Recognition as illegal and cancellation of acts on the appointment of inspections and regulations on the elimination of violations of the legislation of the Committee on Regulation of Natural Monopolies
No. 6001-22-00-6ap/1624 dated 31.10.2023
Plaintiff: JSC "KTG" (hereinafter – the Company)
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 of illegal and cancellation of acts on the appointment of inspections and regulations on the elimination of violations of the law
Review of the case on the defendant's cassation complaint
PLOT: The Department has ordered unscheduled inspections of the Company based on consumer complaints.
Based on the results of the inspections, orders were issued to eliminate violations of the legislation on natural monopolies dated July 11, 25, 2022, and October 3, 6, and 21, 2022 (hereinafter referred to as the orders). By these regulations, the Company is instructed to bring the technical specifications issued to consumers in line with the standard form of technical specifications for connection to gas supply networks, approved by Order of the Minister of National Economy of the Republic of Kazakhstan No. 2 dated January 5, 2021 (hereinafter referred to as the Standard Form).
The Company filed a lawsuit with the court to declare illegal and cancel the acts on the appointment of inspections dated June 20, 27, July 1, 11, 2022 and the regulations on the elimination of violations of the legislation on natural monopolies dated July 11, July 25, 2022, October 3, 6, 21, 2022.
Judicial acts:
1st instance: the claim is partially satisfied. The regulations on the elimination of violations dated July 4, 11 and 15, 2022, were declared illegal and canceled. The rest of the claim was denied.
Appeal: the court's decision remains unchanged.
Cassation: The decision of the first instance has been changed. The judicial acts regarding the satisfaction of the claim for recognition as illegal and the cancellation of the orders on the elimination of violations dated July 4, 11 and 15, 2022 have been canceled. In this part, a new decision was made to dismiss the claim. The rest of the judicial acts remained in force.
Conclusions: Subparagraph 3) Paragraph 5 of Article 144 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the PC) defines that the grounds for an unscheduled inspection of subjects of control and supervision are appeals from individuals and legal entities for violations of the requirements of the legislation of the Republic of Kazakhstan with supporting evidence. If there are convincing grounds, it follows from this rule that state control in the form of verification can be carried out upon citizens' requests for specific facts involving a violation of their rights.
A specific fact should be understood as an event, the reliability of which is considered established and confirmed by specific circumstances. Such circumstances and evidence in this case have been established.
Paragraphs 4, 5 of Article 12 of the Law "On Gas and Gas Supply" provide that the technical conditions are the basis for the design of newly built, modernized and reconstructed facilities of gas supply systems. and (or) Newly connected and reconstructed gas equipment for consumers must be completed in accordance with technical regulations and regulatory and technical documents, as well as provided with design documentation.
Paragraph 8 of Article 24 of the Law "On Natural Monopolies" (hereinafter referred to as the Law) stipulates that technical specifications must define an exhaustive list of requirements for connected networks of a natural monopoly entity, materials, equipment, devices, and metering devices. Subparagraph 6) of paragraph 2 of Article 26 of the Law stipulates that a natural monopoly entity is obliged not to establish additional requirements unrelated to the regulated service provided.
According to paragraph 198 of the Rules for the Conduct of Activities by Natural Monopoly Entities, approved by Order of the Minister of National Economy of the Republic of Kazakhstan No. 73 dated August 13, 2019 (hereinafter referred to as the Rules), the technical specifications define an exhaustive list of requirements for connected networks of a natural monopoly entity, materials, equipment, devices, metering devices.
Subparagraph 25) of paragraph 3 of the Rules defines that technical specifications are the technical requirements necessary for connection to the networks of a natural monopoly entity. Paragraph 263 of the Rules stipulates that the technical specifications specify the permissible capacity, quantity, placement and main characteristics of the equipment.
At the same time, the inclusion of additional requirements by the subject is not provided for. In accordance with subparagraph 7-1) of Article 8 of the Law "On Natural Monopolies", the authorized body develops and approves standard forms of technical specifications for connection to utility networks.
Appendix 3 to the Standard Form approves the standard form of technical specifications for connection to networks in the field of gas supply.
Thus, the technical conditions for connection to gas supply networks provided for in the Standard Form cover:
- the full name of the facility, the address of the facility connected to the service, the total heated area of the premises;
- main characteristics of the equipment, installation of gas equipment, estimated gas consumption;
- the connection point, including the gas pipeline, the diameter of the gas pipeline at the connection point (mm), the gas pressure at the connection point (Mpa).
This means that the Standard Form of the technical specifications contains an exhaustive list of requirements for connecting consumers to the gas supply sector, established by the developer body.
Consequently, the Company's arguments about the absence of exhaustive requirements in the Standard Form of technical specifications are not sound. In view of this, the defendant's conclusions that the KPF of the Company, as part of the provision of a regulated service, is obliged to provide consumers with technical conditions for connecting to its networks strictly in accordance with the Standard Form and has the right to require them to comply only with the technical requirements specified in the Standard Form, are legitimate and justified.
It follows from the above that the Company cannot include additional requirements and recommendations in the technical specifications that are inconsistent with the Standard Form. In this regard, the Company's actions to include additional requirements in the technical specifications led to the establishment of additional requirements for the provision of Standard Forms of Documents for consumers not provided for in the technical specifications.
Consequently, judicial acts in the satisfied part of the claim are subject to cancellation with a new decision in this part to dismiss the claim, since the courts violated the norms of substantive and procedural law, namely, misinterpreted the rules of law, which led to an incorrect resolution of the dispute and the issuance of illegal judicial acts.
The rest of the judicial acts should be left unchanged, since the defendant had the legally prescribed grounds for ordering inspections.
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