Advocates Bureau Yug successfully defended the interests of the largest network company in Southern Russia in a dispute of about 1.3 billion rubles against the Tariff Service of the Astrakhan region.

Our client is the largest grid company in Southern Russia. In 2021 the client filed a tariff application to the Tariff Service of the Astrakhan region requesting to include some expenses into the necessary gross proceeds (NGP) for calculating the new tariff on electricity transmission services, including expenses for the executive office, planned depreciation/replacement of metering devices, and paying interest on bank loans. The Tariff Service refused the application. It considered these expenses being economically unjustified and set a significantly lower tariff rate than the one requested by the client.

The client filed an administrative claim against the Tariff Service in the Astrakhan Regional Court, requesting to recognize the above court decision as invalid. The client justified that all these expenses are reasonable, that he took bank loans to eliminate cash gaps, that he spent the funds on the branch office in the Astrakhan region, and that there are legal grounds for the Tariff Service to accept these expenses provided for by regulatory acts in the electric power industry.

On 20 September 2022, the Astrakhan Regional Court released a decision on case No. 3a-127/2022 and partially satisfied the clients claim. The Court included in the expenses the costs for the executive office, depreciation, and compensation for the NGP adjustment based on actual data for 2020. The client filed an appeal against the court decision. Upon consideration, the Third Appeal Court of General Jurisdiction included planned expenses of 18,378,290 rubles for the replacement of metering devices, as well as the planned expenses for the year 2022 of 758,053,230 rubles for paying interest on bank loans and the actual expenses for the year 2020 of 531,598,930 rubles for paying interest on bank loans.

The Tariff Service of the Astrakhan Region and the Federal Antimonopoly Service of the Russian Federation filed cassation complaints against the said court decision.

Lawyers of Advocates Bureau Yug prepared a statement to defend against these complaints and participated in the court session of the Cassation Court.

On 27 July 2023, the Fourth Cassation Court of General Jurisdiction upheld the previous court decision.

ABYs Managing Partner Yuri Pustovit and Partner Sergey Radchenko represented the clients interests in the Fourth Cassation Court of General Jurisdiction.