the Railway Transport Statute of the Russian Federation and the Rules for Freight Rail Transportation. The company refused to render the services referring to absence of the required cars. The law of the Russian Federation does not provide for such grounds for the carrier to refuse accepting applications. On the contrary, under Article 11 of the Railway Transport Statute and Article 791 of the Civil Code of the Russian Federation, “a carrier must provide to a consignor faultless means of transportation for loading, in a condition suitable for transportation of relevant goods, on schedule, specified in an application filed by the consignor (an order), a transportation contract or a contract for organizing transportations”.

Under the antimonopoly law, in such situations a carrier’s refusal to agree upon and satisfy consignors’ applications constitutes several violations of Article 10 of the Federal Law “On Protection of Competition”. The FAS Commission formulated these conclusions making a decision on the case.

At the Court hearing, representatives of “Russian Railways” OJSC referred to the railway transport reforms. However, normative-legal acts, that form the basis of the railway industry reform, do not change the procedures for filing consignors’ applications for freight transportation. The documents also do not relieve “Russian Railways” OJSC from obligations to grant applications for cargo transportation in the carrier’s cars.

In the FAS opinion, the reforms and removing inventory rolling stock in various subsidiaries are not directly related to the case in question.

The arguments of representatives of “Russian Railways” OJSC that the company does not have rolling stock and it complies with the program of structural reform, contradicts No.1051 Decree of the Government of the Russian Federation “On the Procedures for Using the Rolling Stock of “Russian Railways” OJSC for Freight Transportation and on Establishing Special Pricing Procedures for Freight Transportation in this Rolling Stock” of 20th December 2011.

The FAS position has not changed. “Creating a subsidiary and an affiliate was aimed towards effective competition between owners of rolling stock and not to allow the holder of a natural monopoly evading government regulations of freight transportation”, commented Deputy Head of FAS Andrey Golomolzin. “The problem of “Russian Railways” OJSC is that in spite of the FAS determination on forming the first freight company (“PGK” OJSC), “Russian Railways” OJSC failed to devise a mechanism for using cars for transportation”.

“When FAS approved conditions for creating the second freight company (“VGK” OJSC), “Russian Railways” OJSC undertook an obligation to devise the Regulations determining the conditions for using cars for transportation. Then, however, the company flatly refused to sign the Regulations in the FAS version”, pointed out Deputy Head of FAS.

According to FAS, as a result of the failure of “Russian Railways” OJSC to provide rolling stock for the requested transportations, the principle of publicity of freight railway transportation became just a declaration.

Under the Government Decree, the problem of providing universal rolling stock for transportation was resolved. Thus, “Russian Railways” OJSC must fulfill the obligations given to FAS when creating “VGK” OJSC.

FAS will continue defending its position at Courts.