FAS proposes to unify the procedure for considering tariff disputes

The Federal Antimonopoly Service (FAS) proposes to change the procedure for challenging decisions of regional authorities on setting or changing tariffs, transferring such cases from courts of general jurisdiction to the competence of arbitration courts. This procedure now applies to disputes based on decisions and orders of the antimonopoly service itself. The FAS explains the need for changes by the lack of a unified procedure for considering tariff disputes, which sometimes leads to the impossibility of revising inflated utility tariffs.

The bill prepared by the FAS changes the jurisdiction of cases challenging decisions on the establishment or change of tariffs by regional authorities (in particular, in the areas of electricity and heat, water and gas supply, and waste management). Arbitration courts are invited to consider such cases. Now proceedings take place in courts of general jurisdiction within the framework of administrative proceedings in the form of challenging regulations. At the same time, cases of challenging decisions and orders of the FAS itself within the framework of tariff control are conducted by arbitration courts in the manner of challenging non-normative acts. As a result, the service notes, there is no uniform procedure for considering tariff disputes, which leads “to the impossibility of revising economically unjustified tariffs.”

The FAS explains that the current procedure for challenging regional tariff decisions provides “unscrupulous participants with grounds for abuse of rights.” They challenge the decision on formal grounds, and use the refusal to satisfy the demands to declare it invalid as confirmation of the objectivity of the calculation of tariffs for all items. As the FAS explained to Kommersant, such cases have occurred more than once and “their presence is unacceptable.” As a result, if an already “reduced” tariff is checked by the FAS and it is established that economically unjustified expenses were included in it, then the execution of the order to eliminate the violation is excluded only by the mere fact of the existence of a court decision, which confirmed the legality of the tariff, but did not evaluate the controversial cost items.

Let us note that this is not the first attempt to transfer such cases to arbitration courts – in 2022, the FAS noted the formation of negative judicial practice on the issue of issuing its orders and the mandatory nature of their execution. Arguments were also given that courts of different jurisdictions sometimes adopted mutually exclusive acts. Now the FAS confirms the thesis that the current procedure does not allow “to effectively consider cases challenging tariff decisions,” noting the fact that accounting, financial and economic examinations have been repeatedly appointed during the consideration of cases by courts of general jurisdiction. In each case, they are, in fact, obliged to reconsider the issue of setting a tariff with the calculation of all cost items, but “imposing such an obligation on the court does not meet the goals of legal proceedings,” the service points out. Therefore, the FAS considers the only effective solution to be the unification of jurisdiction over tariff disputes.

The Russian Association of Water Supply and Sanitation fears that arbitration courts will consider tariff cases without a full analysis of all cost items, and then resource supply organizations (RSOs) will almost always lose such cases. In particular, the association believes, RSOs “are essentially deprived of the opportunity to prove in court that the regulator did not take into account the increase in the minimum wage in the tariffs for 2024, which is why enterprises had to withdraw funds from their operating activities to increase employee salaries.”

Alexander Varvarin, vice-president of the Russian Union of Industrialists and Entrepreneurs for legal regulation and enforcement, said that this business association positively evaluates the initiative and believes that disputes over tariff decisions should be considered in arbitration courts. Their specialization and experience of judges allow them to better navigate aspects of tariff formation. At the same time, Mr. Varvarin emphasizes, even when cases are considered by arbitration courts, examinations will remain important evidence.

Ilya Dolmatov, director of the Institute of Economics and Regulation of Infrastructure Industries at the National Research University Higher School of Economics, agrees with this: tariff cases are very complex, so the decision to transfer them to arbitration courts is generally logical, since they are more “tailored” to economic disputes. However, he adds, simply changing the jurisdiction will not solve all the problems – due to the fact that judicial practice is now very different, clarifications by the judiciary on such disputes are needed, as well as improvement of tariff regulation itself.

Evgenia Kryuchkova