Published: 2015-10-02 09:15:34 CEST
Latvijas Gāze
Company Announcement

Latvijas Gāze JSC: Company has recoursed to Supreme Court to achieve respect for legitimate expectation

JSC “Latvijas Gāze” appealed at the Supreme Court against the judgment of the Administrative Regional Court whereby the fine of 2.2 million euros imposed by the Competition Council was upheld. The JSC “Latvijas Gāze” holds a view that the resolution of the Competition Council applies the penalty retroactively, does not comply with the principle of legitimate expectation, and is disproportionate.

The Competition Council penalised the JSC “Latvijas Gāze” in 2013 having concluded that the company’s treatment of debtors who only had gas supply resumed after settling debts did not comply with the principles of competition. However, the Competition Council also recognised that in a number of such situations the company had acted legitimately. The fine was imposed for the company’s action during the period from 2009 to 2013.

Although the JSC “Latvijas Gāze” changed its debt recovery practice immediately after the Competition Council’s resolution, the company considers the penalty unlawful and disproportionate.

Firstly, during the period from 2009 to 2013 the Public Utilities Commission and the Consumer Rights Protection centre reviewed and approved the compliance of the company’s practice with the laws and regulation in around 100 cases. In numerous cases so did the Competition Council and admitted the particular issue as beyond the Council’s competence.

The JSC “Latvijas Gāze” relied on the opinions of regulatory bodies. Hence, the Competition Council’s decision to fine the company for the actions taken since 2009 is illegitimate.

Secondly, the amount of fine inflicted on the company – 2.2 million euros – is disproportionately high and exceeds the aggregate amount of all fines imposed for similar offences over the previous 12 years in Latvia. The highest fine imposed so far was ten times lower, and the companies fined include banks and telecommunication companies with a substantial turnover.

In the view of the JSC “Latvijas Gāze”, if the Supreme Court, too, finds disregard of the principle of legitimate expectation justified, there will be a basis to recourse to the European Court of Human Rights.

         Vinsents Makaris
         Phone + (371) 67 369 144