On recognition as illegal and cancellation of the regulation of the Committee on Regulation of Natural Monopolies
No. 6001-24-00-6ap/1850 dated February 13, 2025
Plaintiff: "V" LLP
Respondent: Russian State Institution "Department of the Committee for Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan" (hereinafter referred to as the Department)
The subject of the dispute: on the recognition as illegal and cancellation of the order dated September 20, 2023 (hereinafter referred to as the order)
Review of the defendant's cassation complaint PLOT:
The plaintiff is included in the local section of the State Register of Subjects of Natural Monopolies in the city of A. for the service of water supply through distribution networks and wastewater discharge
In connection with the complaint of the public association "M", the Department conducted an unscheduled audit of the LLP's activities for compliance with Article 26 of the Law of the Republic of Kazakhstan "On Natural Monopolies" (hereinafter referred to as the Law) for the period from January 1, 2022 to July 24, 2023.
As a result of the audit, an order was issued to eliminate violations, which, taking into account the revision of the LLP's complaint, contains one requirement - to bring contracts for the provision of water supply/sanitation services in line with Standard contracts for the provision of regulated services approved by the order of the Minister.
National Economy of the Republic of Kazakhstan dated June 24, 2019 No. 58.
Judicial acts:
1st instance: the claim is satisfied.
Appeal: the decision of the court of first instance remains unchanged.
Cassation: judicial acts in this case have been annulled. A new decision was made to dismiss the claim of "V" LLP against the State Institution "Department of the Committee for Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan" on recognition as illegal and cancellation of the order dated September 20, 2023
Conclusions: the local courts justified the cancellation of the order by the absence of a signed act on the results of the inspection and the order formed in the information system "Unified Register of Subjects and Objects of Inspections" (hereinafter referred to as IS ERSOP), which entails the invalidity of the administrative procedure.
Indeed, there was a malfunction in the work of the ERSOP IP, which is confirmed by the information provided by the authorized body for legal statistics and special accounting at the request of the court.
The sixth and seventh parts of Article 45 of the CPC establish that government agencies take measures to reduce (eliminate) the use of paper documents and the requirements for their submission in the exercise of public functions and the provision of public services.
If paper documents are used in the course of internal administrative procedures, government agencies take measures to convert paper documents into electronic documents.
Documents on paper or in electronic form are created, certified and stored in accordance with the procedure established by the legislation of the Republic of Kazakhstan.
An electronic document certified by means of an electronic digital signature (electronic document) is equivalent to a signed document on paper and does not require attestation by other means.
The first part of Article 79 of the CPC stipulates that an administrative act is adopted in written (paper and (or) electronic) form, unless otherwise provided by the laws of the Republic of Kazakhstan.
The specified requirements for document management in the cases described above allow the transition to a paper format of work with subsequent reflection (attachment) of documents into the information system.
In this regard, the defendant's actions in forming and handing over (sending) an act on the results of the inspection and instructions are not automated, but with their formation in paper form.
They meet the requirements for the procedure for processing the audit results (Article 152 of the PC), as well as the requirements for an administrative act (Chapter 11 of the APPC).
Therefore, handing over documents to the LLP in this manner does not contradict the law and does not constitute a violation of the rights of the person being checked.
The Judicial Board considered the above actions of the defendant to be correct and in accordance with the procedural requirements of the law, since the Department is not an authorized body that ensures the operability of the information system, therefore, it cannot be held responsible for the consequences of incorrect operation of the information service.
Subparagraph 8) of paragraph 2 of Article 26 of the Law stipulates that a natural monopoly entity is obliged to conclude individual contracts with consumers for each type of regulated services provided in accordance with standard contracts.
Consequently, the requirements specified in the regulation are based on the norms of industry legislation prescribing their strict implementation.
At all stages of the procedure initiated at the request of a legal entity, the defendant acted within the limits of the Law and, as the authorized body for regulating natural monopolies, reacted to the established facts of violations by issuing an act and then an order.
Paragraph 1 of Article 30 of the Law establishes that an unscheduled inspection and preventive control with a visit to the subject (object) of control are carried out in accordance with the PC.
The procedure for conducting an inspection and preventive control and supervision with a visit to the subject (object) of control and supervision is regulated by Article 147 of the PC.
The inspection was conducted on the basis of a request from a legal entity, which corresponds to subparagraph 3) paragraph 5 of Article 144 of the PC.
The fact of violation of the duties of a natural monopoly entity, established in the LLP's activities in terms of non-compliance with the requirements provided for in subparagraph 8) of paragraph 2 of Article 26 of the Law, deserves attention, since in the presence of objectively confirmed violations, the courts formally canceled the order, which is essentially lawful and justified, and was adopted within the framework of the Law, which indicates a formal an approach to assessing the circumstances that are essential to the case.
The local courts should have proceeded not only from the fact of procedural violations that occurred due to circumstances independent of the defendant, but also to take into account the nature of the violations and the degree of their impact on the legality of the administrative act, since the first part of article 84 of the CPC prescribes that an essentially correct administrative act cannot be declared illegal on formal grounds alone.
In the context of the above, the judicial board concluded that the contested order met the requirements of legality and validity, and the local courts had no substantial grounds for declaring it illegal and canceling it.
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