OREANDA-NEWS. July 09, 2014. The Federal Arbitration Court of North-Caucasus District confirmed that the Office of the Federal Antimonopoly Service in the Republic of Dagestan (Dagestan OFAS Russia) lawfully found that “Dagestangazservice” Ltd. violated No.135 Federal Law “On Protection of Competition”.

The antimonopoly body received a petition of “ZhKKh Service” Ltd. (Kizilyurt) that asked to undertake measures against “Gazprom Mezhregiongaz Pyatigorsk” Ltd. for unlawfully terminating gas supplies.

Dagestan OFAS Russia initiated a case against the gas company upon elements of violating Part 1 Article 10 of the Federal Law “On Protection of Competition”: unreasonably terminating gas supply to “ZhKKh Service” Ltd. without economic or technological justification.

“Dagestangazservice” Ltd. was also brought to the proceedings as a respondent because the company switched off gas supply to “ZhKKh Service” Ltd. following the instructions from “Gazprom Mezhregiongaz Pyatigorsk” Ltd.

Upon the outcome of the case investigation, OFAS found that both gas companies had violated the Federal Law “On Protection of Competition”.

“Dagestangazservice” Ltd. disagreed with the conclusions made by the antimonopoly body and filed a lawsuit to Dagestan Arbitration Court and then lodged appeals to the 16th Arbitration Appeal Court and the Federal Arbitration Court of North-Caucasus District. All three Court Instances, however, dismissed the claim. Earlier Appeal and Cassation Courts already supported FAS position with regard to “Gazprom Mezhregiongaz Pyatigorsk” Ltd.

OFAS also opened an administrative case against “Dagestangazservice” Ltd. for this violation. As a result of its investigation, a turnover fine was imposed upon the company – 10.373 million RUB.

“The case is yet another reminder to economic entities that a supplier has the right to decrease or completely terminate gas supply to the buyers that repeatedly breached the payment deadlines for the consumed gas or its transportation. At the same time, the procedure must strictly comply with the procedures for terminating supplies of electric and heating power and gas to the organizations - consumers that fail to pay for the fuel-and-energy resources supplied to them (used by them), approved by a Decree of the Government of the Russian Federation of 05.01.1998”, commented the Head of Dagestan OFAS Russia, Kurban Kubasaev.